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Fraud as res judicata
John:
Obviously you have a more detailed knowledge of the factual situation. not against your client individually if the fraud was conducted by a different employee. The corporation could not defend if it defaults. If corporate formalities were not maintained the blood creditor could seek to pierce the corporate veil and then potentially argue as a result there is a fraud judgment against your client. If your client is the only employee/officer then that scenario would not pan out if your client prevailed at trial.
A smart blood creditor plaintiff might dismiss your client individually and pursue a default judgment against the corporation after it defaults and cannot defend itself. Then after default judgment seek to pierce the corporate veil in order to nail your client.
Mark T. Jessee
Law Offices of Mark T. Jessee
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
"We are A Debt Relief Agency"
(805) 497-5868
(805) 497-5864 Facsimile
In a message dated 5/24/2018 2:14:46 PM Pacific Standard Time, cdcbaa@yahoogroups.com writes:
Thank you, esteemed listservers, for you responses to this one. I am preparing to defend my client in state court.
A further question: the plaintiff sued both the principal and his corporation for the same causes of action, i.e., fraud.
Do I answer both on behalf of the corporation and the principal, or just the principal? The corporation is going to become inactive and sink below the waves without a dividend to creditors, so to that extent, I don't care what a judgment against it says. However, can the plaintiff transform a default judgment of fraud against the corporation into a nondischargeable judgment aga inst the principal, regardless of the principal's defense against the same causes of action?
- John D. Faucher
818/889-8080
The post was migrated from Yahoo.
Thank you, esteemed listservers, for you responses to this one. I am preparing to defend my client in state court.A further question: the plaintiff sued both the principal and his corporation for the same causes of action, i.e., fraud.Do I answer both on behalf of the corporation and the principal, or just the principal? The corporation is going to become inactive and sink below the waves without a dividend to creditors, so to that extent, I don't care what a judgment against it says. However, can the plaintiff transform a default judgment of fraud against the corporation into a nondischargeable judgment against the principal, regardless of the principal's defense against the same causes of action?- John D. Faucher818/889-8080
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To: Cdcbaa Yahoo Listserv
Sent: Tuesday, May 15, 2018 11:39 AM
Subject: [cdcbaa] Fraud as res judicata
a corporation he owns. I expect that he will file an individual bankruptcy case in six months or so.He has just been served with a complaint alleging fraud: client said he would perform a service, plaintiff paid him in advance, then the business shut down. "Plaintiff believes that at the time the representations were made, defendants knew that they could not and would not provide any of the services." No other facts alleged.If the client does not answer the lawsuit, will the default judgment suffice for issue preclusion in a later adversary proceeding for nondischargeability?
The post was migrated from Yahoo.
It can. See *In re Nourbakhsh, 67 F.3d 798 (9th Cir. 1995)*
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On 5/15/2018 11:31 AM, John Faucher j.d.faucher@sbcglobal.net
[cdcbaa] wrote:
>
>
> Hello groupsters:
> My client is in a prebankruptcy winddown of a corporation he owns.
> I expect that he will file an individual bankruptcy case in six
> months or so.
> He has just been served with a complaint alleging fraud: client
> said he would perform a service, plaintiff paid him in advance,
> then the business shut down. "Plaintiff believes that at the time
> the representations were made, defendants knew that they could not
> and would not provide any of the services." No other facts alleged.
> If the client does not answer the lawsuit, will the default
> judgment suffice for issue preclusion in a later adversary
> proceeding for nondischargeability?
> - John D. Faucher
> 818/889-8080
>
>
>
-
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The post was migrated from Yahoo.
Most likely. Also beware of alter ego proceedings after a judgment against a corporation. Very important not to let any state court proceedings defaul on fraud issues.
On Tuesday, May 15, 2018, 11:39:26 AM PDT, John Faucher j.d.faucher@sbcglobal.net [cdcbaa] wrote:
Hello groupsters:My client is in a prebankruptcy winddown of a corporation he owns. I expect that he will file an individual bankruptcy case in six months or so.He has just been served with a complaint alleging fraud: client said he would perform a service, plaintiff paid him in advance, then the business shut down. "Plaintiff believes that at the time the representations were made, defendants knew that they could not and would not provide any of the services." No other facts alleged.If the client does not answer the lawsuit, will the default judgment suffice for issue preclusion in a later adversary proceeding for nondischargeability?- John D. Faucher818/889-8080
Most likely. Also beware of alter ego proceedings after a judgment against a corporation. Very important not to let any state court proceedings defaul on fraud issues.
On Tuesday, May 15, 2018, 11:39:26 AM PDT, John Faucher j.d.faucher@sbcglobal.net [cdcbaa] <cdcbaa@yahoogroups.com> wrote:
The post was migrated from Yahoo.
Hello groupsters:My client is in a prebankruptcy winddown of a corporation he owns. I expect that he will file an individual bankruptcy case in six months or so.He has just been served with a complaint alleging fraud: client said he would perform a service, plaintiff paid him in advance, then the business shut down. "Plaintiff believes that at the time the representations were made, defendants knew that they could not and would not provide any of the services." No other facts alleged.If the client does not answer the lawsuit, will the default judgment suffice for issue preclusion in a later adversary proceeding for nondischargeability?- John D. Faucher818/889-8080
The post was migrated from Yahoo.