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Sustaining the burden of proof.

For more than 19 years I have practiced collection recovery law. Traditionally, my firm has prepared investigative reports and suit recommendations asking for documentary evidence prior to litigation action in order to pursue collection recovery of retail and commercial claims.

We have found that, over the years, credit grantors as well as forwarders of claims, are increasingly interested in our investigative determinations and recommendations. In our preparation of reports, we frequently confront the most serious obstacle of sustaining our burden of proof relative to proper documentary evidence.

During the early stages of litigation, we require that clients provide all aspects of relevant information concerning the claim. First, we must have the debtor's legal name and address, including the name and address of any guarantor.

Frequently, we confront a situation where a sole proprietor has terminated business operations and the only course of action may be against the individually named owner of the business.

Credit managers frequently request our opinion as to the collectibility of a litigation matter against the sole proprietor. We advise them as to our experience regarding collection recovery, provide any current financial information on the debtor, and indicate any possible counterclaim.

Documentation Is Essential in Order To Win Suit

Moreover, we examine the documentation to determine the appropriate witness in a case. In some cases, the salesman who handled the transaction should be available to testify, along with the credit manager who has knowledge of the account history. The documents in our file will provide the information necessary to choose the right witness.

Credit grantors frequently request pursuing a case when we do not have the salesman who is involved in the transaction. Quite often, relevant documents can supply the necessary information which would have normally been obtained from the missing sales representative. Therefore, we request that the credit grantor provide the original order forms, shipping documents, and account ledgers. These documents, along with credit agreements, contract, personal guarantees, delivery receipts, and security agreements will assist us in determining whether to proceed with obtaining a judgment when the sales representative is not available.

Cooperation from Grantors Make Lawyers' Efforts Easier

We have frequently found that credit grantors are willing to make the appropriate witnesses available. This cooperative spirit is most appreciated by legal counsel in an effort to sustain the burden of proof relative to the submission of documentary evidence. Frequently, the sales representative and the credit manager assist in the preparation of affidavits to prove documentary evidence. Further, we also use our rules of civil procedure, including interrogatories, request for production of documents, and request for admissions, in order to meet the burden of proof as required under law.

In a recent case, the excellent organizational skills of a credit manager were used to prepare the documentary evidence necessary to win a contested litigation matter. The credit manager made a comprehensive list of the documents to be entered and we assisted in determining the value of them in light of the business entry exception to the hearsay rule. We prepared the outline of qualifying questions and the proper procedural steps to be taken by the attorney in submitting the documentary evidence.

Credit Managers Should Be Ready to Testify

In other cases where counsel for a debtor-customer has disputed the documentary evidence, the testimony of the credit manager has been used to sustain our burden of proof.

The credit manager is asked to testify: that the document is prepared in the ordinary course of business and that the records are regularly maintained and preserved by the credit granting company; about the actual individual who prepares the records; about the time the records were prepared; and finally, that since the time the documentary evidence was prepared, the company, in the regular course of business, continued to maintain and preserve such records.

By pursuing the above line of questioning at a trial, legal counsel for the credit grantor creates sufficient evidentiary documents in order to overcome objections from the opposing party. Additionally, the testimony by the credit manager will generally verify compliance with all phases of state laws.

This cooperative effort by legal counsel as well as the witnesses of the credit grantor achieve the ultimate objective--obtaining a judgment and pursuing collection recovery. We have always lived by the motto "do not let the trial just happen. Cases are won by preparation or lost for the lack of it."

Jonathan A. Mason is a senior partner with the law firm of Mason, Slovin & Schilling, Co., L.P.A., Cincinnati, Ohio.
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Title Annotation:Collection Basics; suing for credit defaults
Author:Mason, Jonathan
Publication:Business Credit
Article Type:Column
Date:Jun 1, 1993
Words:751
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