By Steven Krieger

As a consumer, you likely have many interactions with businesses each and every day.  Most of those interactions are innocuous and you never give them a second thought. However, on occasion, you may have a really wonderful experience with a particular business or a really terrible experience with another business.
 
If you’re active on social media (and even if you’re not), you may decide to leave a review for the business on a website like Yelp, Angie’s List, Google+, Bing, or Yahoo, to inform your fellow consumers about the details of your experience.
 
In fact, many businesses encourage consumers to leave positive reviews.  If a positive review was written, everyone is happy.  

But, what happens when your experience is negative?  Typically, the consumer attempts to resolve the dispute with the business and the business has an opportunity to do “do right” by the consumer.  Unfortunately, sometimes the dispute cannot or will not be resolved and the consumer goes online and leaves a negative review about the business and the experience.
 
Local business (big or small) take these negative reviews very seriously.  In fact, if the business is able to identify the consumer who left the review, the business may file a complaint in court and will likely claim that the review is defamatory. 
 
Defamation is the general term that describes a printed (libel) or spoken (slander) statement that hurts ones character or reputation.  A negative review posted online will likely harm a business and could be defamatory -- libel, specifically.  However, if the statements are truthful or entirely subjective, the consumer has a valid defense against such a defamation claim.
 
But, even if the consumer has a valid defense, the consumer still must defend the defamation claim, which will cost the consumer time and money.  In the 1990’s, business began to sue or threatened to sue consumers primarily for the purpose of intimidating consumers into removing the negative reviews. The Public Participation Project explains it best: “[t]hese types of lawsuits are known as Strategic Lawsuits Against Public Participation (SLAPPs).  SLAPPs are used to silence and harass.  [Businesses filing these complaints in court] don’t go to court to seek justice, but instead, to intimidate those who disagree with them or their activities” and who speak out.  In 1992, Delaware became the first state to pass an Anti-SLAPP Act.  Currently, there are almost thirty states that have passed some type of Anti-SLAPP Act and the Public Participation Project is trying to pass federal Anti-SLAPP legislation. The Anti-SLAPP acts were passed to help consumers defend against harassing lawsuits filed to stifle First Amendment freedom of speech rights.
 
D.C. passed an Anti-SLAPP act that became effective on March 31, 2011 and was codified as D.C. Code § 16-5501 to 16-5505.  The D.C. Anti-SLAPP explains that these SLAPP suits should be dismissed if (1) “the claim at issue arises from an act in furtherance of the right of advocacy on issues of public interest,” and (2) the business cannot “demonstrate[] that the claim is likely to succeed on the merits.” See D.C. Code § 16-5502(b).
 
In other words, if the consumer who posted the negative review on Yelp or anywhere else online is able to demonstrate that the review (or any other type of statement -- online or offline) was made to further some type of advocacy on an issue of public interest, then the business must demonstrate that the business is likely to win the case if the court allows the case to proceed. Otherwise, the lawsuit filed by the business must be dismissed and the consumer’s negative review may remain online.
 
In addition to allowing the consumer to immediately file a motion to dismiss and avoid the hassle of time-consuming and expensive litigation, the D.C. Anti-SLAPP Act of 2010 allows the consumer to recover attorneys’ fees if the consumer prevails with the Anti-SLAPP defense in whole or in part.  Specifically, §16-5504(a) states: “[t]he court may award a moving party who prevails, in whole or in part, on a motion brought under § 16-5502 or § 16-5503 the costs of litigation, including reasonable attorney fees.”
 
The attorneys’ fees provision is critical because without the ability for the consumer to recover these fees, the consumer may not be able to afford an attorney to file the special motion to dismiss and the consumer may decide to simply remove the negative review instead of defending the lawsuit, which is exactly what the business was hoping for all along.
 
If you’ve had a negative experience with a business and posted a negative review for the business online (Yelp, Angie’s List, Google+, Bing, Yahoo, or anywhere else – online or offline), which resulted in the business filing a lawsuit against you in D.C., the D.C. Anti-SLAPP Act was designed to help you defend yourself against this type of lawsuit from a business that likely has access to more resources, including money, than you.
 
If you’re defending yourself against a SLAPP suit, please feel free to contact my office for a consultation.  

Introduction
Congratulations on winning a judgment.  The judgment will likely appear on the defendant’s credit reports, which will make it more difficult for the defendant to borrow money from a financial institution.  However, your goal in obtaining a judgment was likely to collect from the defendant.  Getting the defendant (debtor) to pay you (creditor) is often more difficult than winning the judgment itself.

To collect on the judgment, you must complete the following three tasks:
1. Locate the debtor’s assets (as many as possible)
2. Attach the judgment to the assets by placing a lien on the assets (called a “judgment lien”)
3. Obtain the assets to satisfy the judgment (the process of liquidation or foreclosure).

Placing a Lien on Assets
When you buy a new car from a dealership or obtain a mortgage to buy a piece of real estate, you almost certainly provided a lien to the dealership and the bank.  The lien allows the dealership and the bank to retake the car or home if you do not maintain your financial obligations.  Similarly, you can put a judgment lien on the defendant’s assets, which attaches the judgment to the assets and allows you to sell the assets to satisfy the judgment.  The type of asset dictates the process for attaching the judgment lien.

You, the creditor, decide whether to use debtor’s real property, personal property (tangible property), and/or wages and financial accounts (intangible property) to collect on the judgment – the debtor cannot require you to use personal property before real property.

Regardless of the asset type that you are trying to obtain to collect on the judgment, proper notice must be given to demonstrate your intentions and to give the defendant an opportunity to pay the money owed.  This is accomplished by filing a “judgment lien” in the city or county where the asset is located. 

Below is a summary of asset types and the corresponding process for a creditor to attach a judgment lien to the assets of a debtor.

Real Estate (Real Property)
The creditor must record the judgment lien in the public records office of the city or county where the property is located.  In Virginia, a judgment from a circuit court is automatically recorded in the public land records where the circuit court is located.  The recorded judgment lasts for a decade and can be renewed.  See Virginia Code § 8.01-446.  However, in general district court, the creditor must take the judgment to be recorded the land records.  Once the lien is filed, it applies to all real property owned or later acquired by the debtor in the city or county where filed, so often a creditor will record the judgment lien in multiple counties just in case the debtor obtains a property interest in another city or county.  See Virginia Code § 8.01-458. 

The Uniform Enforcement of Foreign Judgments Act (UEFJA) allows the creditor to obtain a judgment in another state without having to litigate the entire case again.  The simplified process only requires: 1) proof of the judgment; 2) the last known address of the debtor; and 3) and any filing fees.  Most states, including Virginia, D.C., and Maryland, have adopted the UEFJA; however California, Massachusetts, and Vermont have not.  Obtaining a judgment in another state allows the creditor to attach a judgment lien to the debtor’s property in that state.

Often, the next step is simply waiting for the creditor to attempt to sell the asset or wait for another creditor to initiate foreclosure by filing a “Creditor’s Bill in Equity.”  Alternatively, the creditor can begin the foreclosure process, but it is fairly expensive because it requires a separate lawsuit involving all interested parties (debtor, mortgage holders, other judgment lien holders, and anyone else with an interest in the property).  A commissioner will hear the case to determine what profits (like rent) can be obtained from the property.  If the projected profits are insufficient to repay the judgment in five years, the property may be sold at a public auction.  As you can imagine, this can be a lengthy process and the commissioner is paid hourly (typically by the party initiating the foreclosure).  However, if the debtor has the ability to pay, but simply refuses, foreclosure may be beneficial if there is sufficient equity in the property.  

A final note: there is no “right of redemption” in Virginia, so even if the debtor obtains sufficient funds to pay the debt after the sale, the debtor will not be able to reclaim the property. 

Levy Personal Property
The creditor can seize and sell debtors personal property (like a motor vehicle, jewelry, appliances, equipment, furniture, clothing, etc.) to collect on the judgment.  The first step is to obtain a “Writ of Execution” or “Writ of Fiera Facias” (or “fi fa”) from the clerk of the court in the city or county where the personal property is located to attach the judgment lien to the property. 

The writ allows for the Sheriff’s Office to “levy and seize” the property or “list and leave” the property.  If the creditor decides to have the Sheriff’s Office “levy and seize” the property, the creditor must post a surety bond to protect the debtor, Sheriff, and any other lien holder against a wrongful levy.  Virginia Code §8.01-551; Virginia Code §8.01-553.  Then, the Sheriff can seize the property and place it into storage until the foreclosure sale where the profits are used to repay the creditor.  Virginia Code §8.01-550. 

Generally, this is an expensive process and the details of the process can vary from jurisdiction to jurisdiction.  In some jurisdictions, the Sheriff will only be present, but will not participate in the actual "levy and seize" process.  This requires the creditor to hire a bondsman and pay the corresponding levy fee and storage fee until the Sheriff can sell the item at auction.  Then the creditor would likely have to pay a percentage of the proceeds from the auction to the Sheriff (generally around 10%).  The remaining proceeds would be paid to the creditor.  Unless the personal property has significant value, the costs associated with levying the property and the public auction sale cannot be justified.

Instead, a creditor may elect to have the Sheriff’s Office “list and leave” the property, which is significantly less expensive.  The Sheriff makes a list of the property, places an identification label on the property, and leaves the property where it was found.  Although the debtor may continue using the property with the identification label attached, hopefully, this process will be embarrassing enough that the debtor pays the creditor.

Whether the creditor chooses to levy or list the property, the court sets a return date for 90 days from the date the writ was filed, so the Sheriff’s Office has 90 days to complete the selected process.  The writ must include the total debt owed to the creditor on the return day, which includes all accrued interest up to the return date and provides the debtor with all allowable credits.  If the creditor is attempting to seize debtor’s personal property after the ninety-day period, a new writ must be filed (and should be granted provided the initial judgment is still valid).

Garnish Intangible Personal Property
The creditor can also collect on the judgment by garnishing debtor’s intangible personal property like bank accounts, wages, rent, accounts receivable, and other financial considerations owed to the debtor.  Additionally, a creditor may place a judgment lien an intangible negotiable instruments like stocks, bonds, debts, debtor’s causes of action, or other negotiable instruments.  

In addition to the Writ of Execution discussed above, the creditor must file a “Summons in Garnishment.”  Virginia Code §8.01-502.  This notifies the financial institution or whoever is holding the debtor’s money (garnishee) that the creditor will be using the funds held by the garnishee to satisfy a judgment.  The summons must be served on the garnishee and the debtor.  The summons will instruct the garnishee not to release any funds to the debtor and give the garnishee a date to appear in court to contest the garnishment.  This date is at most 90 days from the date the writ was issued for all garnishments except for wages, which can be extended 180 days.  Virginia Code §8.01-514.  The garnishee may contest the garnishment.  The garnishee will be required to demonstrate why the garnishee should not be required to release the funds to the creditor and may use any legal defense that the garnishee could raise against the debtor – perhaps the funds were abandoned.  The garnishee need not appear in court unless the garnishee wants to contest the garnishment.  If the garnishee appears and does not contest, contests and loses, or does not appear in court, the court will issue an “order of payment” on the writ.  The order will instruct the financial institution to pay the funds to the creditor.

A creditor can also garnish wages, but the amount is limited to the lesser of :

• 25% of debtor’s disposal earnings (after required deductions); or
• the amount that debtor’s weekly disposal earnings exceed forty times the national minimum wage, which is currently $290 ($7.25 is the federal and Virginia minimum wage x 40).

Finally, for intangible personal property, the lien attaches to all property located in Virginia, so the creditor may deliver the writ to Sheriff’s Office before the creditor knows where debtor’s intangible personal assets are located.

Conclusion
Collecting on a judgment can be a complicated and frustrating experience for a creditor.  The debtor may have assets, but the creditor may not be able to locate them, the assets may not be sufficient to satisfy the judgment, or the debtor simply may not have any assets at all.  Fortunately, the creditor has options and many avenues to exhaust to collect on the judgment.  Please feel free to contact Steven Krieger Law, PLLC for a consultation.

Note: This post did not discuss the issues of priority (the order creditors get paid when there are multiple creditors with judgment liens attached the debtor’s assets), debtor interrogatories (requiring the debtor to testify under oath about debtor’s assets and liabilities – not as useful as it sounds), exemptions (some personal items and/or amounts are exempt from levy) and bankruptcy, which all can play an important role in collecting on a judgment. 

Generally, no. 

Whether your entity is filing a claim or defending a claim, your entity is required to retain counsel.  Although, you own the company or corporation, your ownership status does not permit you to represent the entity in court.  Certainly, like an attorney, you could become licensed and represent your company, corporation, or partnership, but your status as an owner does not give you the authority to practice law and represent your entity in a legal proceeding unless the amount in dispute is $2,500 or less and the entity's stock is held by 5 or fewer shareholders (see Vir. Code Ann § 16.1-81.1). 

Vir. Code Ann. § 16.1-88.03(A) makes it clear that a non-natural entity, like an LLC, corporation, or partnership, may (1) file a claim (2) request judgment, or (3) present facts in General District Court without an attorney, but section § 16.1-88.03(B) makes it clear that an attorney is required to litigate the claim.  Specifically, § 16.1-88.03(B) states:

“Nothing in this section shall allow a nonlawyer to file a bill of particulars or grounds of defense or to argue motions, issue a subpoena, rule to show cause, or capias; file or interrogate at debtor interrogatories; or to file, issue or argue any other paper, pleading or proceeding not set forth in subsection A.”

In other words, while a non-natural entity is not required to retain counsel for all aspects of the legal proceeding in General District Court,* only an attorney is permitted to conduct the subsequent litigation that will certainly follow the filing or claim.

For example, an LLC owner could file a warrant in debt (civil claim for money) against a party that owes the LLC money, but the next step is often filing a bill of particulars (reasons why the opposing party owes money), which the LLC owner is not permitted to file.

Additionally, there is an ethical consideration prohibiting the Court from allowing a nonlawyer to litigate a case in court on behalf of an LLC, corporation, or partnership, which parallels § 16.1-88.03.  Specifically, Unauthorized Practice Rule 1-101 of the Virginia State Bar Professional Guidelines.  Rule 1-101, Practice Before Tribunals, states: “A non-lawyer, with or without compensation, shall not represent the interest of another before a tribunal, otherwise than in the presentation of facts, figures or factual conclusions, as distinguished from legal conclusions…” 

Rule 1-101 is elaborated by Unauthorized Practice Consideration 1-3, which states: “A corporation (other than a duly registered law corporation) does not have the same right of appearance before a tribunal as an individual and may not be represented before a tribunal by its officers, employees or agents who are not duly authorized or licensed to practice law in Virginia. A corporation can be represented only by a lawyer before a tribunal, with respect to matters involving legal conclusions, examination of witnesses or preparation of briefs or pleadings.”

If an LLC, corporation, or partnership owner tries to represent the entity in an impermissible fashion, the owner may technically be charged, prosecuted, and found guilty of a Class 1 misdemeanor for violating Vir. Code Ann. § 54.1-3904:

“Any person who practices law without being authorized or licensed shall be guilty of a Class 1 misdemeanor…”

Additionally, and more likely, if you attempt to appear in Court without counsel, the judge may rule that the entity is not present and enter an unfavorable ruling against your entity. 

If your LLC, corporation, or partnership has a legal matter, please contact Steven Krieger Law, PLLC for a consultation.  The earlier you discuss the matter with an attorney the better.

* This discussion is limited to General District Court because the simplified filing process, including form filings, allows parties to attempt to litigate without retaining an attorney.  Circuit Court does not accept form petitions or filings and the amount at stake is often very significant, so parties do not want the risk associated with representing themselves.