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I lost my freelance company, eventually started another one, and am being threatened that I need to permanently leave the industry. (self.legaladvice)

thrownawayfreelance が 投稿

Three years ago I started doing freelance web design work. A friend who also did freelance work and had been through the process helped me to incorporate. After a while I landed some contract work from a well-established designer (Stan). Stan had a bad reputation among a lot of people I knew, but he farmed out part of a big project to me and the pay was incredible.

Our working relationship completely fell apart, which I should have seen coming. I delivered exactly what he wanted, but he said it was unacceptable because the project had undergone huge changes that he failed to communicate to me. He demanded the money he paid me at the time of contracting, I demanded the money he owed me upon completion of the project. It turned nasty, he started badmouthing me to a lot of people.

A few people I knew who had fallings out with Stan in the past advised me to ignore him at all costs. Cut off communication and do not respond no matter what. I heard stories about him borderline stalking people. Like, stuff you hear crazy exes do. They said it only stopped once they disappeared completely from his life.

That’s what I did as the bogus phone calls, letters, emails, and badmouthing continued. During that time I was also served with a lawsuit. I did not understand the importance of this and ignored it just like all the other harassment. Long story short, he ended up with 75% of my company. Once he started seizing bank accounts I consulted with a lawyer and found out that I was basically fucked because I didn’t have enough money to fully litigate a case to retake my company. My lawyer advised that I was basically under an obligation to hand control of all accounts, websites, etc to Stan because Stan legally had the power to make all decisions for the company.

So basically, my company’s website redirected to Stan’s and he took over many of my clients (a lot he didn’t because they were friends, family members, people I had close personal connections to).

One of my clients offered to take me in-house, which saved my ass, and that’s where it stood for about a year and a half. Recently my mom came down with a very serious illness and I’ve been helping her out financially so that she can get the treatment she needs. The in-house salary was not cutting it so I decided to incorporate a new company and start doing some freelance work on the side. Everything surplus I’ve made from my job and freelancing has gone to my mom.

So now the problem, Stan somehow discovered that I was freelancing again, and he found out that I’m working in-house. I got a letter from his lawyer saying that I’ve violated my obligations to my original company (even though I’ve had NOTHING to do with it for over a year other than own my 25% as a matter of principle that I was robbed and not going to turn it over). The letter is demanding that I hand over all the money I’ve generated from freelancing with my new company (he calls it illegally gained money). It also says I’ve violated a non-compete by working in-house, which is just fucking insane because I never signed or agreed to any non-compete because it was my own company.

I have zero money in my bank account for a lawyer right now, and any extra money I do get each month goes to my mom. If I divert money, it literally could cause serious health issues for her. And now I’m staring down the barrel of never being able to work in web design again (that’s another thing the letter says, that I owe a duty to only use my skills in the context of my old company).

I guess my questions are: is the lawyer legally right in what he’s saying? How can I negotiate this given that I literally have no money? I’m in Illinois.

edit

Good news! One of my very first clients was a lawyer and I got in touch with him and he's offering to look things over with me.

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トップ新着論争中古い順Q&A

[–]visvis 333ポイント334ポイント  (26子コメント)

It sounds like you had a default judgment against you when you ignored the lawsuit before. No one here can guess what your contracts with Stan or judgment said. In the jusgment they basically got whatever they asked for because you didn't show up. You need to do two things right now:

  • Be sure to show up for the lawsuit or you will lose everything again.
  • Get a lawyer because you won't be able to win this by yourself, especially given what happened before.

Neither of these is optional. You say you can't afford a lawyer but the reality is that you can't afford not to have a lawyer. You will almost certainly lose more money than the lawyer costs if you don't do these things.

[–]MildlyAgitatedBovine 23ポイント24ポイント  (0子コメント)

You say you can't afford a lawyer but the reality is that you can't afford not to have a lawyer.

These aren't mutually exclusive.

[–]thrownawayfreelance[S] 47ポイント48ポイント  (24子コメント)

but the reality is that you can't afford not to have a lawyer.

I realize what you're trying to get across, it's just hard when this directly impacts my mother's health. I could should a financial burden, but it's not me who will be hurt by this.

[–]SchighSchagh 208ポイント209ポイント  (8子コメント)

I'm not sure you do realize what is at stake. If you lose again, which is very likely without a lawyer, you will have no more income to divert to your mother. Also, while you are fighting this new lawsuit, that time will take away from being able to do more freelance work and will impact your ability to earn money while this is ongoing.

Set up some free consultations, and discuss this with your prospective lawyer.

[–]Fortunate_0nesy 93ポイント94ポイント  (7子コメント)

There are probably plenty of lawyers who would be interested in trading some web design services for legal services. Beyond that, there is legal aid. At least in my jurisdiction, there is a strong push to have all lawyers donate a minimum of 50 hours a year for pro-bono work for charity or the indigent. Maybe Illinois is the same way, and maybe OP can appeal to someone willing to take it on in that context.

Beyond getting a lawyer immediately, at all costs, there are some things the OP must do in the interim.

1) increase income, 2) find some financial stability for the parent.

First, talk to anyone and everyone in the Illinois state system to get the parent set up on financial aid / medicaid / medicare / disability / welfare, whatever. Parallel to this, the OP needs to get a second job-deliver pizzas, sweep floors at night, strip, whatever can be done legally.

I have a feeling that there is some catastrophizing going on here, and that is consistent with the OP's bury-head-in-sand approach to the previous legal concerns.

The only way out, is through.

[–]improperlycited 51ポイント52ポイント  (2子コメント)

I mostly agree, but there is no way OP is going to qualify for pro bono work. If you aren't basically poverty line, you won't qualify. OP is the VP of one company, working full time at a second, and working part time at a third company, and all of those are or should be paying way more than minimum wage (no in-house web designer qualifies for legal aid, and OP makes more on the side).

Basically, they look at income plus usually savings/assets. Legal aid is for people who don't make enough money to afford a lawyer, not people who spend their money on other things and don't have enough left to hire one. Legal aid is about making it possible to get a lawyer, not easy or cheap or comfortable.

There are a few exceptions (in Minnesota they are the Disability Law Center, the Children's Law Center (children in the foster system get a lawyer regardless of income), and the Safety Project for people in abusive relationships to get orders for protection.). I can't even think of an exception that would apply in OP's case.

But you're 1001% right that OP shouldn't be paying his parent's medical bills in the first place. Maybe it's pride, maybe it's ignorance, but momma needs to pay her own expenses or get on Medicaid, not bankrupt her son and ruin his life and jobs/businesses.

You're literally the only person in this thread that recognized the actual answer to OP's entire dilemma is to get his mom on Medicaid. Then he can afford a lawyer who will handle every other aspect of what's going on.

OP's post should really be "I'm hiring a lawyer for some business matters. As a result, I can't pay all my mom's medical bills any more. How do I get her set up with some assistance?"

/u/thrownawayfreelance, please pay attention. You can't do this on your own. You need a lawyer. You need a very good lawyer who is very experienced because this is not a simple or straightforward case. You need to get your mom on public assistance so you can defend yourself or you're going to end up losing your new job, losing your new business, and working for Stan.

[–]Fortunate_0nesy 15ポイント16ポイント  (0子コメント)

Your first point is a bit overstated. I can give pro-bono work to whomever I wish, for whatever reason I wish. I might want to get my foot in the door of an area of law, and a case like this would get my name out there. Or, OP might literally be broke, regardless of his title/ position. But either way, we agree that his issues are his entanglement with his parent's issues.

Before you can save a life, you have to save your own.

[–]syzmcs 9ポイント10ポイント  (0子コメント)

This is invaluable advice, spoken with crystal clarity, and I really hope /u/thrownawayfreelance listens to it, and doesnt come up with a thousand excuses why he must pay his mothers medical bills at the expense of his own financial stability.

[–]thrownawayfreelance[S] 2ポイント3ポイント  (1子コメント)

There are probably plenty of lawyers who would be interested in trading some web design services for legal services.

Good news! One of my very first clients was a lawyer and I got in touch with him and he's offering to look things over with me.

[–]Fortunate_0nesy 0ポイント1ポイント  (0子コメント)

That is great news. Keep us,posted.

[–]carlotkitz 1ポイント2ポイント  (0子コメント)

I do believe IL is the same way with pro bono work. Not a lawyer, but have friends and family that are in IL.

[–]Rmarmorstein 0ポイント1ポイント  (0子コメント)

The state bar association normally has a link or a way to refer people who need pro bono work, at least that's the way it is here.

[–]aronnax512 29ポイント30ポイント  (5子コメント)

Ok, let's play worst case no lawyer.

Stan wins again, damages are imposed on you personally and all current and future personal wages are garnished until damages are paid. He'll receive a portion of your income, regardless of the source (freelance work or your salary) before you see a dollar. How are you going to get enough together to help your mother with a fraction of a paycheck?

[–]ccmulligan 21ポイント22ポイント  (0子コメント)

You need to accept responsibility for your own actions. You formed a partnership with Stan. You chose to walk away rather than filing suit. You chose to ignore a lawsuit. You chose to potentially violate the terms of the judgement against you, particularly if there was a non-compete clause. You chose to go in-house with a client that may have resulted in a breach of loyalty to the company Stan now controls.

You act like these things just happened, but they didn't. They happened because you believed you could not consult an attorney and just float through the business world based on handshakes and good word. You were wrong, very very wrong, and now you need to do whatever you can, including getting a second or third job, and pay for a lawyer to try to bail you out.

[–]befuchs 2ポイント3ポイント  (0子コメント)

When speaking with potential attorneys discuss this situation with them. If you have anything valuable offer it as collateral (get a reciept). I was in a similar situation (needing an attorney and couldn't afford one) and offered a couple valuable firearms I had and worked out a deadline to pay by.

[–]majorgeneralporter 1ポイント2ポイント  (0子コメント)

OP, are you in Chicago? If so, you may want to contact the Legal Clinics with Northwestern and UChicago Law Schools, they'd be a potential starting place for cheap or no cost work, or a referral if it's too big for volunteer work.

[–]fas_nefas 1ポイント2ポイント  (0子コメント)

Your mother should have Medicare or Medicaid access to help cover her medical expenses. That is why these programs exist. She should also have access to health insurance regardless of her age, health, or income, thanks to Obamacare. If she is insured, like she should be, what exactly are you paying for that these programs are not covering?

This isn't /r/personalfinance, but it sounds like taking a good look at how much you are spending on your mom may be in order, and asking whether you can keep those costs down in order to defend this suit.

[–]AppleTerra 0ポイント1ポイント  (0子コメント)

Call your local bar association and explain your story because they can direct you to attorneys who will work pro bono or for a minimal fee. Many attorneys will also set up payment plans for you so you can pay over several years.

[–]fooliam 0ポイント1ポイント  (0子コメント)

It's a pretty simple choice.

If you don't come up with the cash to hire a lawyer and defend this suit, you will lose all ability to help out your mother pretty much forever.

If you come up with the case to hire a lawyer and defend this suit, there is a chance you will be able to continue to help her out.

You can't help anyone if you can't help anyone!

[–]Spudgun888 0ポイント1ポイント  (2子コメント)

I realize what you're trying to get across, it's just hard when this directly impacts my mother's health. I could should a financial burden, but it's not me who will be hurt by this.

The US sure does have a wonderful healthcare system.

[–]tegeusCromis 0ポイント1ポイント  (1子コメント)

The US should does have a wonderful healthcare system.

It sure should does.

[–]Spudgun888 0ポイント1ポイント  (0子コメント)

Thanks for spotting the typo. Healthcare in the US is in a terrible state, isn't it?

[–]flamedarkfire 127ポイント128ポイント  (73子コメント)

You ignored a lawsuit and had a default judgement against you. Stan could have demanded you do the dance of the sugarplum fairies in a pink tutu in the middle of Times Square and the only thing stopping it being legally enforceable is the judge saying no at the time of the judgment.

You need a lawyer yesterday.

[–]thrownawayfreelance[S] 31ポイント32ポイント  (46子コメント)

Yes, I learned that. The terms of the judgment as explained to me by my lawyer was that Stan gained a 75% interest in my company. When I had my lawyer look into things, Stan's lawyer tried to demand that I hand over the remaining 25%. I refused as a matter of principle (the company was literally my full name plus "Inc.").

Now this new letter says that because I still own 25% of my old company, I have no right to start a new company doing the same business. That I somehow still owe a duty to my old company and that I'm illegally taking money away from it. There was nothing in the jugement (as explained to me by my lawyer) that said I had any duty to hand over all my money in the future or that I could never work in web design again.

[–]Manotika 72ポイント73ポイント  (0子コメント)

IANAL

You're an administrative nightmare. I think Stan might have grounds, since this could be considered as you co-owning a company, and creating a second one to compete with the first one. I've seen this scenario before in /r/legaladvice, and I've read enough to know that you're in hot water.

You should get a lawyer. Don't do the same mistake again, thinking that it will just go away. GET A LAWYER.

[–]wanderingtroglodyte 43ポイント44ポイント  (23子コメント)

A lot of these accusations depend on what your role in the company is and what duties arise from such role. It is likely that you and Stan are general partners - because I doubt the court cared to transform ownership into a useful corporate form for you. You still own 25% of the company, which means you have a fiduciary duty to the company. Your lawyer doesn't appear to know anything about corporate law. You have a duty of loyalty to your company.

You fucked up, big. I'm sorry. You need to get a lawyer who does corporate litigation. You need to fully transfer ownership of the company to Stan, and I would have him change the name of the company so that you could operate under your own name. You need to fully extricate yourself.

This is not an easy task. Get a good lawyer. Get a good accountant.

Never walk away from anything until you are fully released by a legally binding document. This is what happens.

Good luck. You absolutely need it. By the way, you almost definitely owe 75% of the money you have made to Stan if you are still the owner of a 25% stake of the company. This will be a very shitty case.

[–]faithle55 -5ポイント-4ポイント  (15子コメント)

You still own 25% of the company, which means you have a fiduciary duty to the company.

No he doesn't. The only owners of companies are shareholders, and shareholders don't have a duty to the company.

[–]syzmcs 12ポイント13ポイント  (12子コメント)

We need more information before we know for sure. Neither of you can really say if he does owe a duty or not.

[–]wanderingtroglodyte 1ポイント2ポイント  (1子コメント)

To be fair, I didn't make it clear enough I was using a fairly bad scenario as my jumping off point in making the analysis. In which he is a partner in a general partnership. If it is a corporation, we would need to see any documents to make a true analysis, including the knowledge of what position he holds - director, president, Vice President, something C-Suite?

I assumed a bad start based on how OP got to where he is - taking advice from people who don't know what they're talking about and not listening to those who do.

Best case scenario is that OP is a troll... and I hope they are right about now.

[–]faithle55 -1ポイント0ポイント  (0子コメント)

No worries. It's easy to fall into the layman's habit of referring to all business as a company, regardless of whether it's a sole trader, partnership, or any other commercial enterprise.

[–]youcanthandlethe 20ポイント21ポイント  (0子コメント)

You may be right, but generally allegations in a lawsuit are deemed true unless denied. So if you again ignore communications and he files suit, alleging what you've told us, you're going to get screwed... again.

You need a good business attorney to sort this out for you. Or go to law school.

[–]The_Original_Gronkie 3ポイント4ポイント  (0子コメント)

I was in a similar situation once. I was the founder of a company, we took on partners and investors who started to demand total control and declared that they would "manage" me, even though they didn't have a clue as to how the business worked. I spoke with a lawyer, and found that I could start a competing business (there was no non-compete/NDA, etc.), but not until after I had resigned my position as an officer in the company. I still retained my share of the business (which basically became worthless after I left, since I was responsible for 100% of the revenues and work), but I had no administrative or any other obligations to the company. In fact, it put me into an excellent position to make trouble for them had they continued to operate, as now I was a major stockholder, and the board of directors primary responsibility is to the stockholders. As president, the BoD was pushing me around, but as a major stockholder only, I could push them around. I didn't bother, because I was content with letting them crash and burn, but if they had recovered and made money, I would have been a major thorn in their side.

Your mistake was starting a new business without resigning your administrative post at your old company. That's a conflict of interest, even if your administrative post is only on paper, and doesn't include any real work responsibilities. As an officer of the company, you still have an obligation to act in the best interests of the company, and starting a competing company and bringing in clients that should be going to the business for which you are VP conflicts with that basic responsibility.

Your best bet at this point is to put your 2nd company into hibernation, resign your post at the original company, THEN start a 3rd, new, company. Perhaps put the new company in your mother's name, then you would simply be an employee of your mother. When you resign, however, make it clear that you retain your 25% ownership stake of Stan's company, and 100% of your 2nd company. Stan may try to collect the money you made when you operated a conflicting business, but perhaps you could trade a portion, or even all, of your 25% and 100% stakes for it and get out from under him entirely, and finally be free to operate your third company. However, IANAL, so spend a few hundred to talk to someone really competent before you embark on any plan.

It's a hard lesson to learn, but those are the lessons that stick the best.

[–]faithle55 6ポイント7ポイント  (5子コメント)

Now this new letter says that because I still own 25% of my old company, I have no right to start a new company doing the same business. That I somehow still owe a duty to my old company and that I'm illegally taking money away from it.

You really, really need to i) get a lawyer and ii) wise up about company law now.

There's no excuse you can make to yourself; if you're smart enough to run an internet business you're smart enough to figure out the need to ensure you're doing things properly.

If it's a company, then you can only own 25% of it by being a shareholder. Company law doesn't require shareholders to have any regard to the company's interests - it's the other way around. BUT most small companies have shareholders' agreements, and that's a different story. The only way the statements I quote could be correct is if a) there's a shareholders' agreement; b) you entered into an agreement to that effect; or c) the Court so ordered (c. is unlikely).

If the business was not a company, but a partnership (the other way you could own a 25% interest) then you are in deeper trouble, because a partner owes a fiduciary duty to his or her partners - which would include not setting up in competition.

Find internet resources about company law in Illinois; also partnership law; and/or order second-hand books from Amazon on the relevant areas of law; carefully peruse and comprehend at the Court order that ended the earlier proceedings; read it and WORK IT OUT. If there are phrases you can't understand, google the exact phrase. If there are any earlier written agreements, do the same thing with yours.

DO AS MUCH AS YOU CAN YOURSELF.

I only say this because i) you said you don't have resources for lawyers; ii) you told us about your mother who is unwell; iii) I've lost count of the number of clients who get into worse shit because they didn't have the gumption to sort things out at an earlier stage, when the problem was painful but not fatal.

Edit: Never ignore letters written in the course of business, even from an annoying douchebag. Read the letter, and then choose not to respond if appropriate.

Much of the above is for other redditors, rather than OP. This is for other redditors only.

Some of his post doesn't make sense. He says he was a freelance designer, and nowhere is there the slightest hint that his business consisted of anything other than him. He also doesn't even hint that 'Stan' was involved in his business until after a Court order.

So here's your question: of what value is OP's business to Stan, if OP isn't doing any work for that business? That being the case, why did Stan even want any share at all of OP's business? Why would a court order someone to give away 75% of his business to another person? - well, because Stan would be entitled to ¾ of the profits, and because the Court thinks OP ought to pay Stan ¾ of his profits, at least for the time being.

It's a little bit baffling.

[–]syzmcs 5ポイント6ポイント  (4子コメント)

DO AS MUCH AS YOU CAN YOURSELF.

This is really risky advice to be giving. With all respect to OP, from what I have seen in this thread I dont think he is in a position to be doing anything himself from this point onwards. Attempting to do so may result in him missing opportunities to get this sorted, and he cant afford to make that mistake again.

He needs to move heaven and earth to get a lawyer before he takes any further action.

[–]faithle55 0ポイント1ポイント  (3子コメント)

Thanks for pointing that out, gives me a chance to clarify. Apologies for not being clearer.

In writing that I meant only in so much as OP needs to teach himself about the background of law and procedure. At the moment he's too ignorant even to give useful instructions to a lawyer.

[–]syzmcs 0ポイント1ポイント  (2子コメント)

Absolutely...OP has got in this situation because he lacked even a basic awareness of business law. No doubt he will learn a lot by going through this nightmare, but if he is going to continue to run his own businesses I think he absolutely needs to proactively learn more about the law.

[–]faithle55 0ポイント1ポイント  (1子コメント)

Yup.

Him and 99% of people who run their own businesses!

[–]syzmcs 0ポイント1ポイント  (0子コメント)

I guess we all learn from our mistakes, and hope that our mistakes wont ever have the sort of consequences that OP is facing!

[–]flamedarkfire 1ポイント2ポイント  (12子コメント)

Did you register the corporation as an LLC, C corp, or S corp? You owning stocks in the company only makes you a shareholder, and with those types of corporations then your liability, and therefore responsibility, to the corporation, is limited. They may be trying to establish that you are still an employee/officer of the corporation, which would be easily disputed by subpoenaing their payroll (I assume for your work the customer paid the corporation and then you were paid through payroll, correct me if I'm wrong).

If you registered as a partnership or a sole proprietorship you might be up shit creek and have to just give up your 25% stake, though with the caveat that the corporation must change their name as it is your name and you are no longer associated with it.

Also keep in mind this is coming from a small base of knowledge from the entrepreneurship and business law classes I have taken. A lawyer in your area will understand the nuances of business law there better, and can collect this information a lot easier.

[–]thrownawayfreelance[S] 4ポイント5ポイント  (11子コメント)

It was a corporation. I might still have a title. After he took control he made a big show of demoting me to VP just to be an asshole.

[–]Eletal 37ポイント38ポイント  (0子コメント)

Wait if you're VP have you been receiving a salary? Being given work to perform or other duties? If not after such a long time that is constructive dismissal. Effectively you were fired. If they insist that you are the current VP I would ask for all wages due for that position.

Honestly this all sounds like a cluster fuck headache and you need a lawyer.

[–]flamedarkfire 8ポイント9ポイント  (0子コメント)

You really need to find out what type of corporation it is, and you need documentation of when you quit or were fired from the corporation. Someone else here might know more, but you really need a lawyer to sort these facts out. This is the difference between not being able to support your mother for a month or so, and not being able to support your mother ever again.

[–]faithle55 0ポイント1ポイント  (8子コメント)

How many employees and officers did this corporation have?

Three years ago you started doing freelance work and within that time you've: incorporated; employed enough people for the corporation to have a Vice President; landed a huge contract from 'Stan'; got into a huge row about that contract; ignored correspondence from Stan for so long that he issued court proceedings; had those proceedings determined by a Court order without notice; started a job 'in-house'; followed that by starting a new freelance business - which has been going long enough for 'Stan' to find out about and now threaten new legal action.

I'm baffled.

[–]syzmcs 1ポイント2ポイント  (7子コメント)

I get the impression that this was a 1/2 man company, and not really a serious business at all. Incorporating isnt difficult or expensive, so that doesnt necessarily indicate to me that this is a large company.

[–]faithle55 0ポイント1ポイント  (6子コメント)

Incorporating, no. But it's pretty wanky to be VP of a two-man company, IMHO.

[–]syzmcs 2ポイント3ポイント  (3子コメント)

It sounds like Stan created the position just for OP. Perhaps to make point.

As an aside, if OP knows that he was created VP for this company, it sounds like there was some level of communication between the two people. OP has fallen into this situation through burying his head in the sand.

[–]faithle55 -2ポイント-1ポイント  (2子コメント)

It sounds like Stan created the position just for OP. Perhaps to make point.

It could have happened exactly like that. My point is, why would you have a VP of a company with only two employees?

[–]syzmcs 2ポイント3ポイント  (1子コメント)

There are many reasons why a small company might use a variety of different titles. If a company has two employees, and one owns a smaller share than the other, it may be agreed that one will be given the title of VP in order to establish some corporate structure.

There is also some logic in using titles as a way of clearly dividing duties and responsibilities, or to create some structure that prepares for future expansion.

As in this case, it may have been done in order to show to the other person that they are no longer in charge.

I have seen lots of examples where kids that start companies get obsessed by titles which are largely unnecessary.

There is also some, perhaps misplaced, marketing logic behind giving titles which may indicate to a customer that the company is larger that it is.

My point is, a title like VP isnt reflective of the size of a company.

[–]thrownawayfreelance[S] 0ポイント1ポイント  (1子コメント)

I was the only employee. I incorporated because (ironically) a friend/colleague who does the some type of work said I could better protect myself through a corporation. Stan "appointed" me VP after he seized control of the company as a way to fuck with me. There were no VPs, employees, etc before.

[–]faithle55 0ポイント1ポイント  (0子コメント)

Hello, OP! Howzitgoin'?

Incorporation can be helpful, no question about that.

How did Stan get control of the company? A court order, right?

[–]warpus 1ポイント2ポイント  (25子コメント)

Will a judge usually rule against a person who does not show up, or are there exceptions? I've seen this referenced in this sub before, and it sounds like it's a default judgement that happens no matter what. But even in extreme cases of fraud, for example? Would a judge look at the case in front of him and decide whether it's reasonable enough or anything similar, or is a default judgement always the outcome when the other person doesn't show up?

[–]flamedarkfire 28ポイント29ポイント  (20子コメント)

When a defendant fails to show up to court then the judge only has the plaintiff's description of the events to go off of, and must therefore take them as the "truth" of the matter. Unless the allegations are wildly outside the realm of possibility ("defendant psychically assaulted me because he's a lizard person!"), or doesn't rise to the level of a tort, a default judgement against the defendant will generally be handed down.

[–]faithle55 8ポイント9ポイント  (0子コメント)

must

*may.

A judge is not obliged to assume the truth of any evidence or the correctness of any legal arguments merely because there is nothing contradictory being offered.

[–]Sasparillafizz 2ポイント3ポイント  (8子コメント)

I wonder if there is an exception for them physically not being able to show up in court. Car accident on the way there that leaves them in the hospital. Or detained by a police officer for something unrelated; I recall that (almost) happening with the guy with the fake western union stuff in another thread. If you can win by default in such a way couldn't you just arrange something to delay the opposition and win whatever you please without contest and no retrial?

[–]YouShallKnow 22ポイント23ポイント  (0子コメント)

Default judgments are generally easy to set aside if acted upon quickly. If op had filed to set aside the default judgment when he got the notice in the mail indicating he lost by default, he probably could have gotten the default judgment set aside and answered the lawsuit. Although he claims he can't afford to fully litigate the case.

[–]flamedarkfire 3ポイント4ポイント  (6子コメント)

That's actually generally how many (maybe not the majority, but still) cases are won. If the defendant shows up ask for an extension and a new court date. Keep doing this until either the defendant can file a motion against that, or the judge tells you to nut up and shut up, or until the defendant fails to show/respond and you can get a default.

I think actively trying to prevent someone from appearing is illegal, but someone with more knowledge than I might have a better idea.

[–]garethnelsonuk 2ポイント3ポイント  (5子コメント)

I think actively trying to prevent someone from appearing is illegal

If it isn't, that's a really fucked up legal system we have and it should be changed.

[–]ham4radio 2ポイント3ポイント  (4子コメント)

How would you prevent someone from showing up to court without violating criminal law?

[–]TheImmortalLS 0ポイント1ポイント  (0子コメント)

tell them to cash your money orders that are counterfeit /s

do things supralegal (is that a word?) and have something else come up that isn't forcing them to not show up, but causing them to have to choose between a choice and another choice (court). One bad example (that won't hold up) would be a client needing OP at 4 PM this thursday time sensitive, or OP will lose out on the lucrative $4000 contract.

It's a no brainer tbh, get default judgement against you or only $4000

[–]garethnelsonuk 0ポイント1ポイント  (2子コメント)

Arranging for them not to get notice sounds like it might be a civil matter, possibly.

Regardless, i'm pretty sure it IS illegal.

[–]ham4radio 1ポイント2ポイント  (0子コメント)

Wouldn't you have to tamper with their mail to do that?

[–]felinelawspecialist 1ポイント2ポイント  (0子コメント)

No notice, or improper service, is one of the most straightforward ways to unwind a default judgment.

[–]samili 0ポイント1ポイント  (9子コメント)

This seems crazy to me. What if there was a mix up I mailing. What if someone never got a notification? Do you sign something saying "yes I received notice of this court date"? I assume Stan just constantly does this to see if anyone just doesn't show. Do this enough times and you're bound to get sow thing right?

[–]YouShallKnow 9ポイント10ポイント  (5子コメント)

To initiate a lawsuit the plaintiff usually has to personally serve the defendant with it (i.e. have someone who isn't him hand the defendant a copy in person). This is called a proof of service and the judge won't grant a default judgement without it.

[–]samili 1ポイント2ポイント  (4子コメント)

Oh I never understood seeing that in movies and TV. I was always thought to myself, don't people have fucking email.

Still seems like a weird system. I wonder if there has ever been a delivery guy who's says they gave the papers, but just threw it in the trash.

[–]duck_of_d34th 4ポイント5ポイント  (2子コメント)

Here, marshalls deliver the papers. They are a type of LEO.

They knock on your door, hand you papers, say "You need to show up to court at this time," then leave.

[–]Reallypablo 1ポイント2ポイント  (1子コメント)

Here service is by sheriff or special process server. The sheriffs sometimes want LEO powers but our courts have consistently shot them down.

[–]duck_of_d34th 0ポイント1ポイント  (0子コメント)

Our sheriffs are parish (county for the non-louisianian) LEOs. The marshalls pack guns and can make arrests, but rarely do so. Mostly they just serve papers and handle court business.

[–]YouShallKnow 0ポイント1ポイント  (0子コメント)

Yeah, people fake service all the time. The person who was served can "quash" service of the document by filing a motion asking the court to do so. At the hearing, it's the serving party's burden to prove proper service. Typically, if you have a licensed process server, it's assumed service was proper unless the parting moving to quash service can prove otherwise.

[–]faithle55 1ポイント2ポイント  (0子コメント)

The US system is based on the English system, in which courts have been dealing with this for centuries, and have evolved a set of rules which are applied because their application will produce the 'most' justice.

I don't know exactly how it works in the US, but in the UK there are a whole series of rules on 'Service'. (Link for the terminally curious or just plain bored.)

For example, if you send a document by first class post, it is presumed to be served on the second business day. (Don't use Registered post or whatever, because there are no presumptions there because the recipient can simply refuse to sign. Do get a certificate of posting from a Post Office.)

Defendant can rebut the presumption. For example, by proving that your local sorting office was flooded, and you never received the document, or that you were on a 4-week cruise and didn't see it until you returned.

But if you find there was a default judgment based on documents that weren't effectively served, you can't just put that on one side till you feel like it. You have to follow the process to apply to set aside the default judgment, and there is a three-limbed test: 1) did you apply promptly once you found that things had gone wrong; 2) do you have a good reason for failing to respond to the service of the documents; and 3) have you actually got a decent defence (no point in granting your application to set aside only to have the decision confirmed at trial because your defence is bullshit).

[–]localbees -3ポイント-2ポイント  (1子コメント)

Depending on the judge, you can do different things to prove that you've attempted to serve the notice. A specific example my professor used was taking out an ad in a newspaper. You can leave a notice at their house. Basically, as long as you've actually tried, it's assumed that the person knows about the trial.

[–]TheImmortalLS 1ポイント2ポイント  (0子コメント)

Only if you can't contact them through other ways.

[–]eccitaze 9ポイント10ポイント  (0子コメント)

While you should never say never, in all practicality a judge is going to be pretty damn pissed that someone ignored the court and wasted his time. In top of that, the plaintiff can say literally whatever they want (up to and including flat out lying), because you're not there to refute their arguments.

After that, literally the only bar the plaintiff has to pass is "don't be so obviously crazy that the judge stops being pissed at the defendant." It's not exactly difficult.

[–]localbees 6ポイント7ポイント  (1子コメント)

You're more or less fucked. Basically, if the judge only hears one side of the story, that's the side they're going to go with.

[–]warpus 1ポイント2ポイント  (0子コメント)

Not that I ever would consider not taking a summons seriously (one thing I learned reading posts in this sub), just mainly curious about the consequences in extreme situations. Thanks!

[–]engineered_academic 4ポイント5ポイント  (0子コメント)

In the face of overwhelming evidence, barring an obscene misrepresentation of the material facts of the case, if the defendant has been served and chooses to ignore it, it is assumed to be the equivalent of "no-contest" pleas. Otherwise people could just continue to ignore process service and nothing would get done.

[–]youcanthandlethe 66ポイント67ポイント  (1子コメント)

Jesus, how can smart people be so stupid?

If I told you I had no money to design a website, I just wanted to do it myself, and then started asking about all sorts of complex features like online ordering, client access to accounts, you'd probably laugh at me.

And here you are, having been screwed over once already, about to half-ass your problem. You apparently own 25% of a legit company, and have some resources in loyal clients- ask around, find an attorney in your jurisdiction that will work on contingency or barter. DO NOT IGNORE letters or paperwork sent to you- that's what he's counting on.

[–]sanderson1650 8ポイント9ポイント  (0子コメント)

Yeah, sadly it sounds like while OP has learned the consequences of ignoring a lawsuit, he is now about to learn the consequences of not spending money on a lawyer. I don't get any indication from his responses that he intends to avoid a second colossal mistake.

[–]beholdmycape 13ポイント14ポイント  (0子コメント)

This is going to get really complicated, and really expensive to negotiate or litigate, but you can't afford to not have a lawyer a second time.

[–]syzmcs 27ポイント28ポイント  (2子コメント)

I'm going to save this for the next time I need to show the consequences of ignoring court papers.

Get a lawyer, otherwise you'll have no money at all to give your mother.

[–]itoddicus 4ポイント5ポイント  (0子コメント)

This is the correct answer. As a result of your carelessness he has you over a barrel, you can't afford to not get a lawyer.

[–]improperlycited 0ポイント1ポイント  (0子コメント)

In going to save your comment to remind me why I saved this post.

[–]bnned 6ポイント7ポイント  (0子コメント)

Stuff like this makes you remember just how important everything is, and that it can happen to anybody.

If you did show up to the lawsuit, couldnt you have easily won this or argued this if your contract covers early cancellations?

Good luck.

[–]m_o_l_d_y 5ポイント6ポイント  (0子コメント)

Bankruptcy lawyer here. Given your current financial situation and the fact that you already have a default judgment and don't have the resources to fight it, you should seriously consider a bankruptcy filing. A Chapter 7 case is typically quick and inexpensive and should discharge any liability you have towards Stan, assuming there are no fraud issues. I do not recommend you file a case on your own as you may have asset issues and other complications that only a consultation with an attorney will uncover. Stan may try to challenge your discharge but the reasons are generally narrow and typically revolve around fraud. It will at least give you a fresh start, stop any garnishments or executions and allow you to continue to live.

You may ultimately decide this option is not for you, but I think you should seriously consider it to get Stan out of your life for good. Most bankruptcy attorneys provide free consultations and many will work with you on a fee. Go to American Board of Certification: Bankruptcy and get a consultation with a board certified bankruptcy attorney in your area to see if this is the best option for you.

[–]briloker 3ポイント4ポイント  (5子コメント)

If you have no money, are you in cook county? Is the lawsuit in cook county? There are many law schools in Chicago and some of them may have clinics where third year students would be able to act as a pro bono lawyer with the supervision of professors. Might be worth looking into by calling the law schools and inquiring. You get a lawyer and they get experience in an interesting case. Northwestern, DePaul, John Marshall, and Loyola are all potential options.

[–]improperlycited 5ポイント6ポイント  (4子コメント)

Pro bono clients have to financially qualify. OP doesn't. He can afford a lawyer, it's just not a priority for him. That's not what pro bono is for

[–]briloker 1ポイント2ポイント  (3子コメント)

This isn't just pro bono, but I'm talking about a legal clinic at a law school using 3L students that haven't passed the bar, which might be interested in taking a corporate case. I'm not talking about a regular lawyer doing pro bono work, and even so I am pretty sure I could do pro bono work for anyone I want. Granted I have no experience with legal clinics at law school, so maybe you are correct that they will only accept a case according to some financial criteria. In any case, you can't assume OP wouldn't qualify since he states he has NO MONEY (although it could have been hyperbole).

[–]improperlycited 0ポイント1ポイント  (2子コメント)

When I was in law school we primarily took cases that had been referred by legal aid or another similar organization. That organization verified that the client financially qualified, but they didn't have the manpower to represent them. If someone came to us directly, then we had to verify that they qualified, using the exact same financial guidelines.

Law clinics are a service the law school provides to the low income community. It is also a great way to get experience, but there are way more poor people in need of representation than there are pro bono lawyers or law clinics. They aren't out searching for interesting cases to do, they are choosing which of the overwhelming number of needy clients they are able to help.

OP doesn't have no money, OP is spending all the money that they have. Big difference. If I decide to spend all my money buying a boat instead of paying for a lawyer, I don't just get a lawyer for free now. Spending it all on medical fees for his mother is more admirable than buying a boat, but no different in terms of financial situation: OP can afford a lawyer and is choosing to spend his income on something else. Pro bono is intended to provide access to the legal system to people who truly do not have access to justice otherwise. Unfortunately that just doesn't describe OP.

[–]choose_a_username-2 -4ポイント-3ポイント  (1子コメント)

Did you actually read OP's post? He has no money because he is paying for his mother's medical treatment that she would otherwise not be able to afford. Stop acting like he's just throwing money away and not deserving of assistance.

[–]improperlycited 0ポイント1ポイント  (0子コメント)

Reread my post and try again.

[–]engineered_academic 16ポイント17ポイント  (0子コメント)

You done messed up, seriously. You are playing in the big boy leagues and you are acting like a bush-league player. You have effectively lost your company and are acting in bad-faith against it. Did you have a lawyer review your contract? Did you even have a contract with a scope of work, or was it just "Do this website for me and I'll pay you x amount?" Seriously if you are going to continue in this profession at all after this is all over watch this and get yourself a decent lawyer. How people can go into business for themselves and ignore the most important part of CYA in business I have no idea.

[–]LouisSeize 6ポイント7ポイント  (0子コメント)

Is your lawyer a litigator? (That means one who specializes in trying cases.)

Did you discuss with your lawyer the possibility of reopening the default?

[–]RagdollPhysEd 7ポイント8ポイント  (0子コメント)

Oh man it's like the sovcit and the dog all over again. Except now it's a company

[–]AlexanderPasso 1ポイント2ポイント  (0子コメント)

You're not in a good position. Technically, since you are still an owner of the previous company by way of the 25%, you still have fiduciary duties (despite being a minority frozen-out shareholder) to the entity and your fellow shareholder.

You really need to speak with an attorney.

*No attorney-client relationship has been formed.

[–]81_iq 1ポイント2ポイント  (3子コメント)

Is there any way this poster can fight fire with fire? I mean start suing Stan himself?

[–]syzmcs 4ポイント5ポイント  (2子コメント)

What has Stan actually done wrong though? The law appears to be on his side.

[–]MrMediumStuff 1ポイント2ポイント  (1子コメント)

It turned nasty, he started badmouthing me to a lot of people

A case might be able to be made for slander and tortious interference.

[–]syzmcs 2ポイント3ポイント  (0子コメント)

Yes good point, that would be a potential. I would be very interested to hear Stan's side of the story.

[–]Lawsnpaws 2ポイント3ポイント  (2子コメント)

Get a lawyer.

Off the top of my head, no you do not have a duty to only use your skills for the company. He's basically using the fact that he has a lawyer and can bully you to get his way.

A lawyer will make grandiose claims in order to intimidate you into submission. Any claim no matter how tenuous will be brought to try and demonstrate you have no hope. So if he's right or not depends on the facts, the state law, and possible defenses that can be raised.

Personally, I would look to get rid of that 25%. I don't know about Illinois, I know in CA many non-competes are illegal, it could be different there.

[–]syzmcs 4ポイント5ポイント  (1子コメント)

Off the top of my head, no you do not have a duty to only use your skills for the company.

We simply do not know enough about the way the company was incorporated to be able to say this.

[–]Lawsnpaws 1ポイント2ポイント  (0子コメント)

True. I was going off of generality.

[–]itsmikeo 0ポイント1ポイント  (1子コメント)

IANAL --

Is he able to give his remaining 25% of the company to Stan (possibly in exchange for Stan to rename the company and to be released of all responsibility) and then start fresh?

Sounds like Stan plays a mean legal game...

[–]syzmcs 1ポイント2ポイント  (0子コメント)

Might be able to do so for a nominal amount...but it is unlikely that doing this alone will resolve the case.

[–]dediss 0ポイント1ポイント  (0子コメント)

It has already been said, but it is worth saying again, this is something you absolutely need a lawyer for.

You want to make this situation better, not worse. I wish you the best of luck!

[–]FailedTech -1ポイント0ポイント  (0子コメント)

You asked advice and was given it. Fighting people here doesn't change anything or what will happen.

[–]DoTheEvolution -1ポイント0ポイント  (1子コメント)

So can redditors around get over the default-judgment-happening and explain if he is currently in any real trouble?

got a letter from his lawyer saying that I’ve violated my obligations to my original company

letter is demanding that I hand over all the money I’ve generated from freelancing with my new company

It also says I’ve violated a non-compete by working in-house, I never signed or agreed to any non-compete because it was my own company.

Is there a case there? Of course we know the answer is get a layer, but educated opinion would be helpful and of course OP should get immediately a lawyer if he actually gets sued. But so far it is just a letter right?

[–]tegeusCromis 0ポイント1ポイント  (0子コメント)

"Worry about it when you actually get sued" is great advice when facing a frivolous suit, but not when facing one which is prima facie meritorious. Based on the demand letter and OP's own account of things, Stan sounds like he has a good case, so OP should act now, not later. In fact he should have acted to sort out this mess long ago.

[–]bluelouie -4ポイント-3ポイント  (0子コメント)

TLDR