Help!! I own a small family owned business in Phoenix, AZ.
Recently, a new client of mine who is also a local attorney, ran up over $3,000 in services from my business then outright refused to pay. FYI yes, we did a great job for this client and performed all services in good faith. After not being paid on our invoice for 2 months, we sent several very polite letters requesting payment for our services but were ignored. I know it’s not a ton of money, but this is what feeds my children so naturally I went about trying to collect.
When we finally threatened to send them to collections we received a letter back from them complete with fabricated accusations about how we didn’t do a good job, were negligent, etc. They piled on a heap of false claims leading to the ultimate punchline, they claim we owe them $240,000 for damages as a result of our services.
Everything in the letter is a complete lie and we have detailed documentation via email and other materials that can completely prove as much. We would destroy them in court on merits. Our attorney read their letter and says it looks like a template they use often, suspecting that this attorney does this to companies all the time. Hires out services, doesn’t pay, and then when threatened by a small company like mine for payment bullies them back with obscene legal threats until they just go away empty handed.
Our attorney says there’s absolutely no way they would win a dime in court based on the trumped up nonsense they put into the accusation letter against us. However, they trumped up a claim of damages against us to a high amount so that, if we sue for what we’re owed, they could pull us into Superior Court. Unlike small claims, in Superior Court we cannot defend ourselves we a forced to retain counsel. A case like this could cost us $20,000 or more to defend.
So that’s the racket. As put so eloquently by my attorney, “they have free legal council, you don’t”. This attorney abuses local vendors, steals services from them, and when they try to collect bullies them to go away - in essence stealing from them. And this isn’t the first time, I know of at least one other company in the last year that this attorney has done this to. That company just went away rather than try to fight.
So my friends here is the question, should I:
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Send them to collections and wait for them to then file a suit in Superior Court, costing me tens of thousands of dollars in legal fees and countless hours of time to prepare a defense?
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Walk away and eat the $3,000 hoping that they blow off and drop everything?
There’s also (going nuclear) option #3 that I have considered which involves:
[ul]
[li]Filing a suit for my $3,000[/li][li]Contacting local news outlets to see who wants to pick up my story[/li][li]Filing a complaint with the State Bar[/li][li]Seeing if I can convince one of their competitors to give me pro bono representation for the case just for the satisfaction[/li][li]Contacting the BBB[/li][li]What else???[/li][/ul]
Thoughts?
