Posted by Joanne_NY on 12/2/08 9:10am
Msg #270872

2009 Here we come!

I just got a call from a company for whom I do about a dozen closings a year - they are a lowball payer, multiple fax backs, but I take there closings when they are within a mile of my office and I have openings. They are currently over 45 days out on two invoices, 60 on one, and over 30 on another. I explained that I do have availablity to cover their closing this week, however, due to their past due status, I would be unable to accept any closings from them until I was paid in full for all outstanding invoices and I would need payment on their current request prior to my acceping the assignment. The rep was stunned! She asked if they faxed me a copy of the check I was to receive for the October closings, would I then accept the closing. I explained that my terms are clearly net 30 and they have not honored that, so their credit is shot!

Needless to say, with the dawning of a new year, I encourage everyone to stick to their guns about their terms and let these signing companies/title companies know that your terms are your terms .... Credit card companies, the phone company, etc., do not let you determine when you will pay them. There are repercussions for paying late.

Let's all start 2009 by sending a message to the companies with whom we do business that our service and expertise are something to value!

Have a great holiday season!

Reply by 101livescan on 12/2/08 9:19am
Msg #270873

You're singing to the choir on this one, Joanne/NY....I'm on board with you. Also, I found a better collection letter than the one I've been using on a brother board, which I cannot post here, so if you haven't also found it, PM me and I'll send along to you, as it has the most teeth I've seen in a model collection letter, which should be faxed, emailed and regular mailed if necessary.

Happy Holidays everyone...

Reply by CopperheadVA on 12/2/08 9:48am
Msg #270874

I'm trying to collect from a signing service right now. Two promised payment dates (in writing) have come and gone. As we are now over 60 days from date of service, today I called the title company on the deal to:

- Confirm that the loan funded
- Confirm that SS was paid, and what date payment was sent to them
- Inform the TC that the SS they are using is not paying its notaries
- Politely ask the TC to contact the SS to inquire about payment on my behalf (this embarrasses SS to their client, and *usually* produces angry payment)

I found out that the file did fund, that the SS was paid upon disbursement in September, and I also found out that I am apparently the first notary to contact the TC to complain of non-payment! There are several other notaries that have posted here on NotRot that they too are having collection issues with this same SS, but why they have not called the TC to put pressure on the SS I have no idea. This is one of the best tools we notaries have in our toolbelt - USE IT!

However, use it wisely and only as a last resort.

Reply by Kevin/Ct on 12/2/08 11:30am
Msg #270882

Don't waste your time complaining to the TC. Serve them with a summons...then they have to respond, or judgment by default will enter against them.

Reply by CopperheadVA on 12/2/08 11:37am
Msg #270883

Many times contacting the TC gets the desired results and the expense of a summons is not necessary. That will be my next step, though, if this does not work!

Kevin, although I did not ask the TC to pay me, the gal volunteered to me that the TC was not responsible for payment, as they hire the SS and any payment issues are between me and the SS. Is the TC ultimately responsible for payment since they subcontracted the work to the SS and also since the TC directly received my work product? Can a notary include the TC on small claims filing or a summons?

Reply by Kevin/Ct on 12/2/08 12:13pm
Msg #270887

You raise several interesting points of contract law. There are a number of different types of contracts. Most of us are familiar with express contracts...either written or oral. In the matter of the express contracts the TC is not liable unless it is a party to the contract or you are a third party beneficiary to the contract between the ss and the TC. In order to be a third party beneficiary the contract would have to indicate that you are an intended beneficiary of that contract. This generally would require that you be specifically named in the contract as benefitting from the agreement between the ss and the TC.

However, there are many ways to skin a cat. There are also contracts implied in fact and contracts implied in law.

a) Contracts implied in fact are those in which not a word is spoken between the parties, but their conduct implies a contractual obligation. The best example is that of a shopper in a super market. The shopper's conduct of placing the items on the counter is an implied offer to buy the items. The clerk's conduct in ringing up the order is an implied acceptance to the offer. The shopper's payment for the groceries is both the consideration for the agreement and his performance. The clerk's bagging to the groceries is his perfomance and consideration. However, this is not a scenario that would generally apply to a TC.

b) Contracts implied in law are not true contracts, but rather a legal fiction in which the law imposes an obligation to avoid injustice. If the TC knew that you were going to render closing services with the expectation of being paid for your services, and accepted your services with that knowledge... an argument could be made that they would be liable under a contract implied in law. However, the burden of proof would be yours to show that there was knowledge on their part of the services you were going to perform.

In response to your question it is probably best not to involve the TC. If you have no reasonable basis to involve them it could result in your being sued for vexatious litigation, abuse of process or unfair trade practices depending upon the law of the applicable state.

Your claim is clearly against the party that hired you. It is not wise to involve other parties without a reasonable basis.

Reply by sue_pa on 12/2/08 12:29pm
Msg #270894

Why doesn't unjust enrichment apply? Every person/entity in the process benefits from our services when the loan funds (lender, broker, title, signing service, borrower). Every one of them either directly or indirectly, knowingly or unknowingly through agents, utilizes our services in the process to achieve the end result they all want ... a funded loan.

That said, every time I am at the end, I type of and fax a copy of the small claims complaint to everyone I have info on (and basically that's everyone ). I ask for their assistance in getting me my money so that I am not forced to file the complaint. The brokers and title companies usually are on the phone or e-mailing the signing service immediately and that in return results in payment - filled with justifications and excuses, none of which would ever hold up in a court.

Reply by Kevin/Ct on 12/2/08 12:45pm
Msg #270897

Unjust enrichment and quantum meruit are other names for a suit sounding in a contract implied in law. You have mentioned exactly the point why it would not be applicable ...at least not in Connecticut. Pennsylvania law may differ. The point at issue is whether they accepted the services when they KNEW OR SHOULD HAVE KNOWN THAT YOU EXPECTED TO BE PAID FOR THEM. In most cases the TC's don't know your identity or who is rendering services. As far as they are concerned they hired an ss, and it is their problem.

The court is not going to protect anyone from making a bad deal. However, in answer to your question the best case I have run accross to illustrate this point was one in which a landscaper delivered shrubs to the wrong address while the inhabitants were not at home. The landscaper sued for unjust enrichment and lost because his loss was due to his own negligence....and the inhabitants had no knowledge that he had rendered service intending to be paid.

There is a huge difference between threatening someone with a suit and winning your case at trial. If you have been successful it is because they felt it was easier to pay the invoice than to get into extended litigation. Had you actually filed you might have been open to a suit for vexatious litigation, abuse of process or unfair trade practices. In Connecticut unfair trade practices can result in the award of triple damages and attorney's fees.

Reply by MikeC/NY on 12/2/08 3:35pm
Msg #270904

"However, the burden of proof would be yours to show that there was knowledge on their part of the services you were going to perform."

In many cases, the docs come from the TC, not the SS - wouldn't the fact that they sent you the docs suggest that they had definite knowledge of the services you were going to perform?

I understand that the laws differ in each state, but it seems to me that they would have a hard time arguing they had no knowledge of your part in the process if they were the ones who provided you with the loan documents...

I agree with you that it's best not to get a third party involved in the legal end of it, but it might not hurt to schmooze them a little bit and see if you can get them on your side. Something along the lines of "I know it's not your responsibility to pay me for this job, but I'm really getting the short end of the stick here. I was wondering whether you would make a phone call or send an email to let them know that you're getting complaints about their lack of payment. Wouldn't you agree that it's in YOUR best interest that the notaries handling your loans are being paid what they were promised?"

Worst that could happen is they say no - in which case, you're right where you were when you made the call...

Reply by Kevin/Ct on 12/2/08 4:15pm
Msg #270907

The fact that they forwarded the edocs or overnighted docs to you could be introduced as evidence of their knowledge, and possibly shift the burden of proof to them to disprove the knowledge. Whether or not you would succeed would depend upon the weight to be given to the evidence of one side or the other by the jury.You raise a good point though.

Reply by sue_pa on 12/2/08 8:14pm
Msg #270927

Exactly. Everyone, except the borrower, knows we're involved and exactly what we do. The lender certainly knows that a CA title company isn't going to sit at the table for a PA closing. When that CA title company gives an order, as a matter all of their orders for the entire country , to a signing service in say Florida, they absolutely know that service is hiring us.

End result is contacting the title company and/or loan originator is almost always effective in getting your $$$.

Reply by Kevin/Ct on 12/3/08 6:28am
Msg #270962

It is not as cut and dried as you seem to think it is. Mike raised a good point, but it is not conclusive at trial. It only shifts the burden of proof. It is possible that there are rational explanations which opposing counsel could make to rebut the evidence....a number of them.

There are also other problems. If the TC has paid the ss in full, and your fee was contained in that amount ...it may be deemed to have satisfied any obligation to you. This is a valid defense in mechanic's lien cases, and I would certainly make that argument if I were representing the TC at trial.

Furthermore, unjust enrichment is an equitable cause of action. As such they are a little harder to win than legal causes of action. There are a number of equitable maxims and /or pre requisites that the proponant of unjust enrichment must satisfy. That is the Connecticut perspective. If Pennsylvania has a different stance...take a shot at trial. Maybe you will be lucky and not be sued.

Reply by sue_pa on 12/3/08 7:18am
Msg #270964

the thing is, there will never be a trial nor a jury in these type situations. If unjust enrichment is an action in equity, then, at least in PA,. it cannot be heard in small claims and certainly no one is owed, or should be owed, whatever the common pleas amount is (perhaps $8000 or $10000, not sure). "Someone" owes the money and when "someone" is in the same state as we are, "someone" pays or puts extreme pressure on "someone" else to pay when backed against the wall viewing a small claims complaint to be filed in a few days.

Reply by Kevin/Ct on 12/3/08 8:17am
Msg #270968

You are right to the extent that there would be no jury in a trial of a matter in equity. In my earlier post I should have said "trier of fact" rather than "jury". The judge would sit as the trier of fact in equitable claims. The jury would sit as the trier of fact in legal claims. Some states have maintained a separation of courts to hear equitable and legal claims such as Illinois...at least at the time I went to law school. It may have since changed.

Other states such as Connecticut have not maintained this separation. In Connecticut the same judge would apply equitable principals to claims in equity and legal principals to claims at law in a trial by the bench. In a trial by jury the Judge would sit as the trier of fact in equitable claims but the jury would sit as the trier of fact in legal claims.

Connecticut must differ from Pennsylvania with respect to small claims. We have a $5,000.00 jurisdictional limit. Any claim in excess of that has to be filed with the Superior Court. I have tried claims for unjust enrichment in Connecticut's small claims court.

If you and the Defendant are both located in the same state you should by all means proceed with legal process. My concern is not with the location of the parties and the jurisdiction of the court...but rather with the proper parties to the suit.

I had a personal injury case several years ago in which I represented a defendant. My client was a payrolling service. One of the driver's for one of its clients lost control of a truck and collided with some department of transportation workers on the road side. He killed three people and injured two others. The defense attorneys were looking for the deep pocket and sued my client alleging that my client was vicariously liable as an employer. They had never taken the time to research the State of Connecticut's position with respect to payrolling as opposed to employment. The case went on for two years, and the attorney's fees were astronomical.

Several weeks before trial the court required a pretrial conference to explore settlement. In these conferences the court tries to foster and cajole settlement by talking to each party's attorneys separately. The judge indicated to me that the opposing attorney's were "sharks, and they smell blood in the water." I responded by telling the judge that my client would not pay them a dime, and that I planned to sue all four defense attorneys and their clients for vexatious litigation for asserting a frivolous case against my client. The judge excused me, and called all four opposing counsel in to talk to them. Ten minutes later the judge called me back into conference, and indicated that he wanted to let my client out of the case without consequence. The fear of a vexatious litigation suit requiring payment of several million dollars and astronomical attorney's fees had brought opposing counsel to their senses. My client got off without paying a dime. Co defendant in the case got caught for the limits of its insurance policy...$1,000,000.00.

The point is make certain your claim is directed at the right party...the consequences are dire. with respect to unincorporated TC's the federal law Fair Credit Collection Act may come into play. It prohibits making threats of groundless litigation or of litigation you never intended to pursue.

Reply by Kevin/Ct on 12/2/08 12:30pm
Msg #270895

By them I was referring to the ss...not the TC.