Assignees Can Not Inherit A Cause Of Action
I'm not a lawyer, I am a judgment broker
I'm not a lawyer, I am a judgment broker. This article is my opinion, from my experience in California. Laws are different in every state. If you ever want legal advice or a strategy to use, you should contact a lawyer.
In bad economies, judgment debtors become more tempted to use potential "loopholes with proof of service" created with default judgments. Some debtors will assert they weren't served, even when they really were, and try to vacate the default judgment against them. When you're thinking about becoming the assignee, pay attention to the proof of service.
If a default judgment is set aside (vacated), that's not good news for the Original Judgment Creditor (OJC). After the judgment is set aside, the OJC has the option of suing the defendant again and possibly winning a new judgment.
When judgments are assigned, the causes of actions for the judgment does not move to the assignee. The assignee of record hasn't any recourse if there is an attempt to appeal or vacate the judgment. Also, an assignee of record has no recourse if the county recorder or a court clerk makes an error, that thwarts the judgment lien from attaching to a judgment debtor's real estate.
If a default judgment is set aside, it is usually depressing for the assignee of record, because the cause of actions are gone, which means that judgment is now worth nothing, and a assignee of record loses everything they paid attempting to recover the judgment.
just because a judgment was won by default, does not mean it won't get recovered. However, default judgments are not as strong as non-default judgments. In some places, for example New York, default judgments require another case number, and prevailing in another court lawsuit to get domesticated to their state.
There are methods to fix questionable proofs of service for judgments by default. One way is to get the judgment debtor personally served anything related to the judgment (paying a Sheriff or a registered process server), then wait 6 months; and then the judgment debtor will not be able to successfully claim they didn't know about their judgment. If one does this, all issues about the original proof of service of the lawsuit not getting served on the debtor properly, disappears.
Some judgment enforcers use purchase agreements which require the OJC to pay them something if a judgment gets appealed, vacated, or when a judgment debtor successfully gets protection by going bankrupt. Some OJCs do not like such policies, and look for other judgment enforcers having contracts that do not require a reimbursement under such conditions.
One can see both sides of the issue. When judgments get set aside because of an inadequate proof of service, the judgment recovery specialist gets burned because the OJC didn't make sure to have the judgment debtor personally served by a registered process server or a Sheriff.
When the notice of the lawsuit wasn't properly and personally served, or was served by publication, it may end up becoming a worthless judgment. Before investing significant cash recovering a default judgment having non-perfect proof of service, fix the proof of service.
by: Mark Shapiro
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