Collect Now Or Forever Hold Your Piece … Of Paper.
| March 16, 2017
Too frequently, a successful litigant’s judgment is worth no more than the piece of paper it is written on.Add the tremendous cost of litigation, and a big win may feel like a big loss.The problem is that while the lawsuit is pending the defendant is (i) incurring attorneys fees; (ii) using, encumbering, or losing assets; and/or (iii) defending other lawsuits or collection efforts.Ultimately, you cannot collect what a defendant no longer has.
But what if you could collect first, then litigate?What if you could seize the funds from a defendant’s bank accounts before he spends that money on an attorney?What if you could seize his property before he encumbers or loses it?What if you could secure your “piece of paper” before the defendant even knows he has been sued?Arizona allows certain plaintiffs to do all of the above through prejudgment provisional remedies of attachment, garnishment, and replevin.
Provisional attachments allow a plaintiff to seize a defendant’s property so that if the plaintiff prevails, the plaintiff can recover by selling the seized property.Provisional attachments are available in many circumstances including where a contract for the payment of money is no longer fully secured by real or personal property.Because of the downturn in the real estate market, provisional attachments may prove a very useful and relatively easy tool for lenders.
Provisional garnishments allow a plaintiff to force a third party in possession of the defendant’s property (such as a bank or employer) to turn that property over to plaintiff.If you know where a defendant has an account, including a retainer with a law firm, a garnishment may provide a quick way to collect money to secure a possible judgment.
Provisional replevin permits a plaintiff to repossess, usually by sheriff’s deputy, personal property wrongfully held by a defendant until a court can determine to whom the personal property belongs.A replevin often provides protection against the wasting or harming of personal property.
In addition to securing a future judgment, provisional remedies provide significant leverage.The plaintiff, now a judgment creditor, can gain access to the defendant’s otherwise off-limits financial information.There may be an evidentiary hearing for which defendant has minimal time to prepare.This is a unique opportunity for a well-prepared plaintiff to collect evidence and admissions.And, frankly, taking a defendant’s real or personal property causes hardship.All of these side-benefits increase the likelihood of a quick, favorable settlement.
So why don’t all plaintiffs seek provisional remedies?First, provisional remedies are not available in all cases.Second, provisional remedies require the plaintiff to post a monetary bond.Third, there may be consequences if the provisional remedy is later deemed improper.You should consult an attorney knowledgeable in provisional remedies to determine availability and cost, and to avoid potential consequences.
Litigation is aggravating and risky.Getting a judgment is great.But knowing that the numbers on that piece of paper are secured by already-collected property is priceless.Back to News & Events