Can a customer sue with a bill of sale?

UPDATED: Aug 23, 2011

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Can a customer sue with a bill of sale?

I’m a small business owner recognized as an “S” corporation. Last year an ex-partner did some work for a customer and the customer was displeased so they filed a lawsuit. I neglected to respond to any phone calls I may have received at the time due to no official documentation. All this time I was unaware that my partner at the time did this work for the customer. I am certain that the customer would not be able to supply any written evidence to prove work was done through my business. I believe that there was a court date, however, I never received any paperwork to inform me of this matter. If in fact this was the case and a judgement was awarded to the plaintiff. What would be the next move for me to make without facing any penalties to my ex-partners actions?

Asked on August 23, 2011 New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If a judgment was awarded to the plaintiff by default--due to your failure to respond or appear in court--there may be little you can do: while you may file a motion to vacate a default judgment, you would have to show both good cause for missing court and a reasonable or good defense, and if you were aware there was a lawsuit against the business, it may be very difficult to show that. Still, it is worth discussing with an attorney, and if you can show that notice to your business was deficient, you may be able to at least re-open the case--though you'll still then have to defend against the lawsuit.

If you can show that the ex-partner did the work on his own, and not as part of your business, then you may be able to get the judgment vacated and the case against your business dismissed. This could be difficult, however, if the ex-partner was still a partner at the time he did this work: a partner can clearly obligate the company. If he was not a partner then, however, you'd have a good chance of showing your business is not liable and they need to sue him personally for recourse.

You personally should not be liable in any event, if the work was done through the S-corp or by an ex-partner personally.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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