Middleton v. L&J Assets
Plaintiff and respondent Valerie Middleton got a Citibank credit card, bought things with it, and then stopped paying on June 5, 2001. She owed Citibank nearly $13,000. Defendant and appellant L&J Assets acquired the debt that Middleton owed Citibank. On June 2, 2005, L&J sued Middleton and her husband, plaintiff and respondent Matthew Livermore, for breach of contract. L&J also claimed that -- to avoid her creditors -- Middleton had fraudulently transferred to Livermore her ownership interest in the condominium where they both lived. L&J recorded a lis pendens against the property. While that lawsuit was pending, Livermore tried to sell the condominium. To complete the sale, about $37,000 had to be put into an escrow account. It was distributed to L&J on close of escrow. L&J then dropped its lawsuit.
Middleton and Livermore then filed this lawsuit against L&J for conversion and unjust enrichment. Based on a mistaken allegation in the complaint in the 2005 contract action, the trial court concluded that that lawsuit had been time-barred, and that L&J was not entitled to the funds it got from the escrow. The court entered judgment for Middleton and Livermore on both claims. Court reverse. L&Js contract action was timely. Court remand the matter for trial and a determination whether Middleton and Livermore can prove conversion and/or unjust enrichment.
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