To sue or or not to sue or collections, that is the question ?

[LegalNewbie]

What is the name of your state? IL

We have a small Illinois corp that does (did) business with an out of state business.

We have done business with the company for many years with no real issues. We wholesale a product to them in which they retail. Over the past year or so, things have been a bit on the bumpy side. The retailer from time to time would complain about turn around on orders, or end user support (sometimes justifiably, sometimes through fault of their own). On a few occasions, I caught the retailer selling products to customers that were not ours, but were labeled as ours.

I gave them notice that this was no acceptable behavior and from went downhill very quickly from there. Eventually, the decision was made to halt selling product to this retailer. Things were a bit ugly both privately (email) and publically (public internet boards). In private emails, the retailer stated they would put us 'out of business', etc, etc.

Very shortly after all of this the retailer released their own version of the product they carried from us. This wasn't a real surprise as they were already sellings some units of theirs under our name .... while this isn't really that big of a concern the following items are ....

#1 - They refuse to pay past due invoices from late 2005 / 2006. These invoices are ~23K. Everytime we bring them up, we are told there are many problems iwth the invoices. We have submitted a completely list of each invoice by customer, order, UPS tracking #, etc. They never address this. The most progress made here is that they went back to the FIRST invoice received by them of 2005 and went line by line through it asking for a minimal credit on it ... This invoice was paid in april 05 and wasn't even under dispute. This also took them 3 months to send us info this one invoice. To me, this screams of a stall tactic to make it seem like they are trying to rectify the situation, while they really have no intent to do anything....

#2 - While we were on good terms, we 'gave' them an expensive piece of hardware we use to make our product which also allows others to make product for themselves personally, etc. The product was 'given' to them for work on their own internal projects; however, they started using it to make competitive product or alter our retail products wihch was expressly forbidden. The value on this product was ~3,500. Once our working relationship resolved, I requested this to be returned and was told no, its 'ours' now.... I'm curious on the interpretation on 'gave' as no where did I sign anythign stating it was there's permanently. The 'giving' intent on my part was the same as loaning someone a tool between friends. A reasonable person does not expect someone to 'give' them a $3500 tool permanently. Would this interpretation stand ? Additionally, the software license for the tool states it cannot be used the way they claim to use it... Regardless of the hardware question, the software should be enforceable either way ?

My main purpose here is to collect the outstanding invoices in a reasonable amount of time ~23K. I need ot determine if sending the unpaid invoices off to collections is a better idea than suing to compel them or not ? Also, if suing them, I would think there are some possibilities for damages based on the email / other discussions which highlight some very 'non business like' behavior ? Also, we do have a basic signed retail agreement with this company that does state they will pay their invoices within a specified time period and if not they will accrue interest + collection fees.....

Any comments ?

 

[seniorjudge]

What is the name of your state? IL

We have a small Illinois corp that does (did) business with an out of state business.

We have done business with the company for many years with no real issues. We wholesale a product to them in which they retail. Over the past year or so, things have been a bit on the bumpy side. The retailer from time to time would complain about turn around on orders, or end user support (sometimes justifiably, sometimes through fault of their own). On a few occasions, I caught the retailer selling products to customers that were not ours, but were labeled as ours.

I gave them notice that this was no acceptable behavior and from went downhill very quickly from there. Eventually, the decision was made to halt selling product to this retailer. Things were a bit ugly both privately (email) and publically (public internet boards). In private emails, the retailer stated they would put us 'out of business', etc, etc.

Very shortly after all of this the retailer released their own version of the product they carried from us. This wasn't a real surprise as they were already sellings some units of theirs under our name .... while this isn't really that big of a concern the following items are ....

#1 - They refuse to pay past due invoices from late 2005 / 2006. These invoices are ~23K. Everytime we bring them up, we are told there are many problems iwth the invoices. We have submitted a completely list of each invoice by customer, order, UPS tracking #, etc. They never address this. The most progress made here is that they went back to the FIRST invoice received by them of 2005 and went line by line through it asking for a minimal credit on it ... This invoice was paid in april 05 and wasn't even under dispute. This also took them 3 months to send us info this one invoice. To me, this screams of a stall tactic to make it seem like they are trying to rectify the situation, while they really have no intent to do anything....

#2 - While we were on good terms, we 'gave' them an expensive piece of hardware we use to make our product which also allows others to make product for themselves personally, etc. The product was 'given' to them for work on their own internal projects; however, they started using it to make competitive product or alter our retail products wihch was expressly forbidden. The value on this product was ~3,500. Once our working relationship resolved, I requested this to be returned and was told no, its 'ours' now.... I'm curious on the interpretation on 'gave' as no where did I sign anythign stating it was there's permanently. The 'giving' intent on my part was the same as loaning someone a tool between friends. A reasonable person does not expect someone to 'give' them a $3500 tool permanently. Would this interpretation stand ? Additionally, the software license for the tool states it cannot be used the way they claim to use it... Regardless of the hardware question, the software should be enforceable either way ?

My main purpose here is to collect the outstanding invoices in a reasonable amount of time ~23K. I need ot determine if sending the unpaid invoices off to collections is a better idea than suing to compel them or not ? Also, if suing them, I would think there are some possibilities for damages based on the email / other discussions which highlight some very 'non business like' behavior ? Also, we do have a basic signed retail agreement with this company that does state they will pay their invoices within a specified time period and if not they will accrue interest + collection fees.....

Any comments ?

No one can answer your questions.

What you need to decide is if they have the dough and would pay if you sued them.

 

[LegalNewbie]

hi,

they absolutely have the 'dough'. They dared us to sue them stating 'we have more money than you, go ahead....'. Publically when touting their new product (to compete with ours) they stated they spent $XXXX developing it, which conveniently was the amount thye owe us, etc.

They are obviously just turning our screws to see what we would do.

The ? I have is is it 'worth' it ? I don't sue people on a normal basis. To me, this seems like a fairly clear cut case. Company has invoices, we have documentation to show that each order we invoice them was recieved from them and we have documentation that orders were shipped and customers received product. They refuse to pay and attempt to divert subject by looking at even older invoices at a snail's pace .....

I've been on jury duty before and seen cases that last a day but then you see the train wrecks that go on for months..... I don't have the will power / ability to be in a lawsuit that is going to be dragged out and since even if I have an agreement that states they are on the hook for expenses related to collection, I assume most legal professsionals would expect to be paid in advance which would also drain me of $.

While I know no one has a crystal ball, do we have any educated guesses how long something like this could carry on for ? Any guess as to whether this would be clearly a case for collection of the amount of hte invoices or is there a possibility of punitive damages which might compel them to just settle / pay the invoices ?

I know the answer i'm probably going to get is .. .talk to a lawyer, but I thought I'd throw it out here first for some basic thoughts.

thanks in advance.