Debt Collection and Accounting

CREDITOR’S RIGHTS AND DEBT COLLECTION

All parties to a written contract are expected to comply with the provisions of that contract.  When a commercial debt goes unpaid, the delay in receipt of payment can wreak financial havoc on the creditor.   When your business suffers financial harm because another company fails to live up to the terms of your contract or written agreement, you are entitled to exercise your legal rights as a creditor.  

The debt collection attorneys of Bellatrix PC take an ethical but aggressive approach to recovering commercial debts on behalf of corporations, partnerships, and limited liability companies.  We have extensive experience handling debt-related legal matters including but not limited to Chapter 11 bankruptcy, writs of attachment, writs of execution, foreclosure, garnishment, commercial liens, detinue, and replevin.  We focus on recovering commercial debts as rapidly and efficiently as possible, so that your business can keep moving forward with minimal disturbance.

To arrange for a private legal consultation with our experienced business attorneys, call the law offices of Bellatrix PC at (800) 889-8376.  The sooner you reach out to us for assistance, the sooner we can start exploring the possible routes toward resolution of your debt-related legal issue.

Does the FDCPA Apply to Business Debts?

Congress enacted the Fair Debt Collection Practices Act (FDCPA) in 1977 to better protect consumers against abusive debt collection practices.  The FDCPA prohibits, among many other tactics, calling debtors at certain times of day, using certain language, and communicating with third parties.  The FDCPA is further bolstered by similar laws on the state level, such as California’s Rosenthal Fair Debt Collection Practices Act (the “Rosenthal Act”), Cal. Civ. Code §§ 1788 et seq.

The FDCPA applies exclusively to the collection of consumer debts, and does not regulate business debt collection agencies or their representatives.  15 U.S. Code § 1692a provides the following definition of a consumer debt:

“The term ‘debt’ means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.”

Only debts which meet this criteria are subject to the collection regulations mandated by the FDCPA. That being said, commercial creditors must nonetheless take precautions to avoid engaging in abusive business debt collection practices.  For instance, members of the Commercial Collection Agency Association (CCAA) must comply with CCAA ethical criteria, or risk losing their CCAA certification.  

Our attorneys will help your company evaluate its legal options to determine the most appropriate and cost-efficient means of debt recovery available to you.

money collections and debt collection

 

Domesticating and Enforcing Foreign Judgments

If a judgment has been entered in a state other than California, it is considered a foreign judgment and must be domesticated in the state of California before it can be lawfully enforced and collected by the creditor.  Depending on the specific origin and nature of the debt, the creditor may be required to:

  • Domesticate a sister state judgment.
    • Cal. Civ. Code § 1710.10(c) defines a sister state judgment as “part of any judgment, decree, or order of a court of a state of the United States, other than California, which requires the payment of money, but does not include a support order as defined in Section 155 of the Family Code.”
  • Register a federal judgment.
  • Domesticate a foreign judgment.
  • Confirm a foreign arbitration award.

In accordance with Cal. Civ. Code § 1710.15, judgment creditors are required to apply under oath for the entry of a sister state judgment.  The application must be filed in a superior court, and must include, among other components:

  • A statement confirming that the judgment is not based on a statute of limitation which has already expired.
  • A statement confirming that no court has ordered a stay on the judgment which would interfere with enforcement and collection.
  • A statement confirming that no pending actions are ongoing in any other courts.

Once the judgment is properly registered and domesticated, it becomes a California judgment.  The judgment becomes enforceable once it is served on the commercial debtor, and the creditor may obtain a writ of execution within 30 days.  The debtor has 30 days to file a motion to vacate the judgment.  Due to the short deadlines which are involved in these types of cases, it is essential for creditors to be proactive and seek legal assistance as soon as possible.  

You’ve already rendered a product or service – now you deserve to be paid for your time and effort.  If your business has suffered financial losses because of another company’s failure to pay the debts which you are rightfully owed, our creditors’ rights attorneys are prepared to take aggressive collection and enforcement actions on your behalf to protect your financial interests.   

If litigation is not desired, we are also qualified to assist your business with alternative dispute resolution in a mediation capacity.  In some cases, mediation proves sufficient to effectively resolve the collection matter.  To start discussing your business debt issue in a confidential consultation, call the experienced legal team at Bellatrix PC at (800) 449-8992 today.

 

What do you need to know about Equal Pay laws?

woman ready to take notesWith the current surge of women’s rights issues in the news, equal pay laws have been receiving a lot of attention. As an employer, you should be aware of both state and federal laws governing this area.

For example, California Labor Code 1197.5 prohibits the payment of wages at rates less than the rates paid to employees of the opposite sex in the same establishment if the job requires equal skill, effort, responsibility, and similar working conditions. Different pay rates may be allowed where they arise under a merit or seniority system, a system which measures earnings by quantity or quality of production, or a differential based on any factor other than sex (or else be faced with a sex discrimination lawsuit). The Federal Equal Pay Act is nearly identical to the California Statute.

Due to these laws, lawsuits regarding an employer’s failure to enact equal pay laws have steadily been on the rise. Typically in these cases, the focus is on the work product and qualifications of the employee filing the lawsuit versus the employee/gender of employees who are receiving better pay. The greater the disparity in pay, the more justification the employer will have to prove for such a disparity.

Judgments for these cases typically include not only the recovery of any wages lost  but also liquidated damages. A party bringing such a suit may also recover attorney’s fees in a private action to enforce this section.

As a result of these laws and the recent Lilly Ledbetter Fair Pay Act which essentially resets the statute of limitations to file a discrimination lawsuit with the receipt of each new paycheck, class actions lawsuits are steadily on the rise. These can be very painful suits to defend. They are long, time consuming, comprised of multiple former employees and a lot of work. The fallout of such a lawsuit can be both devastating to you personally and to you business.

At the risk of being redundant, employers should audit their workforce!  I’m going to keep saying it until they start doing it.  It’s the best way to protect and defend against these types of suits.  Remember that these lawsuits start with the big companies and slowly work their way down to small companies, so you aren’t safe simply by virtue of the fact that you have 20 employees instead of 20,000.  Many of my clients know this by personal experience.

If you want to know whether you are at risk for an equal pay lawsuit (or any other lawsuit), sign up today for a free Business and Employment Law Planning Session, or contact our employment law attorneys at (800) 449-8992 for a consultation.

Medical Leave and Disability Laws Still a Source of Confusion

sick dogThrough our blog, we always want to keep you up to date on new laws and/or cases that will affect the way you do business.  Today’s post is on an old topic that still creates huge liability problems for employers every day. If I were to make a Greatest Hits List of the top employment law mistakes that businesses make, Medical Leave/Disability Accommodation mistakes would top my list.

Here’s a common scenario: you have a California employee on a medical leave for some type of illness or disability.  The leave can be for any condition, ranging from depression to cancer to a bank injury to pregnancy complications. Generally, the employee begins taking leave for a serious medical condition under the Family Medical Leave Act (“FMLA”) or California Family Rights Act (“CFRA”).  In this common scenario, the employee has taken and exhausted their allowable leave under these acts.  The employee is unable to return to work at the end of that leave and needs to remain on medical leave.

WHAT NOT TO DO: Do NOT summarily send the employee a letter from Human Resources, stating something to the effect of, “You have exhausted your FMLA/CFRA leave and are unable to return to work.  Therefore, we are terminating your employment.”  This is a common mistake that even large companies make.  Let’s refresh your disability laws savvy.

Why is this letter so devastating for your business?  Because the leave laws are different than the disability accommodation laws. Sometimes the disability laws require longer leaves, even if the leave laws have been satisfied. If your Human Resources personnel misses doing a disability accommodation analysis, that letter is going to be answered with a lawsuit for disability discrimination.

In my practice I have seen this occur an astounding number of times. The worst part of this scenario is that the best evidence the plaintiff employee will have against you will be the letter from your HR Department that basically admits you terminated that employee because of a medical leave of absence or because of their disability.

Writing letters such as these is like putting a bulls-eye target on your business.  You might as well just send out a flyer to Plaintiff’s lawyers that says, “Please sue me and use the smoking gun document that I just sent out to my former employee to prove your case.”  Plaintiffs’ lawyers salivate when a disabled potential client brings in such a letter from their former employer. And disability discrimination claims are the largest category of discrimination claims brought by both the EEOC and plaintiffs.

WHAT TO DO: Instead of sending such a letter, what you should and must do, if an employee is unable to return to work after exhausting their FMLA/CFRA leave, or even if they do not qualify for FMLA/CFRA leave in the first place, is to turn to an ADA analysis.  A disability is generally defined as any condition that interferes with a major life activity, which includes interfering with working and sleeping.  This definition is very broad and encompasses most health conditions.  The law was expanded in recent legislation and is constantly growing to include new conditions and facts. A disabled employee can ask their employer for an accommodation for their disability, and they are entitled to a reasonable accommodation, as long as it does not create undue hardship for your business.

If your employee requests an accommodation for their disability, such as a leave of absence, you MUST engage in the interactive process with them. This means, simply, having a dialogue with the employee (and potentially their physician) on how you may be able to accommodate their disability.  Then, it’s your duty to provide a reasonable accommodation for their disability. A leave of absence of reasonable length (which is sometimes well beyond a few months) has been held by courts to be a reasonable accommodation.

And even if your employee does not request accommodation, but simply states that they cannot work, the onus is on the employer to begin the interactive process. Once you are on notice of a potential issue, you must act to comply with the law.

This is only a snapshot of these rules, and there are other intricacies.  As you can see, this is clearly not a simple analysis to perform and having lawyers involved who are well-versed in the application of these laws is extremely helpful in your attempt to insulate yourself as much as possible from liability.

SUMMARY: The lesson to be learned here is to make sure that your HR personnel and business managers are knowledgeable that there are numerous laws that apply to disabled employees who are on medical leaves of absence.  Employees on medical leave have a great many rights, and to take steps toward terminating an employee who is on medical leave, you must jump through all the hoops under Americans with Disabilities Act (ADA) and you should document this process well.  Protect yourself by preparing yourself with evidence to defend a disability discrimination case that may be brought later.  Do this by documenting the interactive process and your attempts to accommodate the employee.  When you find yourself in this situation, involve a lawyer and go through these steps meticulously.  Disability discrimination cases, if successful, can have a lot of jury appeal and be very costly to your business.

Class Actions

CLASS ACTIONS

“Class action” is a pretty scary term. We hear about these types of cases constantly in the news, usually accompanied by a quick blurb about how a company is paying out millions of dollars in judgment or settlement. But what exactly are class actions and why should the everyday, small business owner be concerned?

At its most basic, a class action is a type of lawsuit in which the claims and rights of several people are decided in a single case. Most plaintiff’s bringing the action are never named in the suit, except a few to act as the “class representatives” whose names will appear on all pleadings filed with the court. Class actions can be wonderful because they allow people whose damages are too small to bring an individual lawsuit to try their cases together Further, sometimes class actions are the only practical way to stop illegal practices. Historically, class action suits have allowed individuals to stand up against the most powerful industries nationwide for deceptive practices and procedures. However, class actions can be detrimental, driving many companies out of business.

Class actions are filed in numerous areas of law, ranging from securities violation suits, product liability and consumer actions, to employment class actions. Employment class action lawsuits are typically brought on behalf of employees of a company for violations such as unpaid overtime, failure to provide breaks, to workplace discrimination.

Why it’s Important to Contact an Attorney at the First Sign of Trouble

As a small business employer, it is important to know how class actions work and how they could harm your bottom line. It is also incredibly important to know how to avoid them altogether.

First, class actions are like a regular lawsuit but on steroids. There are multiple plaintiffs, typically between 30-50 individuals. This means that litigation can quickly get out of hand with investigative work, i.e., discovery. It’s extremely easy to be buried in paperwork early on defending a class action. You will want to retain an attorney immediately and come up with a detailed litigation plan to attempt to eliminate any “sprawl,” essentially streamlining the case down to only what is needed. It’s extremely easy to not see the forest through the trees so to speak in a class action suit. Not having a litigation plan in place early can cost you and your business thousands of dollars.

Second, class actions are incredibly expensive to defend. Remember those 30-50 typical class members I discussed above? Each one of those individuals has claims against your company. There is a lot on the line for you defending a class action. You will want to hire an attorney knowledgeable about class actions and the area of employment law. Because employment law deals with a lot of statutory fines that are already established, it is easy to get an idea of how much a potential judgment could be early on. It is also important to realize that in most situations, the Court must approve any settlement you agree to with the parties. Meaning, if the judge doesn’t think your proposed settlement is “fair enough” for the class action members, he can send you back to the drawing board. Knowing and understanding these issues is vital to any small business owner.

Third, class actions can be pending for years. With the Court budget reductions nationwide, cases are sometimes lingering for several years before ever being heard for trial. Thus, a class action can be the rain cloud over your head for as long as four or five years.

Given all of this, business owners should take proactive steps to ensure they are not hit with a potential class action. Follow all labor codes within your state. You will want to make sure all employees are accurately paid all wages owed and taking all proper meal and rest breaks. This list is not all inclusive as there are numerous labor codes. Having an attorney who can guide you through the employment law landscape before you get served a class action could save you millions in the long run.

If Your Business is Involved in an Employment or Litigation Issue that Could Turn into a Class-Action, Our Attorneys Can Help

If you are unsure whether or not you might be exposed to a potential class action, take the proactive approach and contact Bellatrix PC today at (800) 889-8376 for peace of mind.

How to Talk to a Reporter

woman with mega phoneWe’ve all heard the saying, all press is good press.

That’s probably true if you are a celebrity. But if you are a small business, consultant or professional, media can be either a blessing for your business getting you tons of exposure and new customers… or a terrible, bad Yelp-review spawning curse that lives forever on YouTube.

I’ve had more than one client call me after getting surprised with a “consumer reports” type news piece that harmed their online reputation.

I learned through “trial by fire” to deal with the press in 2012 when I defended multiple lawsuits against the Libertarian Party’s Presidential candidate. During that time, I learned how to do press releases and was interviewed by reporters. Now, I’m a regular on a San Diego political radio show called The Andrea Kaye Show on AM 1170.

Politics and press go together like peanut butter and jelly. Business is also a popular topic for the press.

If you get an opportunity to speak with the press, you should grab it. (But never speak to the press about lawsuits or criminal charges involving you!)

Here is a strategy to make talking to reporters effective PR for your business or career.

Step 1: Frame the Story

There’s a saying that you should take to heart. “If you are explaining, you’re losing.” In other words, if you get pounced on by a reporter who is placing you on the defensive, the story is not going well for you.

What you want is to shape the story. Reporters need something interesting that will engage their readers on a gut (i.e. emotional) level. This is called a “news hook.”

Make it easy for the reporter to share your words and see your point of view. The easiest way to do that is to create a “bad guy” who is not you. This doesn’t need to be another person or business.

Here are some appealing “bad guys”:

  • The government (local, state, federal)
  • Taxes
  • Regulations
  • Politicians
  • Foreign competition
  • Big business

Step 2: Highlight the things you are trying to do to help people but are prevented from doing because the “bad guy” is in the way.

Step 3: State that you are willing to dialogue or compromise with the “bad guy” because you are a nice, reasonable person. This will give you credibility. Even though you have pointed to someone or something else as the villain in your story, you won’t be a hero if you aren’t nice.

Step 4: State the public benefits of your position.

You need a message for why your position is the just position — and not just for you but for the reader, too. For example:

  • “I just want to save the people of XYZ town as much money as possible on their lawn care but the new tax on landscapers is preventing me from doing that.”
  • “My goal is to offer everyone the opportunity to have affordable lawn care but the City legislature won’t let me because of this new tax.”
  • “This tax will kill the beautiful landscaping that has been the hallmark of our city. It just makes me sad our children won’t be able to benefit from this tradition.”

Repetition is your friend. If you hit the same message 7 or 8 times in a 10-minute interview, the reporter cannot ignore it.

Bonus Advice: remember that nothing is “off the record.”

Even when the interview is friendly, presenting a story in this way makes it much more likely that you will be quoted extensively and presented favorably.

How Do I Find The Right Attorney For My Business?

Find An Attorney You Can Trust.Hiring a lawyer is a major purchase for most people or businesses. After all, a lawyer costs thousands of dollars and is handling some of your most difficult problems.

Learning how to hire the right people in any position is an art form. Hiring the right lawyer for you (or any professional, such as a doctor, dentist or accountant) is no different.

In fact, because there is much to say on the topic, I have created an entire five post series on the topic, called, fittingly, “How to Hire a Lawyer.”

For those of you who want the 60-second cliff notes, though, here’s a video. It’ll give you a place to start, but I still recommend signing up for the five post series in your inbox.

Video Transcript:

How do I find the right attorney for my business?

How do I find the right attorney for my business?” That’s a great question. The best attorney for you is someone who understands you, your business, your goals and strategies, and is someone whom you trust. You can research attorneys by checking with the state bar, looking at their website, reading articles or blogs they may have posted, or watching their videos. When you are ready, interview the attorney and do not be afraid to ask how they would deal with your most vexing problems. The attorney should interview you back, to understand your needs and determine whether they are someone who can genuinely help you. Go for an attorney who listens to you, understands your problem, and exhibits honesty, compassion and wisdom. Got more questions? Visit us at bellatrixlaw.com for more answers or to schedule a consultation with one of our business law attorneys or real estate attorneys, depending on your situation.

You can get more of Alicia Dearn’s videos and helpful insights on her YouTube channel.