WHAT EVERY PLAINTIFF SHOULD KNOW – PREJUDGMENT REMEDIES
You have a claim for damages against the defendant, but how do you know if the defendant has any money to pay you if you win? A prejudgment remedy can help you determine whether the defendant has any assets to pay a judgment down the road and to attach those assets now to pay your judgment in the future.
What is a prejudgment remedy?
In Connecticut, unlike in most other states, the plaintiff can apply to the Court for a prejudgment remedy (often referred to as a “PJR") against the defendant. For example, if the plaintiff sues the defendant for failure to repay a loan in the amount of $100,000, the plaintiff can file an application with the Court for a PJR against the defendant in the amount of $100,000 (and possibly more if the loan document provides that the defendant is responsible for the plaintiff’s legal fees). The application consists of an affidavit and some other technical paperwork.
Why should I bother with a PJR?
A PJR application is useful for a number of reasons.
Upon filing, the defendant will be advised by his or her attorney that, if granted, the plaintiff will be able to essentially freeze some of the defendant’s assets during the pendency of the case, which could be years. Such assets can include real estate, bank accounts, and other property of the defendant which is non-exempt. This possibility is often distasteful to the defendant, especially if the defendant was planning to transfer or liquidate his or her assets in the near future.
At the hearing on the PJR application, the plaintiff has the opportunity to subpoena the defendant and other witnesses to give testimony and provide documents concerning the underlying facts. If the plaintiff’s case is strong, the plaintiff can make the most of this opportunity by locking in favorable testimony early on in the process. In some cases, the prospect of a PJR will force the defendant to come to the settlement table.
It may be the case that the defendant is “judgment-proof," meaning that he or she has limited or no non-exempt assets to speak of. Though unfortunate from the plaintiff’s perspective, it is better to learn of this reality early in the process instead of spending precious time and money pursuing a defendant that will never pay, even if the plaintiff could ultimately prevail at trial.
How difficult is it to obtain a PJR?
To obtain a PJR, the plaintiff must demonstrate at a hearing that there is probable cause to support its claims against the defendant. The probable cause standard is a relatively low one, though some courts are more demanding than others. The plaintiff does not need to prove his or her case at the hearing on the application for a prejudgment remedy; the plaintiff need only demonstrate through testimony and documents that a reasonable person could determine that the plaintiff may ultimately prevail at trial in the amount sought. Indeed, the Connecticut Supreme Court recently confirmed that “[a]lthough the attachment of a defendant’s assets while an action is pending can have significant consequences, a probable cause determination rests on a low level of proof and a prejudgment remedy hearing generally is far more abbreviated than a trial on the merits." State v. Bacon Construction Co., Inc., 300 Conn. 476, 483, 15 A.3d 147 (2011).
Whether it is prudent to seek a PJR depends on the specific facts of the dispute and budgetary considerations.