S
SandraE
Guest
from california: my husband and i formed an s corp for a small (scuba diving) business. the corp was given a 28' chris craft boat, in need of restoration in oct of 2000. we spent approx $9000 on engines and misc materials in starting to restore. in dec of 2000, a friend/business partner in another business wanted to joint venture with us on restoring the boat, and we verbally agreed that ownership percentage would be dependent on how much each of the two parties contributed in the boat. because the boat dock slip was already registered to the s corp, and the harbor charges a $450 fee to re-register a boat slip when there is a change in ownership, our friend told us to keep the boat registered in the s corp's name....and not add his name, as he didn't want to pay the $450 fee. he did get a key to the boat and a key to the dock at this time. all three of us did the labor. in may, the other business blew up in our faces, and the friendship was over. in the interest of fairness, we assured the ex-friend that although the boat agreement was verbal, we would honor our original agreement, and would try to sell the boat and split the proceeds with him proportionally. although we tried, we were unable to sell the boat, and informed him a few months later of this, and invited him to try to sell it. we also invited him to buy us out of the boat. he then initiated a small court claim against us for the amount of money he put into the boat, claiming that he never took any ownership. the claim was for $5000. in the meantime, we paid all of the boat slip fees of $2000, bringing our investment to $11,000! we had the boat surveyed, and the value was placed at $4500 (clearly not a good investment). the judgement in small claims awarded him $2500, and did not mention the disposition of approx. 1/2 of the items listed in his $5600 claim that are still in his possession. should we appeal this judgement, based on the facts that 1)we should not be obligated to pay him a disproportionate share of his investment, and 2) we should not be obligated to buy out his portion of the venture just because he wants out of it? we feel the judge in small claims paid very little attention to what was being said in court.