speaker: dan spilatro, managing partner, spilatrolaw group chicago 2012 - litigating comm… ·...
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Litigating Commercial Collections & Defenses Raised by Debtors
Speaker: Dan Spilatro, Managing Partner, Spilatro Law Group
Daniel J. SpilotroSpilotro Law Group, LLC
Broadcast Cable Credit Association's Media Seminar
July 19, 2012
Litigating Commercial Collections & Defenses Raised by Debtors
Spilotro Law Group, LLC © July 19, 2012
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Terms of payment on insertion orders
• Net 10/30 days
• Interest 1.5% per month
• Attorney’s fees
• Jury waiver
• Consent to jurisdiction
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Other important terms
• Positioning – no guaranty
• Limitations on liability
• Merger clause – Complete and entire agreement between the
parties and shall supersede any and all other agreements whether verbal or in writing between the parties
Pre‐Suit Collection
• Most preferred conclusion – also the LEAST effective
• Debtor has already ignored payment demands from creditor
• Debtor will probably ignore letters and phone calls from agency/attorney
• If responsive at all – will likely be to the attorney
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Preparing and filing the complaint
• Produce all insertion orders – signed or unsigned, invoices, statements, and correspondence between the parties
• Determine the legal entity responsible for the debt before filing suit (otherwise your judgment could be worthless and uncollectable)
• File a verification with the complaint– Decreases time to entry of judgment if not opposed
– Requires verified answer to your complaint if opposed
• Advance court costs and non‐contingent suit fee
Causes of action
• Breach of contract– Written contract
• Account stated– Continuous business between the parties
• Unjust enrichment– Improper receipt of services
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Suit is filed … now what?
• Summons is issued and the Sheriff will attempt to serve the debtor if it is in county
• Debtor is served and has three choices– Ignore it– Respond and file an appearance/answer– Hire an attorney
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Appearances
• Yes– Small claim: set for trial on initial status
– Over $10,000: initiate discovery
– Answer & affirmative defenses (lack of authority, forgery, statute of limitations)
– Motion to dismiss (arbitration clause, jurisdiction)
• No– Default judgment if verified complaint
– Proveup if complaint is not verified
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Jury demand
• Set discovery cut‐off date
• Case proceeds to mandatory arbitration first
• Initiate discovery
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Counterclaim
• Potential pitfall of all litigation – You become a defendant in your own lawsuit
– Requires new retainer agreement on an hourly basis to defend the counterclaim
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Discovery
• Interrogatories
• Request to produce documents, etc.
• Depositions
• Disclosure of witnesses for trial
• Requests to admit‐failure to timely answer deems the request admitted
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Trial/arbitration
• Witness is required to appear in person– Travel costs; time‐out‐of‐office expenses
– Trial may last more than one day and require witness to return
• Typical breach of contract elements to prove: offer, acceptance, consideration
• Records witness – someone with knowledge of the documents
Trial/Arbitration
• Arbitration – Non‐binding in Illinois – either party can vacate and have a second trial before a jury
– Requires additional trial fee along with cost of bringing in witness(es)
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Use experienced counsel in your jurisdiction … They know the good plaintiffs’ judges and which ones to avoid. Also, they use their experience
against opposing counsel who does not practice regularly before the court.
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Now you have a judgment, but you are only halfway there.
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Post‐judgment remedies
• Citation to discover assets to debtor• Citation to discover assets to third party
– Banks– Credit card companies (Amex and Discover; not bank‐issued Visa or MC)– State unclaimed funds (Illinois Cash Dash has $1.5B in cash unclaimed)– Landlords– Their own attorney– Internet – use to locate their customers (most list them on their website)– PayPal and Groupon
• Lien on real property• Levy on real property
Thank you!
Contact Information:
Daniel J. SpilotroSpilotro Law Group, LLC2551 N. Clark Street, #405Chicago, IL 60614773‐451‐[email protected]