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  1. #1
    Join Date
    Sep 2018
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    2

    Default Where Should a Lawsuit be Filed for a Breach of Contract

    My question involves independent contractors in the state of: Louisiana

    A woman I work with is in a situation where a client has breached the contract between them. I worked on it with her but am not mentioned in the contract. It was a clear violation, and the client has refused to return any emails or phone calls. The company is incorporated in Rhode Island, the work was completed entirely over the internet, with her primary place of business (ie. where she did the work) being in Louisiana. We do not know where the client himself lives, although we were able to contact the registered agent.

    The company does business via the internet all over the world via phone and mail, not just the state they live in. In the contract it doesn't have a Disputes section, but it does have this line:

    9.7 Governing Law. The laws of the State of Louisiana will control the interpretation of this Agreement.

    My questions are:

    1) Does the fact that they do nationwide business and the fact that the laws of Louisiana govern the contract constitute grounds for her to file a small claims case in Louisiana?

    2) Is serving notice to the registered agent about a lawsuit the same as serving the business owner?

    3) Would it be reasonable to ask the court to place a lien on the client's domain name if she is successful in suing him?

    Thank you.

    -Michael

  2. #2
    Join Date
    Oct 2014
    Posts
    7,411

    Default Re: A Question of Venue

    Quote Quoting mvandemar
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    My questions are:

    1) Does the fact that they do nationwide business and the fact that the laws of Louisiana govern the contract constitute grounds for her to file a small claims case in Louisiana?

    2) Is serving notice to the registered agent about a lawsuit the same as serving the business owner?

    3) Would it be reasonable to ask the court to place a lien on the client's domain name if she is successful in suing him?

    Thank you.

    -Michael
    1. I assume that your friend's contract is with the corporation in Rhode Island. The issue then becomes whether the Rhode Island corporation has sufficient contacts in the state of Lousiana to be subject to jurisdiction there. If the corporation is registered in Louisiana as a foreign corporation (which it must be if it does business in that state) then clearly your friend may sue her in that state. Otherwise, more facts are needed to determine if she may use the corporation in Louisiana. Simply the fact that your friend did the work in Louisiana is not by itself enough for the corporation to be subject to jurisdiction in Louisiana.

    2. Your friend needs to sue the person with whom she has the contract. If that is the corporation then she sues the corporation. If the corporation has a registered agent in the state then serving the agent with the summons and complaint is generally sufficient. She cannot sue the individual owner of the corporation unless the contract was with that personally individually, or the owner personally guaranteed it, or your friend has a good basis to assert the doctrine of piercing the corporate veil.

    3. If she gets a judgement against the corporation she may file that judgment as a lien against the assets of the corporation. The domain name is an asset to the extent it serves a trademark for the corporation. If she properly files the judgment lien she may be able to attach that trademark right.

  3. #3
    Join Date
    Sep 2018
    Posts
    2

    Default Re: A Question of Venue

    The contract was between my friend and the owner and president of the company, the work completed was a complete rebuild of the company website. How would that affect things?

    Quote Quoting Taxing Matters
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    If the corporation is registered in Louisiana as a foreign corporation (which it must be if it does business in that state)
    Does a company that operates over the internet and sells to clients in Louisiana via phone and mail constitute one that "does business" in Louisiana? And does the "governing law" clause in the contract have any impact at all on venue?

    -Michael

  4. #4
    Join Date
    Oct 2016
    Posts
    3,231

    Default Re: A Question of Venue

    Considering the wording in the contract I would sue the corporation in Louisiana. You would still need to serve the registered agent in RI.

  5. #5
    Join Date
    Jul 2018
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    1,656

    Default Re: A Question of Venue

    Quote Quoting mvandemar
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    The company is incorporated in Rhode Island, the work was completed entirely over the internet, with her primary place of business (ie. where she did the work) being in Louisiana. We do not know where the client himself lives
    Please explain the distinction you are apparently drawing between "the client" and "the company." it sounds like you're making a distinction between a corporation and an individual. If that's correct, is the corporation or the individual the other party to the contract with your friend?

    Quote Quoting mvandemar
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    The company does business via the internet all over the world via phone and mail, not just the state they live in.
    Who are "they"?

    Quote Quoting mvandemar
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    In the contract it doesn't have a Disputes section, but it does have this line:

    9.7 Governing Law. The laws of the State of Louisiana will control the interpretation of this Agreement.
    That's called a choice of law provision, and it means exactly what it says.

    Quote Quoting mvandemar
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    Does the fact that they do nationwide business and the fact that the laws of Louisiana govern the contract constitute grounds for her to file a small claims case in Louisiana?
    I think you're asking whether the courts in Louisiana -- and specifically a small claims court in Louisiana -- have personal jurisdiction over the other party to the contract (again with "they"). It is rudimentary jurisdictional law that a person or entity is not subject to personal jurisdiction in State X solely because he/she/it enters into a contract with an individual in State X. That the contract has a Louisiana choice of law provision would be one factor that a court would consider, but your post does not contain enough information for an informed analysis. However, regardless of constitutional jurisdiction, many states do not allow suits against non-residents in small claims courts. I did a quick google search and couldn't quickly find whether or not Louisiana is among those states.

    Quote Quoting mvandemar
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    Does the fact that they do nationwide business and the fact that the laws of Louisiana govern the contract constitute grounds for her to file a small claims case in Louisiana?
    No, but if you're suing a corporation, service may be effected by delivering a copy of the lawsuit papers to the registered agent. If the owner(s) of a corporation that is being sued are also being sued in their individual capacities, then they must be served by other means.

    Quote Quoting mvandemar
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    Would it be reasonable to ask the court to place a lien on the client's domain name if she is successful in suing him?
    No. Moreover, obtaining a "lien on [a] domain name" would be of little, if any, value.

    Quote Quoting mvandemar
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    The contract was between my friend and the owner and president of the company, the work completed was a complete rebuild of the company website. How would that affect things?
    If, in fact, the contract is with the individual and not the corporation (are you sure the other person didn't sign in his/her capacity as president of the corporation?), then your friend can only sue the individual. Beyond that, it doesn't change anything that "Taxing Matters" or I wrote.

    Quote Quoting mvandemar
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    Does a company that operates over the internet and sells to clients in Louisiana via phone and mail constitute one that "does business" in Louisiana?
    What constitutes "doing business in" a particular state depends on the purpose for which the inquiry is made. For example, a corporation might be "doing business in" State X for tax purposes but not for purposes of employment law.

    Quote Quoting mvandemar
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    does the "governing law" clause in the contract have any impact at all on venue?
    "Venue" refers to which court in a particular jurisdiction a case must or may be filed. For example, if a resident of New Orleans gets in a car accident in Shreveport with a resident of Shreveport and the NO resident files suit, the proper venue for the suit would be Caddo or Bossier Parish. On the other hand, if the accident occurred in NO and the Shreveport resident is suing, the proper venue would be Central District Court in Orleans Parish. Your questions all relate to jurisdiction, not venue. As explained above, the Louisiana choice of law provision would have relevance to the question of whether the individual or corporation in Rhode Island is subject to jurisdiction in Louisiana.

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