Bailment means to loan something to someone without transferring ownership. In the context of civil court judgments, bailment means to recover a judgment without either having complete ownership of all rights, title, and interest in the judgment, or being a lawyer.
Few subjects are more controversial and hotly debated by judgment enforcement professionals than the topic of bailment. Judgment recovery specialists that are not attorneys or collection agencies cannot represent anyone, so they need to have judgments assigned to them, so they can "step into the shoes" of the Original Judgment Creditor (OJC).
After the judgment is assigned to them with a notarized document, and that document is endorsed and filed by the court, the judgment enforcer owns the judgment, and all rights to recover the judgment.
When the OJC sells their judgment outright at a very steep discount, the judgment enforcer owns all legal and financial rights to the judgment. If the judgment is bought on a future-pay basis, the enforcer has a fiduciary responsibility to the OJC if and when any funds are recovered beyond their court-related expenses to enforce the money.
A court case that covers the fiduciary responsibility of future-pay purchases of judgments assigned to enforcers is Cross v. Bonded Adjustment Bureau, 48 Cal. Appeals 4th 266; 55 California Reporter. 2d 801, July 9, 1996.
The simplest example of potential bailment in the judgment business is a time limit in a purchase agreement, for example "buyer will return judgment to OJC in 1 year". While this may not be a problem in most states, more than one court judge has decided that putting time limit clauses in judgment purchase contracts is bailment.
Charges of bailment may subject the enforcer to charges of abuse of process and Unlicensed Practice of Law (UPL). Unfortunately, sometimes, the law is often what a black robe judge decides it is.
In most states, time limits in judgment contacts are working just fine, and many judgment enforcers put time limits in their contacts. Many OJCs are uncomfortable assigning their judgment, and time limits help many OJCs feel more comfortable.
However, there is case law (in California, Cohn v. Thompson) that says purchase agreements should be for "all rights, title and interest" in the judgment. The case also says time limits for recovery in the purchase agreement constitutes a temporary agreement, and are tantamount to an agency relationship (creating a bailment).
In some states, for example, Arizona or Virginia, one should never purchase a judgment on a future-pay basis unless they first consult with a lawyer, or form a collection agency, etc.
Most judgment enforcers will gladly return difficult or impossible judgments back to the OJC, but very few put this policy in writing. The return of judgments should be at the policy and discretion of the recovery specialist, and not a contractual obligation.
In some states, courts view return clauses as bailment and judgment "rentals". At least one time, the "perpetrator" was sentenced to a long prison term because of UPL-related charges. Note that UPL is is a crime, not a civil matter, and a UPL charge usually begins with a judge recommending that a district attorney make a criminal charge. The best judgment purchase agreements identify the irrevocability of the assignment. The best enforcers (who are not attorneys) do not allow the OJC sellers have any control over their actions. In some states, a revocable, temporary, or conditional assignment constitutes UPL and bailment.
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