Here Ye, Hear Ye. The Court of Public Opinion is now in Order

KevinP73 · 07:10 PM

XXX Body Shop operates as an L.L.C. with two Members. Member A held a majority interest in the business. Member B, obviously held a lesser percentage of the business. One day Customer Joe brought his car in for repairs (consisting of major rust repair and a total refinish along with some upholstery work) ,paid for services as milestones were reached and the project advanced. Before the project was completed Member B terminates his interest and participation in the L.L.C. and Member A (holding the majority interest) retained all the elements of XXX Body Shop, including personnel, and moved to a separate facility. It was agreed between Member A and Member B that Member A would retain Customer Joe's car, complete it and receive payment for the balance of the project. Customer Joe's car was eventually completed and Member A received payment for services rendered and Customer Joe took possession of his car.
A short time later (well within any expressed or implied period of warranty) Customer Joe becomes aware of a couple details that he is not satisfied with. Customer Joe makes Member A aware of these imperfections and asks what can be done to correct them. Member A states that he would be willing to address imperfection #1 but is unable to address both as imperfection #2 involves refinishing part of the car and that he (Member A) is not capable of painting due to the absence of technical ability and the lack of proper facilities. Member A suggests that Member B should accept the responsibility of imperfection #2.

Here is where the question arises. To what extent is Member B responsible for warranty work on Customer Joe's car?

Zeke · 06-22-2012, 04:16 PM

When one of the partners is a lawyer, you're screwed. Should have never gone into a partnership with a lawyer that can't paint. Sounds silly, but you're feeling the result in reality.

schamp · 06-22-2012, 04:18 PM

Partner B isn't. Partner A took customer in the deal along with the car. Finished car, etc. Partner B can do the job and get paid by Partner A or Partner B can do it for good will. Which, good will is out the door already. my .02 and worth even less.

Gogar · 06-22-2012, 04:18 PM

Partner B is not responsible for any warranty work on the car. Partner A "assumed responsibility" and collected the balance.

If Partner B is a 'nice guy', maybe he can give Partner A a reduced rate for the fix, but it's up to him.

Superman · 06-22-2012, 04:20 PM

Good question.......

stomachmonkey · 06-22-2012, 04:24 PM

Partner A bought the problem.

McLovin · 04:55 PM

Quote:

Originally Posted by KevinP73

Before the project was completed the partnership is terminated and Partner A (holding the majority interest) retained all the elements of XXX Body Shop,

You use different terms that are not compatible, "LLC" and also "partnership."

Assuming it is a partnership, from a legal perspective, I think the quoted sentence above is the key.

When you say "retained all the elements" does that include "retained all of the liabilities?"

If the deal were structured properly, the agreement where the partnership was terminated would expressly say that A retains all the liabilities, AND he also would agree to indemnify B against any claims.

If it is an LLC, the LLC structure should protect A and B from any personal liability. I.e., the customer only has a claim against the LLC and LLC assets, not against A or B personally.

So, if after the termination of the business relationship between A and B, B would be gone from the LLC. A would be the only remaining member of the LLC. (The "owners" of an LLC are called "members," not "partners"). Any claims against the LLC would have to be handled by Member A. B is no longer a member of the LLC. Former Member B can tell current Member A to pound sand.

From what it sounds like, though, A is going to claim that there is some sort of "side deal" where B agreed to perform the work, even after B is no longer a member of the LLC. So, A will seek the best of both worlds. He gets full control of the LLC's *assets* (including collecting for all the work done on the car), while trying to pawn off the *liability* to B. Seems like a lowlife position to take, but it sounds like that's the type you're dealing with.

KevinP73 · 06-22-2012, 05:47 PM

Ok I corrected the wording. Thanks

Zeke · 06-22-2012, 06:01 PM

Quote:

Originally Posted by McLovin

Seems like a lowlife position to take, but it sounds like that's the type you're dealing with.

If you knew........

Maybe not a low life since I am acquainted with both parties. But let's just say one of the members has a lot more "business" skills and the other has the skills required to run the production side of the business.

You all know Kevin does awesome work. Take it from there.

McLovin · 06:54 PM

Well, the good thing is Kevin seems to have inertia on his side on this one.

I.e., he can simply say "pound sand," and someone would have to do something to move him off that position.

Even in disputes, objects at rest tend to stay at rest.

john70t · 06-22-2012, 07:19 PM

I'd re-read everything McLovin wrote.
Not a lawyer but the customer would have a difficult time with https://en.wikipedia.org/wiki/Piercing_the_corporate_veil of Member B, especially after leaving.

Have to file with the state to CYA: When a Member Leaves an LLC

bell · bell's Garage

Quote:

Originally Posted by stomachmonkey

Partner A bought the problem.

this.......it's pretty cut and dry.

Rick V · 06-23-2012, 02:54 AM

If the issue is a result of Partner B's work, then Partner B should make good on it. Just in a stand behind your work type of situation. If the work in question was done after the partner split then it is on Partner A to find someone to correct the issue and make Customer A happy.
The end result should be a happy customer and who makes it that way is really doesn't matter to Joe.

on2wheels52 · on2wheels52's Garage

re "A.......while trying to pawn off the *liability* to B........"

I'm an expert in that area.
Jim

Zeke · 06-23-2012, 08:18 AM

Quote:

Originally Posted by Rick V

If the issue is a result of Partner B's work, then Partner B should make good on it. Just in a stand behind your work type of situation. If the work in question was done after the partner split then it is on Partner A to find someone to correct the issue and make Customer A happy.
The end result should be a happy customer and who makes it that way is really doesn't matter to Joe.

I don't think you caught the drift. Kevin is P B. He did not paint the car from what I'm reading. Whoever did, messed it up. If Kevin did it in the first place, that's one thing. But it sounds to me like P A took it somewhere to have it done as he didn't have the facilities. Now you have a third party (P) involved who is apparently not going to redo the work.

It can get complicated. Joe's car was started when A and B were in business. The car was finished by A with P. I can see the writing on the wall from here. P is blaming B for poor work under the paint.

People are like that.

Here's where Joe stands. "A" better have had an active repair licence on file or he was acting as an illegal shop when he took over the car. If he did, the State will iron this out....eventually. They are way understaffed these days.

KevinP73 · 06-23-2012, 09:13 AM

Quote:

Originally Posted by Zeke

I don't think you caught the drift. Kevin is P B. He did not paint the car from what I'm reading. Whoever did, messed it up. If Kevin did it in the first place, that's one thing. But it sounds to me like P A took it somewhere to have it done as he didn't have the facilities. Now you have a third party (P) involved who is apparently not going to redo the work.

It can get complicated. Joe's car was started when A and B were in business. The car was finished by A with P. I can see the writing on the wall from here. P is blaming B for poor work under the paint.

People are like that.

Here's where Joe stands. "A" better have had an active repair licence on file or he was acting as an illegal shop when he took over the car. If he did, the State will iron this out....eventually. They are way understaffed these days.

Not exactly. I didn't "pull the trigger" on the gun but I did oversee every step of the restoration while I was a member of the L.L.C.. I haven't seen the defect in question so I can't say what the problem may be. It may not actually need to be re-sprayed, but then again it might. It is obvious from the customers standpoint that he shouldn't have to ask twice for the defect to be addressed.
From my standpoint, I'm still trying to survive the huge mess that partnering with Member A has caused. Financially I know it's not over, although keeping my doors open is a day to day struggle here. Anybody in their right mind would have pulled the plug long ago. Emotionally it's been devastating, losing the business I started 20 years ago to some low life that doesn't know which end of the screwdriver goes in the slot has been hard to swallow.
Personally I feel like I've had enough stolen that I'm not going to give more away that I'm not obligated to.

Rick V · 06-23-2012, 01:25 PM

Whatever defect there is should be corrected by who ever caused it. I'm just a black and white kind of guy in matters like this. I may be old school but I still believe in trying to make a happy customer.
If paint guy says it is an issue of the prep or repair then Paint guy didn't look at the car before he started to blow the color.

john70t · 06-23-2012, 06:02 PM

I'm assuming the break has already happened and the paperwork over with.
Even if not, keep track of everything with photos, etc.

The grass is greener around the corner and there will always be demand.

Probably enough has been said online. The situation(anguish) has been presented clear enough.
I'd suggest using PMs with individuals from now on, and wish you the best.

Zeke · 06-23-2012, 06:26 PM

Quote:

Originally Posted by Rick V

Whatever defect there is should be corrected by who ever caused it. I'm just a black and white kind of guy in matters like this. I may be old school but I still believe in trying to make a happy customer.
If paint guy says it is an issue of the prep or repair then Paint guy didn't look at the car before he started to blow the color.

A lot of painters won't paint unless they do the prep. Last car I did I prepped until only one prime coat, a guide coat and final sanding was needed. They stripped the car and started over costing twice what it should have been. The car in question got steel flares. I quit doing body work then and there. Why bust my balls when no one will trust my work?

But, I really can't blame the painter. That is unless he was out to just make a ton of money. If he cared, he would have asked me what I used and how I used it. We now live in such a suck world that having anything done is a major hassle.

Ol' Joe here just wanted to avoid the hassle I'm sure. Then his company of choice goes awry. Kevin, you might want to take a look just to gain back a customer and a future reference. That might be what real car guys do.