Collections: Motion to Set aside Judgment - Timely Filing

     Timing can be everything. A prime example of this is the case of Trimark Partners v. HST L.L.C. In Trimark the Fairfax Circuit Court ruled that a debtor cannot move to set aside a confessed judgment because he failed to file a motion within twenty one days of learning of the judgment. 

     In Trimark the Court initially entered a judgment against three defendants based on a confession-of-judgment provision in a note. Two of the defendants had executed the note containing the confession-of-judgment terms. A third defendant later had signed an allonge, or attachment to the note, by which he consented to the note obligations. All three defendants later moved to set aside the judgment. 

     Under Virginia Code §8.01-433, a defendant must move to set aside a confessed judgment within twenty one days following notice to him that the judgment has been entered. The judgment can be set aside "on any ground which would have been an adequate defense or set off in an action at law...". 

     The Court found as a matter of fact that on a certain date the debtors were advised by the creditor of the entry of a judgment. A couple weeks later the judgment order was actually served on the debtors. More than twenty one days from the date on which the creditor advised the debtors of the entry of judgment, but not more than twenty one days form the date the judgment order was served on the defendants, the defendants filed a motion to set aside the judgment. The judgment creditor objected to the motion because it was not made within twenty one days of notice. 

     The Court ruled in favor of the creditor, ruling that notice was proven by the creditor's evidence of notice (advising by letter); the Court found that notice was not proven only by the serving of the judgment on the defendants.

     The lesson of Trimark, as is the lesson in so many cases, is to create a paper trail of all transactions, and act promptly. It will usually reap dividends.

Collections: Confessed Judgment Set Aside

     The United States District Court at Alexandria, Virginia, set aside a confessed judgment in the case of Benton Land Fund, L.P. v. NvMercure Ltd Partnership because the entry of the judgment was by a party not specifically authorized to confess judgment. The Court found that the provisions in the note at issue stated that judgment may be confessed by "any attorney admitted to practice in any jurisdiction or any vice president or senior vice president of the bank". The Court found that this language was not sufficiently specific to allow the plaintiff limited partnership to confess judgment because of certain ambiguities among the documents in identifying the "Bank" referred to in the note. Further, the language in the note did not entitle the person who actually confessed judgment to act as the attorney-in-fact for that purpose.

     This case serves as another reminder as to why competent legal advice should be sought, and why loan documents and contracts should be carefully read and strictly followed.

Collections: Motion to Set Aside Judgment - Timely Filing

     Timing can be everything. A prime example of this is the case of Trimark Partners v. HST L.L.C. In Trimark the Fairfax Circuit Court ruled that a debtor cannot move to set aside a confessed judgment because he failed to file a motion within twenty one days of learning of the judgment.
     In Trimark the Court initially entered a judgment against three defendants based on a confession-of-judgment provision in a note. Two of the defendants had executed the note containing the confession-of-judgment terms. A third defendant later had signed an allonge, or attachment to the note, by which he consented to the note obligations. All three defendants later moved to set aside the judgment.
     Under Virginia Code §8.01-433, a defendant must move to set aside a confessed judgment within twenty one days following notice to him that the judgment has been entered. The judgment can be set aside "on any ground which would have been an adequate defense or set off in an action at law...".
     The Court found as a matter of fact that on a certain date the debtors were advised by the creditor of the entry of a judgment. A couple weeks later the judgment order was actually served on the debtors. More than twenty one days from the date on which the creditor advised the debtors of the entry of judgment, but not more than twenty one days from the date the judgment order was served on the defendants, the defendants filed a motion to set aside the judgment. The judgment creditor objected to the motion because it was not made within twenty one days of notice.
     The Court ruled in favor of the creditor, ruling that notice was proven by the creditor's evidence of notice (advising by letter); the Court found that notice was not proven only by the serving of the judgment on the defendants.

Collections: Confessed Judgment, Power of Attorney, and Required Signatures

     The Fairfax County Circuit Court, in the case of Cardinal Concrete Co. v. White, ruled that where the debtor signed a power of attorney appointing an agent selected by the creditor to confess judgment on a note in the event of default, and the attorney-in-fact did not sign the instrument, the confession of judgment would not be set aside because the debtor ratified the creditor's selection of the agent, and the attorney-in-fact was not required to sign.
     The facts of In Re: White were that the debtor executed a promissory note in favor of the creditor. The note contained a power of attorney stating that the creditor appointed an agent to confess judgment on behalf of the debtor. Only the debtor signed the power of attorney. After the entry of a default judgment, the debtor moved to set aside the confessed judgment on the ground that the creditor selected the attorney-in-fact, and that the attorney-in-fact did not sign the power of attorney.
     The motion to set aside was denied. The Court ruled that even if the creditor had no authority to designate the attorney-in-fact, the debtor ratified the appointment by executing the power of attorney. Also, the court found that Virginia Code §8.01-435 did not require the attorney-in-fact to execute the instrument.

 

Collections: Motion to Set aside Judgment - Timely Filing

     Timing can be everything.  A prime example of this is the case of Trimark Partners v. HST L.L.C.  In Trimark the Fairfax Circuit Court ruled that a debtor cannot move to set aside a confessed judgment because he failed to file a motion within twenty one days of learning of the judgment.

     In Trimark the Court initially entered a judgment against three defendants based on a confession-of-judgment provision in a note. Two of the defendants had executed the note containing the confession-of-judgment terms. A third defendant later had signed an allonge, or attachment to the note, by which he consented to the note obligations. All three defendants later moved to set aside the judgment.

     Under Virginia Code §8.01-433, a defendant must move to set aside a confessed judgment within twenty one days following notice to him that the judgment has been entered. The judgment can be set aside "on any ground which would have been an adequate defense or set off in an action at law...".

     The Court found as a matter of fact that on a certain date the debtors were advised by the creditor of the entry of a judgment. A couple weeks later the judgment order was actually served on the debtors. More than twenty one days from the date on which the creditor advised the debtors of the entry of judgment, but not more than twenty one days from the date the judgment order was served on the defendants, the defendants filed a motion to set aside the judgment. The judgment creditor objected to the motion because it was not made within twenty one days of notice.

      The Court ruled in favor of the creditor, ruling that notice was proven by the creditor's evidence of notice (advising by letter); the Court found that notice was not proven only by the serving of the judgment on the defendants.

     The lesson of Trimark, as is the lesson in so many cases, is to create a paper trail of all transactions, and act promptly.  It will usually reap dividends.