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NA
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Experience:  NA
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I own a company that provides dent-repair services for local

Customer Question

I own a company that provides dent-repair services for local dealerships. A very large dealership group was shut down by the state (Colorado) two weeks ago for failing to pay off the loans on traded-in vehicles. The owner is $50M in debt to Chrysler, local banks, etc. and has missed local tax deadlines and payroll for his 200 employees. He surrended the dealerships to Chrysler Financial Corp on July 31st, and the dealerships are now closed.

Collectively, the dealership group owes me $5,300 for repair services, dating back to January and February of this year, when they stopped paying all of us service providers. We have no contract with the dealerships - industry standard practice is to provide the work and then turn in a bill to the appropriate clerk at the dealership. He or she will then generate an internal purchase order number and route the invoice accordingly. That PO number is XXXXX given to us.

My question: what can I do to collect this money? Thanks!
Submitted: 5 years ago.
Category: Business Law
Expert:  NA replied 5 years ago.
Thank you for your question.

If the dealerships are closed, and your calls and invoices are not being returned, you may want to consider filing a small claims suit.

Filing in small claims is fairly easy, and you do not need an attorney to file and present your case. I've provided a link the complete instructions from the Colorado courts here: http://www.courts.state.co.us/userfiles/File/Media/Brochures/smallclaimsweb.pdf

Basically you'll file a simple form and pay a small filing fee to get the case started. You will need find the official name of the dealership as they did business with you. If you have a copy of a previous check from them their legal name should be on it. Hang onto the check once you retrieve it-- you may need it later.

To be on the safe side, you can double check at the Colorado Secretary of State website to make sure that you have the correct corporate name. If there is a corporate name and a "doing business as" name, you will will to sue "Corporation A, DBA B", where A is the name of the parent corporation and B is what they did business as.

You then need to have the case served on the dealership. If you know where the CFO is located, the best bet would be to have the sherrif or marshall from the court do the service on the corporation. You pay a fee to have that done, but it can be worth the trouble as you'll be sure that the service is done properly.


Once your case is filed you will get assigned a court date. You have a simple case and won't need to prepare much. Just bring copies of all of the invoices along with a one page statement of how much is owed in total, and for dates and work. Bring any copies of monthly statements and notes on when and where you called and/or tried to see the CFO in person.

The other side may not even show up. If they do, you simple tell the judge what you said in your description in your question here.

You are very likely to get a judgment in your favor. Once you have the judgment, however, doesn't mean you automatically get paid. You then have to go after the funds.

With the judgment in hand, if they don't pay you, which is likely, you can garnish their bank account and put a lien on any real property they own.

The court can provide detailed information on how to go about this.

Depending on what you think the dealership's remaining assets might be (buildings, land, bank account funds, etc) it may or may not make sense to pursue this route.

If you decide not to sue in small claims, keep an eye out for a bankruptcy announcement from the dealership. You would be an unsecured creditor and would collect from what was left after secured creditors (most likely Chrysler corporate and the bank if they owned the dealership property) had collected.

Please don't hesitate to ask if you need any additional information.
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NA, NA
Category: Business Law
Satisfied Customers: 184
Experience: NA
NA and 9 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
Thank you very much for the detailed reply. I have been considering small claims but wasn't sure if it would be worth the effort, since I am 100% certain they will refuse to pay me no matter what, and I'm also certain that their bankruptcy is inevitable. I'm going to go ahead and file, mostly for the experience of learning how to do so.

Can I please ask about two follow-up issues?

- There are five dealerships, all of which owe me money, and I'm limited to filing two claims a month in Colorado. Can a single claim be filed against the parent corp, spelling out the five DBAs that owe me money?

- The dealerships are physically closed, and I have no idea if the CFO or the other GMs or owners are working inside during the day. Security guards have been hired to stop people before they can enter the lot (it's a giant campus out in the middle of nowhere, miles from town). So my concern is finding someone to serve. I'll ask the sheriff's dept to do it, but can they? Do I have to figure out where some of these officers live in order to this to be served?

Thanks!
Brian
Expert:  NA replied 5 years ago.
Hi Brian,

Regarding multiple suits and defendants, whether you can bring suit against all five dealerships in one case depends on how the relationship was established, how you performed the work and collected, and the legal structure of the dealerships and the parent company.

If the dealerships are not individual entities (corporations, LLC's, etc.), and you have always been paid from the parent company solely, then you could argue that your agreement was with the parent corporation, not with the individual dealerships. You would sue the parent company and name the dealerships as DBA's as well.

If the dealerships are separate entities and you were paid by each of them under their own account, you will most likely have to pursue the cases individually, but you may want to check with the small claims clerk to confirm-- rules can vary from court to court.

Regarding service: All corporations in a state must have a registered agent for service. This is a person or firm who can officially accept service on behalf of the corporation. You can easily find this by checking with the CO Secretary of State's office or website.

Check to see what type of legal entity the dealerships are as well-- they may their own registered agent-- quite possibly the same as the parent.

Once you have that information you can find out directly from the court if they can serve notice for you.

If you have the time, you may also find the following helpful. There is a free monthly small claims seminar and judgment collection seminar in Denver.

Here's the date and location of the next offerings:

August 18: Smalls Claims
August 20: Collecting a Judgment
Denver County Court Civil Division
1515 Cleveland Place, 4th Floor(NNN) NNN-NNNNbr />11:00am – 1:00pm

I would also highly recommend a book by Nolo Press called, "Everybody's Guide to Small Claims Court". It will walk you through all of the steps needed to file, prepapre, win, and collect your case. It's clearly written and a great resource.


Please don't hesitate to ask if you need additional information.
NA, NA
Category: Business Law
Satisfied Customers: 184
Experience: NA
NA and 9 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
Great - thank you very much!

Brian
Expert:  NA replied 5 years ago.
My pleasure. Please don't hesitate to ask if you need more information.

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