Friday, November 8, 2013

The Capcity of a Judgment Assginee Against an Obligor Follows that of the Assignor, the Judgment Obligee

Cal-Western Business Services, Inc. v. Corning Capital Group, No. B241714 (D2d7 Nov. 6, 2013)

Plaintiff is the assignee of a judgment that it is trying to enforce against defendant judgment debtor. Unfortunately for the plaintiff, the corporate status of the assignor of the judgment was suspended for nonpayment of taxes prior to the assignment and has never since been reinstated. After a jury rendered a verdict against some of the defendants, defendants raised the issue that as an assignee enforcing the rights from a suspended corporation, plaintiff lacked capacity to sue. The trial court agreed and dismissed the case. On appeal the court held that the trial court did not abuse its discretion in permitting the defendants to belatedly raise the capacity issue because plaintiff clearly indicated that it had no intention of paying the assignor’s back taxes. And because an assignee takes subject to any defenses applicable to the assignor, the assignor’s lack of capacity could be asserted against the plaintiff, so the case was properly dismissed.


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