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What should my next step be in the recovery of unpaid service fees?

Easton, CT |

I have a software development company (Florida LLC) that provided services to a client (Connecticutt LLC) for over 2 years. They stopped paying their invoices in August 2011 and owe us approximately $40,000, as they had major money issues.
In December 2011 they proposed a payment plan and we agreed (done via email). They made 1 payment and stopped.
We have a general services contract signed, but nothing on the payment plan.
What should my next step be in trying to collect this debt?

To clarify: - The contract states jurisdiction in the state of CT. So in that case there's not much I can do in FL, correct? - It also has an attorney's fees clause saying that in the event of litigation, the prevailing party shall be entitled to recover reasonable attorney's fees and court costs from the non-prevailing party.

Attorney Answers 4

Posted

Given the amount of money involved ($40,000), the contract jurisdiction provision (Connecticut), and contract provision allowing for collection of attorneys fees, it is advisable to speak with a business litigation attorney in Connecticut.

Generally, if the target defendant is in Connecticut (and presumably has few / any assets outside the state) proceeding with a case in a foreign state (Florida) will likely result in an appearance default that when brought to Connecticut (to become a domesticated judgment ) would have to be restarted here anyway.

An business litigation attorney can review the agreement terms and other circumstances more fully, but generally (from the limited information you’ve provided) a default by the customer appears to have occurred so you’d have a number of potential claims. Also, as the customer “had major money issues” another option an attorney in Connecticut may suggest is initiating a pre-judgment action. Doing so may result in a quicker case decision earlier in the litigation, plus if an attachment is granted then you have a chance to secure (attach) certain assets of the customer (debtor / defendant) now for use in satisfying any eventual judgment you might obtain years later in the case.

While most cases like this are on an hourly basis, there maybe (depending on the size and solvency of the defendant) be an opportunity for contingent fee representation or a blend of reduced hourly against contingent fee.

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Disclaimer: The foregoing answer does not constitute legal advice, is provided for informational and educational purposes only for persons interested in the subject matter. Each situation is fact specific and may be subject to state specific laws. Without a comprehensive consultation and review of all the facts and documents at issue it is impossible to evaluate a legal problem fully. This answer does not create an attorney-client relationship.

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Posted

There are several possible next steps, a thorough review of all the relevant facts by an experienced attorney will hopefully lead to a successful choice. The possible steps include in no particular order
1.Have a Florida attorney send a demand letter
2.Have a Connecticut attorney send a demand letter
3. Start suit in Florida
4. Start suit in Connecticut
5. Continue to call, write etc....
6. Do you have any rights to halt their use of the software that you developed.
7. ??
The best choice depends a lot more on facts that don't appear in your question, including the terms of the general services contract (i.e. is there a jurisdiction clause, attorney's fee clause ?)

Providing answers to questions on AVVO does not create an attorney/client relationship. It is not possible to provide legal advice in the context of question and answers on the internet. Consult an attorney licensed to practice in your state or jurisdiction before taking any action.

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Posted

A lot of contracts state the law that is to be applied in case of dispute. If you are under Florida law, then it is likely you will need a Florida attorney to send a letter of demand and file suit in Florida. In Florida you are above the county court limits and would need to file in the circuit court. If you were to file in Connecticut it would be in the Superior Court. You should take a copy of the agreement and go see a Florida contract litigation attorney who will likely give you a free initial consultation and then determine your options.

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Posted

Based upon your additional information, I would consult with an attorney with experience in commercial debt and contract litigation. Many attorneys will take a case like this on a contingency fee basis provided you are willing to pay the costs of initiating suit.

This answer is for general purposes only and does not establish an attorney-client relationship. An attorney-client relationship will not be established with me unless and until you have executed a written agreement for me to represent you.

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