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Want to Get Your Money Back Quickly?

Date

September 8, 2006

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6 minutes

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You know your adversary owes you money. Your adversary knows they owe you money. Everyone knows that your adversary will eventually have to pay you the money. Yet the other side continues to file motion after motion after motion to delay your inevitable judgment. And even worse, they are paying their lawyers with your money.

Indeed, even when you have the superior legal claim, you will often need to spend substantial legal fees and endure years of litigation before you even have a chance to obtain a judgment granting you the disputed sum. Then, even if you prevail, you ordinarily will not be able to recover your legal fees (absent an applicable fee-shifting agreement), and you may not be able to collect on your judgment, particularly if your opponent spent all their money (and your money) litigating against you.

Given these realities, whenever you are the party that is left holding an empty bag when the dispute arises, you are always searching for creative ways to wrestle control of the money from your opponent without having to win a judgment first. In most cases, you will search in vain, because there is a strong bias in the American court system against what the courts often refer to as prejudgment attachments.” Nevertheless, there are some instances where you can actually freeze the disputed sum or some other assets of your opponent without first obtaining a judgment, and in those instances, you can sometimes turn the tables on your opponent within a matter of days, rather than years. When it works, it can change the complexion of a case overnight. The following discussion outlines some of the more popular ways, and some of the most obscure ways, to obtain a “prejudgment attachment” or similar relief from an Illinois court.

Statutory Prejudgment Attachments

In Illinois, there is an often-overlooked statute specifically dealing with prejudgment attachments. This prejudgment statute provides that under certain circumstances, nearly any creditor with a money claim greater than $20 can obtain at the beginning of a case an attachment against the property of a debtor located in Illinois. The statute can be triggered if any one of a number of enumerated situations occurs, including the following:

 

  1. The debtor is not a resident of Illinois
  2. The debtor dodges service of process
  3. The debtor leaves Illinois with the intention of having its effects removed from Illinois
     
  4. The debtor is about to leave Illinois with the intention of having its effects removed from Illinois
     
  5. The debtor is about to remove its property from Illinois to the injury of the creditor
     
  6. The debtor has a history of fraudulent conveyances within the last two years; or
     
  7. The debtor is about to fraudulently convey its property or effects.

 

Therefore, any time your adversary is a non-resident of Illinois or you believe your adversary is fleeing Illinois, removing his property from Illinois, or fraudulently conveying his property, then Illinois’ prejudgment attachment statute allows you to obtain a prejudgment attachment at the beginning of litigation against your opponent. If you obtain a prejudgment attachment, you will essentially freeze some of your adversary’s assets until the court ultimately decides whether you should win on the merits of your claim. Of course, while you are waiting for your case to wind its way through the court system, you will not be able to liquidate or use the assets you attach, but neither will your adversary, and you will have a pool of funds available to satisfy your judgment if you do prevail at trial. In short, you will dramatically and instantly improve your leverage if you win a prejudgment attachment.

You should note that a prejudgment attachment is not limited to a specific, identifiable asset or fund at issue in the litigation. Instead, your attachment can apply to nearly any property belonging to your adversary located in Illinois that is convenient for the court to attach. This an important point because many times there is no specific fund that is the subject of a dispute. For example, in a standard breach of contract case, the plaintiff will be seeking money damages, but there is no identifiable fund or pool of money that the defendant is required to set aside to satisfy the plaintiff’s claim if it prevails.

Equitable Prejudgment Attachments

If your adversary is a resident of Illinois, and you cannot establish that they are fleeing Illinois, dodging service of process, removing their assets from Illinois, fraudulently conveying their assets, or are otherwise triggering Illinois’ prejudgment statute, then you will not be able to obtain a statutory prejudgment attachment. Nevertheless, you still have other options available to you. Most notably, you may be able to obtain what is called an “equitable attachment.” This seldom-used tool can be just as powerful as a statutory prejudgment attachment, but many lawyers, and even judges, are surprisingly unfamiliar with it.

An equitable attachment is designed to save a plaintiff from the frustration of (and perhaps the court system from the embarrassment of) watching a defendant dissipate or dispose of a specific disputed asset (including a fund or pool of money) while the parties go through an ultimately pointless exercise of arguing about it in court. If your adversary possesses such a specific asset that you believe should be turned over to you, you can ask the court to take possession, custody, and control over the disputed asset at the beginning of the case, without first obtaining a judgment or otherwise having to prove your case. If the court agrees, it will literally require your adversary to place the asset(s) in escrow or turn them over to the court until the case is resolved.

Therefore, an equitable attachment has the same basic effect as a statutory prejudgment attachment — it freezes the asset and thus prevents your adversary from using it to fund their defense and/or otherwise disposing of it. And if you prevail on the merits at trial, you will also have a tangible asset available to satisfy your judgment. Therefore, an equitable attachment can have an immediate and dramatic impact on the parties’ relative leverage positions just like a statutory prejudgment attachment.

The key to obtaining an equitable attachment is identifying a specific asset, fund, or pool of money that is the particular subject of your dispute. You will not be able to obtain an equitable attachment if all you have is a general claim for money damages. Even if the amount you are owed is a specific sum, that still will not be enough. Rather, you must claim a possessory right to the specific asset itself. For example, if your opponent owes you $100,000 for goods or services you provided, you cannot obtain an equitable attachment of their bank account, even if it contains $100,000. But if your opponent owes you $100,000 and previously agreed to pay it to you by turning over the specifically identifiable proceeds of their bank account, then you can ask the court to take control over those proceeds until the case is resolved.

Given the impact an equitable or prejudgment attachment can have on a case, you should always consider them as possible remedies, especially if your case will involve a specific, identifiable asset or pool of money. You may have to fight through some initial hostility from the court, and your adversary can be expected to oppose the attachment vigorously, but if you successfully obtain the attachment, your case could dramatically change for the better overnight.


Filed under: Litigation

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