Defendant closed his business.

[weasel]

What is the name of your state? MA

A sued a small business (karate studio) in small claims, and won judgment about a month ago. The defendant hasn't paid.
Today I was driving by his business and saw that the place is empty, and there is a new office being set up there. And there was a small ad in the window, about selling the equipment "everything must go".
It looks like he is closing down, and selling all the property.

My question is if I can still hope to collect from him personally. I did name him (and his wife) in the complaint as well as the name of the business. Does it help? Or should I just give up and cut the losses at this point?

Thanks very much for your help!

 

[dcatz]

Why would you give up?

You've got a judgment against the business, the owner and his wife? You should be able to continue against both individuals but, if the equipment of the business belongs to him, rather than being leased or financed (and it would not appear so), you should also be able to reach the proceeds of the sale, if you act promptly.

If time is of the essence, you may find it cost-beneficial to consult with a local commercial collection attorney, who can keep you pointed in the right direction and assist with paperwork.

 

[weasel]

Thank you very much from your response.
I doubt consulting an attorney is going to be too beneficial in my case. The judgment is only $900, and spending the better part of it on a lawyer kinda defeats the purpose... unless ... I could collect those expenses from the defendant too ... Can I?
In any event, I doubt I am going to be able to do much about the proceeds of that sale anyway - the ad in that window said that today would be the last day... and he is selling for cash.

As to why I am worried I would not be able to get money from him ... well... it was the business (at least officially) that wronged me, not him personally, right? Could he argue that?
And actually, I just checked that ... I did list them all by name in the complaint, but my judgment paper only mentions his business name, and not him or his wife. Does it change things? Am I screwed?

 

[dcatz]

I doubt consulting an attorney is going to be too beneficial unless I could collect those expenses from the defendant too ... Can I?

No. You seem to have passed that stage. Costs of enforcement – levy, garnishment, service of process, recording liens – can normally be added back in but not attorneys’ fees. Still, had the amount been larger and there was a chance assets would be lost, it had seemed something to consider to buy speed.

I did list them all by name in the complaint, but my judgment paper only mentions his business name, and not him or his wife.

??? Did you only serve the business and not Mr. and Mrs. too? That would explain the judgment, unless the court fouled up. For example, if the business was a sole proprietorship – Joe Jones dba Joe’s Junk or a husband and wife partnership with a fictitious business – Joe Jones and Jane Jones dba Joe’s Junk, individually, jointly and severally, and you only served Joe’s Junk, it appears you’ve lost your assets. If you named them all and served them all, the court judgment shouldn’t read as you say it does. We don’t know what went on, but courts make errors too. If the judgment has a clerical error, go back to court and ask that it be amended nunc pro tunc (“now as it was then”) to correct a court error.

It was the business that wronged me, not him personally, right?

If the business was a corporation or L.L.C., the business is a separate legal entity from him and, in terms of recovery, you are right. (If that was the case, there was no point naming him and his wife.) If the business was a sole proprietorship or partnership, he or he and his wife ARE the business, and they needed to be served.

Am I screwed?

Question is answered and, I hope, explained above, but there is one more point. If the business was a corporation and you had filed a Judgment Lien on Personal Property after getting the judgment, there is a chance you could have still reached the proceeds of the sale (too little information in the post to know for sure). If it was his sole proprietorship and he appeared at court to contest the case, you still may be able to get judgment amended to add him (again, too little information in the post to know).

 

[weasel]

Thanks again for such an informative reply!

I did not exactly serve anyone. I just filed the complaint with the court, and they mailed them the notice. I did list business address only though in the complaint (did not even know his home address at the time). Is that the problem?

On the upside, he did appear personally to defend himself in court. Does it mean he is not a corporation? Is there any way for me to find out what form of business he was?

On a related note, I heard a rumor today, that he is about to file for bankruptcy. What can I do? Am I supposed to appear at some kind of a hearing to claim my judgment? I think I read somewhere, that there supposed to be a public notice issued or something. Where do I look for that?

If he puts his hose up for sale. Can I put a lien on it? What is the procedure for that? Does that "Show Cause" hearing have to come first either way, or can I skip it, and go straight to attaching wages/property? How exactly is that done?

I am sorry if I am asking too many questions. Those clerks in my district court are so unhelpful :-(

Thanks again for your help!

 

[dcatz]

I am sorry if I am asking too many questions. Those clerks in my district court are so unhelpful

Court employees are not permitted to provide anything that could be considered “legal advice”. They can tell you what form you need to file but not what to put in it.

I did not exactly serve anyone. I just filed the complaint with the court, and they mailed them the notice. I did list business address only though in the complaint.

If the court made service by mail, I think you have to look at the court file to see who it says was served. If the Proof of Service says that they did 3 individual mailings, one to the company and one to each individual, I think you are fortunate and have a good argument for the court amending the judgment to correct its own error, since he worked at the business and can be personally served at the place of employment. Your post doesn’t say enough to tell if the same would be true for the wife. If she didn’t work there and that’s the only place service was made, I think you are out of luck on the wife.

He did appear personally to defend himself in court. Does it mean he is not a corporation?

Appearing personally is not inconsistent with the business being a corporation. A corporation would authorize an individual to appear on its behalf.

Is there any way for me to find out what form of business he was?

There are many commercial resources, which is the best way to start but, if the business is a corporation, it will be listed on the web site for your Secretary of State, together with the registered agent for service of process. Every corporation authorized to do business in your state must give this public information. If the business is a sole proprietorship operating under a fictitious name, fictitious names (“dbas”) are normally registered with the County Recorder for the county in which the business is based. Those filings are also commonly public record, but you will have to have to check on your own to see if registration is with the County Recorder or some other entity and if they are public record in MA. This is the kind of information that would routinely be available from a commercial vendor.

On a related note, I heard a rumor today, that he is about to file for bankruptcy. What can I do?

If he goes BK and if he lists you as a creditor, you will get notice from the Bankruptcy Court. There is still not enough information in your thread to say anything more about your possible status. If you are a creditor in a BK, you will get notice and opportunity to attend a creditor’s meeting.

If he puts his hose up for sale. Can I put a lien on it? What is the procedure for that?

Maybe yes, maybe no. OP – I’m still not clear on who/what your judgment is against. If your judgment is against a corporation, you cannot lien his personal or real property. If your judgment is against a company that was/is a sole proprietorship, it is still not clear that you have tied him to the company. You have to review the judgment. If you can tie him to a sole proprietorship – i.e. get his name on a judgment - you can lien real and personal property and, in fact, it’s the very first thing that you should do after taking judgment. (On the other hand, I believe there is a $500K Homestead exemption in your state, and he would be crazy to not have already filed for it.) Real property liens are also normally filed with the County Recorder (or whatever it is called in MA) where the property is located. I don’t know the name of the document that you must record. In my state, it is called an Abstract of Judgment. Ask your court what form is required to create a real property lien.

 

[weasel]

I know they cannot give legal advice. Still... I am not asking them what I SHOULD do, just what I CAN do, or HOW I can do something ... Anyway ...

They wife did work there too... They are both "directors". Yet, I doubt they (the court) actually sent three separate letters to same address. I'll find out on Monday.

Don't you have to be a lawyer to represent a corporation though? I always thought that was the case. Can't you only represent yourself and your wife unless you are an attorney?

I looked him up at the secretary of state website. There is a corporation listed there with the same address, and him as a "manager". But the name is different (and no dba). Does that mean anything?

About bankruptcy. What if he doesn't list me as a creditor? I mean, knowing him, he probably won't? What can I do about that?

And regarding the house... Suppose it costs more than the exemption (and suppose, I can still go after his person assets of course), do I need some kind of separate court decision to place that lien or do I just show up at registry of deeds with my original judgment?

Thanks a lot for your help. It's been invaluable.

 

[dcatz]

I know they cannot give legal advice. Still...

Maybe they weren’t prepared for this much.

Don't you have to be a lawyer to represent a corporation though?

Not in Small Claims. In states that permit lawyers in SC, it could be, but a corporation just needs a duly appointed or elected officer or director or a regular employee duly authorized. If the corporation were not a law firm and attorneys are otherwise excluded, I doubt that a court would permit an appointed officer who happened to be an attorney.

Can't you only represent yourself and your wife unless you are an attorney?

Confusing phrasing. You could represent yourself if you are sued personally, whether or not you are and attorney. Generally speaking, a spouse may represent a spouse if (1) the claim is joint, (2) the represented spouse has consented and (3) the court feels the interests of justice would be served. I have looked at your state, and I can imagine some situations where that would elicit an objection from a plaintiff. I don’t know how individual courts would handle that, except to possibly continue the case. How did we get into this, if you’re not sure who was served?

There is a corporation listed there with the same address, and him as a "manager". But the name is different (and no dba). Does that mean anything?

Same address, different name and he’s “manager”? I have no idea what it might mean and insufficient collateral information to speculate. “Manager” would be more consistent with a L.L.C.

About bankruptcy. What if he doesn't list me as a creditor?

Coming back to the prior discussion, you don’t know that he has to. He hasn’t filed. You don’t know if it would be a personal or company BK and you don’t know who/what you have judgment against. You’re getting ahead of yourself. Best case? You have judgment against him, he files personally and doesn’t list you, anything that you might do is suspended by the Automatic Stay but, when he’s discharged, you haven’t been affected by the BK (until he re-opens it to add you).

And regarding the house...do I need some kind of separate court decision?

Normally, it’s just a different form, issued by the court post-judgment.

Find out who or what your judgment is against. Until you do, this is all premature at best and irrelevant at worst.

 

[weasel]

Maybe they weren’t prepared for this much.

Exactly. That's what I meant.

In states that permit lawyers in SC, it could be,

I thought, MA did, no?
Anyway, I actually saw a judge send a woman away, because she was an officer of a corporation, and the judge said she had to hire a lawer...

How did we get into this, if you’re not sure who was served?

Never mind. I only mentioned "wife" to say that it was my understanding that a non-attorney in general cannot represent anyone but himself or his wife. I thought that meant you cannot represent your corporation either, because, being a separate legal entity, it's neither of the above.

Same address, different name and he’s “manager”? I have no idea what it might mean and insufficient collateral information to speculate. “Manager” would be more consistent with a L.L.C.

Yes, the corporation I looked up is an LLC. But what I am trying to figure out is whether I have actually sued that corporation, or another business that happened to reside at the same address. The name in the complaint is different from the name of that corporation.

anything that you might do is suspended by the Automatic Stay but, when he’s discharged, you haven’t been affected by the BK (until he re-opens it to add you).

It sounds like I may be better off not knowing about his bankruptcy. Is that so?
I mean, it looks like it won't do me any good trying to find out more about it, and make sure I get listed as a creditor, because if I don't I'd have more chance to collect. Right?

You’re getting ahead of yourself.

I know I just like having a plan for more than one step ahead (I am a fairly good chess player - perhaps, that's where it comes from). I think, I got (more than) enough information from you for my next move for which I can't thank you enough.
So, if my endless questions are starting to annoy you, I will completely understand if you just stop answering them

 

[dcatz]

I will completely understand if you just stop answering them.

Good. This is for opinions and advice. With due respect, it is not chess, not for homework (which should have been done before filing the case) and, when it veers into hypotheticals, it could become endless.

MA Small Claims is not a separate court. It is a division of the Municipal Court in Boston, the Housing Court and District Courts elsewhere. Some might consider that a rather convoluted system relative to other states.

In my sole opinion, the Rules for attorneys appear equivocal:
“Attorneys may represent parties at small claims trials. A party represented by counsel should not be required to appear unless the party is a necessary witness. Although attorneys are permitted to appear in small claims sessions, the forum was “obviously” intended to provide a form of hearing that did not require assistance of counsel. Thus, the court should carefully control the proceeding to insure that the presence of an opposing attorney does not inhibit a full presentation by the unrepresented litigant. . . . .Pursuant to Uniform Small Claims Rule 7(e), the court has wide discretion to the extent of counsel in a hearing . . .”

Small Claims Standards are here:
http://mass.gov/courts/admin/legal/smclstandards2002.pdf[

The Uniform Rules for Small Claims are available here:
http://www.mass.gov/courts/admin/legal/courtrules2.html