Hard Work Pays Off
Relentless pursuit of the debtor is our playbook for collecting debt.
In this case we were stymied by the debtor from learning about his assets. As you will see, we relentlessly pursued the debtor. He even did some time in jail.
But the judgment was collected in full. But not immediately…
The timeline of events:
- March 24, 2014 – Default Judgment entered against the defendant.
- March 27, 2014 – An an abstract of the debt was recorded in several counties where we thought the debtor might have property.
- May 12, 2014 – We sent post-judgment discovery to the defendant. The defendant ignored the discovery.
- June 25, 2014 – Because the defendant refused to answer the discovery, we filed a motion to compel the defendant to respond.
- July 24, 2014 – The judge ordered the defendant to respond to our discovery- but the defendant ignored the judge’s order and never answered the discovery.
- August 12, 2014 – Because the defendant refused to do what the judge ordered him to do, we we filed a motion with the court for the defendant to be held in contempt.
- October 16, 2014 – The judge held a hearing but the defendant did not appear. So the judge issued an Order for Writ of Attachment. This order told law enforcement personnel to arrest the defendant. At that point the Sheriff went to the Defendant’s home and arrested him.
- October 18-19, 2014 – The Defendant was jailed, posted bond and then was released
- Late October 25, 2014 – We entered into a settlement with the Defendant that called for a payment plan. The client agreed that the Defendant did not need to answer the post-judgment discovery so long as payments were made. So we did not dismiss our motion for contempt, just in case.
- February 2015- The Defendant made three months of payments and then the Defendant stopped making payments.
- March 4, 2015 – We filed our 2nd Motion for Contempt since the Defendant has still not answered the post-judgment discovery we sent to them.
- May 14, 2015 – The hearing was held and this time the Defendant appeared. He promised to provide the discovery answers so the judge issued an order, but did not require any jail time. However, no answers were given.
- June 5, 2015 – Because the answers the Defendant promised to the judge were not delivered, we filed our 3rd Motion for Contempt, again seeking jail time for the Defendant.
- June 2015- The Defendant put his homestead up for sale.
- July 20, 2015 – The sale of homestead was held up briefly by the abstract previously filed. The Defendant decided that rather than request a release of his homestead (something we would be required to give him had he asked) that he would just pay the judgment in full out of the proceeds. At this point he was exhausted and just gave in.
- July 29, 2015 – Release of judgment filed.
We represent lawyers
We represent lawyers in collecting fees.
An unwritten rule says lawyers should never sue their clients, even if they refuse to pay their legal bills. But at the firm we’ve been blazing a new path by representing attorneys in Texas and across the nation in disputes over unpaid legal fees.
During the past 10 years, law firms have experienced a staggering 10 percent drop in the amount they collect versus what they bill their clients, according to a 2016 report from Georgetown University Law Center.
Darrell W. Cook and Melissa J. Parker recently helped the Atlanta-based law firm Hanks Brookes, LLC, prevail in a claim against State Bank of Texas. The case was filed after the Dallas-based bank refused to pay Hanks Brookes for nearly $13,000 in work under a contract signed by bank president Chan Patel.
Hanks Brookes was hired to help collect court judgments against two people who previously were sued by State Bank of Texas. Hanks Brookes was never paid and hired the firm to sue the bank, which contested the amount owed and asked the court to force Hanks Brookes to pay its legal fees.
Judge Craig Smith of 192nd District Court in Dallas ruled in favor of Hanks Brookes after a one-day trial and awarded the firm the full invoice amount along with $12,000 in attorneys’ fees for the firm. While the dollar figures are small compared to other debt collection cases the firm has handled over two decades, this result should help reverse the notion that lawyers and law firms should simply walk away when their clients refuse to pay.
In addition to representing law firms in fee fights, Darrell W. Cook & Associates helps attorneys and business clients recover judgments in Texas and across the U.S.
Many lawyers and law firms are great when it comes to winning court judgments, but few know how to collect them. We are the splinter you can’t get out of your finger. We will not go away until our clients’ are paid what they’re owed, whether it’s an invoice for legal services or a judgment.
Injunction rescues a business.
Injunctions in Texas are complex and lawyers need to be on their toes.
We work on cases that seek to have an injunction entered. We also work on cases trying to defeat an injunction. In this case, we are defending against the injunction.
The client and his prior lawyer went to the temporary injunction on a Friday. The hearing did not go well and was carried over until Monday. Because it didn’t go well, I received an email from the client (then only a potential client) on Friday night.
This case was a dispute over the sale of a business. The client was accused of agreeing to sell a business to a couple of employees and then backing out of the agreement three years later. The hearing was supposed to determine whether the client could continue to operate the business.
The client could tell that his prior lawyer wasn’t experienced in temporary injunction matters and was in a panic. The hearing was clearly not going well.
We received an email from the client asking if we would be interested in taking over on Monday. Darrell agreed to meet with the client on Friday night to review the situation. We didn’t want to take on a matter if we couldn’t do a good job.
We accepted the case and worked over the weekend preparing for the contuation of the hearing. We electronically filed a flurry of documents on Sunday and appeared at the hearing on Monday morning.
We took the case because the employees could not meet their burden at the hearing to be awarded a temporary injunction. This proved to be true at the hearing as we continually reminded the judge that one element of a temporary injunction, the requirement of “irreparable harm,” would prevent the granting of a temporary injunction.
The court agreed and denied the request for injunction against our client. When the judge announced his ruling we were treated to the added pleasure of seeing one of the employees collapsing in disappointment.
We love this job.
A collections TRO
Some collections matters require a TRO.
We were called by the general counsel of a large, publicly-traded company that had a substantial receivable in Dallas against a nursing home. The client’s customer service representative learned from the nursing home’s employees that the owner was planning to transfer the business to another company they owned in an attempt to avoid its creditors.
When the General Counsel called she was worried that there was nothing to be done to stop the nursing home from dissipating assets and defrauding its creditors.
We immediately filed suit and asked the court for a TRO stopping the transfer from going forward. The court granted the TRO and we proceeded to the temporary injunction hearing.
In the meantime, we found where they had created new companies and found witnesses that corroborated everything we had heard from the client’s customer service representative.
Armed with this evidence we headed to the temporary injunction hearing. Before the hearing was to begin we met with the lawyers for the nursing home and a dialogue for settlement began. As a result, the court agreed to delay the hearing for an hour.
Eventually, before the temporary injunction hearing was commenced, the client settled on terms they found favorable.
Life as a Texas collections lawyer is rarely boring. Not every lawyer knows the best practice for collecting a judgment. No two situations are the same. Frequently we are retained by lawyers who obtain a judgment and then are stumped. A lawyer in Houston had obtained a judgment against a debtor who had a Big Firm lawyer representing him. Prosecuting judgments in Texas is a specialty, not every one understand the process and eventually we were hired to collect the judgment.View Entry