Can I sue my business partner and change my small claims amount?
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Can I sue my business partner and change my small claims amount?
I’m a minority shareholder and I want to sue my business partner who is a
majority shareholder in the LLC business we have. He has breached the fiduciary
duty operating agreement by not informing or consulting me on business
decisions. He has not given me any updates on the business activity when I
asked him. He has used the company checking account as his own personal
checking account. I asked for last year’s income tax return and he has not
provided this information to me. I do not know what he is doing as far as the
business goes because he ignores my text messages and phone calls. He barley
responds to my email. The claim is 5,000. I originally filed a small claims for
5,000 and he got served. He admitted he did me wrong in a text message. When I
invested in the company I took out a credi card to invest 5000 with interest at
20.24. When I filed 5,000 I did not incorporate the interest I’m paying. Can I
change the claim amount to 6,000 even after he got served for 5,000? Also the
contract said I invested 5,000 but does not mention it was a credit card
investment. Can I still sue him for 6,000 including the interest now? What are
my chance of getting 6,000 if we go to court? All I have is the credit card
statement with the interest. He said he’s not responsible for how I invested
the money but he knew I used the credit card to invest into the business and I
let him use the credit card to pay for the business activities when I went on
vacation. He does not want to pay interest on my credit card investment. I
don’t want to lose my original 5,000 he admit to paying back if i go for 6,000
with the judge.
Asked on July 8, 2018 under Business Law, New Jersey
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
1) You can't amend or change a small claims complaint (you generally can in non-small claims court). You could voluntarily dismiss your current case "without prejudice" if you've not had the trial date yet then refile for a different amount ("without prejudice" means you can refile).
2) If he violated either the terms of an operating agreement or his "fiduciary duty"--or duty of honesty, reasonable care, and good faith owed by one business owner to his co-owner(s)--you could sue based on, as applicable, breach of contract and/or breach of fiduciary duty.
3) To win a lawsuit, you'd need to prove in court by a "preponderance of the evidence" (more likely than not) that the breach you accused him caused you to lose the money you are suing him for--that is, that the wrongful act(s) he committed lead to you losing the $5,000+.
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