M Design Vehicles rode the food truck wave earlier in the decade but left a trail of lawsuits, debts and angry customers in their wake. Max Schulte
How can they get away with this? What do I do now?
A six-month Democrat and Chronicle investigation revealed that Rochester food truck builder M Design vehicles has accepted tens of thousands of dollars in deposits from customers and has not delivered completed trucks in a timely manner.
Their aggrieved customers wonder whether they have any recourse. They also wonder how the company could still be in business, and apparently not in trouble with the law.
The answers come down to New York state law. When a business is registered as a limited liability company (LLC), a corporation or another form of business, the owners may not be personally responsible for much of the company’s debt and legal actions.
► D&C investigation:Food truck builder burns customers nationwide
A business can run into financial trouble even with the best of intentions, explained John Ninfo, a retired federal bankruptcy judge, speaking in general terms and not about M Design in particular. Economic conditions can change, bad decisions can be made and a major project can go awry.
Two business owners paid a combined $66,500 in deposits to M Design Vehicles for fabricated food trucks and then never received a truck. D&C reporter Sarah Taddeo tracks down the missing trucks. Max Schulte
Business owners may face criminal or civil fraud charges if their intent was to defraud. An example: “There becomes a point and time when it was clear this business wasn’t going to succeed. Now they take a deposit for goods they know they never can deliver. That’s fraudulent," Ninfo said.
M Design Vehicles started doing business around 2012 and became a corporation in 2014. While co-owner Maggie Tobin acknowledges the company owes more than $170,000 in taxes, legal judgments and deposits, the company is capable of moving forward, she said.
What are the options for aggrieved food truck owners, or for anyone who feels like they have been wronged by a business? There are several, but all have limitations.
1. File a report with local police.
The Singh brothers paid $42,500 to have M Design Vehicles build a food truck. Months later they still don't have a truck or their money back. Max Schulte
Three of M Design’s customers called 911 and requested a Rochester Police Department report during the summer of 2017.
The report indicates that Officer Brian Cala had contacted Assistant District Attorney James Egan and was told that more than one victim would be needed for a scheme to defraud. The Rochester Police Department and District Attorney's Office declined to comment about the status of any investigation.
2. File a complaint with the state attorney general.
Three food truck owners submitted complaints about M Design Vehicles to the New York state attorney general’s Bureau of Consumer Frauds and Protection, according to documents obtained via a Freedom of Information Law request. (Two are included in the investigative story.) Two truck owners received form letters stating that the office does not intervene in private disputes between businesses.
3. Submit a review or complaint to the Better Business Bureau.
Reporters Tracy Schuhmacher and Sarah Taddeo invite readers behind the scenes to explore how they approached their six-month investigation and reporting into M Design Vehicles. Olivia Lopez
The Better Business Bureau (BBB) is a nonprofit institution that helps mediate disputes with businesses. Its website can be useful for checking out a business. But until the Democrat and Chronicle called the BBB's western New York office as part of this investigation, the bureau did not even have a listing for M Design Vehicles. The call triggered the bureau to make inquiries to M Design, but M Design did not respond. M Design now has a listing with no rating, and BBB's website indicates the business' lack of response to BBB's inquiry.
In January, the regional website posted a complaint from a business which stated that M Design had not paid six invoices dating as far back as May 19, 2017, despite repeatedly promising to make payments.
4. Go to small claims court.
Food truck owner Joe LoPresti discusses the condition of the truck that he took back from M Design Vehicles after repeated delays on its construction. Max Schulte
Individual and sole proprietorships may go to small claims court for cases involving as much as $5,000; the fee in New York is $15 to $20 and a lawyer is not required.
Erica Pratico, co-owner of Roadies Diner, went this route in Massachusetts to recover the costs of a $2,000 repair to its truck. The court found in her favor. But Pratico hasn't received payment, despite promises from Tobin dating back to August 2017. Tobin said she had paid Pratico but has not offered proof of payment.
5. Get a private lawyer.
Several truck owners have retained attorneys. M Design Vehicles also has its own attorney who is helping the company respond to customer disputes, tax liens and so on.
The food truck owners' attorneys have offered similar advice: that a lawsuit against a company with no assets will be costly and ultimately fruitless. That may be the case with M Design, which has relocated its base of operation from an expansive production facility on Norman Street to a small office on State Street.
The bottom line: The trucks may have come to the end of the road when it comes to options.
“That’s the kind of risk that people take when they are in business,” said Ninfo. “Sometimes they just don’t work. Because not everybody is honest. And sometimes businesses fail."
TRACYS@Gannett.com
STADDEO@Gannett.com
More:Mistakes to avoid if you want to start a food truck
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