John Doe Inc. (“JDI”), a fictional Washington small business, obtained terrible authorized tips on a commonly misunderstood subject matter – the statute of limitations on aged debts. A lawyer instructed the business not to hassle pursuing authorized action from significant accounts that experienced at first fallen into default 6-in addition a long time in the past. In accordance to the legal professional, “since the account holders initially defaulted much more than six a long time in the past, the statute of constraints would have time bar your claims.”
The attorney's assistance was flat mistaken in this condition, and the undesirable suggestions most likely charge JDI the value of the substantial accounts against which JDI still had legitimate statements. The suggestions was erroneous because of sporadic partial payments on the previous-thanks accounts. The account holders' partial payments to JDI allegedly eliminated any time bar on the contemplated assortment lawsuits.
In Washington, the statute of restrictions on a agreement lawsuits refreshes just about every time the debtor makes a partial payment to the creditor. Washington's legislature codified this legal principal less than RCW 4.16.270, also identified as the 'partial payment statute' or 'financial debt revival statute.' The partial payment template reads as follows:
When any payment of principal or fascination has been or will be created upon any present contract, whether it be a bill of trade, promissory notice, bond or other evidence of indebtedness, if this sort of payment will be produced after the very same shall have come to be because of, the limitation will continue to be from the time the past payment was designed.
Early 20th century circumstance law stemming from JM Arthur & Co. v. Burke , 83 Clean. 690 (1915) manufactured it extremely difficult for collectors to establish qualifying partial payments for purposes of personal debt revival. But a pair of 1950s Washington Supreme Court conditions impliedly abrogated or restricted Arthur and its progeny. The watershed moment was the Supreme Courtroom circumstance Wickwire v. Reard , 37 Wn.2d 748, 751-59 (1951). There the Washington Supreme Court essentially differentiated Arthur and a lot of other scenarios that experienced set high evidentiary burdens for partial payment arguments. 4 several years later-1955-the Washington Supreme Court docket's feeling in Keen v. O'Rourke , 48 Wn.2d 1, 2-4 (1955) more minimal Arthur and its progeny in dicta. The Eager Court recommended the line of holdings from Arthur should be constrained to their “pecicular” specifics due to the fact they had associated scenarios strongly stating no qualifying payments experienced been designed.
Given that the 1955 Eager case, it seems no Washington appellate opinion, revealed or otherwise, has dealt with a problem to the adequacy of proof in a partial payment argument. See, eg , Hamilton v. Pearce , 15 Wn.Application. 133, 135-39 (1976) Hopper v. Hemphill , 19 Wn.App. 334, 336 (1978) Watters v. Doud , 92 Wn.2d 317, 319-21 (1979) Greer v. Whatcom Meadows Camping Ass'n , 84 Wn.App. 1101 (1997) Nilson v. Castle Rock Sch. Dist. , 88 Wn.Application. 627, 631 (1997) Citibank S. Dakota, NA v. Cramer , 139 Wn.App. 1089 (2007) Hansen v. Anderson , 147 Wn.Application. 1009 (2008). The watershed Wickwire and Keen cases feel to have adequately signaled the finish of abnormally high evidentiary anticipations in partial payment cases.
Savvy lenders and Washington business enterprise lawyers have a lot more rationale than ever to consider the partial payment statement prior to abandoning previous debts.