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  1. #1
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    Default Is a Judgment Valid if a Party Changes its Name During the Litigation

    My question involves court procedures for the state of: AZ

    This involves an insurance co that indemnified a homeowners assoc. A friend got an adverse judgment in favor of some named parties in his HOA--only atty's fees, no monetary judgment other than that. The judgment was recorded in the name of the insuring company, apparently subrogating the parties. Second lawsuit brought in the name of the company this time for fraudulent transfer (wrongfully), they got a default judgment in that company name, but further on in the case name changed to a subsidiary company who was not the original insurer. Two years later (FT case is still unsettled), my friend files for bankruptcy, but appearances are filed in the name of BOTH companies by orig atty, and then by bankruptcy specialist his firm hires. Judge now states that my friend has two creditors, because appearances were filed in the name of both companies instead of just the original one.

    Friend had done some original research that indicated first company might not have had legal right to litigate in AZ... so my question is what is the law regarding right of an out of state corp to litigate in AZ, if any? Company is not incorporated in AZ, only has a license to do business there. On invoices (other atty had to produce them for proof of claim) there were several days spent on researching the caption issue and it's possible effect on the original judgment. One entry was “legal research re arguments to purported error by defendants in caption re Company A v Company B”. (Of course, those weren't the names, lol). Then among several others on the same subject was this with specific rule references: "legal research re Rule 60(a) and (b), 61 and art. 6 sec 27 re response to defendants argument based upon erroneous name in caption". Also more questions regarding subrogation under the law of the state the company's incorporated in were researched according to the invoices.

    Any thoughts?

  2. #2
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    Default Re: Corporate Plaintiff Changed to Sub Company Name Mid Case; is Judgment Still Valid

    I am not able to decipher your narrative to determine exactly what happened (and why) or to determine if the name issues resulted from filing errors by the plaintiff. Tell your friend to have a lawyer review his case files, and to discuss the full facts of the cases with the lawyer, to determine whether the judgments are valid and enforceable.

  3. #3
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    Default Re: Corporate Plaintiff Changed to Sub Company Name Mid Case; is Judgment Still Valid

    Really. No idea what you are talking about.

    Apparently though this does not even apply to you or concern you, so trying to wade through this excrement is not worth the effort.

    Why don't you let your friend ask his own questions. Try to ask a specific question too. Don't ask something stupid and open ended like "Any thoughts."

    This mess should have been taken care of when it was originally in court. Nobody can change the caption of a case once it is filed. You can't substitute plaintiffs, especially if the original has no standingin the first place. Banks try to do that in forclosure cases and it is illegal. Of course the defendant better have a good attorney or be very smart and do his homework.

  4. #4
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    Default Re: Corporate Plaintiff Changed to Sub Company Name Mid Case; is Judgment Still Valid

    Hoping to clarify a little: Friend sued members of his HOA. HOA was insured by Company A, incorporated out of state (but licensed to do business in AZ) who hired a local firm to represent them in his suit. Ultimately, he lost. Judgment was lodged in the name of Company A instead of the individual members of the HOA, subrogated I guess it's called. Second suit for FT also brought under the name of Company A, default judgment granted under that name, but as case continued to progress, name was changed to Company B. Apparently a notice of name change was filed. Forward to the bankruptcy, friend now has both Company A and Company B as claimed creditors. Friend believes company A never had a right to litigate in AZ, hence the name change to Company B. But, it's actually NOT a name change; they are two separate companies, A incorporated in 1916, and is the parent company of B, incorporated in 1997 both out of state. They are still distinct separte entities, NOT one company that simply changed it's name to another, and is the same in all other respects. The creditors actually changed the litigating PARTY by changing the name from A to B, not simply the NAME of the party from A to B. So, if there was some irregularity about A's right to conduct litigation in AZ, this would be their attempt to rectify that after the fact.

    To that end, I've been trying to find out what is necessary for an ins. company incorporated in another state, particularly one with several different sub companies, to have standing, jurisdiction, or whatever it is called to conduct litigation in AZ. The atty was obviously concerned enough over the question of the supposed "name change" to bill his client A, for several days worth of research on the matter. To me, that is a red flag. Invoices still go to the name of A, even after the name change to B as late as of Jan. 2009, though the court was "officially" notified in April 2008, though the captioning was changed much earlier.

    If A never should have litigated in the first place, no judgment granted to them is valid. SO, it's very important to me to find out what the criteria is for out of state corporations to litigate in AZ. I would gladly have my friend contact an atty, but he is both disabled and in bankruptcy. We have tried every possible avenue we can to get him an atty, and cannot. All he has to offer is interest in his paid for house, but that is at stake. A confident atty could make out quite well, as he does want to sell afterwards. Not only that, the FT case was wrongfully brought and the atty's collected a judgment against the other party, so if successful, that's another action against them potentially worth a lot of money to whoever turns over the case.

  5. #5
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    Default Re: Corporate Plaintiff Changed to Sub Company Name Mid Case; is Judgment Still Valid

    Quote Quoting medievalmaggie
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    Friend sued members of his HOA. HOA was insured by Company A, incorporated out of state (but licensed to do business in AZ) who hired a local firm to represent them in his suit. Ultimately, he lost. Judgment was lodged in the name of Company A instead of the individual members of the HOA, subrogated I guess it's called.
    That couldn't happen the way you have described things. The judgment would be entered in favor of a party, not a party's insurance company.

    When an insurance company pays out on a claim it can contractually gain subrogation rights - the right to try to recover the amount it paid from a party (or parties) that caused or contributed to the loss. Perhaps your friend's lawsuit was determined to be frivolous and sanctions were awarded to the defendant and its lawyers as a consequence of that determination, with the insurance company now seeking to collect the money owed. You don't seem to know what happened, your procedural history is at best incomplete, and we aren't able to investigate this for you.
    Quote Quoting medievalmaggie
    Second suit for FT also brought under the name of Company A, default judgment granted under that name, but as case continued to progress, name was changed to Company B.
    You have not provided any factual context here. A claim for fraudulent transfer involves the allegation that a party transferred assets out of his name in order to impoverish himself such that creditors would be unable to collect money owed to them. The lawsuit would ordinarily name both the debtor and the person to whom the property was transferred. (I guess this is the lawsuit you were describing in one of your other threads.)
    Quote Quoting medievalmaggie
    Apparently a notice of name change was filed.
    There's no "apparently." Something was filed. You need to find out what it was and tell us what it was, or we're left guessing. Guesses aren't likely to be helpful.
    Quote Quoting medievalmaggie
    Forward to the bankruptcy, friend now has both Company A and Company B as claimed creditors.
    That would apparently be because there's some form of judgment in favor of Company A from the first lawsuit, even though you have not adequately explained how that could be the case, and Company B won a default judgment in the second lawsuit.
    Quote Quoting medievalmaggie
    Friend believes company A never had a right to litigate in AZ, hence the name change to Company B.
    What "apparently" happened or what somebody "believes" happened, again, is irrelevant. We need to know what actually happened. You can determine what happened by examining the court records.
    Quote Quoting medievalmaggie
    But, it's actually NOT a name change; they are two separate companies, A incorporated in 1916, and is the parent company of B, incorporated in 1997 both out of state. They are still distinct separte entities, NOT one company that simply changed it's name to another, and is the same in all other respects.
    From what you stated before, one is a subsidiary of the other. Perhaps Company A assigns certain debts to Company B for collection. We have no way of investigating this for you and, again, the answers lie in the court records.
    Quote Quoting medievalmaggie
    The creditors actually changed the litigating PARTY by changing the name from A to B, not simply the NAME of the party from A to B. So, if there was some irregularity about A's right to conduct litigation in AZ, this would be their attempt to rectify that after the fact.
    Or it could be that they made a clerical error in the initial filing, or it could be that the assignment occurred during litigation and they substituted parties rather than filing a new case (although that would be procedurally very odd). But we can only guess. The answer lies in the court records, which we cannot access.
    Quote Quoting medievalmaggie
    To that end, I've been trying to find out what is necessary for an ins. company incorporated in another state, particularly one with several different sub companies, to have standing, jurisdiction, or whatever it is called to conduct litigation in AZ.
    The following provision appears to relate to the corporation collecting debts owed to it by Arizona residents, but you can inquire with an Arizona lawyer as to how that state's courts interpret and apply the language.
    Quote Quoting ARS Sec. 10-1501. Authority to transact business required
    A. A foreign corporation shall not transact business in this state until it is granted authority to transact business in this state as provided in this chapter from the commission.

    B. The following activities, among others, do not constitute transacting business within the meaning of subsection A:
    1. Maintaining, defending or settling any proceeding.

    2. Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs.

    3. Maintaining bank accounts.

    4. Maintaining offices or agencies for the transfer, exchange and registration of the corporation's own securities or maintaining trustees or depositaries with respect to those securities.

    5. Selling through independent contractors.

    6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts.

    7. Creating or acquiring indebtedness, mortgages and other security interests in real or personal property.

    8. Securing or collecting debts or enforcing mortgages and security interests in property securing the same.

    9. Owning, without more, real or personal property.

    10. Conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of a like nature.

    11. Transacting business in interstate commerce.

    12. Being a limited partner of a limited partnership or a member of a limited liability company.
    C. The list of activities in subsection B is not exhaustive.

    D. This section does not apply to insurance corporations or any corporation transacting in this state only the business of lending monies to religious, social or benevolent associations.
    Quote Quoting medievalmaggie
    The atty was obviously concerned enough over the question of the supposed "name change" to bill his client A, for several days worth of research on the matter.
    Whatever the issue was sounds a lot more complicated than "was a foreign (i.e., out-of-state corporation) entitled to sue in Arizona's courts". If your friend paid his legal bill, he should have a copy of the lawyer's findings resulting from the "several days worth of research". If not, even if we knew the actual issue, you're not going to find anybody who is willing to do several days worth of intensive legal research for free.
    Quote Quoting medievalmaggie
    To me, that is a red flag. Invoices still go to the name of A, even after the name change to B as late as of Jan. 2009, though the court was "officially" notified in April 2008, though the captioning was changed much earlier.
    What invoices are you talking about?
    Quote Quoting medievalmaggie
    If A never should have litigated in the first place, no judgment granted to them is valid.
    You told us that in the first litigation, A was not a party - it was the insurer. You do appear to have presented incomplete facts, but we're in no position to guess as to what the undisclosed facts may be. As in the second case the judgment was awarded to Company B, the question of whether Company A could have obtained that judgment appears to be moot. Further, as you've been told, to challenge a default judgment you must first set it aside. If none of the defendants to the lawsuit resulting in a judgment to Company B chose to defend against the lawsuit, and neither chose to try to set aside the judgment, it stands. Finally, in one of your various threads you suggested that a codefendant in the second lawsuit paid off the judgment, so it's not even clear why it remains an issue in the bankruptcy case. More procedural information that can be determined from the court records, but which you either don't know or haven't shared.

  6. #6
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    Default Re: Corporate Plaintiff Changed to Sub Company Name Mid Case; is Judgment Still Valid

    Actually the judgments are valid. The time to fight them was BEFORE they were issued.

    Still, you have no horse in this race it seems. You are also apparently trying to practice law without a license.

    The bottom line is that all time for appealing has been exhausted and there is simply no way to attack the judgments at this late date. Even an allegation of fraud upon the court (by an attorney) isn't go to reopen anything. What you don't seem to understand is the simple fact that the court that issued the judgments HAS NO JURISDICTION, and no court would have any jurisdiction to reopen any issue in this case.

    It is way way too late to argue the corporate status of the insurance company or jurisdiction, etc.

    The basic rule is that each party pays their own costs. That is only changed in two circumstances. The first circumstance is if the statute under which the case is filed, allows for the award of attorney fees to the winner. The second is if the case was frivolous and the court awards attorney fees on that basis.

    Obviously the attorney fee award is to the defendants. However, their insurance contract would subrogate the attorney fee award to the insurance company as that company paid for the defense. Then the insurance company would get the judgment in its name.

    Thus, not only would you have to reverse the award, you'd have to reverse the original court's decision, which is IMPOSSIBLE. PERIOD, END OF STORY.

    Your friend though needs to track down the filing of the judgment and how the name was changed on the judgment and what happened to turn it into two. This will all be on file with the clerk of court and he can get copies. Then he'd probably have to file a declaratory action in circuit court to get a court order straigthening this out. In other words, he'd have a file a new action, which would give that court the jurisdiction to correct the problem of the duplicate judgments. Perhaps the judgment was assigned to the other company and the original was never cancelled or something. He maybe should get an attorney.

    If this is an issue in bankruptcy, that court has no jurisdiction either to do anything about the judgments, your friend has to proceed as desribed above. I doubt the judgment is dischargable in bankruptcy anyway. It depends. Judgments for intentional torts will not be discharged.

    This is entirely different from what you seem to want to do, which you can't do, even if you had standing, which you don't. All in all a big waste of time for everyone involved.

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