Default judgement-not served and no notice

[k8dubs]

What is the name of your state (only U.S. law)? AZ

Upon applying for a home loan to purchase my first house, I was notified by the mortgage company that I have a default judgement on my credit report. I was denied for this reason and told to fix this issue and reapply. This was the first i had heard of this default judgement, and after further investigation I determined that Capital One received a default judgement against me for a credit card debt back in 2009. I was never served nor notified. I realize this is 5 years old at this point. Are there any legal remedies available to me? Thanks in advance.

 

[Mark Maroon]

What is the name of your state (only U.S. law)? AZ
Upon applying for a home loan to purchase my first house, I was notified by the mortgage company that I have a default judgement on my credit report. I was denied for this reason and told to fix this issue and reapply. This was the first i had heard of this default judgement, and after further investigation I determined that Capital One received a default judgement against me for a credit card debt back in 2009. I was never served nor notified. I realize this is 5 years old at this point. Are there any legal remedies available to me? Thanks in advance.

If you want to talk about legal remedies, then you first have to get a copy of everything in the court docket. Once you have everything from the court docket, you want to pay attention to how they claim that you were served. If the service wasn't proper, then you will want to file a motion to open or strike the default judgment. If you prevail on that motion, then it will force them to actually find and serve you properly (which will be VERY easy to do if you attend the motion yourself, and relatively easy to do if your credit report has your correct address). Then once you are properly served they will have to actually litigate their case against you. I have no idea if they have a good case against you or not. It may or may not be worth it to them to jump through all those hoops. If you get the court to strike or open the judgment, then you can contact the credit reporting agencies and let them know so that they update your credit report (not sure how you do that).

 

[dcatz]

I respect but can’t wholly endorse the advice offered. I do agree that a thorough review of the case file is appropriate; without it, the OP may not fully appreciate the “legal remedies” available.

An AZ judgment is initially effective for five (5) years from the date of its entry by the Clerk of the Court. The OP is released from further obligation unless the judgment creditor files an affidavit of renewal or brings an action for enforcement during that period. (A.R.S. §12-1551).

While five years may be a comparatively long time, if the OP seeks to vacate the judgment and vacating a judgment commonly requires a “prompt response without undue delay”, under the circumstances posted, any response at the moment may be “poking the bear”. We might infer that there has been no enforcement effort since judgment was entered. We do not know if the five years has been exceeded. We do not know if the judgment has been renewed and we do not know the OP’s ultimate goals under any scenario. We also do not know what is intended/expected by “fix the issue and reapply”.

We do not know if judgment lien(s) were recorded, but it is a reasonable assumption that they were, since the OP became aware of the default when attempting to purchase real property. To reiterate what was already stated, we do not know the present viability of any such liens but it is worth noting that, should the OP successfully vacate the judgment and unsuccessfully litigate the original claim, it is highly probable that the property sought to be purchased will be promptly burdened with a lien (see A.R.S. §§ 33-963 and 33-964). Again, “poking the bear” may not be wise.

If the OP were to successfully vacate the judgment but unsuccessfully litigate the original claim, there will be five more years of accrued interest on the claim, possibly making settlement without suit more difficult.

The claimant will not have to “find and serve” the OP, as suggested. Any disputed issues are simply re-opened and litigated on the merits. To get the judgment vacated and to have that opportunity, the OP will have to show the claimed defect in service and a valid defense.

The OP is trying to strategize to make what is commonly regarded as one of the most significant financial decisions made in the average lifetime. My advice would be to forego anonymous internet strangers and contact local counsel for further assistance

 

[Mark Maroon]

I respect but can’t wholly endorse the advice offered. I do agree that a thorough review of the case file is appropriate; without it, the OP may not fully appreciate the “legal remedies” available.

An AZ judgment is initially effective for five (5) years from the date of its entry by the Clerk of the Court. The OP is released from further obligation unless the judgment creditor files an affidavit of renewal or brings an action for enforcement during that period. (A.R.S. §12-1551).
\
The claimant will not have to “find and serve” the OP, as suggested. Any disputed issues are simply re-opened and litigated on the merits. To get the judgment vacated and to have that opportunity, the OP will have to show the claimed defect in service and a valid defense.

The OP is trying to strategize to make what is commonly regarded as one of the most significant financial decisions made in the average lifetime. My advice would be to forego anonymous internet strangers and contact local counsel for further assistance

I didn't know about the AZ rules concerning how long a judgment is active. Given that relatively short period, I agree that depending on whether or not an affidavit of renewal or an action for enforcement was brought since the judgment was entered, it might be better to wait and not "poke the bear".

But in my experience (albeit not in AZ), if a defendant is able to strike/vacate/open a default judgment due to lack of service, then before anything else can happen the plaintiff has to serve the defendant - as there wasn't any service to begin with. But if in order to strike/vacate/open the judgment the plaintiff has to make some kind of showing of a valid defense, then that might constitute an appearance which would moot the need for service?

In the end, I agree 100% that we're just pointing out some sign posts along various roads, and the OP should not take what is said here as "advice" which is better sought from local counsel.

 

[FlyingRon]

It's likely that if it was entered in 2009, that we're not quite gotten to five years yet.

The way to resolve this (presuming that he really did owe the money and it wasn't time barred at the time), is to pay off his debt. Once he can show to the lender (more likely the title company) that the judgement has been satisfied, he should be able to proceed. About the only thing that might otherwise save him is proof that the didn't legally serve him. The fact that he didn't "receive" service doesn't mean he wasn't legally served. More details are needed? Where was the judgement entered? WHen was the account delinquent? etc...

 

[latigo]

What is the name of your state (only U.S. law)? AZ

Upon applying for a home loan to purchase my first house, I was notified by the mortgage company that I have a default judgement on my credit report. I was denied for this reason and told to fix this issue and reapply. This was the first i had heard of this default judgement, and after further investigation I determined that Capital One received a default judgement against me for a credit card debt back in 2009. I was never served nor notified. I realize this is 5 years old at this point. Are there any legal remedies available to me? Thanks in advance.

We have to assume that the court would not have entered your default and issued the claimant's judgment without the claimant having submitting some form of proof of service of process.

So, I think the first step is for you to tract down the court that issued the judgement and examine the clerk's file to see what document the court relied on in finding that you were properly served with process and failed to timely respond.

Without that information it is but speculation to be advising you of the means to move to set aside the judgment.

Interesting however, is the absence of any denial as to the legitimacy of the Capial One claim. You have determined that Capital One is the judgment creditor, yet your post doesn't dispute the debt underlying the judgment? Which suggests what . . . .?

The point being - as alluded to by MM - Arizona may have the same requirement as many, including my state. Which is that the party moving to set aside the default must also attach to the motion a verified proposed answer or response to the claim alleging that the party has a meritorious defense to the claim. "Verified" meaning sworn to under oath under the penalty of perjury.

 

[azdeputyclerk]

Here in Arizona, a default judgment cannot issue unless the defendant was served. The OP will want to review their file to determine how the plaintiff served them. Many Summonses are served by publication in larger counties if personal service fails, so it could be that the Summons was published in a newspaper.

The OP will want to consult with counsel as to how to approach the matter. It's been my experience in dealing with service matters that once you file a response (even claiming that the Complaint should be set aside for lack of proper service), the court may consider the fact that the defendant is responding to be proof that the defendant has notice of the lawsuit. Thus by filing a response raising the defense, the court may consider the defense moot (and they have done so before).