By: Robert J. Nahoum
You live in New York but used to live in another state and just learned that you were sued in that state by a debt collector and they have a default judgment against you.
Can the debt collector pursue the default judgment in New York? Will you see it coming? What can you do to stop it?
Full Faith and Credit
Article IV, Section 1, of the U.S. Constitution, referred to as “The Full Faith and Credit Clause” provides that the states must recognize legislative acts, public records, and judicial decisions of the other states. It further states that “Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State.” What that translates to mean is that a judgment in one state must be recognized and honored in every other state. It also prevents parties from moving to another state to escape enforcement of a judgment or to re-litigate a case already decided elsewhere.
While the Full Faith and Credit Clause of the U.S. Constitution was intended to prevent evasion of judgments, the States have discretion in enacting laws to achieve that end.
Domestication of Sister State Judgment In New York
In New York State, the mechanism for domestication of a sister state judgment depends on how that judgment was obtained. If the judgment was not by default, the debt collector simply has to file a certified copy of the judgment along with an affidavit with the clerk in the county in which judgment is to be entered. If the judgment was by default, then the debt collector has a few extra hoops to jump through – a motion for “summary judgment in lieu of complaint” must be filed with the court. Under such a motion, the consumer has the opportunity to show up in court and contest the jurisdiction of the sister state judgment. The most common challenge to the sister state’s jurisdiction is that the consumer was not properly served in the initial lawsuit. This defense is generally strong considering that the consumer was likely not living in the sister state at the time he or she was allegedly served.
If the consumer is successful in opposing a motion for summary judgment in lieu of complaint, the debt collector will either have to give up its efforts to enforce the judgment in New York or start the whole thing all over again in a New York court.
The FDCPA and Forum Abuse
When enacting federal debt collection laws called the Fair Debt Collection Practices Act (FDCPA for short), Congress intended to eliminate abusive debt collection practices by collection agencies and other debt collectors. Among the abusive practices that Congress intended the FDCPA to eliminate was the “problem of ‘forum abuse,’ an unfair practice in which debt collectors file suit against consumers in courts which are so distant or inconvenient that consumers are unable to appear,” thus allowing the debt collector to win a default judgment. S.Rep. No. 95-382, at 5 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699.
The FDCPA’s venue provisions require that consumer debt collection lawsuits be brought “only in the judicial district or similar legal entity in which [the] consumer resides at the commencement of the action” or where the “consumer signed the contract sued upon.”
If a debt collector has begun efforts to domesticate a default judgment from another state, gather whatever proof you have that you were not living there at the time you were allegedly served. Show that proof to the debt collector and insist that they stop domestication. If the debt collector refuses, you should consult a qualified attorney to oppose a motion for summary judgment in lieu of complaint.
If you didn’t live in the sister state when you were sued and you didn’t sign a contract sued upon there, you may have a case under the FDCPA for venue abuse. If a debt collector violates the FDCPA, you can sue the debt collector for statutory damages up to $1,000.00, actual damages (like pain and suffering) and the debt collector may have to pay for your attorney.
What does this mean for you? The FDCPA gives consumers the power to swing the pendulum in the other direction and call the debt collector to the out for violating your rights as a consumer. Best of all, if you’re successful, the debt collector may have to pay for your attorney.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.