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Allen M., Esq.
Allen M., Esq., Employment Lawyer
Category: Employment Law
Satisfied Customers: 19169
Experience:  Employment/Labor Law Litigation
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A company based in TX red an independent contractor company

Customer Question

A company based in TX hired an independent contractor company in NV and grossly overpaid the company in NV. What recourse does the TX company have to recover money from independent contractor company in NV?
Submitted: 1 year ago.
Category: Employment Law
Expert:  Allen M., Esq. replied 1 year ago.

That really depends on what you mean by "grossly overpaid."

If you are just talking about having paid more than you could have, because other cheaper options were available, the courts are not going to allow a recovery for that.

For you to have any basis for a recovery, there must be some sort of fraud, misrepresentation or breach of contract. If the IC here was hired for certain work and did not do it properly, or abide by the contract, then you there would a breach of contract claim available.

Without some illegal action to point to though, there is no means of recovering funds from a bad deal.

Once you determine if you have some illegal act to point to, you'd have to sue in the state that you can obtain jurisdiction in. If the IC contract has rules about where claims can be brought (and many do), you'd have to sue in accordance with that documents rules. Otherwise, you can sue where either party is located, though it is almost always easier to sue in the state where the defendant has a presence, because it is easier to then serve them with notice of the complaint being filed.

Customer: replied 1 year ago.
Check was written for $11250.00, work done was for 112.50. No invoice # ***** check for reference. If company refuses to payback $10k claiming it was owed money or something, is there any recourse on getting said money back?
Customer: replied 1 year ago.
Mind you check was written to an LLC in the state of NV whereas company issuing check is in TX.
Expert:  Allen M., Esq. replied 1 year ago.

Ok. That makes sense. Yes, you'd sue for something called unjust enrichment. You would state that you hired them for a specific amount of work that is normally paid at a certain rate and that you only owed $112.50. As a defense, they'd have to establish that they actually did $11,250 worth of work. When they can't show that, the court can use its equitable powers to require repayment and, given the very obvious error there, the court would probably make them pay interest and costs.

Because the check was cashed in NV and the company is in NV, it really is going to be way easier to sue in NV than in TX. Unless that company has some presence in TX, getting service of process on them is going to be near impossible.

Customer: replied 1 year ago.
LLC in NV does not have presence in TX, Don't think TX company has attorney in NV. What do you mean about getting service of process?
Customer: replied 1 year ago.
Is there any claim NV company could make that would make payment justified? or put burden of proof on TX company?
Expert:  Allen M., Esq. replied 1 year ago.

Service of process simply means that someone is made aware that they are being sued, but in a legally formalized fashion.

Perhaps you've seen in movies where a person hands a document to the individual being sued, asks them to sign for it and then says "you have been served." There are other acceptable methods of doing this, but the key ingredient is that individual (or in the case of an LLC, the listed receiver for service which every LLC must have) being involved in accepting the summons and notice of complaint.

The TX company, as the company suing, has the burden of proof at all times, but the court has to consider all the facts. The only sort of argument that the company could make is that you agreed to this payment for the work done. Just making that argument without something on their end to back it up though will fall flat. That is a huge difference in what you are saying you owe and what they took and the transposition is perfectly understandable too.

There isn't a legal argument they can make (we already cashed it, so it's ours). They'd have to make a factual argument themselves, showing some amount of work done in order to establish a defense. Otherwise, the scales would tip in your direction and they'd have to repay.

Customer: replied 1 year ago.
I think serving NV company would be difficult as address on file is a UPS store box and don't think they can sign for certified mail. Also, what if they close the company or change bank accounts?
Expert:  Allen M., Esq. replied 1 year ago.

But they have to file a document with the state showing who can accept service of process or they can't form an LLC., so it actually wouldn't be too difficult to serve them there. You just have to go through the proper channels and any attorney would know how to do so.