A standard civil collection lawsuit in Connecticut Superior Court (for amounts over $5,000.00) currently requires a court filing fee of $360.00 and a marshal’s fee of approximately $50 – $100.00 per defendant. The plaintiff’s attorney prepares and signs a Summons and Complaint, assigns the civil action a “Return Date” (suit starting date) and delivers it to the marshal. The marshal serves the defendant(s) and delivers the original Summons and Complaint with proof of service to the attorney who then e-files (or “returns”) the papers with the court with the filing fee.
Within two days after the Return Date the defendant must file an Appearance and subsequently answer the complaint. If no appearance is filed a Motion for Default for Failure to Appear and a Motion for Judgment with an Affidavit of Debt (See Conn. General Statues §17-23) from the plaintiff can be submitted. This material is reviewed by the court and a judgment can enter if all documents are in order in cases where damages are liquidated.
It is possible with moderate effort for a defendant to file appropriate motions that can delay the entry of a judgment in a civil action in Superior Court. (A corporate defendant may not represent itself and must have an attorney represent it.)
A very powerful tool in commercial collections is a Prejudgment Remedy Attachment (“PJR”) proceeding which is filed along with a civil collection action (See Conn. General Statues §52-278a, et seq.) The PJR seeks a lien on the real property or bank accounts of the defendant as security for a judgment to be obtained in the future.
There are two types of PJR actions in Connecticut. If you have a commercial credit agreement which contains a Waiver of Notice and Hearing (See C.G.S §52-278f) properly signed, we can file such an attachment on the debtor’s real or personal property based on an Affidavit from the creditor and our Summons to the marshal. We do not need the court’s permission to file such a lien when this waiver has been properly signed in a commercial transaction. (This is the quicker of the two PJR processes.)
When the debtor has not signed such a waiver we apply for the more common two step Prejudgment Remedy Attachment.
In this process, we first file documents with the court, the clerk schedules a hearing and the marshal serves the defendants with notice of the hearing. At the PJR hearing we try to convince the judge that it is likely the creditor will get a judgment in the amount indicated and therefore is entitled to a lien in the amount requested as security until the judgment is entered down the road.
The current court filing fee for this process is $540.00 and the marshals fees can be $250.00 or more (the court adds such charges to the judgment.) If the defendant does not respond to this process we will usually get an attachment by default if the documents are in order.
If we are successful at the hearing the court orders an attachment (usually upon real estate, at least at first). This attachment is filed in the land records by the marshal and remains on the property until a judgment lien is filed after we subsequently obtain judgment. The judgment lien then relates back in terms of priority to the day of recording of the PJR attachment.
We can file a PJR action on consumer or commercial accounts, and with or without a signed written agreement.
In PJR actions we confirm ownership of the real estate but usually do not perform a full blown title search, as the object is to quickly record a lien and get in line before any other creditors that might be proceeding with collection actions. We always presume that any attachment of a creditor seeking a PJR would be behind taxes, municipal water and sewer charges and any previous mortgages on the property. Such an attachment or lien may be foreclosed on by any higher priority lien holder
The advantage of a Prejudgment Remedy Attachment proceeding is that if successful a quick lien on the defendant’s property is obtained. The defendant must respond promptly and usually must hire an attorney (at a substantial cost) to defend itself in the PJR action. The defendant can move to reduce or discharge the lien or bond it over.
The PJR hearing is like a mini trial of the case in a way (although judgment does not enter at this stage). The purpose is to establish that there is probable cause that a judgment will enter in the future in the amount requested in favor of the plaintiff. This process very often compels the defendant to come to the bargaining table and settle the claim or agree upon a judgment at an early stage.
In the event that the value of the real estate attached does not provide enough equity for all of the mortgages and liens ahead of a creditor’s PJR attachment and the PJR obtained, a plaintiff can apply to the court to convert the real estate attachment to a lien on a bank account (if known). We file motions to compel the defendant to disclose the value of real property, the amount of encumbrances, as well as the existence of any bank accounts or other assets or debts owing to the defendant.
The PJR process requires substantial additional legal work on the part of this firm (at least 10 hours more than a standard collection suit) including attendance at a hearing (and usually a short calendar session beforehand to schedule the matter) and preparation of an Affidavit, Memorandum, Application, etc., (in addition to preparation of the standard collection complaint for money owed.)