Vacating Judgment ... does it "reset" SOL?

[DBS]

What is the name of your state? California, Placer County

Thanks is advice for any useful advice given

My wife stopped paying a creditcard company on a $15,000 balance over a dispute regarding several thousand dollars in charges.

The company "charged off" this account. A 3rd party purchased the account, and sued us for the balance in December of 2002/January 2003. We were not served (or were improperly served, I guess) , and had not been living at the location where they claimed to have served us for several months. We have utility bills and other documentation atesting to this. (We know that the property had been rented to another individual, with whom we are not aquainted) In short, the process server committed perjury. As such, we were unaware of the suit or default judgment.

We were just recently made aware of the suit/judgement, when it appeared on my wife's credit statement.

Given that process was not served - or not served correctly - we intend to file to have the default judgment vacated. (My understanding is that we have up to 180 days from the time we became aware of the judgment to do so.)

We stopped payments in 2002, the statute of limitations would have ordinarily passed by now, regarding the ability of the company to sue for this debt.

HERE's the rub: Does having the judgement vacated in any way "reset" the statute of limitations?

I'd like to settle this debt with the collections agency, but feel that the fraudulently obtained judgment gives them an unfair advantage.

As this is my first post in this forum, I doubly appreciate any thougtful replies or advice.

[Chien]

No, vacating the judgment does not re-set the SOL (and it would seem that you would have had to default very early in 2002 for the 4-year statute to render the debt time-barred in any event).

The SOL stopped when the original suit was filed.

If you are going to assert lack of notice as the grounds for your motion, I take it that you are going to be relying on CCP sect 473.5, and you will note that section requires you to attach a proposed Answer to your motion.

The Court is likely to grant the motion, because courts disfavor defaults, but I would not rely on asserting the SOL as a viable defense.

If you're going to go forward, start the settlement negotiations soon as well. It's going to cost the creditor something too to renew litigation, and there will be additional expenses to release any Abstract that they might have filed. Then, they have to enforce any judgment that they may get again. A voluntary payment offer may be more appealing.

[DBS]

You may have answered this already, so pardon me for asking for clarification.

My general logic goes something like this:

• The collection agency failed to follow process
• Their behavior has resulted in the SOL expiring
• Vacating the judgment does exactly that
• They can't "re-sue", as the SOL has expired
• The assertion that the fraudulently obtained default jugment "tolls" the SOL could give the creditor a "unlimited SOL" in effect.
• As such they should not get an extension or "toll" on the SOL. To grant them the right to "re-sue" makes it impossible for us to mount a defence, as too much time has passed, etc.

I don't know to what degree this makes legal sense, or if it would be likely to hold up in court at all. It just seem to make common sense that incompetence or willful neglect of process on the part of the judgment creditor shouldn't result in giving them unlimited recourse.

Am I making sense at all, or is there more to this than I am aware of?

[Chien]

You make good points, and I was actually going to include "but you can still try the SOL defense" in the original post.

Consider it included here, but I'll explain my logic as to why it won't avail you of an absolute defense (apologies if this gets legally "geeky" and I must make some assumptions.)

1. The collection agency failed to follow process.

1a. In California, process servers are registered and bonded. Because of this, their Delaration of Servive is entitled to a presumption of validity under the Evidence Code. Translation: it's up to you to prove the Proof of Service, which is filed under penalty of perjury, is false. In your case, the POS probably is subject to challenge for the reasons that you explained, but that means that it is wrong and vulnerable. There could be (and apparently is) a mistake, but it doesn't necessarily mean that someone perjured themself. We don't know how service was made, because we've never seen the POS. For example, if the server went to the door and said to "new tenant" "I have legal process for 'old tenant'" and new tenant said ok" (rather than "they don't live here") and took the papers, (ostensibly) good service could be perfected by a follow-up mailing.
Then there's the alternative: they knew you moved, couldn't find you readily and served by publication. Again, we haven't seen the POS.

1b. Except in Small Clims court, where litigants often use friends, rather than registered servers, to make service, I've never know an experienced litigant is use other than a registered server, because of the evidentiary presumption.

1c. Whatever was given to the Court as a POS "passed muster", because default judgment was entered. If it were seen to be defective, it would have been rejected - so the Court also believed that good service was made.

1d. For legal reasons (that I'll skip), the plaintiff would not have used "one of it's own people" to make service. My assumption is that the server was an idependent contractor. His/her actons may have been insufficient to effect good service, but that cannot be imputed to the CA - ergo "The collection agency failed to follow process" fails. CA wasn't any better informed than the Court or you.

1e. I've never know a registered server to put his/her registration and bond on the line to "fake" one service - there's too much at stake to make it worth it. (And process servers normally get paid whether service is perfected or the address is a "not found" - the responsibility for providing a good address is on the litigant.)

So there are a number of reasons why I think your first point will fall of deaf ears. The rest of the answers pretty much follow from that.

2. Their behavior has resulted in the SOL expiring.

2a. No. The SOL stopped when they filed. What is at issue is validity of service.

3. Vacating the judgment does exactly that.

3a. Not if I'm right about service and filing. Remember, CCP sect 473.5 requires you to also file an Answer. You can assert the SOL defense (and, in fact, must for it to be considered). The Court won't even consider it at that stage unless you (1) prevail on the motion (and, as stated, you probably will) and then (2) file a demurrer alleging that the Complaint is time-barred on it's face. Otherwise, the SOL defense will just be another Affirmative Defense that won't be relevant until the case comes to trial. My suggestion is to consider retaining counsel, because I'm guessing that this may be getting a little complex, if you've never done it before.

4. They can't "re-sue", as the SOL has expired.

4a. (See above) They are not "re-sueing". If you're successful with your motion, the SAME CASE is starting over.

5. The assertion that the fraudulently obtained default jugment "tolls" the SOL could give the creditor a "unlimited SOL" in effect.

5a. No. Again, because they are not "re-sueing". They are re-starting a case filed within the SOL. (Actually, you are trying to re-start it.)

6. To grant them the right to "re-sue" makes it impossible for us to mount a defence, as too much time has passed, etc.

6a. The same amount of time has passed for you both and they have the burden of proof to establish their claim. If they could do it then, maybe they can do it now. If you could defeat it then, maybe you can defeat it now. There is no good reason that either of you has gained or lost from the position you were in before. In fact, if there has been a loss, it is likely to have been theirs, because they no longer have the evidentiary support for their case. Winning, for you, means establshing that they can't prove their case.

And don't rely on information that you get on the Internet. However this sets with your "general logic", get an attorney. Discuss your reasoning with him/her and then decide on a course of action.