Legal Question in Business Law in California

Collecting on a business debt

We are a small corporation and are owed $4000, $1250, & 1750 from a client (major corp, owned by a mutual fund). We have signed contracts for the 2 smaller invoices. They have been 'disputing' all 3 invoices, but in the last email from their VP of Finance, they admitted their was no 'dispute' with the 2 smaller invoices, but they want a credit for the larger one - disputing it entirely.

The larger invoice was for work authorized by a VP that is no longer with the company; his replacement was an Acting VP, and he approved this December invoice in January. The AP Manager is the one who is disputing this.

We want payment in full for all 3 invoices. What is the best way to pursue this? Court, small claims, collection? Per the two agreements signed, legal and court fees are their responsibility.

Thank you.


Asked on 3/21/09, 1:31 pm

2 Answers from Attorneys
Adam Telanoff Telanoff & Telanoff

Re: Collecting on a business debt

Seeing your attorney's fees clause, makes me want to say -- hire me! This is not as facetious as it may sound, I would like this case.

However, you should get them to pay the two "undisputed" invoices, then sue them in small claims court for the final invoice. The key is that you performed the services/provided the goods for which you charged them.

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Answered on 3/23/09, 11:50 am
George Moschopoulos The Law Office of George Moschopoulos

Re: Collecting on a business debt

Generally, the limit for the amount in controversy for a small claims action is $7,500 for an individual and $5,000 for a corporation. Typically, there are no lawyers in small claims EXCEPT where the party is a corporation.

To sue for the full amount you are owed, with relaxed rules of discovery and a less formal procedure than a 'full blown' lawsuit, you can bring a claim in Superior Court under limited jurisdiction. This means that the amount in controversy does not exceed $25,000. Your claims will likely be for breach of contract, account stated and open book account.

You will also likely have to pay an attorney his or her fees up front, but if the contract allows, you may be able to recover these fees from the other side if you prevail.

If you are serious about legal representation, feel free to contact my office directly for a free phone consultation.

Best of Luck!

What I recommend,

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Answered on 3/21/09, 3:18 pm


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