Security for Your Lawsuit

Two weeks ago I obtained a judgment for a client against a contractor in the amount of $215,000.00. This included triple damages, attorney's fees, interest and costs. It was a great victory, but there is a problem: the defendant is virtually judgment-proof.

In any lawsuit, a cost-benefit analysis needs to be done to determine if it is worthwhile to pursue a claim against a defendant. The money spent has to be balanced against the ability to collect a judgment if it is obtained. The best way to secure a potential judgment is to move for prejudgment attachments. The most common asset to attach is real estate.

In Massachusetts, the plaintiff must demonstrate a likelihood of success on the merits (the he or she will probably win), and that the defendant does not have liability insurance to satisfy a claim. It the attachment is done "ex parte" (without notice to the other side), the plaintiff must also show that the defendant is likely to convey the property if given notice, or that the defendant is not within the jurisdiction of the courts.

Homeowners or home contractors can move for prejudgment attachments, but home contractors have the mechanism of the mechanic's lien available to them, so in their case, it is more rare.

In almost all of my cases, I move to attach an asset, because no one wants a lawsuit to just be an exercise in frustration or waste of money. So, parties to an agreement should try to get as much information as they can about assets from the other side (properties owned, other jobs, motor vehicles, bank accounts) in order to protect themselves if something should go awry.

Although it may appear distrustful, it provides insurance in case something should go wrong. In a subsequent post, I will discuss mechanic's liens.