Civil Judgments

Very few things in civil law are set in stone. Take judgments, for example. The fact that a local or state court enters a judgment against a defendant does not necessarily mean that the court’s decision is final. Even civil judgments can be appealed. And if the defendant is able to make a solid case on appeal, a judgment can be overturned.

This is not to say that getting a judgment overturned is easy. It’s actually not. Defendants generally have three courses of action in the pursuit of overturning a judgment:

  1. Prove the original claim was erroneous,
  2. Prove a process error, or
  3. Demonstrate that an error of law occurred when the original court reached its decision.

An appellate court will not overturn a judgment based solely on the fact that the defendant cannot pay. Judgments are not reversed because of hardship conditions, family crises, or the defendant’s assertion that they should not have to pay because of some perceived inequity. Rather, the defendant is burdened with proving that one of the three previously mentioned conditions exists.

An Error of Law and Indiana

A recently decided case in Indiana illustrates how one might successfully challenge a judgment and have it reversed. In this particular case, the defendant was a general contractor whose livelihood is flipping houses. The plaintiff was a third-party lender who accused the contractor of breach of contract for refusing to pay commission on a real estate deal.

Without getting into all the details, the original case was based on the lender’s assertion that, despite refusing its offer of financing, the contractor was still obligated to pay a 2% commission. The contractor obviously disagreed. His position was that no commission was owed because no transaction actually took place.

A Superior Court in Marion, Indiana found in favor of the lender. A judgment was entered against the contractor, instructing him to pay the commission, interest, and the lender’s legal fees. But rather than do so, the contractor appealed. Fortunately for him, the Court of Appeals ruled that the lower court committed an error of law by requiring the contractor to pay commission on a transaction that never occurred.

When Appeals Are Lost

There is no telling what would have happened in the Indiana case had the contractor lost his appeal. But it is not uncommon for creditors to then enlist the services of an experienced judgment collection firm to take things from there. According to Salt Lake City’s Judgment Collectors, specialized collection agencies that work exclusively on judgments tend to be the most adept at getting debtors to pay.

A collection agency has certain tools at its disposal to ensure enforcement of a civil judgment. In the case of an individual, a collection agency can pursue wage and bank account garnishment. Some types of personal assets can be seized and sold. In terms of real property, a collection agency can place liens on property on behalf of their clients.

The Exception Rather Than the Rule

Although reversal of a civil judgment is possible, it tends to be exception rather than the rule. A 2004 study out of Cornell University showed that between 1988 and 2000, defendants managed to get their judgments reversed only about 15% of the time. Perhaps that explains why only about 10% of non-trial civil cases are appealed.

It is possible to appeal a civil judgment. However, getting a judgment overturned is not easy. You have to present a solid case that demonstrates either an erroneous original claim or an error of law by the court that originally decided the case.