Thursday, February 21, 2013
Subrogation is a legal concept whereby a party "steps into the shoes" of another. Most commonly you see subrogation in the context of insurance contracts. For instance, an insurance company that is obligated to its insured might pay the claim to their insured and then "step into their shoes" and sue a third party who is arguably liable. Subrogation provides an opportunity in some situations for an insurer to mitigate what might otherwise be a losing endeavor. Subrogation is most common in construction contracts, insurance contracts, suretyship and negotiable instruments. Seeking to have an insurance company compromise in part their subrogation interest is a common method that plaintiff's attorneys use in the context of personal injury claims to achieve greater recovery for the injured person than they might otherwise be entitled to. There are generally two kinds of subrogation, express and implied.
Wednesday, February 20, 2013
Med pay, uninsured and underinsured insurance protects you, not the other driver. It is relatively cheap when compared to the liability insurance products that protect the other driver. Make sure you get the maximum amount available. If you get in an accident, you will be glad you did!
Tuesday, February 19, 2013
The foremost benefit of an entity is the fact that the entity shields the business owner from liabilities that arise from their business. A fact of transacting any type of business is the possibility of being liable to someone for something that went wrong. For example if the business was unable to meet the terms of a contract. If the business is operating as an entity (and the business owner did not personally guarantee the contract) the person suing would usually only be able to sue the entity. If the business is not operating as an entity, however, the person suing would most likely sue the business owner individually. If the suit is successful and a judgment is entered against the business owner, the business owner’s personal assets could be seized to satisfy the debt. But if the judgment was only issued against a business owner’s entity, however, the business owner’s personal property (his home, car, etc.) would most likely be protected because only the entity’s property could be seize to satisfy the judgment.
Thursday, February 14, 2013
What happens if you have a judgment issued against a person or entity, the judgment debtor doesn’t pay you as ordered, and the judgment debtor doesn’t own any property located in the state where you sued them? A judgment from a state court in one state will not allow you to seize property located in another state. Domesticating your foreign judgment is the process by which you get around this problem so that you can seize property in the other state. Once a foreign judgment has been domesticated by a court in the state where the judgment debtor has property, you can use that state’s enforcement mechanisms to satisfy your judgment. Although each state has its own procedures for domesticating foreign judgments, the overall process is the same. You will not have to have your previous trial over again, that part is done. In the process of domestication the court in second state will simply accept the judgment from the first state and issue a new judgment with essentially the same terms as the original judgment. Once the second state court has issued its judgment against the judgment debtor, you will be able to use all of the enforcement remedies of the second state to enforce your judgment against the judgment debtor’s property in that state. This post relates to state court judgments. Federal court judgments are treated differently.
Wednesday, February 13, 2013
What happens when someone obtains a judgment against an entity, the judgment debtor refuses to voluntarily pay the judgment, and the judgment debtor has no property or assets to seize? It may turn out that the person who owns and operates the judgment debtor actually does have assets. Because entities generally shield business owner’s personal property from being seized to satisfy the debts of their business, does that mean there is no way to get to the business owner’s personal property to satisfy their business’ debt? Not always. Although entities generally do shield the business owner’s personal property, there are certain circumstances that will allow the judgment creditor to break through the shield that entity creates—traditionally called “piercing the corporate veil”—and seize the business owners’ personal property to satisfy the debts of the judgment debtor business. Each state has different laws associated with allowing an entity to be set aside for purposes of piercing the veil, and every case will be decided based on the specific facts of that case. However, the factors that generally allow this to happen include some or all of the following: - the entity is only a sham or “alter ego” of the business owner, - the entity is only used to advance the private interests of the business owner, - the entity is or was being used to defraud customers, clients, creditors, etc.; - the entity’s owners, managers, members, or directors did not observe corporate formalities; - the business owner exerted complete and total financial interest, ownership, and control over the entity in a way that benefitted the personal interests of the owner far more than the entity; -the business owner used the entity or the entity’s property for their personal use outside of the business’ purpose.
Monday, February 11, 2013
There are many different types of debt: liquidated, unliquidated, contingent, secured, unsecured, consumer, commercial, dischargeable and nondischargeable. It is important to know just exactly what type of debt is at issue so you know which "rule book" you will need to follow.