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  1. #1
    Join Date
    May 2007
    Posts
    7

    Default Collecting Small Claims Judgment from a Vehicle Repair Shop

    uffolk County, NY

    I have sued a motor vehicle repair shop (small claims) and have been awarded approximately $4500.00 which I would like to collect. It has been thirty days and the repair shop has not paid me. I have previously sent a formal letter requesting payment (certified and return receipt) and I'm wondering if someone can advise me of how to proceed. I do not know the repair shop bank account, nor the owner (just the manager who may be the owner) although I do know that they are a licensed Department of Motor Vehicle repair shop and are licensed to do state inspections. (I'm not sure if this can help me.)

    Many of the NYS guides as well as forum posts deal with suing an individual and not a business. Can I have the business suspend payment from all employees until I am paid? How can I obtain bank information and then collect money? Etc. Your help is greatly appreciated.

    Emanuel

  2. #2
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: Collecting Small Claims Judgment from a Vehicle Repair Shop

    I owned a "auto repair shop", in NY, and under DMV regulations, the "license #" of the repair shop must appear on all invoices and business cards, there must be a standard sign, "green background" with the "shops name" and "license#" on the outside of the building clearly visible to the public.

    If there is no such sign that you can clearly see, no license # on the invoice, then the shop is in violation, and you can complain immediately to DMV. If it is an unlicensed shop, then DMV will come by and close it immediately.

    DMV came by my place, told me my business cards were illegal because it didn't have the DMV license # on them, and I had to reprint them.

    One sanction of NY laws is that business licenses will not be renewed if judgments are not paid. If the repair shop does not pay you, you can notify DMV, and his license would not be renewed, and he has to close.

    I beleive this would probably be more effective than seizing bank accounts if you don't know where he banks. Of course, you can subpeona him to do a debtor's exam. On the other hand, it's simpler just to call DMV.

  3. #3
    Join Date
    May 2007
    Posts
    7

    Default Re: Collecting Small Claims Judgment from a Vehicle Repair Shop

    So it appears that the owner (also was the manager) is keeping the shop open but changing the name of the business and doing a penske truck rental... presumably to avoid payment... what can I do to collect?

  4. #4
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Collecting Small Claims Judgment from a Vehicle Repair Shop

    You can find some tips here and here.

  5. #5
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: Collecting Small Claims Judgment from a Vehicle Repair Shop

    Just to add to the information here.

    What you mentioned the debtor did is not uncommon in the business. Some of them subcontract work to my business, and there's been a number of occasions where when we chase after them, they have already conveniently "reincorporated" into another corporate name.

    When they do this, you simply can't go and seize bank accounts because the judgment is under one name, the bank accounts are another. One guy who bailed on me is on the "same block", a few stores down, and simply painted over the old blue awning with "blue paint", and had a new sign affixed to the building.

    Then, there was a guy in the neighborhood that reincorporates every two years, came to look at my business when I was selling it. He does this when bills and judgments pile up, and he can't pay them. People said to me "are your sure he's going to pay off the note he'll owe you when you sell to him". Of course not. I didn't sell the business to him.

    Having said all of this, what do you do with people like this. I ran a business, had no time to chase after a few thousand here, a few thousand there. I thought about what these guys did, and if I had the time, and with my knowledge of collections, which was my field for nearly a dozen years, would've nailed them to the wall.

    First off, these guys know all about reincorporating, but usually fail to do it properly. Further, they don't follow DMV regulations to the letter.

    Changeover of ownership, reincorporating requires an entirely new application to legally operate. DMV takes 6 to 8 months to act on it, and techncially, the business should be closed in the meantime. But because the business has rents, leases and other bills to pay, keeps operating under the "old name". It's a technical violation that DMV doesn't really act on unless there's a complaint.

    Sometimes they reincorporate and fails to get re-licensed, and it's a good time as any to get them. Relicensing is often a pain, requiring an on site inspection. if they are an inspection station, and the machine is broken, they have to get it fixed first.

    And if they sold it to a "new owner", this new guy should've technically kept the place closed for the 6 to 8 months waiting for DMV. Do you think he'll be happy if you complained to DMV about the technical violation. Besides, in the Purchase and Sale agreement for a new business, especially for repair shops, the old business has to guarantee it's work within a certain period, if customers go after the new. What do you think he'll say if you told him you'll go after him and make him make good on a bad repair.

    I don't beleive many of these guys boasting about reincorporating really follow the letter of the law in "dissolving" the previous company either. If they did filed papers to dissolve, they would have to certify that "there are no outstandling debts", clealy not the case here. If they falsely certify, then the owners becomes personally liable.

    Then, I don't beleive there would've been valid transfer of assets from the old company to the new, in which case, they'll be commtting fraud and theft. If they had properly done things, then the previous company should've filed bankruptcy already, and you would've been notified by now.

    Clearly the first step is the grab hold of the debtor, subject him to a debtor's exam, and from this, you should be able to determime what he did with the old assets. and when, and if there are bank accounts anywhere.

    If you do this, maybe he'll figure you're serious and pay up.

  6. #6
    Join Date
    May 2007
    Posts
    7

    Default Re: Collecting Small Claims Judgment from a Vehicle Repair Shop

    Thank you both for your answers. As far as the DCA of NYC, I'm in Suffolk County so they cant help me. I'm going to call my local consumer affairs and see what they say.

    SChinFChin, Thank you for taking the time to write what you have. I'm hoping that I can find bank accounts / credit card accounts. Otherwise, not sure what to do.

    -E

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