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  1. #1

    Default Former Business Associate Refuses to Pay Share of Split Advertising

    My question involves business law in the state of: Texas

    I achieved a verbal agreement with a former business associate (franchisee) to split advertising whereby I would pass on his number to any customer who was in the areas he served. My business began to close a month after we began this advertising and fully closed three months later. The business closure and ensuing litigation with the franchisor has left me with debt. My advertising bill remains due and not yet paid for the last three months for which we shared advertising.

    When I asked him to pay his share of advertising, he said he would review the numbers I had emailed him. On follow-up emails he said he had been too busy. He later stopped responding to my attempts to contact him.

    I filed suit in small claims court two years later. He now claims that I never passed to him any leads and secretly served them myself. And he claims that he should not have to pay since I have not paid the advertising bill yet.

    Because I gave his number to customers that called and fell in his area, it is difficult for me to prove that I passed customers on to him from the advertising. I requested Discovery to obtain his sales leads tracking (to identify any marked to come from the advertising we split, or to compare customer phone numbers against my call records), which judge denied. I now intend to simply present emails that shows that as a general practice I would pass on leads that fell outside my area to other franchisees. I abandoned my attempt to contact customers in his area who called me and I passed on to him upon finding multiple emails through which I am passing on leads to other franchisees. I am hoping these emails along with his initial emails that he had not yet had a chance to look at the numbers I put together will demonstrate a preponderance of evidence that my story is true.

    I have these questions specifically and would appreciate any comments on any of them.

    1. If I have not yet paid the advertising bill, does that excuse him from paying me? That is, if I have incurred the advertising costs but have not yet paid it, can he claim, as he is attempting to do, that I have not suffered any damages from his non-payment? Does incurring the obligation not constitute a damage?
    2. If I have the emails, do I still need to ask a former customer to come to court only to say that they called me and I passed them on to him? If the emails are not enough and it is important to have such a statement, will an affidavit have value or do I need to ask them to come to court?
    3. What are the pros and cons of requesting a jury trial in this situation?
    4. If I win in court and he refuses to pay, is there a process to sign over the judgment to a creditor?

    Thank you for any advice!

  2. #2
    Join Date
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    Default Re: Former Business Associate Refuses to Pay Share of Split Advertising

    A court may well be receptive to the defendant's argument that unless you've paid the bill, and your history suggests that you will not even if you win a judgment, you can't claim to have been damaged by his failure to contribute to the unpaid bill. I would not be surprised if, should he lose, he requests permission from the court to tender any amount awarded directly to the creditor.

    I don't know what evidence he will present that you did not keep your side of the bargain. If you believe you should have evidence and witnesses to support your contention that you kept your promises, by all means be prepared to present your evidence and testimony. I have not seen the emails at issue, so I cannot comment on their credibility or sufficiency.

    If you request a jury trial you will, well, get a trial by jury.

    If you win a judgment you are a creditor. If you want to retain a collection agency or lawyer to assist in collecting a judgment, you are free to do so.

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