Business Law: Q&A

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Legal Questions?!

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Today's questions have been answered by Mark Russakow Esq.

The topic of this post is Business Law. Please feel free to leave comments on this post and we will try to answer them in a timely manner.

Question:
I work for a manufacturing subsidiary of a larger distribution company. I was given access to the distributor's customer database to assist my work. I have printed their customer list with contact names and numbers and parts list and have given this info to a friend who is starting a competing company. Is this a crime? They knowingly gave me access. What if I take the info and use it myself?

Answer:
You have some issues that may be a problem. The customer lists may be called a "trade secret" and you also may be sued under the uniform trade secret act or Business and Professions code section 17200 for unfair competition. You and your friend should NOT use this list. You do not go to jail, but you can be sued in civil court for lots of money. Not a good idea to use this list.

Question:
I have sued a defendant in small claims for colliding with my car while it was parked and causing damage to it. Her insurance co. has refused to pay my damages.

Can her insurance co. defend her at the small claims trial? Or must she defend herself?

Answer:
No. She must show herself as lawyers are not allowed in small claims court unless they are representing a corporation. She is not a corporation, and the insurance company is just paying the coverage, and is not the defendant.

Question:
we have an employee that was since fired. we want to file a claim for misappropriation of funds. he was with us for 5 months and took 4 weeks of vacation and overpaid himself $3500. he was an interim president so signed his own checks.

how much can we sue him for? just the value of the amount stolen or damages as well? jail time? this is in response to a frivolous claim he is filing against me.

Answer:
You can sue him for breach of fiduciary duty as the president of the company. As an officer, he must not take funds from the company and he breached his duty.

Question:
We just discovered that One vendor that we are about to sign a contract with is a CA corporation and his corporation status is Suspended. What does it mean if we sign a contract with such a vendor. Do we the client corporation, land in any trouble?

Answer:
It means the corporation is not entitled to be afforded the protections of California Law. You will not get in trouble, but I would have the officer of the corporation sign as an individual. Usually suspension happens when corps fail to pay the yearly fee. It can easily be fixed by paying the state the fee.

Question:
We filed a lawsuit for breach of contract. It's been 30 days and the defendant has not responded. I was told that in CA, as a courtesy, we wait another 15 days before asking a default judgment because otherwise, judges are not inclined to accept the default. Is it true? thanks

Answer:
Well you can request a default at 30 days, but usually the defendant will answer a few days later and make your request moot. Most courts do give a little slack. So I guess there is no rule about 15 days, but generally a good idea if you do not want to waste time and money.

Question:
I am starting a general partnership with two friends, one of whom has a history of debt. Could debt collectors come after me if I am linked to this person through our business? Could money be taken from our business to pay his debt?

Answer:
It depends. If the judgment debtor attaches an asset in his name and it is being used by the business yes. Also they can try and get his part of the partnership. So, you need to be careful how you take ownership of assets and the bank accounts. It is risky.

Question:
Wife owns a business with a partner. We are obtaining a divorce. She won't give me any info of profit and loss except a loss to our income tax person. Am I liable for this & how do I get released from liability?

Answer:
Once you file for divorce each side must turn over documents as part of the process or the court will order her to do so. You are responsible for actions she took during your marriage and any liabilities unless you had a pren-up or the liabilities are backed by her separate property during marriage. You absolutely should be entitled to this information.

Call or email us, we are here to help! mrussakow@rrjlaw.com or 626.683.8869