Charlie Davis, owner and operator of Davis Packaging, was having a particularly harrowing day. A strike at his main supplier's production plant was entering its third week, and he was completely out of corrugated stock. Finished goods all ready for shipment were piling up in the warehouse because of some kind of Teamsters' job action. And he'd lost track of the number of calls he'd taken since 8 a.m. from angry customers.

Now his secretary was pushing a pile of papers at him from Fred Newman, his attorney.

Charlie glanced at the papers and grabbed the phone.

"Fred, what is this stuff you sent me, anyhow?" he demanded to know.

"It's the Oxford suit, Charlie," Fred replied. "You know. They never paid for that big order, so you agreed we should sue them."

"I know all that," Charlie told him. "But that's not what I asked you. What I want to know is what all these papers are for."

"They're an affidavit to support a summary judgment," Fred replied patiently. "I want you to read them over, sign them, and return them to me."

"You think that's all I've got to do, Fred?" Charlie shot back. "I'm running a company here. I've got my hands full. You're the lawyer. If you weren't sure this affidavit was okay, you shouldn't have sent it to me."

"I really wish you'd look them over . . ." Fred started to say, but the phone went dead. Charlie had hung up.

What do you think of Charlie's judgment. Is he making a mistake?

Click on "next" below for the answer.

Summary Judgments

Charlie would be wise to take Fred's advice.

Most cases started by creditors are not defended by the debtors, and, in those cases, the attorney for the creditor usually enters a default judgment and proceeds to try to collect the judgment from the debtor.

In a small number of cases, however, the debtor will interpose an answer and contest the creditor's complaint. The answer may contend there was late delivery, defective merchandise,or a shortage in the goods; or, in the cases of obligations to financial institutions, the debtor may claim that the statute of limitations has run, that credit for his payments was not received, or that the amount sued for is incorrect.

Key Definitions Summary Judgment - A summary judgment is a request to the court (judge) that the creditor be entitled to judgment based upon an affidavit and documentation supporting the affidavit. It asserts that the debtor has raised no genuine issue to be tried and asks the judge to rule in favor of the creditor. Interrogatories -- A formal or written question asked by one party of an opposing party in court of law. They must be answered in writing under oath. Discovery proceedings -- Part of the pre-trial litigation process in which each party requests relevant information and documents from the opposing side to attempt to 'discover' pertinent facts. One method of 'discovery' is an interogatory (see below). Others include depositions, document production requests and a request for inspection. Generally discovery devices include depositions, interogatories, requests for admissions, document production requests and requests for inspection.

A certain number of these cases will reach discovery proceedings to ask the debtor written questions (interrogatories) or to conduct examinations of the debtor under oath (examinations before trial). After these discovery proceedings are complete, the case may go to trial, and one or more officers or representatives of the creditor may have to appear in court to testify.

The competent attorney will always be alert to the opportunity to make an application to the court for a summary judgment during these proceedings. A summary judgment is a request to the court (judge) that the creditor be entitled to judgment based upon an affidavit and documentation supporting the affidavit. If the creditor can persuade the court that he is entitled to judgment based upon the affidavit, then the court may award judgment to the creditor and the case will end there. Discovery proceedings and a trial of the matter will not be necessary, and the attorney will save the client significant time (being a witness) and money (cost of stenographic minutes) and legal fees.

An example of this opportunity is where the financial institution has sued the guarantor on the basis of a promissory note in which the guarantor has executed a separate agreement of guarantee. The creditor has commenced suit against the guarantor without proceeding against the original debtor. The guarantor alleges that the creditor must proceed against the debtor and obtain a judgment against the debtor, and that the judgment must become uncollectible before the creditor can proceed against the guarantor. The creditor produces the promissory notes, which in writing allow the creditor to sue the guarantor even without proceeding against the original debtor.

This would be a perfect time to use summary judgment (i.e., produce the original note to the court together with an affidavit as to the amount due). The court would probably award judgment to the creditor, and a trial of the case would not be necessary.

This brings us to the affidavit used in support of the motion for summary judgment. Too often, the client receives this affidavit, glances through it, signs it, and returns it to the attorney. If the motion for summary judgment is won, this procedure by the client is probably acceptable. Unfortunately, the court may also deny a summary judgment.

The basis of the denial of a summary judgment is that an issue of fact or a dispute of a fact exists that can only be resolved at a trial. Some judges are reluctant to grant summary judgment and will actually search the affidavits of the creditor and the affidavits of the debtor in order to find an issue of fact so that they can deny the motion for summary judgment. It's the old philosophy that it's easier to say no and let another judge decide the case. For this reason, the client must be prepared for the fact that marginal motions for summary judgment are often denied.

Accordingly, the client should read the affidavit carefully and pay attention to all the statements made in the affidavit. The attorney is relying on the documentation furnished to him by the creditor, and sometimes mistakes are made or incomplete information is initially furnished to the attorney. The client should read the affidavit and:

1. be certain that the amount that is being sued for is the correct amount. Typographical errors do occur.

2. review all the statements set forth in the affidavit about the activity of the debtor and yourself. If the motion is denied, the client may have to testify at the trial as to the same facts as are contained in the affidavit. It is imperative that the testimony at trial be the same as is set forth in the affidavit. If testimony at the trial varies from statements in the affidavit, the defendant's attorney will attack the plaintiff on cross-examination with the affidavit, and these contradictions may destroy the creditor's case.

3. Review the affidavit to be certain that all the information and documents in the creditor's possession have been made available to the attorney. If additional documents may be helpful to support the statements in the affidavit, contact your attorney immediately. Remember that the summary judgment is based on documentation.

4. Verify dates, invoice numbers, payments, balances, and interest. Whether the amount involved is substantial or a small balance, the figures set forth in the affidavit should be accurate.

After you have reviewed the affidavit and are comfortable that it accurately reflects the claim of the creditor and the activities of the debtor, you can comfortably sign it, have your signature notarized, and return it to the attorney. You should also retain a copy.

Editor's Note: The above article originally appeared in the Credit & Collection Manager's Letter, a newsletter purchased by Credit Today in 2006. This article originally appeared prior to 2000.