From Our Perspective: Collecting a Judgment From 2010

Our knowledgeable attorneys give their unique insight in “From Our Perspective.” We take a closer look at cases won by our attorneys at Robinson & Henry. We’ll also share our legal expertise on other cases and legal issues in Colorado.

In this episode, Robinson & Henry Civil Litigation Attorney, Sonia Zaheer, discusses a recent collections case.

Failure to collect a judgment from a lawsuit is a common problem. This case is about collecting a judgment our client was owed from 13 years ago. Over the years, the individual was unsuccessful in collecting the judgment from the defendant. Sonia explains how Robinson & Henry effectively collected $133,000 for our client. 

Past results afford no guarantee of future results; each matter is different and must be judged on its own merits. Facts are those of an actual Robinson & Henry litigation case. 

Question: Sonia, thank you so much for joining me today. Tell me more about who we represented and what this case was about.

Sonia: We represented a local family-owned business that deals in car parts and various other services. Our client had sold a business to the defendant back in 2009/2010 and the defendant had failed to pay under that sale agreement. Our client then went to court and obtained two judgments in 2010, totaling about $40,000 against the defendant. After obtaining those judgments our client tried to collect without any success. For years, he tried first to negotiate a payment plan. He engaged a collections company. No success at all and the defendant essentially vanished. In about 2022, our client discovered that the defendant had acquired some real property and at that time our client retained us.

Question: When our client found out that the defendant had acquired a house, how did this help collect the judgment?

Sonia: Essentially, the judgments were worthless before there was a known asset that we could attach in order to collect on the judgments. And with this discovery now we knew that the defendant was entitled to a property that we could impose judgment liens against. We did our investigation. We looked into the value of the property. We looked at the existing encumbrances, encumbrances on the property. We also ensured that we were compliant with the Colorado homestead exemption rules, which provide that there needs to be a certain amount of equity in the house before a creditor can execute their judgment. And after doing that investigation, we filed a complaint seeking to foreclose on the liens and to have the house sold at a sheriff’s sale so that our client could collect on the judgments.

Question: Once you served the complaint on the co-defendant, who is a relative of the defendant, how did things change for our client?

Sonia: The complainant named several defendants as required by law. One of the defendants that was listed was a relative of the debtor defendant. Our debtor defendant tried to evade personal service of the complaint. He just wouldn’t let the process server serve him with the complaint. In the meantime, we were able to serve the relative who then shared that complaint with the debtor defendant and now our defendant was aware of the allegations against him. He knew now that we were going to foreclose on the house even if he tried to evade actual personal service. He had a choice either to come forward, you know, discuss a resolution or have his house foreclosed upon. And I think wisely, he chose to come forward and engage in trying to resolve the lawsuit.

Question: In reaching a settlement agreement. What were the total damages awarded to our client?

Sonia: The original judgments totaled about $40,000. The court order providing for those judgments also included post-judgment interest accruing per annum. That order also provided for any attorney’s fees or costs that our client would incur in collecting on those judgments. Over about 13 years, the judgments had accrued to about $103,000. Our client had incurred significant attorney’s fees in doing the investigation and commencing the lawsuit that we did. The total damages awarded to our client under the settlement agreement totaled over $133,000.

Question: If someone is watching and they are trying to collect a judgment, what sort of advice would you give?

Sonia:  I would advise that they do some investigation and see if the debtor has acquired any assets, or they can consult with an attorney who can help with that investigation and that attorney can advise them as to the best legal route for them in order to collect on that judgment.