Practical Ecommerce

Recovering Damages From Thieves, Crooks and Scofflaws

It seems not a day passes that Dozier 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. But, sometimes there are pockets from which to collect. 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 U.S. 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 irrelevant to your ability to collect, particularly when ecommerce 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 also includes bank accounts, some retirement accounts, PayPal accounts and AdSense account balances! 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 websites.
  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 U.S. to “debtor’s prison!”

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.

John W. Dozier, Jr.

John W. Dozier, Jr.

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