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Archive for the tag “contract”

Don’t Like An Award From Compulsory Arbitration? You Must Appeal

Can a party to a case where a judgment has been entered in compulsory arbitration have that judgment modified without appealing? This is the underlying question in the recent matter heard by the Pennsylvania Superior Court, captioned as Blucas v. Agiovlasitis, 2018 Pa.Super. 25.

In Blucas, tenants brought suit against their former landlord for the return of their security deposit. The landlord, of course, claimed the leasehold had damages for which he incurred expenses and he needed compensation/reimbursement from the tenants.

The case was tracked into compulsory arbitration pursuant to 42 Pa.C.S.A. Section 7361. After a hearing before a panel of arbitrators, a judgment was entered awarding the tenants $10,000 and the landlord $1,450, for a net award to the tenants of $8,550.

Pursuant to Pa.R.C.P. 1307 and established case law, the entry of an award following compulsory arbitration has the force and effect of a final judgment. The court contrasted an award flowing from compulsory arbitration with one following statutory or common law arbitration. Unlike an award from compulsory arbitration, a party must petition the trial court to confirm an award from statutory or common law arbitration 30 days or more following the date of the award. For an award from compulsory arbitration neither party must file a præcipe to enter judgment on the award.

In July 2016, an award and notice of the same was entered on the docket in this matter, and was final (unless appealed). A judgment on the award was entered in November 2016. Within less than two weeks following the entry of the judgment in Blucas, the landlord remitted a check to the tenants for the full amount of the judgment ($8,550). Pursuant to Pa.R.C.P. 1307, a party must file an appeal within 30 days from when the award and notice are entered on the docket in order to further litigate the matter. No appeal was ever filed. Instead of appealing, the tenants, in April 2017, filed a motion for costs and prejudgment interest (motion) requesting a recalculation of the award.

The court reviewed the various case, statutory, and procedural laws applicable to the instant matter, and unequivocally concluded that the sole remedy for an adverse or unsatisfactory compulsory arbitration award is an appeal within 30 days from the award and notice. The only exception to the above the court could discern is Pa.R.C.P. 1307(d), which provides for a means to “mold” a previously entered award for obvious errors, in either arithmetic or language, that do not go to the substance and/or merits of the award.

The tenants’ motion did not address basic errors in arithmetic and language but, rather, asked the trial court to award them additional damages in prejudgment interest and costs. Inexplicably, and without citing support, the trial court granted the tenants’ motion, which led to the landlord’s appeal to Pennsylvania Superior Court, resulting in the decision, cited above, that is the subject of this article.

Superior Court noted that the motion did not comply with the law and procedure cited above.  The motion clearly is not an example of “molding.” More importantly, it was not filed within 30 days of the award.  The trial court was unclear as to precisely how it calculated the award and what the figures in the award exactly represented (e.g., interest and costs? security deposit? pet deposit? etc.). As a result, there is no way for Superior Court to even attempt to “mold” the award regarding prejudgment interest, even if it could. Consequently, as the tenants did not file an appeal of the compulsory arbitration award, the trial court was without authority to attempt to revisit the award with regard to prejudgment interest.

As always, it is absolutely critical for practitioners to be totally cognizant of the applicable deadlines and time periods mandated by law or procedure and act accordingly to ensure compliance with the same and opportunity to litigate a matter as fully as possible.

Originally published in The Legal Intelligencer on March 19, 2018 and can be found here.

A Collection of Personal Injury Writings by James W. Cushing, Esquire

Over the course of my career, I have written extensively on a wide variety of personal injury legal principles.  These writings have been published in The Legal IntelligencerUpon Further Review, and The Pennsylvania Family Lawyer as well as posted onto my blog.  I have collected these articles and blog posts and have listed them below.  Thanks for reading!

Musings:

My Articles:

A Collection of Contract and Debt Collection Writings by James W. Cushing, Esquire

Over the course of my career, I have written extensively on a wide variety of contract law issues and debt collection legal principles.  These writings have been published in The Legal IntelligencerUpon Further Review, and The Pennsylvania Family Lawyer as well as posted onto my blog.  I have collected these articles and blog posts and have listed them below.  Thanks for reading!

My Articles:

Musings:

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.

Unemployment Compensation Over Payment Cases – Fault or No Fault?

People who are out of work often have the option to file for, and collect, unemployment compensation benefits to help fill the gap, financially speaking, until they can secure new employment.  As one may expect, however, not everyone who applies for benefits are eligible to collect them.  Ineligibility for benefits can be caused by a variety of factors including, but not limited to, issues regarding self-employment (see here and here), conflicts with other benefits (see here and here), conflicts with retirement (see here and here), issues surrounding termination due to willful misconduct (see here and here and here), issues surrounding whether one voluntarily quit (see here), and/or issues regarding whether one is available for work (see here).

Now, there is a delay between one’s application for benefits and a ruling that one is ineligible and, very often, during that interval a claimant will receive benefits.  If, after receipt of benefits, it is determined that the claimant was ineligible, then the benefits he received would be considered, retroactively, an over payment to him as he ought not have received them in the first place due to being declared ineligible.

The obvious question here is this: what is the consequence to receiving benefits to which one is not entitled?  There are two possible results based on a finding of the claimant’s intentions when his application for benefits were made.  Were the claimant’s intentions “innocent” (in that he acted honestly with Unemployment Compensation at all times) when he applied for benefits which, as a result of the same, he was granted benefits inadvertently?  Or, were did the claimant act with deception or fraud when applying for benefits which resulted in him being dishonest with Unemployment Compensation?

For example, the Claimant honestly may not have fully understood the legal distinctions between “employee” and “contractor” (see here) when he applied for benefits or he honestly may not view the conduct which led to his termination as willful misconduct (see here and here and here) or he honestly may not have fully understood the interplay between Unemployment Compensation benefits and other benefits (see here and here) or he honestly may not view his termination from employment as voluntary (see here).  If this is the case, then his over payment would be considered to have been caused by no fault of the Claimant’s own

By contrast, the Claimant, when applying for benefits, may have intentionally lied about the cause of his termination, or lied about the status of his side job, or intentionally obscured his other sources of income (e.g.: workers’ compensation benefits).  If this is the case, then his over payment would be considered to have been the result of the Claimant’s act of deception and, therefore, brought about by a fault of his own.

If the Claimant’s over payment is due to no fault of Claimant’s own (as described above), the consequence is that if he were to collect unemployment compensation at any time over the following three years, his benefits will be deduced by the amount of the over payment as paid through monthly installments.  If the Claimants over payment is due to Claimant’s fault (as described above), the consequence is that the Claimant must immediately repay all of the benefits at pain of penalties, interest, and other sanctions.

Now, like nearly all things in in the American legal system, determining whether the Claimant was overpaid, and whether that over payment was due to the fault of the claimant (as described above), is determined at a hearing after the presentation of evidence and testimony.  Sometimes this can be done at a single hearing but, more often than not, two hearings will be held: the first to determine eligibility and the second (if the claimant is found ineligible) to determine whether any payments he received were due to his fault (as defined above).  Most of the time, Claimants do their best to fill out the application for benefits and simply do not know how certain terms are used and/or have a different view of the facts surrounding their termination from employment, and, as a result, they will not be required to repay their over payments.  Occasionally, however, a Claimant actively tries to deceive Unemployment Compensation and, for that, immediate repayment will be due.

Fallout for Injuries Sustained by Contractor’s Employee

When construction is taking place on a piece of real estate, and an employee of the contractor doing the work is injured there, who bears the potential tort liability for the injury, the property owner, the general contractor, or both?  Luckily Pennsylvania law provides a way to discern how liability should be distributed if there is no existing contract between the contractor and property owner which addresses the liability question.

The basic legal principle is foundational, well established, and has manifold case support in Pennsylvania.  The standard of care present in such a case mirrors the standard of care a property owner has to an individual on the property owner’s land.  The standard of care a property owner has depends upon whether the individual on the property owner’s land is a trespasser, licensee, or invitee.  Under Pennsylvania law, the employee of a general contractor who is authorized to be on the property falls within the classification of business invitee, and therefore, the duty of care owed to a business invitee is the highest duty owed to any entrant upon the property.

Pennsylvania “case law sets forth the duty that a possessor of law owes to business invitees as follows:  A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if, and only if, he (a) knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and (b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and (c) fails to exercise reasonable care to protect them against the danger.”  Chenot v. A.P. Green Services, Inc., et al., 2006 Pa.Super. 52, 63 (2006)  Therefore, a property owner is potentially liable for the injuries sustained by a contractor’s employee while on the property.

In addition, there is no doubt that a duty of care attaches to a contractor for the injuries sustained by its employees.  Suffice it to say, a contractor has a duty, for which it can be held liable if breached, for injuries sustained by its employees while they are engaged in working for the contractor at the property.  However, the duty of care applied to a contractor does not lessen or relieve the property owner of his/her/its duty of care over business invitees/visitors.  Despite a contractor’s duty of care, a property owner “must [still] protect an invitee not only against known dangers, but also against those which might be discovered with reasonable care.” The court in  Gutteridge v. A.P. Green Services Inc., A.W. et al., 804 A.2d 643, 657 (Pa. Super. 2002) stated that a property owner ‘“owes a duty to warn an unknowing contractor of existing dangerous conditions on the landowner’s premises where such conditions are known or discoverable to the owner.”’  Finally, it should also be noted that the property owner’s duty to warn remains regardless of whether a contractor ‘“exercises full control over the work and premises entrusted to him.’”  (See Gutteridge).

Based upon the above, it is abundantly clear that a property owner can be held liable for the injuries sustained by a contractor’s employee working at his property if he breaches the duty of care described above and does not fulfill his duty to warn.  Consequently, the highest standard of care that a property owner ought to maintain applies to an employee of a contractor at the property who is authorized to be working there.  Such an employee is a business invitee of the property owner.  Therefore, to that end, a property owner has a duty to protect such an employee from known dangers at the property and those which could be discovered with reasonable care.  The liability of the property owner is supplemental to, and/or in addition to, any liability the contractor may also have for his employee’s injuries.

Originally published in The Legal Intelligencer on January 28, 2016 and can be found here.

Debt Acknowledgment: Going Beyond Limitations

Anyone considering bringing a lawsuit needs to be aware of the relevant statute of limitations applicable to one’s case.  A statute of limitations establishes a hard deadline by which a particular suit must be brought, which, if missed, bars the potential plaintiff from bring it.

 

Generally speaking, in the context of a debt collection contract claim, the applicable statute of limitations sets a four (4) year deadline to bring suit after a breach of contract.  This limitations period is set by 42 Pa.C.S.A. Section 5525(a)(1).  A breach of contract occurs upon non-performance of a contractual duty, which, in this case, would be the non-payment of a debt.

 

Although the four-year statute of limitations identified above serves as a hard deadline in most debt collection cases, there is an important exception to this statute which serves to extend the time to bring suit and/or serve to toll the statute of limitations: the so-called “acknowledgement doctrine.”

 

Pennsylvania law has well established the acknowledgement doctrine.  The doctrine states that “[a] clear, distinct and unequivocal acknowledgement of a debt as an existing obligation, such as is consistent with a promise to pay, is sufficient to toll the statute.”  In Re David Cutler Industries, Ltd., 502 B.R. 58 (2013)

 

The acknowledgement doctrine in practice serves to restart the running of the applicable statute of limitations cited above, which would begin upon a reasonable elapse of time from the date of acknowledgement.

 

For example, if the statute of limitations for the failure to pay a debt is set to expire on August 1, 2015, a debtor’s acknowledging the debt on July 25, 2015 would serve to toll the statute of limitations and reset the hard deadline set by the statute to four years after a reasonable elapse of time from July 25, 2015.  A debt customarily must be paid within thirty days of when it comes due; therefore, the new statute of limitations in the example above would be four years from August 25, 2015.

 

When litigating a breach of contract claim, particularly a debt collection matter, and a statute of limitations deadline is approaching, or has passed, practitioners would be wise to explore the possibility of trying to have the debtor acknowledged the debt at some point.  Doing so could serve to save the viability of a case and go a long way to ensuring the debt owed is paid.

 

For more information on the issues addressed above, be sure to also review these cases: Colonial Assur. Co. v. Mercantile and General Reinsurance Co. Ltd., 297 F.Supp.2d 764 (2003); Huntingdon Fin. Corp. v. Newtown Artesian Water Co., 442 Pa.Super. 406 (1995); Camenisch v. Allen, 158 Pa.Super. 174 (1945); In Re Maniatakis’ Estate, 258 Pa. 11 (1917).

Originally published in The Legal Intelligencer Blog on July 21, 2015 and can be seen here.

Local Ice Rink Tries to Put Law Suits on Ice

My nephew recently had a birthday and, because he is an avid ice hockey player, he chose to celebrate it at a local ice rink.  Before I get to the meat of this post let me say that I had not ice skated in at least ten years before that party and I was seriously out of practice!  By the end of the party I felt I was back to some semblance of respectability, but my back, ankles, and knees are clearly not as young as they once were.

Anyway, the ice rink facility the party was held at is very large and well equipped for such a party.  The facility is so large that there are two ice rinks separated by a common area for eating and lacing up one’s skates.  Next to one of the rinks are a series of smaller rooms where people gather for the parties that are held.  As one may expect from a kid’s party, much pizza, cake, and Coca-Cola are consumed in these rooms.

Part of the party process requires anyone intending to participate in ice skating to receive a sticker which identifies him/her as a guest of a party.  The sticker is a white paper with the name of the party on a piece of wax paper.  The person who receives the sticker peels off the sticker from the wax paper and puts the sticker on his or her shirt as identification on the ice rink.

All seemed rather typical to me for such a party until I noticed something peculiar.  While I was enjoying a slice of pizza, one of the kids at the party peeled off his sticker from its wax paper backing and threw the wax paper onto the table in front of me.  I glanced down at the wax paper and noticed that it was covered with text.  Curiosity got the best of me, so I picked up the wax paper and read all of the text written on it, which read as follows:

WAIVER OF LIABILITY

ASSUMPTION OF RISK:

I am aware that ice skating, hockey and/or broomball activities involve inherent risks dangers and hazards which can result in serious personal injury or death.  I am also aware that the ice skating rinks and arenas contain dangers that can cause serious injury or death.  I hereby freely agree to assume and accept all known and unknown risks of injury arising out of ice skating, hockey and/or broomball activities.  I recognize and acknowledge that risks of ice skating, hockey and/or broomball can be greatly reduced by: taking lessons, abiding by the Responsibility Code and using common sense.

RELEASE AND WAIVER OF CLAIMS AGREEMENT:

For allowing m e to participate in public skating, hockey and/or broomball activites at the [ice rink], I agree to the fullest extent permitted by law, as follows: 1) TO WAIVE ALL CLAIMS that I have or may have against the [ice rink] and its owners and affiliates, arising out of public skating, hockey and/or broomball.  2) TO RELEASE the [ice rink] and its owners and affiliates from all liability for any loss, damage, injury or expense that I (o my next of kin, parent, guardian estate) may suffer, arising out of ice skating, hockey and/or broomball activities from any cause whatsoever including negligence or breach of contract on the part of the [ice rink] in the operation, supervision, design or maintenance of its facility.

So, basically, on the back of the wax paper for the identification sticker was a rather detailed waiver which protects the ice rink from all liability for injuries sustained there.  When I saw this, I instantly knew I had to write a blog on it because this waiver seemed so ridiculous to me.

I find this waiver to be of dubious enforceability.  Waivers must be accepted knowingly.  The identification stickers are merely provided by the ice rink to the person in charge of the party who then distributes them to the people at the party.  No one at the ice rink indicated that a waiver of liability is written on the back of the stickers.  Furthermore, the waiver is written on what is ostensibly trash.  The people there had no idea that the back of the stickers had text on them, let alone something as vitally important as a waiver of liability.  Instead, the people at the party – as one may expect – simply peeled off the stickers from the wax paper and threw out the wax paper.  I would have never noticed it myself had the kid at my table not, by chance, tossed his trash in front of me.  In addition, the waiver of liability is received after the contract was formed and payment was made for the use of the ice rink.  So, no consideration was exchanged for the waiver.  A waiver cannot simply be thrust onto someone after the contract was formed and payment made.  Even if it could be argued that there was consideration for the waiver between the ice rink and the person who paid for the party, there was certainly no consideration between the ice rink and a guest of the party.

A waiver of this sort is basically an exculpatory clause.  When it comes to exculpatory clauses, they are to “be strictly construed with every intendment against the party seeking their protection.” Phillips Home Furnishings v. Continental Bank, 231 Pa. Super. 174 (1974) citing Kotwasinksi v. Rasner, 436 Pa. 32 (1969). Furthermore, an exculpatory clause will not be valid if there is a disproportionate bargaining power between the parties to the contract at issue. Id. citing Hennigsen v. Bloomfield Motors, Inc., 161 A. 2d 69 (NJ, 1960).  In addition, an exculpatory clause that a Court is unwilling to enforce is where the terms of a contract are unwilling to be altered by its maker.  In other words, a contract where the other party (i.e.: not the drafter of the contract) “has no bargaining power and must accept [the] terms” presented to him and is “powerless to alter” them, with rejection of the contract as the only alternative to executing the contract.  There is no meeting of the minds in this sort of contract negotiation. Galligan v. Arovitch, 421 Pa. 301 (1966).  In addition to the relationship of the parties to a contract, the Court also analyzes whether a party to a contract were “aware of and understood the terms of the release before his agreement can be deemed a particularized expression of the intent to assume risk.” Wang v. Whitetail Mountain Resort, 933 A.2d 110 (Pa.Super., 2007) citing Chepkevich v. Hidden Valley Resort, 911 A.2d 946 (Pa.Super.2006).  Finally, “[i]n determining whether a releasing party had such awareness and understanding, we consider: 1) the release’s placement in the document; 2) the size of the release’s print; and, 3) whether the release is highlighted in some fashion.” Id.,citing Beck-Hummel v. Ski Shawnee, Inc., 902 A.2d 1266, 1269 (Pa.Super.2006)

Based on the above, I think it is pretty clear that the language located on the back of the sticker is problematic. The contract relationship is obviously imbalanced.  A person seeking admission to the ice rink has no choice but to accept the exculpatory clause else he cannot gain access.  Further, the exculpatory clause is printed on what amounts to a piece of trash.  The guest cannot bargain and negotiate with the person at the ice rink’s office about the terms of the clause and try to change them.  In fact the person at the office likely has no authority at all to act on the ice rink’s behalf in order to change or alter the language on the sticker even if he wanted to do it.  So, obviously, there is a “take-it-or-leave-it” aspect to the sticker.  In terms of whether the recipient of the sticker was aware of and understood the terms of the exculpatory clause, I think even the average observer can see that there is likely no awareness of this clause, let along comprehension, at the time of entry into the rink.  Who reads what is basically trash?  No one gets the language mentioned or explained by the person at the ice rink’s office.  I would guess that the person at the office has likely never read it either or knows what it means.  What non-lawyer knows what an exculpatory clause is or how it works and how it could effect him?  Remember, this is all in the context of a busy kids’ party and being handed a sticker for one’s shirt amid the hustle and bustle at an ice rink.  Who is taking the time to read the wax paper on the back of a sticker, let alone understand the technical legal jargon on it?

I wrote a similar post to this one a couple of summers ago about my trip to the Philadelphia Zoo.  The Zoo tries to do similar things as this ice rink, which is to sneak in an exculpatory clause on the back of an admission ticket after the ticket is purchased which means, therefore, there is no opportunity to read it at the time of purchase.  You can read more about that clause here.

So, suffice it to say, I think the inclusion of the exculpatory clause on the back of the ice rink’s identification sticker is pretty sneaky.  I do not think the clause is particularly enforceable and is of questionable legitimacy in contractual terms.

Acknowledging a Debt to Toll the Statute of Limitations

As every lawyer knows, the statute of limitations is the death knell for any case if the deadline it sets to bring a lawsuit is missed.

Collecting on money owed pursuant to a contract is generally governed by a four (4) year statute of limitations which begins to run upon the breach of that contract. One way to extend that four (4) year statute is to find a way to toll it. The case of In Re Michael Angelo Corry Inn, Inc., 297 B.R. 435 (W.D., PA 2003), provides one innovative way to try and toll it.  Specifically, the Court in the above case analyzed whether acknowledging a debt and promising to repay serves as a way to toll the statute of limitations.

The underlying case involved the filing of a proof of claim by a creditor against a debtor who has filed for bankruptcy. The fact that the context of the case was bankruptcy has no effect or relevance on how the statute of limitations for a contract claim functions and/or applies. The issue was the fact that the creditor did not pursue the alleged debt with any alacrity and many years passed with no action taken on the loan and/or its repayment. The time that elapsed from the potential breach was longer than four (4) years in this case and, therefore, on its face, any action to pursue the contract claim would then be barred by the relevant statute of limitations. In order to avoid the contract claim from being a non-starter due to being barred by the statute of limitations, the creditor attempted to argue that the aforesaid statute is tolled by an acknowledgment of the debt made my the debtor.

The Court agreed that the statute of limitations on contract claims can be tolled if the debtor acknowledges a debt. The caveat, however, is that acknowledgment is more than merely expressing a willingness to pay it.

The acknowledgement doctrine requires a debtor’s acknowledging the existence of, and obligation for, a debt to be clear, distinct, and unequivocal, along with a promise to pay that is similarly doubtless. The Court made it clear that there must be no uncertainty in the debtor’s identification of the specific debt owed, acknowledgment of his own obligation to pay that debt, and a clear promise to pay. A debtor who simply declares an intention or desire to honor his obligation is not considered to have made a promise to pay sufficient to toll the statute of limitations under the acknowledgment doctrine.

So, when litigating a breach of contract claim for an unpaid debt, if one thinks the case can no longer be pursued due to the expiration of the statute of limitations, remember to fully explore the acknowledgement doctrine. It may allow a creditor to successfully pursue a debtor far beyond the four (4) years permitted by the statute of limitations.

Originally published on September 8, 2014 in The Legal Intelligencer Blog and can be found here.

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