Union Adjustment Company purchased an old debt from an auto lender. The debt was a finance contract entered into between the Jorgensen & Salberg’s client (Delgado) and an auto lender. The finance company originally extended credit to Delgado for the purchase of a 1992 Honda Accord. The car was purchased on April 7, 2001 with Defendant paying $1,000 cash down and financing the remaining balance of $9,566.85 at 21.20% APR. Under the terms of the contract, Delgado would pay a total of $12,651.04 for the car.
Just a few months later, the car began breaking down. The vehicle was inoperable more than it was operable and Delgado spent significant sums of money trying to fix the car. At some point, Delgado could no longer afford to keep the vehicle, and defaulted on payments. Delgado informed the finance company and dealer of all of these facts and of her imminent default. Unfortunately, Delgado’s vehicle was repossessed on April 8, 2002. On May 2, 2002, the vehicle was sold at auction for $2,350.00, even though it was worth considerably more, leaving a deficiency balance of $5,203.91.
On January 16, 2003, Union Adjustment Company filed suit against Delgado alleging breach of contract. Union Adjustment Company falsely claimed it served Delgado with a copy of the lawsuit, when Delgado had not been served. Delgado, having no notice of the lawsuit, failed to file an answer to the allegations, and a Default Judgment was entered against her on April 24, 2003 for $7,099.48.
For 8 years, no attempt to enforce the judgment was made, which allowed the judgment and interest to double. Then, on November 21, 2011, Union Adjustment Company applied to renew the judgment. By June 20, 2012, as a result of the accumulation of interest and fees, the judgment had grown from $7,099.48 to $15,656.21.
Shortly thereafter, Delgado discovered the lawsuit because assets in her bank account were missing. She went to the ATM to withdraw her son’s child support and was unable to do so. Upon entering the bank and speaking with a teller, she was advised that a levy was put on the bank account. Delgado only had that bank account to have her son’s child support direct-deposited into it. The money that was taken Delgado’s son’s child support as those were the only funds in that account. At that point, Delgado sought the advice from Jorgensen & Salberg and discovered that she had been sued back in 2003.
Jorgensen & Salberg was able to prove that Union Adjustment Company never served Delgado with the lawsuit. After convincing the judge that Delgado had never been served with the lawsuit, the judge vacated the judgment, and set the case for trial on the merits.
On October 18, 2013, at trial, Jorgensen & Salberg successfully defended the claims that the Union Adjustment Company was owed $15,656.21. The court awarded Union Adjustment Company absolutely nothing, and Jorgensen & Salberg is now in the process of recovering all litigation costs from Union Adjustment Company.
