Judgment Paperwork Should Avoid Return Clauses
I am not a lawyer, I am a judgment referral expert (Judgment Broker). This article is my opinion, based on my experience in California, and laws vary in each state. Nothing in any of my articles should ever be considered legal advice. If you ever need legal advice or a strategy to use, you should contact a lawyer.
Bailment means to loan something to someone without transferring ownership. In the context of civil court judgments, bailment means to recover a judgment without either being a lawyer, or having complete ownership of all rights, title, and interest in the judgment.
Few subjects are more controversial and hotly debated by judgment recovery professionals than the subject of bailment. Judgment enforcers who are not lawyers or collection agencies cannot represent anyone, so they must have judgments assigned to them, so they can "step into the shoes" of the Original Judgment Creditor (OJC).
After a judgment is assigned to them with a notarized document, and that document is endorsed and filed by the court, the judgment enforcer owns the judgment, and all rights to recover the judgment.
When an OJC sells their judgment outright for a very steep discount, the judgment enforcer owns all legal and financial rights to the judgment. When the judgment is purchased on a future-pay basis, the enforcer has a fiduciary responsibility to the OJC if and when any money is recovered beyond their reasonable expenses to recover the judgment.
A court case that discusses the fiduciary responsibility of future-pay purchases of judgments assigned to enforcers is Cross v. Bonded Adjustment Bureau, 48 Cal. Appeals 4th 266; 55 California Reporter. 2d 801, July 9, 1996.
The simplest example of potential bailment in the judgment business is a time limit in a purchase agreement, for example "buyer will return judgment to OJC in one year". While this should not be a problem in most states, more than one court judge has decided that putting time limit clauses in judgment purchase contracts is bailment.
Charges of bailment may subject the enforcer to charges of Unlicensed Practice of Law (UPL) and abuse of process. Sometimes unfortunately, the law is often what any black robe judge decides it is.
In most states, time limits in judgment contacts are working just fine, and many judgment enforcers put time limits in their contacts. Many OJCs are uncomfortable assigning their judgment, and time limits make many OJCs feel more comfortable.
However, there is case law (in California, Cohn v. Thompson) that says purchase agreements should be for "all rights, title and interest" in the judgment. The case also says time limits for recovery in the purchase agreement constitutes a temporary agreement, and are tantamount to an agency relationship (creating a bailment).
In a few states, for example, Arizona or Virginia, one should never buy a judgment on a future-pay basis unless they first consult with a lawyer, or form a collection agency, etc.
Most judgment enforcers will gladly return difficult or impossible judgments back to the OJC, but very few put this policy in writing. The return of judgments should be at the discretion and policy of the enforcer, and not a contractual obligation.
In some states, courts view return clauses as judgment "rentals" and bailment. In at least one instance, the "perpetrator" was sentenced to a long prison term because of UPL-related charges. Note that UPL is a crime, not a civil matter, and a UPL charge usually starts with a judge recommending that a district attorney make a criminal charge.
The best judgment purchase agreements identify the irrevocability of the assignment. Most enforcers (who are not lawyers) do not let the OJC sellers have any control over their actions. In some states, a revocable, conditional, or temporary assignment constitutes bailment and UPL.
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http://www.JudgmentBuy.com - is the best and fastest judgment solution, where Judgments quickly get Purchased or recovered by the very best - matched for your judgment!
Mark Shapiro - Judgment Broker - Free leads for Judgment Enforcers and contingency collection attorneys.
Bailment means to loan something to someone without transferring ownership. In the context of civil court judgments, bailment means to recover a judgment without either being a lawyer, or having complete ownership of all rights, title, and interest in the judgment.
Few subjects are more controversial and hotly debated by judgment recovery professionals than the subject of bailment. Judgment enforcers who are not lawyers or collection agencies cannot represent anyone, so they must have judgments assigned to them, so they can "step into the shoes" of the Original Judgment Creditor (OJC).
After a judgment is assigned to them with a notarized document, and that document is endorsed and filed by the court, the judgment enforcer owns the judgment, and all rights to recover the judgment.
When an OJC sells their judgment outright for a very steep discount, the judgment enforcer owns all legal and financial rights to the judgment. When the judgment is purchased on a future-pay basis, the enforcer has a fiduciary responsibility to the OJC if and when any money is recovered beyond their reasonable expenses to recover the judgment.
A court case that discusses the fiduciary responsibility of future-pay purchases of judgments assigned to enforcers is Cross v. Bonded Adjustment Bureau, 48 Cal. Appeals 4th 266; 55 California Reporter. 2d 801, July 9, 1996.
The simplest example of potential bailment in the judgment business is a time limit in a purchase agreement, for example "buyer will return judgment to OJC in one year". While this should not be a problem in most states, more than one court judge has decided that putting time limit clauses in judgment purchase contracts is bailment.
Charges of bailment may subject the enforcer to charges of Unlicensed Practice of Law (UPL) and abuse of process. Sometimes unfortunately, the law is often what any black robe judge decides it is.
In most states, time limits in judgment contacts are working just fine, and many judgment enforcers put time limits in their contacts. Many OJCs are uncomfortable assigning their judgment, and time limits make many OJCs feel more comfortable.
However, there is case law (in California, Cohn v. Thompson) that says purchase agreements should be for "all rights, title and interest" in the judgment. The case also says time limits for recovery in the purchase agreement constitutes a temporary agreement, and are tantamount to an agency relationship (creating a bailment).
In a few states, for example, Arizona or Virginia, one should never buy a judgment on a future-pay basis unless they first consult with a lawyer, or form a collection agency, etc.
Most judgment enforcers will gladly return difficult or impossible judgments back to the OJC, but very few put this policy in writing. The return of judgments should be at the discretion and policy of the enforcer, and not a contractual obligation.
In some states, courts view return clauses as judgment "rentals" and bailment. In at least one instance, the "perpetrator" was sentenced to a long prison term because of UPL-related charges. Note that UPL is a crime, not a civil matter, and a UPL charge usually starts with a judge recommending that a district attorney make a criminal charge.
The best judgment purchase agreements identify the irrevocability of the assignment. Most enforcers (who are not lawyers) do not let the OJC sellers have any control over their actions. In some states, a revocable, conditional, or temporary assignment constitutes bailment and UPL.
------
http://www.JudgmentBuy.com - is the best and fastest judgment solution, where Judgments quickly get Purchased or recovered by the very best - matched for your judgment!
Mark Shapiro - Judgment Broker - Free leads for Judgment Enforcers and contingency collection attorneys.
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