No attorney can accurately answer your question based on those facts. There is no definitive answer. It depends on too many different things. Sorry.

The best I could say is take a very aggressive posture with them w/o being a dick, then cut the best deal you can. If you have an attorney friend who could write them something on firm letterhead, that would probably help.

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What a drag it is getting old. -- Stones

While tri-direwolf has it right - check it out with a real attorney, I thought part of the deal of an S-Corp is to protect against personal liability for circumstances like this. It sounds somewhat suspicious to me, not that they're trying to take advantage of you, but more along the lines of mixed numbers, dates, and owed amounts.

"am I personally liable in any way for paying this bill?"

direwolf is right. about all i can say is that to find out the answer to this question (i.e., get a judicial determination of liability) will cost you (and the insurance company) a lot more than 3g.

My advice however would be to not immediately adopt an aggressive posture or send letter from atty. I would first play mr. i'm a nice and reasonable guy trying to do what's right here and this must be a silly mistake. It may work and if not then you can always turn up the aggression, eventually bringing out the "I will be forced to refer the matter to my attorney" line.

Also, be sure to follow the appropriate formal procedures for turning this bill into a "disputed bill" to toll any late fees, penalties, etc. (should be outlined in insurance company fineprint). Then you are in a good tactical position as the status quo is you not paying any money.

Good luck!

Thanks for the advice. I've been playing Mr. Nice Guy, as well as Mr. Shocked guy (this bill is a total surprise).

I thought that, unless it's a case of peircing the corporate veil, shareholders aren't liable for a corporation's debts nor could legal action be brought against a corporation's shareholders?

The first thing you want to do is call your agent and dispute the audit.

Andy

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Andy

'You'd be surprised how many people violate this simple principle every day of their lives and try to fit square pegs into round holes, ignoring the clear reality that Thinsg Are As They Are.'

Let me add something, this is the kind of stuff I do. Unless you signed a personal guaranty I doubt they have much a case against you personally. If you went through the proper procedures in dissolving your corp, then I think you are OK. Were there any assets left in the company that you distributed to yourself upon closing? Feel free to email me direct at pschmidt@tilfordlaw.com if you want to talk a little more in depth.

I think most worker's comp/health insurance policy's have provisions that allow for audits up to 12-18 months based on actual claims/experience. The formulas should be pretty standard and unfortunately, this type of adjustment happens all the time. I've had some in the company's favor and some swing the other way. If the formulas were in fact wrong, maybe request a reaudit.

I am not an attorney, but even though the corp may be disolved - you can still be named in a suit and the retainer alone would probably be at least $3K. As an owner of the corp - if you go to get insurance again, you will most likely experience problems; people may not want to insure you.

Good points above, but some additional food for thought:

Try to work it out in a manner that makes business sense for you, but if it cannot, perhaps you consider drawing the line in the sand. The first question is whether an insurance company would really pursue you for $3,000. Insurance companies typically hire lawyers, and the question is whether they would incur the expense when legal fees will eclipse the amount at issue. Do you know whether your insurance contract has a legal fee provision in it? While we cannot give you legal advice based on the facts above, my gut tells me you would not have exposure on a personal level given that the insurance was, I guess, in the name of a corporation (please tell us you did not take it out in your individual capacity!). The insurance company would have to "pierce the corporate veil" to get to you, which is a difficult standard requiring some proof of fraud or commingling, depend on the state law where you reside. The insurance company will know this, and that should be a factor in their decision regarding suit.

The second point is that you likely can defend youself, and therefore not have to come out of pocket for counsel. Most states have jurisdictional limits on what division of the court you end up in. In Florida, at least, an amount in dispute of $5,000 or less places you in small claims. You do not need legal counsel in small claims; the process is specifically designed for citizens to seek redress, and defend themselves, without incurring the expense of legal counsel.

The great thing about small claims court is that they send you straight to mediation. No trial proceeds until mediation fails. So you get right back to the point of trying to resolve the matter in a business-like way. Most small claims cases settle this way. Hopefully your state has procedures like this.

Feel free to PM me if you have any questions.

Robert

As others have noted, this is a bit like Tom D. doing a bike fit over the phone without knowing your measurements or the bike.

That said, I join with the sense of thread. Remember, it will cost you in terms of time and money to work through the process, so decide what your time is worth and evaluate the claim accordingly.

Finally, as Bluemonkeytri does this sort of thing as his day job, have a chat with the guy who knows it. Hopefully he is in the same state as you.

Good luck

Thanks for the reply, Robert. I appreciate your thoughts.

The insured named is my corporation (not me). Furthermore, the $3,000 bill they sent me is calculated incorrectly. In reading their audit statement, upon initial issuance of the policy, they calculated my premium based on my payroll projections. They then, upon performing an audit, they used my gross sales numbers as payroll numbers (gross sales were about twice as much as payroll) to come up with their figure (good for them, bad for me). I suspect that, once corrected, the actual *bill* will be closer to $1,500, which may help matters even more.