Judge Won't Dismiss Judgment from Dissolved Corporation

[mariov322]

I have a judgment that was placed against me in 2006 with a company that no longer exists. They were a debt collection company. They filed for articles of dissolution in 2009 because they were being sued for fraud and also had debt they could not pay. I filed a motion to vacate judgment based on the fact that they no longer exist and that I can't find anyone to pay. I served the attorney and company at its last known address with a returned to sender letter from the attorney. On my court date I assumed that I would win based on a default judgment because neither party appeared in court. When I got in front of the judge he said he could not rule because he no longer had jurisdiction over the case, even though it was in his court where the initial judgment was ruled. What do I do? Why did he not have jurisdiction, and why was I not given my Due Process??? If the other party did not show and were notified by myself and the courts, why did I not win on a default judgment? This is in a Texas Court.

I went ahead and filed a Notice to Vacate Judgment with Uncontested Affidavit with the court, the county clerk and the county record. It is now in the county records with affidavit and I listed the bailiff of that court as a witness that the Plaintiff did not show and I should get a default judgment for failure to appear. Will this help?

[SChinFChin]

My question involves a consumer law issue in the State of: Texas

I have a judgment that was placed against me in 2006 with a company that no longer exists. They were a debt collection company. They filed for articles of dissolution in 2009 because they were being sued for fraud and also had debt they could not pay. I filed a motion to vacate judgment based on the fact that they no longer exist and that I can't find anyone to pay. I served the attorney and company at its last known address with a returned to sender letter from the attorney. On my court date I assumed that I would win based on a default judgment because neither party appeared in court. When I got in front of the judge he said he could not rule because he no longer had jurisdiction over the case, even though it was in his court where the initial judgment was ruled. What do I do? Why did he not have jurisdiction, and why was I not given my Due Process??? If the other party did not show and were notified by myself and the courts, why did I not win on a default judgment? This is in a Texas Court.

There are several issues here.

First is whether you actually owe the money. It seems a judgement is rendered against you on these grounds, and there are limited grounds for setting aside a judgment, even if you went back to the SAME judge.

If the creditor is a "collection agency", no doubt they bought the debt from someone, and this judgment is an asset. When they dissolved, you said they owe money to creditors, then this asset rightfully belong to those creditors. An analogy is if you owed someone money, he got a judgment, then he died. The monies are still owed to the estate, to go to the heirs. The fact that the creditor died does not extinguish the debt and judgment, and you cannot have the judgment set aside just because the creditor died. And if the decedant has debts, then the executor or administrator would use the money collected to pay those debts.

On the issue of corporate dissolution, if there are NO outstanding debts, judgments then belong to the stockholders, or LLC members. I had a business, dissolved it, and had ALL DEBTS assigned to me personally by the corporation, and I can legally pursue debts and judgments personally, as I PERSONALLY own it. I did this because I did not want the expense of keeping the company open for the sole reason of collecting debts and judgments owed me. Keeping a company open also entails maintaining corporate bank accounts, filing tax returns, paying state franchise fees, filing annual reports etc.

In the above case, a debtor simply cannot go to court and have a judgment set aside because I decided to have the company dissolved, and have the debts assigned to me personally. The fact the corporation does not exist anymore means squat.

If your objective is to PAY, and if your problem is you can't find anyone to pay, in most jurisdictions you can always pay the court. In this case, just find out from your court exactly what paperwork is involved to do this. Usually it's called "Request to Pay Judgement" or something similar. The object here is to clear your credit records, so you'll have a record of making the payment, and get a "Satisfaction of Judgment" filed. Then the court would hold the money, and it is up to the court to figure who is it they are supposed to pay, or most likely, wait for someone to come in to claim the monies.

[Mr. Knowitall]

The problem appears to have been that the court does not have the legal authority to grant the relief you're requesting. See the Texas Rules of Civil Procedure.

(f) On expiration of the time within which the trial court has plenary power, a judgment cannot be set aside by the trial court except by bill of review for sufficient cause, filed within the time allowed by law; provided that the court may at any time correct a clerical error in the record of a judgment and render judgment nunc pro tunc under Rule 316, and may also sign an order declaring a previous judgment or order to be void because signed after the court's plenary power had expired.

If you don't raise the issue in a timely manner and in proper form, you should expect that a court will reject your motion. You were not applying for a default judgment - you were seeking relief from a judgment that, from what you said, remains valid and unpaid. As SChinFChin said, the lapse of the corporation doesn't invalidate the judgment.