ROCKVILLE — Debabrata Banerjee thought his debt would be forgotten when at the eleventh hour he got a notice to renew judgment from North American Capital Bank, a company that was not and had never been registered with the state of Maryland.
This is the beginning of the allegations in a case against North American Capital Corp., North American Capital Bank and Protas, Spivok & Collins LLC in Montgomery County Circuit Court right now over the processes to assign and renew debt judgments.
But, on May 5, the plaintiff’s case hit a roadblock. Circuit Court Judge Audrey Creighton said the issues about the judgment assignment had already been litigated when Banerjee fought the judgment in District Court and lost. According to a legal doctrine preventing relitigation of previously disputed points, which is known as collateral estoppels, the same issues cannot be brought over and over again.
But she said the issue was interesting and complex.
“I’m sure the appellate courts will tell me if I’m wrong,” she said.
Banerjee’s attorney, Carlos Salvado, said he is only questioning the renewal of the judgment in March 2013 rather than the assignment of the judgment, and his argument is that collateral estoppel does not apply to questions about the renewal.
The war over this debt began in December 2000, when NACC filed for a judgment against Banerjee in District Court. The district court issued the judgment on April 10, 2001, in favor of NACB, a company that seems to have been created by a court error with the same address as NACC. The judgment was good for 12 years, and in March 2013, PSC filed to renew the judgment under the name of NACB on behalf of a new company, Merriman Investments LLC, after the court rejected its renewal under Merriman’s name.
This renewal is what Salvado argues is void. Salvado alleges NACC had no right to renew the judgment because it ceased to exist after a merge-out in 2001 and forfeited its status in Maryland in November 2002.
“Defendant alleges it is the holder of a twice sold/assigned judgment. As neither assignment was filed, the judgment remains in the name of the original creditor, who forfeited their status prior to the renewal of judgment, and judgment has now expired,” Salvado said in the opposition to motion to dismiss.
Max Brauer, an attorney at Hoskins Law in Baltimore, said the case falls in line with the difficulty that can come from companies buying judgments that the original owner of the debt feels no need to collect.
For example, if someone has credit card debt, the bank can hire a third party to collect that debt on the bank’s behalf. But, Brauer said, if the bank for whatever reason has no plans to collect the debt, the bank can sell the judgment to another company for cents on the dollar. That way, the bank does not have to enforce the judgment but still makes some money, and the company that buys it can enforce the judgment and collect the full amount.
Brauer said Banerjee’s confusion over who owns the judgment is not unusual.
“There are a lot of sort of common threads here,” Brauer said. “We’re seeing a lot of judgment buying going on, and a lot of the times consumers and consumer attorneys are trying to figure out how the legal assignment has taken place.”
In Banerjee’s case, the timeline of the judgment buying also struck Brauer as a little bit “odd,” since the renewal was filed so close to when the judgment was going to expire.
Although Brauer could not comment on the specific judgment buying that took place here, he said the rules that govern judgment assignments could be interpreted to mean the new debt buyer is not required to file with the court but “may” if the buyer wants to enforce the judgment.
“From a public policy perspective … to the extent it’s ambiguous text at all it seems to indicate when a judgment has been assigned, you don’t have to do anything, but if you want to enforce it, you have to file,” he said.
The defendants also said in its motion to dismiss that there is a paper trail: a bill of sale and data file showing Merriman Investments holds the judgment.
For consumers who are concerned about the legitimacy of the person or company trying to collect debt, there are a number of outlets. Brauer said they can look on the state’s Department of Labor, Licensing and Regulation to see if a collection agency is licensed. There are also self-help centers and live chats or attorneys across the state to help consumers struggling with debt.