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Archive for the category “Musings: General Practice”

The Secret Defense to Debt Collection Matters

Unfortunately, many people find themselves in a situation where they get behind on paying their bills and, due to lack of funds, wind up not paying some of them.  Not paying one’s bills will more often than not result in that debt being sold to a collections agency and that agency suing the debtor for payment (and adding on all kinds of things, like interest, attorney’s fees, penalties and the like to boot).

Selling one’s debt to a collection agency is an important step in the process that directly affects the subsequent lawsuit against the debtor.  Typically, large lenders – especially lenders like credit cards companies – have a fair amount of debtors who stop paying (for whatever reason) on the debt owed to the lender which results in their debts being sent to collections.  When these lenders send debts to collections, they do so by selling the debts to a collection agency.  When they sell the debts to a collection agency, they will often sell the debts in bulk, often for pennies on the dollar.  The transaction benefits the creditor as it gets something for the debts owed without having to pursue costly and time consuming litigation.  The transaction benefits the collection agency because it can pursue collection (including law suit) against a debtor for the full amount despite having bought the debt for far less than its principal value, let alone its value inflated by interest and such.

More often than not, when debts are sold to collection agencies, the initial creditor (e.g.: a credit card company) simply provides an affidavit to the collection agency regarding the amount of the debts and the names of those who owe the debts.  Typically, no other document is supplied by the initial creditor to the collection agency, including any contracts with the debtor or anything bearing the signature on the debtor.  Once the collection agency assumes the debt, it has the right to bring suit against the debtor for the unpaid debt.

The lack of documentation of the contract with the debtor is absolutely key to any defense to the collection of the debt.  If the creditor brings suit against the debtor in the Court of Common Pleas and does not attach the contract between the debtor and the creditor which underlies the alleged debt, the debtor can file objections to the complaint (the document which initiates the law suit) asking for it to be dismissed due to the lack of a contract.  I can say, from personal experience, that such a tactic works as, very often, the collection agency pursing the debtor simply does not have the underlying contractual documentation to prove its case against the debtor.

If the case is brought in small claims court, the creditor does not have the obligation to include a copy of the contract to the complaint, so successfully defending against a collections law suit takes some shrewd strategy.  The lack of documentary evidence is still a huge problem for the creditor, but the small claims aspect of this matter makes the approach different and much trickier.  As the complaint does not require the contract to be appended to it, and the primary place for these matters to be resolved is at a hearing before a judge, the creditor has the procedural advantage.  At the hearing, the collection agency, armed with an affidavit from the initial creditor (as described above), secures almost all of the other evidence it needs to win against the debtor through the debtor’s testimony.

Here is how the hearing would play out: the creditor describes the claim to the judge, which is that the debtor had a contract with a credit card company (for example), he did not pay the debt owed, and is now in collections and all of this is supported by the affidavit.  Now, the affidavit, taken alone, is insufficient to win the case as there is no evidence that the debtor actually contracted with the creditor.  So, at the appropriate time during the trial, the creditor will ask the debtor some questions (i.e.: cross-examination).  These questions will be something like: “did you have a credit card from XYZ company on these dates”?  “Did you make charges on it?” “Did you make all the payments on it?”  “Do you owe $XYZ on the credit card?” And other questions like it.  At the end of the examination, the debtor himself provides all of the evidence against himself that the creditor needs to win the case against him.   As a result, the creditor will win the case against the debtor thanks to the debtor supplying all of the evidence, via his testimony, need by the creditor.

So, how does a debtor avoid the fate of the debtor in the above scenario?  That is where a good lawyer comes into play.

The Philadelphia Parking Authority, Street Justice, and a Land Yacht

I have had a fairly minor neighborhood dispute that, I think, is worth sharing here.

Back in September 2015, Pope Francis visited Philadelphia.  Around that time a motorhome appeared at the corner of my street.  I assumed that it was there to accommodate a pilgrim to see the pope.  I did not think much of it aside form the fact that the motorhome was over three car lengths long and called a “Land Yacht” – which, judging by its size – was more of an accurate descriptor than just a catchy euphemism.

Now, it is worth noting that Philadelphia City Ordinance does not permit motorhomes to be parked on a city street for more than thirty days at a time (see here).

A few months went by and I noticed that the Land Yacht remained parked on the street.  I was, quite honestly, annoyed, but it did not go much further than that.  On average, I only passed it once per week, so it went out of my mind a lot, but, as the weeks went by, I would take note of its presence time and time again, and the fact that it started to look like an eye sore sitting on the street indefinitely started to grate on me.

In March 2016 my uncle came to my house and complained that he could not find a parking space.  Now, parking is at a premium in my neighborhood on a good day, but a perpetually parked motorhome that exceeds three cars in length eats up a lot of potential parking spaces!  My uncle’s plight in finding a parking spot was the last straw for me.

I could not discern the motorhome’s owner, however I did note that its stickers were up-to-date, although it did have Florida tags.  I also noted that one side of the street had a sign which read “No Truck Parking” while the sign which hung on the other side was gone.  Once I collected information from the motorhome, I called the police (specifically the 8th precinct), the Philadelphia Parking Authority (PPA), and Philly311.  I also tried to recruit my neighbors to do the same, but I do not know if they did.  I received different responses from each person I called and not a whole lot of cooperation.

When I called Philly311, they were pleasant and took my information and promised a response within about thirty days.  They insisted that they would have to treat the motorhome as “abandoned,” but I am not sure why because, as I tried to explain to them, the motorhome did not appear abandoned, but is parked in violation of City Ordinance.  The person I spoke to was unfamiliar with the ordinance and continued treating the matter as an abandoned car matter.  When I was asked where the motorhome was, the 311 person required an address.  I gave a street crossing as the motorhome was really not parked in front of a house.  Strangely, the street crossing was insufficient for 311 – which is weird because street crossings are a standard way to identify a location in a city – and I had to spend 5 or 10 minutes google mapping the area to get an address.

I called the police who, like Philly311, were totally unfamiliar with the City Ordinance cited above.  The officer I spoke with asked if the motorhome was illegally parked.  As the officer was also unfamiliar with the ordinance, he did not think it was illegally parked, so he, too, pursued an abandoned car angle as well.

The PPA was easily the worst of the three.  The people I spoke with when I called the police and 311 were pleasant, listened, and promised to do something (although what they were going to do was unclear).  Each time I called the PPA, the person who answered the telephone was rude and seemed annoyed at the fact that someone called.  They, needless to say, had absolutely no idea what the City Ordinance had to say.  I tried to explain how the motorhome was taking up a lot of parking spaces illegally, but the explanation really did not go anywhere.  The PPA was uninterested in looking into the matter.  Furthermore, when asked where the motorhome was – in a neighborhood in the Greater North East – the PPA told me that it does not enforce “all the way up there.”  Now, mind you, the Greater North East is part of the City of Philadelphia, so I see no legitimate reason why the Philadelphia Parking Authority would not enforce in all parts of the City.  The only reasons I can think of for a lack of enforcement in the Greater North East is because the revenue in Center City is much greater (so it assigns more people there and too few elsewhere), and my neighborhood is filled with police, firemen, and other city employees and the PPA does not want to ticket them.  Finally, when I complained a little louder, the woman I spoke with told me that “times are changing” and the PPA cannot tow all the cars it needs to tow, so I should get my own tow truck and simply tow the motorhome myself.  When I told her that I am just an average and ordinary citizen and not empowered to, basically, steal and/or damage someone else’s property by towing it myself, she insisted that I could as things “are changing.”  Thankfully I did not act on her advice.

Each place I called asked what the motorhome looks like.  Obviously, that question is completely expected and normal.  What is not normal is the precision they required – colors, plate numbers, and such.  The motorhome is enormous and the only one on the block and when one goes on the street, it is pretty obvious which vehicle is the motorhome.  Annoyingly, this was insufficient for their purposes.  I imagine all three were filling out a government form and did not know, how to think, quite literally, outside the boxes on the form they were using.

Philly311 told me it needed a thirty day turnaround time.  So, I did not call them back after I provided my report.  I called the PPA every three days.  I called the police twice per week.  In fact, as I had a dentist appointment during this time – and my dentist is across the street from the police station – I made a pop in on them too.  Whenever I called either the PPA or the police, the person I spoke to had almost no information for me.  When I popped in, however, the police officer I spoke with was familiar with the matter and insisted it was in process.  It was about this time I noticed the “No Truck Parking” sign looked to have been removed.  So, armed with that information, I called PPA again, and reported an illegally parked car (illegally per parking signs this time and not an Ordinance with which no one was familiar).  The person I spoke to took down my information without argument, and said the PPA would look into it.  About this time, the motorhome’s tags changed from Florida to Pennsylvania.  Coincidence?  Doubtful.

So, a month later I suddenly get a picture-text-message from my wife of the street.  Land Yacht free!  No fanfare.  No warning.  Suddenly, as quickly as it arrived, it disappeared.  No one called me to tell me it happened.  I never saw police or PPA in my neighborhood casing the streets or the motorhome.  Nothing.  One day there and the next day gone.  All it took was collecting a lot of information, and being a thorn in the side of three government agencies (police, 311, and PPA).  I have no idea which agency made it happen or when it actually happened.  I just know it did.  It “only” took about five weeks of effort to make it happen!

This whole process just highlights how difficult it is to get something very minor accomplished in the City, as so many of its employees are some combination of disinterested, lazy, rude, and/or ignorant.  The responses I received from the PPA were just shocking.  The police and 311 were, at least, nice and tried to accommodate.  The PPA was just rude, and telling me that they do not enforce in my neighborhood is ridiculous, and telling me that I should tow it myself was just beyond the pale.  The PPA should be ashamed, but, of course, it seems proud of itself.  So much so that television shows are made about it (see here).

So, I guess the moral of this story is this: if you have a problem in the City, call as many agencies as possible, wade through their collective ignorance, rudeness, laziness, stupidity, and/or inflexibility, and be annoyingly persistent to ensure that they actually do what they are supposed to do and/or indicate they will do.  Making sure that they know you will not go away goes a long way.  The squeaky wheel got its oil and the Land Yacht has shoved off for other, hopefully more appropriate, waters.

The Rise of the Man Child

Over the course of my career I have seen a rather strange trend among men which is conspicuously absent among women, and that is what I call the “man-child.”  I am not exactly sure what the sociological explanation is for the gender difference, and perhaps my sample size is too small (though I doubt it as my office has had hundreds of clients over my 12 plus year career), but it is definitely pretty much a male thing (in comparison with the dozens of man-children I have encountered, I have dealt with maybe only two women who I would describe as “woman-children”).

What is a man-child?  A man-child is a chronologically adult man who continues to act like, and get treated like, a child by the woman in his life, and he seems to accept (or desire) this willingly.  The woman in his life is sometimes his wife, or girlfriend, or even his mother (strangely, I have never seen a “man-child” with another man playing the role of the aforesaid women).  Now, don’t miss read me, this is not some sort of “male power” post or a post about appropriate gender roles and Christian male headship or something like that.  Not all.  This post is about grown men who are, basically, children and need the woman in their lives to mother them and control their lives.  I was inspired to write this post due to the realization that man-children seem to be multiplying at an alarming rate.

Let me give you some examples.  How about the grown man, and father of children, who needs help with a custody case regarding those children?  Seems typical enough at first blush until you find out that my main client contact about his custody case is his wife (who is not the mother of those children) who also pays for his case and is the person who contacted me to represent him.  By “main client” contact, I don’t mean because he works during the day and she is the stay-at-home mom and more available to talk to me.  No.  I mean main client contact in that she does all the talking, provides all the information to me, conducts the email correspondence with me, and makes the custodial decisions at home for a child that is not even hers.  When I call or email the father, his wife returns the call or email.  When I ask him to make decisions about his case, he has to “check in” with his wife.  When fees are due, he needs to use her check or credit card.

How about a case involving debt collection?  A grown adult man owes money to a credit card and got behind on payments.  It happens to the best of us sometimes for various reasons.  This man is sued and needs representation to help him against the credit card company.  Who calls me?  His wife.  Not because the man is tied up with other obligations but because he has ceded the responsibility for his life to her.  She is the one who was my main point of contact.  I tried to negotiate an agreement in the case and it was the wife who approved the language to it.  She stated that she does not let her husband make any decisions like that anymore and he seemed to simply accept it.

Another example is a case involving a man in his early 40s who may have fathered a child a few years ago.  The issues of custody, support, and paternity are all on the table.  Who retained me?  The man’s mother.  Who does all the talking?  The man’s mother.  Who makes the decisions?  The man’s mother.  You get the idea.

Another thing they all have in common is the the “follow up” call.  Many times, especially for that last one, I try and call the man on his telephone (who is the client after all)  but he never picks up, so I leave voice mail messages for him.  Who calls me back?  The mother/wife/girlfriend on her telephone.  Obviously he knows I called him and listened to the message I left but then, instead of calling me back to discuss the case, called the woman in his life, told her what I said, and had her call me back.  Perhaps my favorite is when I actually do have a conversation with the man – indeed sometimes an extended conversation – and after we conclude the call, the woman in his life calls me about an hour later to have the exact same conversation with me.  Why?  Because the man “can’t be trusted” to actually process what we discuss.  Or she wants to “check in” to make sure the man follows or at least considers my advice.  Or “he never listens” and needs her to ensure he does what he is supposed to do.  Or she needs to make sure she “hears it right” because you just never know how he will relay the information.

I wish I could say that the above examples are due to a healthy division of labor between husband and wife.  Or a dutiful mother helping her disabled son.   Or, perhaps to at least explain it, some sort of overpowering matriarchy or something.  Indeed, none of these examples are derived from manipulative men who control the women in their lives to do their “dirty work” for them.  These are all adult men who, basically, still need their mommies to control their lives or, as a substitute for dear old mom, they find women who, although technically “wives” and “girlfriends,” are basically mothering them.

I am not sure why this phenomenon is happening.  Maybe my practice just attracts men like this.  Somehow I doubt that is the case.  I decided to write on this because I feel that the sheer number of man-children I encounter cannot be a coincidence or bad luck.  I probably would not have written this post were it not for the fact that others in my office – some of whom are very different from me ideologically – have noticed the rise of the man-child as well.  I think the fact that women are rarely in a comparable position to be quite telling.  I also think the fact that the “actual adult” in the life of these man-children is nearly always a woman to be telling as well.  I think greater study needs to be done but I think much of this reflects some disturbing trends in our society, such as the decline in manhood, the decline of the nuclear family, the rise of sexual promiscuity, and the lengthening of male adolescence.  Maybe it is due to something much less dire.  I just do not know.  Over the ensuring weeks, months, and years I’ll see whether this trend continues.  Until then, all I can say is that I hope these men someday grow up, if only for the sake of their children (especially the boys who look up to them as fathers) who are still actually children.

Comic Books, Geek Life, and Trademark & Copyright Law Pod Cast

Anthony Verna, Esquire, a reputable copyright lawyer in New York, is the host of a podcast called The Law and Business Podcast (you can find it here).  He recently had me on as a guest on his podcast to talk about the various intellectual property issues surrounding comic books and movies based in comic books.  This seems especially relevant as the enormous blockbuster Avengers: Age of Ultron is about to be released in theaters this coming weekend.  I get the feeling that I was asked onto this podcast because I am such a huge comic book nerd as opposed to any legal expertise, but be that as it may I really enjoyed my time and I think we covered a lot of interesting topics, both legal and nerdy!

You can listen to (and hopefully enjoy!) the podcast here.

Jack Kirby v Marvel – the Comics Lawsuit Has Settled

Jack Kirby is one of the greatest comic book illustrators and innovators of all time.  Though arguably his most influential work was co-creating Captain America in the 1940s and working with Stan Lee in the 1960s when Marvel Comics reinvented itself in the so-called “Silver Age,” introducing characters like the Hulk, Thor, the Fantastic Four, the X-Men, and so on, he also worked with DC Comics (most significantly creating the Fourth World characters and concepts) and others.

Jack Kirby died in 1994 but his heirs have taken to the Court against Marvel to protect what they think are their property rights over Kirby’s creations which, now with the advent of extremely popular superhero movies, especially since 2000, have become extremely valuable.  This matter was slowly but surely climbing the judicial ladder to the United States Supreme Court however a last minute settlement deal, practically on the steps of the Court, resolved the dispute between Marvel Comics and the Kirby family.

This matter has been litigated for a number of years and involves some fairly complex intellectual property law.  You can learn more about this matter here, here, here, and here.

The Gavel’s Greatest Hits

Last week one of my friends sent me a Facebook message of a rather humorous court opinion which got me thinking of some of my favorite court opinions which I will share here.  I hope you enjoy them as much as I do.

When a judge makes a decision, particularly at the appellate level, he will often accompany his decision with an opinion.  An opinion is a judge’s extended explanation, which generally includes a recitation of a case’s  facts and procedural posture, of his legal analysis to demonstrate how and why he made his decision and what led him to make such a decision.  Sometimes, either because the judge is particularly snarky or funny, or he wants to point out just how preposterous the underlying case is, or he wants to make commentary on the case, attorneys, and/or parties involved, or maybe just because it is fun, a judge will draft an opinion that is funny and/or irreverent and/or sarcastic and/or bombastic and/or otherwise notable and worth reading even if one has no interest or need in the case itself.

One of my all time favorites opinions I read in my law school contracts class.  It deals with a guy who saw this Pepsi Cola advertisement regarding accumulating Pepsi points in order to earn various prizes:   In the ad a kid earns a jet after accumulating 7 million Pepsi points.  I think the ad is obviously in fun and the jet also obviously not an actual prize, but that did not stop someone from accumulating 7 million Pepsi points and suing Pepsi Cola for breach of contract when Pepsi refused/failed to give him the jet he worked so hard to earn.  The court, which of course ruled in favor of Pepsi, entered a hilarious opinion when it did so, which you can find here in the case of Leonard v. Pepsico, Inc., 88 F.Supp.2d 116 (S.D. New York 1999): Leonard v Pepsico Inc

Another fantastic opinion was written by the Pennsylvania Supreme Court.  The case dealt with the free speech implications of banning the book Tropic of Cancer on the basis that it is obscene.  The Court ruled that banning the book violated the right to free speech as guaranteed by the First Amendment of the U.S. Constitution, but not before Justice John Musmanno entered one of the most memorable dissents ever written, in the case of Commonwealth v. Robin, 421 Pa. 70 (1966).  You can find it here: Com v Robin

Sometimes the attorneys in a case are so incompetent that a Court feels the need to take note of that while making its decision, perhaps because the Court is bitter about doing the legal leg work it feels the attorneys should have done in the first place or wasting its time with a very poorly developed case.  In the case of Bradshaw v. Unity Marine Corporation, 147 F.Supp.2d 668 (S.D. Texas 2001), the Court hilariously castigates the attorneys for both sides for their inadequate legal work.  You can find it here: Bradshaw v Unity Marine Corp Inc

Another great case involved a real estate matter where a purchaser wanted to rescind an agreement of sale based on suspicion that the house being purchased is haunted.  This is the case of Stambovsky v. Ackley, 169 A.D.2d 254 (1991) and can be found here: Stambovsky v Ackley

Of course, lots of other websites have their own “best ofs” which you may enjoy.  Check them out here:

I hope you enjoy these as much as I do!

 

Judges are People Too (unfortunately?)

People come to court rightfully expecting an unbiased judge who will review their cases thoroughly and logically using established, known, and predicable laws and legal principles.  Unfortunately, judges are just as human as the rest of us and, aside from human error, what often happens is that people encounter judges who, right before arriving in court, got into a fight with their spouse, or got into a traffic jam, or were up all night with a baby, or spilled coffee on their pants before robing, or heard a particularly bad/exacerbating/annoying/&c case right before one’s own, or what have you.  Just as frequently, people encounter judges who had a great breakfast before taking the bench, or received a nice awaited call from their son or daughter, or hit all of the lights on the way to court, or had a great cup of coffee, or had good night of sleep is now feeling refreshed, and what have you, right before taking the bench.  Similarly, some judges are nice, easy going, and understanding while others are short tempered, crotchety, or impatient.  Who knows?  Being just as human as anyone else, judges, though generally unintentionally, bring their lives, experiences, moods, preferences, and feelings to the bench along with their law books and training.  Although precautions are taken, ultimately there is no way around the fact that the judge making decisions in a particular case is just as human as the parties and lawyers in front of him.

One of the cases I was handling recently saw the variables a judge can bring first hand.  I represented a party to a finalized divorce who was owed alimony (and other monies).  The other ex-spouse (“ex-spouse”) was to pay my client a certain sum of money each month over given period of time in order to repay my client for sums taken and kept during the marriage.  The payments just described were part of a contract (i.e.: a Property Settlement Agreement) and enshrined into law as a Court Order.  No one disputed the legitimacy of the contract or Order.

As it turns out, the ex-spouse did not make any of the payments owed.  My client, being understanding and not wishing to litigate, tried to work with his ex-spouse on the payments, especially as the ex-spouse’s income declined for a few months (though it was restored eventually).  Frustrated that nothing was paid, my client, using me as his attorney, filed a petition for enforcement of the contract.

A hearing was held on the above-mentioned petition.  The judge at the hearing found that the ex-spouse made none of the payments required under the contract.  I thought this meant victory for me and my client.  Instead, the judge inquired into the ex-spouse’s “ability to pay” on the contract.  I argued that this was irrelevant; a contract is a contract and my client is owed funds from the ex-spouse, especially as they were in lieu of a formal marital property division.  The judge was unpersuaded and scheduled a follow up hearing for the ex-spouse to present complete records regarding her income and expenses.

The above-mentioned follow up hearing was before a different judge.  It did not appear that the new judge was aware of why the case was rescheduled and began the hearing asking me to make argument on behalf of my client’s underlying Petition.  I did so and my argument was quickly followed up with argument from opposing counsel on the ex-spouse’s ability to pay and an attempt to present the records requested by the first judge.  The new judge was befuddled and wondered why ability to pay was even being discussed.  I chimed in, agreeing of course, arguing that the language and obligations in the contract is/are clear and that the ex-spouse is obliged to fulfill them by remitting to my client what was owed.  The new judge asked the ex-spouse if not having the “ability to pay” shielded her from having to pay her rent/mortgage, utility bills, credit cards, or any other contract.  Of course, the ex-spouse responded in the negative, which led the judge to rhetorically wonder why an ability to pay (or lack thereof) was relevant for the contract at issue in the hearing (implying that it was not relevant).

Ultimately my client won the case but I did not write this piece to toot my own horn and show off my trial advocacy skills.  Indeed, I thought the case was pretty straight forward.  I wrote this piece to demonstrate that the very same case, with the very same facts, and the very same applicable law, was presented to two different judges.  One judge was sympathetic to the ex-spouse and inquired into “ability to pay” and was seeking a way to soften or reduce the ex-spouse’s obligation to my client under the contract.  The second judge thought the case was rather black and white and as there was no disagreement on the legitimacy of the contract and the obligations contained therein, then the ex-spouse was obliged to fulfill her end of the contract at pain of sanctions and Court enforcement of the contract.

I have no idea why the two judges were so different in their approach.  What I can say is that they reflect the different approaches to cases and facts and laws that different people may, can, and often do have.  Unfortunately, no matter how “good” or “righteous” of a case one may have, or how good or skilled a lawyer one may hire, the judge one faces, and how that judge approaches the case, may, and often does, determine whether one’s case is successful.    This is important to keep in mind when thinking about litigating.  One of the insights attorneys often have is knowing the tendencies of judges based on their experience with judges in prior trials, hearings, and/or cases.  This insight is invaluable when making litigation, tactical, and settlement decisions and ought to be heeded.

Our legal system is facilitated, controlled, and designed by people and, for better or for worse, our legal system is also subject to the benefit and foibles of those same people.  It is best to keep that in mind when litigating.

Warrentless Car Searches Now the Law in PA

The Pennsylvania Supreme Court (by vote of 4 to 2) has just issued a ruling indicating that police officers no longer need a search warrant in order to search someone’s vehicle.  Prior to this ruling a police officer could only search the contents of a car if he received a search warrant signed by a judge, did so with the consent of the driver, or personally saw contraband (or the like) in plain view.  Under this new ruling, the police officer merely needs probable cause to search the vehicle.  Many commentators believe that this ruling flies in the face every American’s 4th Amendment (to the U.S. Constitution) protection against search and seizures, not to mention similar protections laid out in Pennsylvania’s Constitution, however the Pennsylvania Supreme Court states that its ruling is consistent with federal law.  Apparently refusing to allow an officer to conduct a search is not, itself, probable cause, though in practice who knows how that will play out.

Obviously, this case is ripe for an appeal to the United States Supreme Court.

Some good articles on this subject can be found here, here, here, and here.

What do you think?  Have we lost freedoms with this ruling or is this merely making Pennsylvania consistent with our actual freedoms and protections as guaranteed in the Pennsylvania and United States Constitutions?

 

Judgment Proof or Justice Proof?

Generally speaking, people bring suit against another because they feel wronged by another to the point where they need a third party, namely a Court, to make them whole and exact justice against the wrongdoer.  Laying aside, for the purposes of this post, the chances of success for such suits, which, of course, rely upon things like legal merits and sufficient evidence, the persons bringing suit expect their suit, if successful, to bring them the justice they feel they deserve.  Although such an expectation seems intuitive and obvious, most people are shocked to learn that, even if they win a verdict, they may not receive the justice they desire, sought, and may even deserve.

Very often people do not receive the justice they seek because the person or entity that they sue is what attorneys call, “judgment proof.”  What does it mean to be judgment proof?  A judgment proof person is someone who, although subject to a judgment, cannot pay it by virtue of his circumstance.  The easiest way to explain it is by way of example.

A common example is this: suppose Larry gets into a car accident with Fred and, as a result of the accident, Larry suffers extensive damages and/or injuries.  It is clear from the evidence available that Fred is totally at fault for Larry’s damages and/or injuries.  Fred, as it turns out, is uninsured.  To make matters worse, Fred does not own a home, has little to no money in his bank account, has no significant assets, and/or has a spotty employment record.

As one may expect, Larry initiates a law suit against Fred in order to be compensated for his various damages and injuries.  The evidence available is clear, sufficient, and unambiguous in favor of Larry.  The legal arguments to support Larry’s case clearly have merit.  Due to the evidence and legal merits, Larry’s law suit against Fred is successful and he wins a judgment of $100,000 against Fred.

At first, Larry feels vindicated and that justice was done; after all, an independent fact-finder and tribunal, the Court, viewed all of the information presented and found in Larry’s favor.  The Court publicly found that Fred was in the wrong and Larry in the right and that Fred must make Larry whole through the payment of $100,000 to Larry.

While basking in his moral and emotional victory, Larry then attempts to collect on the $100,000 verdict.  Unfortunately, no matter how willing Fred may be to pay off the $100,000, he has no real assets to pay it.  Of course, he could, out of good will and conscience, establish a payment plan to Larry to pay off the judgment, but what if he doesn’t do that?  What are Larry’s options?  In Pennsylvania, Larry cannot garnish Fred’s wages.  He cannot put a lien on his real estate, as he owns none.  He could try to freeze and take the money in Fred’s bank account, but it is not much and will not come close to paying the $100,000.  As the hypothetical scenario involves a car accident, Larry may be able to get Fred’s driver’s license suspended, but that does not really equate to payment on the judgment and, indeed, if one has a judgment as a result of another sort of case (i.e.: not a car accident) even this remedy is unavailable.

See, Fred is judgment proof.  As the old saying goes, “you cannot get blood from a stone.”  In the same way, one cannot get money from someone who has none.  So, was justice done?  Well, inasmuch as Larry got a verdict in his favor, yes it was.  Also, inasmuch as Fred will likely always have the $100,000 judgment hanging over him, which will impede or prevent his ability to get a mortgage or loan in the future until it is paid, yes it was.  Unfortunately, though, the justice of being made whole by being paid the judgment means, for many like Larry, such lawsuits, taken as a whole, are unjust as judgments such as Fred’s will likely never be paid.

Unfortunately, there is not much which can be done about this sort of thing.  Gone are the days of debtor’s prisons and/or indentured servitude to pay off such debts, and even then the debt may not have been truly paid off.  So, potential plaintiffs should beware the peril of outlaying time and money pursing a law suit against someone who may never be able to pay it.

The general advice provided above should serve as an corollary or an addendum to a previous post on this blog called “Losing Even Though You Win” which deals with outlaying more money to bring suit than you will win at the end.  The example of a judgment proof defendant is the problem identified in “Losing Even Though You Win” taken to the extreme.

Judgment proof litigants are more common than one may think and, despite not receiving the justice one believes one is deserved, it should give one pause before bringing suit against someone as it may, at the end of the day, cause an injured party to lose even more money than the damages already suffered as a result of another.

Losing Even Though You Win

Probably every practicing attorney has had to have a conversation with a client which goes something like this: “I know you’re “in the right” and would win your case, but is winning your case worth the cost to do so?”  Such counsel is a difficult pill for someone to swallow and sometimes an even more difficult pill to administer.

One of the reasons one hires an attorney is that an attorney can offer a dispassionate and objective view of a case that the party in the case may not have as a result of the emotional and personal ties he has to it.  Unfortunately, it costs money to pursue a case.  Anyone who has been quoted a retainer fee or has had to pay an attorney’s hourly rate will know just how expensive lawsuits can become.  This is true even for those litigants who hire an attorney on a contingency basis.  Sure, they may not have to pay a retainer fee but the potential damages they may receive may not make the investment into litigating the case worthwhile; for example, there is little financial sense for an attorney to sink $25,000 into a case which may only garner $10,000 in damages or, from the client’s perspective, the contingency fee, once deducted, makes the damages payable to the client less than his actual loss.

Many people look to the justice system honestly seeking justice, but people often view balancing the costs to pursue a case as an injustice in itself and, quite honestly, it is sometimes unjust.  For example, a person who has been truly wronged may seek justice in court in order to be made whole and remedy the loss/injury/damage caused by another.  Unfortunately, sometimes the cost to pursue that remedy is greater than the loss/injury/damage itself, which means pursuing the case will put that person in a worse position than the loss/injury/damage itself!

The reverse is also sometimes true.  Practically anyone can file a lawsuit for practically any reason against practically anyone; this is not to suggest that these law suits are legitimate or meritorious (they may not be), but that there is no gatekeeper at the start of a case to reject these sorts of cases.  Instead, parties who are perfectly “innocent” and/or without any shred of liability to the plaintiffs in these cases have to spend money to defend a completely meritless case.  There is little recourse against the plaintiffs of meritless cases.  Potential plaintiffs have a wide latitude to bring cases, especially because there is often no way of knowing whether a case is meritorious at its inception, and before discovery is conducted and evidence is produced, and, perhaps more importantly, the right to petition the government for redress is enshrined in the First Amendment of the U.S. Constitution and few restrictions are in place as a result.  Unless an “innocent” defendant can demonstrate that the plaintiff brought the case knowing it was meritless, or brought it negligently, for a vexatious purpose, and/or knowing the case was complete frivolous, an “innocent” defendant will have no redress against the plaintiff for bringing a meritless suit.  Of course, to add insult to injury, if there is potentially a claim against a plaintiff for abusing the legal system, a defendant will have to outlay money (either through a retainer fee or contingency fee) to pursue that claim.

Now, some people pursue claims “for the principle” and know going into a case that they will likely lose money even if they win the case when their winnings are compared to the money they had to outlay to pursue the claim.  People pursue these claims “on principle” because they view justice as not allowing someone else to “get away with” whatever it is he did.  This is certainly a choice someone can make, but in my experience in practice, very few people have the stamina to actually follow through with their crusade for principle when the costs begin to mount.

So, until there is some sort of fundamental change in the American legal system, parties to a law suit will have to expend money in some way to pursue a claim or defend a claim and, unfortunately, that may lead to a financial injustice of some sort.  When looking at the facts of a case in which one is or could be a party, please be sure to seriously consider the financial implications of the money that will have to be spent to pursue it and/or defend it.  It may not be just, and one’s attorney may be the person bearing the bad, but unfortunately, accurate news, but it is the reality of the legal system with which one must work in America at the moment and there is not much one can do about it when considering (or defending) a lawsuit!  No one wants to win a case but ultimately lose when all of the numbers are tallied up.

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