Saratoga News

Photograph by Robert Scheer

Jeremy Launier of San Jose checks the fictitious business files for his computer consulting business. His new company, Aardvark Computer Consulting, specializes in diagnosis and recommendation of PC systems for home users.

Entrepreneurs say state law on business names is flawed

By Cecily Barnes

Two Saratoga entrepreneurs say they are victims of an imperfect state law that requires business owners to file fictitious business name statements with the county clerk's office.

Reneigh Erickson, owner of Argonaut Glass and Mirror, and Carl Orr, owner of Colour Shoppe Interiors, paid at least $60 to be the exclusive owners of their company names. But their money didn't guarantee anything. Although they'd followed the rules and registered properly, records show that a colleague laid claim to the businesses' names because no one bothered to check his application--or theirs.

State law requires that all fictitious business name statements be filed at the county clerk's office. Before registering, business owners are asked to look up the fictitious name they want to use to make sure no one else in the county is already using it. If no one is, they pay a fee of at least $60 to register and publish their fictitious business name. Business owners must refile every five years, shelling out another $37.

However, these regulations apparently do not guarantee business owners the sole right to the registered name, unless they can afford to pay for litigation.

Erickson and Orr run their businesses out of a small center on 12361 Saratoga-Sunnyvale Road. Four days after Erickson moved in on April 15, 1995, a neighbor in the same shopping complex went to the county clerk's office and filed as the fictitious business name owner of Argonaut Glass and Mirror. Records show that Steve Martin Mull, who ran his own business, Total Health, also claimed to own the name Colour Shoppe Interiors.

Unaware of Mull's actions, Erickson and Orr pursued cordial relations with their neighbor over the ensuing six months.

Just before Mull backed out of his lease in October, he let folks at another business in on his secret: He had registered fictitious business names for Argonaut Glass and Colour Shoppe Interiors. They told Erickson and Orr, who said they cannot explain Mull's actions.

Orr speculated that Mull was bitter that his storefront was the least noticeable in the complex. Erickson suspects Mull blames her for complaints filed against him via her phone. But Mull was unreachable for comment, and no one knows exactly what his motive was.

Regardless of why Mull claimed the two business names, Erickson, Orr and others are asking how he was able to do this, and what sort of recourse is available to them.

Mull, who has disappeared since terminating his lease, was unreachable for comment at press time. But he apparently followed the county clerk's regular procedure of searching microfiche for the name, then registered with the clerk.

"When [business owners] come into file their fictitious business name, we tell them to look on the microfiche. We say, 'Do not use [a name] if it is already there,' " legal clerk Arlene Burdick explained. "But if they bring it to us, all they have to do is pay the filing fee, [and] we have to file it."

The clerks do not double-check to see if the fictitious business name is already in use because it is not part of their job. "It is the legal obligation of the applicant to insure that their name is not one that violates any business regulations," said Kathy Smith, Deputy Court Executive. "This is not the filing of a patent; it is only a registration to show who the business owner is. The emphasis of the whole thing is to have on public record who really owns a business."

Hence, business owners would only know that someone else was using their name if they happened to stumble across the information. And then, their only legal recourse would be to litigate.

Clerks at the Santa Clara Superior Court insist they have never heard of this sort of thing before. Being the registered owner of a fictitious business does not give you legal right to the business itself, only the name. And a name without a business isn't much, they point out.

Orr went to the court and refiled Colour Shoppe Interiors under his own name. Erickson changed her business name to Argonaut Glass and Windows. Neither has opted to pursue legal action.

Mull is under investigation by the Santa Clara County Sheriff's Department for an unrelated offense. He is accused of changing a sales slip to reflect a higher price. The Sheriff's Department has been unable to locate him.

"At this point, I have a misdemeanor complaint [against Mull] and will be filing it through the court in order to get a warrant," Detective Luther Pugh said.