Receipt Given Buyer for a Downpayment and Buyer Subsequently Reaffirms the Debt

[SuperCat]

What is the name of your state? South Carolina
I have a case that has been pending in Civil Court for 1 1/2 years and is finally 15th on the docket for a session starting next week. This case has to do with me never receiving a down payment on some property I sold to someone. I let the buyer talk me into letting him pay me the down payment "under contract" and signed a receipt for his mortage application saying he had given me the down payment so he could get financed. I have four other contracts with him and two handwritten notes re-affirming the debt after the close. All signatures and handwriting have been certified as authentic by a forensic document expert.

My attorney says the crux of this matter is the fact that I gave the fellow a receipt so he could qualify for his financing but then the buyer made subsequent contracts with me to pay off the debt and therefore the receipt doesn't matter, in other words, the buyer re-affirmed his debt on more than one occasion.

I guess I am just nervous about going in front of a judge next week and would like to know from some people with more knowledge and experience than I, whether this is a correct conclusion?

 

[seniorjudge]

What is the name of your state? South Carolina
I have a case that has been pending in Civil Court for 1 1/2 years and is finally 15th on the docket for a session starting next week. This case has to do with me never receiving a down payment on some property I sold to someone. I let the buyer talk me into letting him pay me the down payment "under contract" and signed a receipt for his mortage application saying he had given me the down payment so he could get financed. I have four other contracts with him and two handwritten notes re-affirming the debt after the close. All signatures and handwriting have been certified as authentic by a forensic document expert.

My attorney says the crux of this matter is the fact that I gave the fellow a receipt so he could qualify for his financing but then the buyer made subsequent contracts with me to pay off the debt and therefore the receipt doesn't matter, in other words, the buyer re-affirmed his debt on more than one occasion.

I guess I am just nervous about going in front of a judge next week and would like to know from some people with more knowledge and experience than I, whether this is a correct conclusion?

I let the buyer talk me into letting him pay me the down payment "under contract" and signed a receipt for his mortage application saying he had given me the down payment so he could get financed.

Are you saying you committed fraud?

 

[SuperCat]

Receipt is Fraud?

The receipt reads that the buyer has made a contract with me to pay this downpayment outside of close and has fufilled those obligations as of the date of the receipt. The receipt is dated 6 weeks prior to the close. No dollar amount is noted on that receipt.

In the downpayment notation on the HUD statement it reads $33,582.05 "as paid under contract", there is no POC notation which in and of itself apparently can be a problem for the closing attorney, or so I am told. The downpayment did not go thru the closing attorney's escrow.

The buyer was not forthcoming with any further downpayment funds after the close and kept wanting to make "amended" contracts on this downpayment matter. There are 3 of these amended contracts the last made on May 30, 2003 and my attorney is advising that this last contract is what will take precedence.

 

[JETX]

Yep, sounds like credit fraud to me, though it will require a COMPLETE and THOROUGH review of all the facts. And the 'clean hands doctrine' is a killer!!

The clean hands doctrine is a rule of law that someone bringing a lawsuit or motion and asking the court for equitable relief must be innocent of wrongdoing or unfair conduct relating to the subject matter of his/her claim. It is an affirmative defense that the defendant may claim the plaintiff has "unclean hands".

 

[SuperCat]

Unclean Hands Doctrine

My attorney says that is indeed what they will throw at me, the "Unclean Hands" doctrine. But I did not intentionally commit fraud. My honest thought at the time was that "this fellow seems okay" and he had a settlement amount coming that he said he would probably be able to pay me off early from. He signed a contract stating that he owed me the downpayment. I signed a receipt but in my mind, the contract with him was the downpayment.

The closing attorney was fully aware of the contract for the downpayment at the close. He acted as the closing attorney on both sides and advised me that it would be okay to sign a receipt since I had the contract from the guy. That is why he put the "Amount paid under contract" phrase on the HUD statement we both signed.

The closing attorney is scheduled for a deposition next week, prior to trial and he called my attorney on Friday and said he (the attorney that closed this) couldn't find his file on sale and wouldn't be able to bring it to the deposition.

 

[seniorjudge]

...But I did not intentionally commit fraud.....

What would you call this?:

I let the buyer talk me into letting him pay me the down payment "under contract" and signed a receipt for his mortage application saying he had given me the down payment so he could get financed.

Your lawyer has probably also told you that you intend the natural and probable consequences of your own actions.

 

[SuperCat]

Anything unusual about going into Master's of Equity Court?

Well, just an update on this mess. The Circuit Court judge referred it to the Master in Equity of the county. My attorney says this is good for us because the rules of evidence and procedure are more lax and the Master is more likely to take into account the physical abuse, etc.

In Circuit Court, the argument of "fraud" against me was brought up but we countered it with two facts: 1) The receipt was signed under duress (I have the emergency room report (the night I signed the receipt) and receipts for subsequent doctor's visits -- see this guy beat the snot out of me to make me sign this thing and then subsequently to go thru with the deal) I wasn't sure that would be admissible, but the judge did hear that evidence. 2) The closing attorney also testified that the best thing I could have done was transfer the property out of my name and he acted as the closing attorney for both sides (and also the attorney in my divorce from which I obtained the property). To compound matters for the closing attorney, he literally stated in the deposition that the defendant was a "good old boy and he just assumed he was on the up and up and didn't see any need to verify if the money actually changed hands. He just took him at his word". This attorney actually said this in a deposition.

The Circuit Court judge got this disgusted look on his face and said since it was a real estate matter, it was best referred to the Master In Equity since he (and these are the judge's actual words) "has more time than I do to sort this mess out".

We are waiting on a hearing date from The Master now. A couple of interesting side notes, the boob is now trying to sell the property (listed thru a realtor) and my attorney says there isn't anyway he can transfer it until this Master's in Equity case is settled so he has written a letter to the BIC (Broker in Charge) advising him of the pending court action. Also the boob's bank has moved along with foreclosure proceedings against him. Their foreclosure case may go before the Master before mine does!

 

[seniorjudge]

Well, just an update on this mess. The Circuit Court judge referred it to the Master in Equity of the county. My attorney says this is good for us because the rules of evidence and procedure are more lax and the Master is more likely to take into account the physical abuse, etc.

In Circuit Court, the argument of "fraud" against me was brought up but we countered it with two facts: 1) The receipt was signed under duress (I have the emergency room report (the night I signed the receipt) and receipts for subsequent doctor's visits -- see this guy beat the snot out of me to make me sign this thing and then subsequently to go thru with the deal) I wasn't sure that would be admissible, but the judge did hear that evidence. 2) The closing attorney also testified that the best thing I could have done was transfer the property out of my name and he acted as the closing attorney for both sides (and also the attorney in my divorce from which I obtained the property). To compound matters for the closing attorney, he literally stated in the deposition that the defendant was a "good old boy and he just assumed he was on the up and up and didn't see any need to verify if the money actually changed hands. He just took him at his word". This attorney actually said this in a deposition.

The Circuit Court judge got this disgusted look on his face and said since it was a real estate matter, it was best referred to the Master In Equity since he (and these are the judge's actual words) "has more time than I do to sort this mess out".

We are waiting on a hearing date from The Master now. A couple of interesting side notes, the boob is now trying to sell the property (listed thru a realtor) and my attorney says there isn't anyway he can transfer it until this Master's in Equity case is settled so he has written a letter to the BIC (Broker in Charge) advising him of the pending court action. Also the boob's bank has moved along with foreclosure proceedings against him. Their foreclosure case may go before the Master before mine does!

see this guy beat the snot out of me to make me sign this thing and then subsequently to go thru with the deal

Why did you wait 20+ days to tell us this little tidbit?

What else have you left out?

 

[SuperCat]

Haven't left anything else out

I left out the abuse part because it was highly questionable as to whether it would be admitted into Circuit Court. My attorney told me we had about a 50/50 shot that it would be heard and I didn't want to throw it into the thread if it wouldn't even be a factor. I wanted opinions based on the facts without it since it was questionable evidence.

As it so happened, when we got to court, the judge seemed to take a keen interest in the emergency room report and admitted it which seemed to poke a big hold in the opposing counsel's "Unclean Hands" accusation. They fought like hell to keep it out and that little scenario alone took up most of the time we had in front of the bench. After that was introduced, it opened up the 5 other hospital reports, 3 police reports and the 3 other contracts to pay from this guy and it was like the floodgates just opened for this type of evidence. The judge really did assume a strange manner and just ruled that the Master In Equity had jurisdiction over this since it was real estate, transfer the case. There were about 100+ things on this judge's docket for that week and I think he sensed that this whole thing really STINKS. There is impropriety on the part of the attorney that closed this and predatory lending is a hot button in this state right now. On top of not verifying the downpayment, this attorney also transferred the property directly from my ex-husband to "Booby" even though I was awarded the property in my divorce, it never was transferred to me and then to "Booby".

"Booby" reaffirmed his debt with me three different times after the close happened and my attorney has stated that the last affirmation of the debt is what will take precedence in MIE. The only other thing I "left out" is that "Booby" notarized his own signature on 2 of the 3 re-affirmations. That didn't seem to go over well with the Circuit Court judge either. I got the feeling that the judge was also asking, "Do they still give out the Darwin awards?"