Recovering Damages From Thieves, Crooks and Scofflaws

It seems not a day passes that Traverse Internet Law is not asked how to pursue someone who is using a replica website to “compete”, is stealing traffic through trademark infringement, is publishing outrageously false information online, or is undertaking sinister, threatening conduct against a business or its owners. “You can’t get water from a rock” is often a self-serving declaration offered by the crooks when caught. At Traverse Internet Law we have come to appreciate the fact that with some hard digging sometimes there are pockets from which to collect a significant damages award. And the good news is that there are very powerful legal tools to work with that, if understood, can be used to recover a judgment.

First, let’s acknowledge that getting a huge monetary judgment against someone personally is often meaningless unless it can be collected. With very limited space, let me tell you how you can get your money from a judgment:

1) For a Federal Court judgment, you can execute and serve post judgment actions anywhere in the US. For a state court judgment, you can “execute” on a judgment after using a very easy process to register an out of state judgment in the state in which you need to proceed. The defendant’s location may be irrelevent to your ability to collect, particularly when e-commerce is occurring and money is owed to the defendant from third parties like payment processors, Google, and others.
2) Garnishment is the most often used process, and means that 25% of the defendant’s wages as an employee, and 100% of sums owed as a contractor or from any other company, are taken and paid directly to you through the court. This includes bank accounts also, and some retirement accounts. And Paypal account and Adsense account balances also! You can issue many at the same time, and do them again and again until paid.
3) Attachments are used to seize property. If the defendant owns a car, the vehicle can be seized, sold, and the proceeds after paying off the note and expenses are paid to you. It is often used to seize personal property, and can include rings and watches, household items, other personalty, and even domain names and web sites.
4) Judgment liens are placed on real estate records and property owned by the defendant, unless owned as husband and wife in its entirety, and the property cannot be sold without paying you the proceeds. Or, you can file a lien and then file a lawsuit to force the sale of the house if you don’t want to wait.
5) Debtor’s Interrogatories are used when you don’t know what the defendant (“judgment debtor”) owns. You can serve a summons on the defendant every six months and your lawyer will interrogate the defendant under penalty of perjury. If the defendant fails to show it can lead to the defendant being held in jail until the next hearing date, often a month away. This is as close as we get in the US to “debtor’s prison”!

Obviously this is a succinct list of tools that, together with applicable statutory exemptions, vary by state. But you work with the tools you have. Envision yourself in the judgment debtor’s shoes…never knowing when the sheriff will knock on his door to inventory his household effects, never knowing when the money he is owed by a business will disappear into your coffers, never knowing when he will be required to come in and be interrogated, and never knowing when his car will be pulled over and seized. Yes, you do work with the tools you have…and on a rock, you may want to try a chisel.

So whether you are someone faced with a potential claim, or someone trying to decide how to pursue a scofflaw, understand that this is the mindset a high quality, motivated lawyer will have in pursuing the recovery of a judgment. Mr. Dozier was a founder, Vice President, and National Legislative Chairman of the National Association of Retail Collection Attorneys, a trade group of almost 1,000 law firms dedicated to collecting debts. There are plenty of law firms ready, willing and able to make life very difficult for a judgment debtor. It’s not a place you will ever want to be.