4th Circuit: United Marketing Solutions v. Fowler- Settlement Agreement was not Contract for Sale of Judgment

Summary: United Marketing Solutions (UMS) obtained a judgment against the Fowlers for $106,076.82. Subsequently, Rees Associates obtained a judgment against UMS for $172,194.94. Rees then initiated garnishment proceeding against the Fowlers, but then entered into a Settlement and Release with the Fowlers which called for the Fowlers to pay Rees “the sum of $ ___ upon execution of this Agreement in full and complete satisfaction of the Garnishment. In return for this payment, Rees will credit the Rees Judgment for [$111,766.92] resulting in full satisfaction of the Fowler Judgment.” UMS refused to mark its judgment against the Fowlers as satisfied, despite Rees having its judgment against UMS marked as partially satisfied, and the district court largely agreed, only giving the Fowlers a $10,000 equitable offset in the amount actually paid to Rees. On appeal the Fowlers argued that they had, in essence, purchased the Rees judgment against UMS for $10,000, which was then used to satisfy the judgment UMS held against them. The Court of Appeals, however, found that the plain language of the Settlement Agreement between the Fowlers and Rees, as well as the parties behavior, indicated that this was not a contract for the sale of the Rees judgment, “[t]o hold otherwise would permit a judgment debtor and third party to contract around a judgment creditor’s right to enforce its judgment without the judgment creditor’s participation or consent.” For a copy of the opinion, please see: United Marketing Solutions v. Fowler- Settlement Agreement was not Contract for Sale of Judgment.pdf