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I am the Creditor / Lender and an Arizona resident currently

located in AZ. The Borrower...
I am the Creditor / Lender and an Arizona resident currently located in AZ. The Borrower is a resident of TBD and is located in Illinois.
After cumulative principal sum distributions ($6639.36) to "bailout" a credit damaged friend (Borrower), the "stories" have become so outrageous that I have to "cut-bait". The borrower has refused to acknowledge (yet not deny) the monetary distributions by NOT accepting an offering of an Unsecured Promissory Note, Demand, Draft Rev - (since installments are not sustainable). This Note would have eliminated this next step, further damaging the borrower's credit history and publicly documenting the liability. (This alternative step has been documented for and to the Borrower.)
The distributions occurred over a 4 month period where the borrower was in AZ, OK, or IL at the time of the distribution.
Can I bring the Borrower to Judgment in Maricopa County, Arizona State OR does another jurisdiction apply?
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Answered in 22 minutes by:
8/22/2012
TexLaw
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4,430
Experience: Lead trial/International commercial attorney licensed 11 yrs
Verified

Hi,

Thank you for your question. It is well-put and actually involves quite complicated legal issues.

The clerk's analysis is incorrect. To be able to bring suit against the borrower in Arizona, you would have to be able to establish that the court has personal jurisdiction over him. The lender is the Plaintiff, the borrower is the Defendant. When a Defendant does not reside in Arizona, the only way that the Arizona court can establish jurisdiction over the Defendant without the Defendant's consent is through the Arizona Long-Arm Statute.

Arizona's long-arm statute is very broad and is intended to allow Arizona to exert personal jurisdiction over a non-resident litigant to the maximum extent permitted by the United States Constitution. Houghton v. Piper Aircraft Corp., 112 Ariz. 365, 367, 542 P.2d 24, 26 (1975); see also Ariz. R. Civ. P. 4.2(a). Consequently, we need only consider the constitutional limitations of asserting specific jurisdiction under the Due Process Clause. See Batton v. Tennessee Farmers Mut. Ins. Co., 153 Ariz. 268, 270, 736 P.2d 2, 4 (1987).

Under the federal constitution, two factors govern the scope of personal jurisdiction: the defendant's minimum contacts with the forum state and the reasonableness of exercising personal jurisdiction over the defendant. The requisite contacts for specific jurisdiction exist if Barnard Vogler "purposefully created contacts" with Arizona, id. at 271, 736 P.2d at 5, or "'purposefully directed' [its] activities" at Arizona residents. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 85 L. Ed. 2d 528,XXXXX 2174 (1985) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 79 L. Ed. 2d 790,XXXXX 1473 (1984)).

So, in this case, if the Defendant was residing in Arizona at the time of one of the disbursements, then there could potentially be jurisdiction in Arizona over him. Further, the fact that the Defendant kept an account in Arizona and that one of the disbursements at issue was to that account will likely subject the Defendant to jurisdiction in Arizona, as this would be considered a minimum contact necessary for due process.

The issue in your case will be serving the Defendant with process. You will need to be able to locate him. The court will be hesitant to grant a default judgment against the Defendant if he was not served with process and is being brought into the court's jurisdiction by the long-arm statute.

Please let me know if you need further information.

-ZDN

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Customer reply replied 5 years ago

GOOD Catch! "...the court of jurisdiction lies with the Borrower's (Plaintiff) address ..." should have been "... Borrower's (Defendant) address ...". And, thank you! Something didn't feel right about the clerk's information.

 

"So, in this case, if the Defendant was residing in Arizona at the time of one of the disbursements, then there could potentially be jurisdiction in Arizona over him." Here (as always in tax law) I get confused by the term "residing" vs. “located” (I do not know the Borrower's (Defendant) State of Residence, regardless of where "located", but was domiciled in PhoenixAZ at the time of the initial disbursement.) So, does “residing” and “domiciled” mean the same thing?

 

"Further, the fact that the Defendant kept an account in Arizona and that one of the disbursements at issue was to that account will likely subject the Defendant to jurisdiction in Arizona ...”. This is a HUGE point and satisfies the jurisdictional question; I am of the contention!

 

Further, I DO know where the Defendant is located in Illinois so “all I would need to do” is have Process served at that address … easier said than done! But, it would appear as if the condition “… being brought into the court's jurisdiction by the long-arm statute.” would be satisfied.

 

Thank you for all your case law references! School never ends, does it?

 

So, in concluding, if you would provide me with the-idiot’s-answer to “residing” vs. “domiciled”, I would feel confident and satisfied with your guidance.

 

Well done, Sir.

Thank you for your response and it is my pleasure to assist you.

The fact that he was residing is key. And by "residing" I mean that he was simply present in Arizona. Domiciled means that it is his place of residence, which is required for certain other things in court (like if he wanted to get a divorce, etc), but in regard to your question is only importent in that if he was domiciled in Arizona, you would not have to use the long arm statute and would simply have to wait for him to come home.

That being said, the mere fact that he has/had a bank account in Arizona at the time of the disbursement is likely enough to bring him under the Court's jurisdiction through the long arm statute, even if he did not ever reside in Arizona. This an important thing to remember in future business. Establishing minimum contacts in a state that exposes you to jurisdiction can even come through making sales phone calls to a state. It's a very broad standard.

On the service of process issue, this is harder said than done indeed. You will need to request that the clerk issue the citation for you to pick up and then contact a private process server in the Defendant's location and have them serve it on the Defendant.

As you are going through your lawsuit, if you have any other questions, just find my profile and send the question to me directly that way. Give me a short reminder "debt collection case in Arizona" and I'll remember what's going on.

I wish you the best of luck and hope you get your judgment.

-ZDN

TexLaw
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4,430
Experience: Lead trial/International commercial attorney licensed 11 yrs
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