Partnership or Inc: Who to sue?

[Crispix]

What is the name of your state? California

I'm an LLC that was unfortunately burned by a dot-bomb customer almost 2 years ago. They did not pay their final bills to the tune of $30k.

At the time I consulted with a collection agency and a law firm. Their consensus was that I have sufficient proof to win a lawsuit, however the issue was one of collectibility (is that a word?) Lawsuits are expensive, and the chances of collecting were slim, so the years went by.

Since the Statute Of Limitations (2 years?) is only a couple months away, and I'm unwilling to spend money on a lawsuit, small claims will at least (probably) get me a $5k judgement that I can try to collect for the next 10 years. So here's the question:

Who do I sue? The original contract was with a Partnership. Do I sue the two partners individually? This is my best bet for getting paid since there is no corporate veil to hide behind, right?

At the time they stopped paying, a corporation (C Corp) had been created. There were no changes in the contract, but the corp did pay most bills with company checks and invoices were sent to the corporate address. The corporation is now listed as "suspended" according to the CA Sec. of State web site. The original Partnership, however, is still listed as active in the San Diego County web site.

Is there a way to sue both the Corp and the individuals and let the judge decide who owes the money? If I'm stuck suing a suspended corporation, do I have any better options for getting some money back? I've heard of "piercing the corporate veil" -- what are the criteria needed to have the two partners liable for the company's debts?

Thanks for your help.

 

[JETX]

First, the SOL for a written contract in California is 4 years.

Technically, you should only sue the party named in the contract, however, due to the confusing issues in your post, I would probably file against ALL parties (partnership and corporation and individuals). It is possible that the individuals could challenge their inclusion (and get themselves excluded), but you might just get the court to leave them in.

As for your 'reduced claim' strategy, most states do not allow you to reduce the claimed amount to get under the jurisdictional limit, but California does. If you have a legal basis to allow you to separate the billing (but not just split it), you could consider filing up to two cases per year of $5000 each.

 

[Crispix]

Thanks very much for your reply. Would separate invoices satisfy a legal basis for separate claims?

 

[JETX]

"Would separate invoices satisfy a legal basis for separate claims?"
*** It depends largely on the accounting procedures used. For example, is each 'job' or order processed and invoiced seperately?? Or all all the billings 'lumped' onto a single, increasing invoice??

 

[Crispix]

I see your point.

It's similar to the way lawyers bill, actually -- clients get an invoice every two weeks if time was spent on the account, regardless of the type of work performed. In this case, however, it was all for the same project but the invoices span several billing periods.