British Man Must Pay Up After Fleeing Creditor

(CN) - The 7th Circuit upheld a $750,000 judgment against a British man who fled the United States to shake a creditor.

Robert Hodges signed a contract in 2005 with Relational, an equipment financing company, guaranteeing a debt owed by Hodges' hardwood-flooring business, Laminate Kingdom. When Hodges' 62-store company went bankrupt two years later, Relational filed suit against Hodges.

Hodges, however, had sold his Florida home, without leaving forwarding information, and moved to Birmingham, in his native United Kingdom.

A U.K. private investigator located an address for Hodges using a database of corporate information maintained by the British government and had a process server deliver a summons and complaint.

An Illinois federal judge entered a $750,000 judgment against Hodges after Relational submitted a return of service and an affidavit signed by a British process server.

Relational's U.K. counsel soon received letters from Hodges's grandmother and aunt. The letters claimed that the documents had been left on the doorstep at the home of Hodges' grandmother, and that the family had no knowledge of Hodges' whereabouts.

Relational filed an action to enforce the judgment in the British courts, and Hodges repeatedly delayed the case by requesting several extensions.

The day before his hearing, Hodges filed a motion to vacate the default judgment in Illinois, arguing that he had not been served.

The district court would not allow the U.K. process server to testify by telephone, but admitted a second affidavit that included a physical description of Hodges. The new affidavit was not certified by an administrator of oaths.

Hodges admitted at the hearing to having relocated to the U.K. without leaving his creditors a forwarding address, but said that he lived 16 miles away from his grandmother and had not seen her in two years.

Hodges also submitted a credit card statement that showed he spent 71 pounds at a local pub on the day Relational claims he was served. Because Hodges' credit card statement did not specify what time he was at the pub, and because of his previously evasive behavior, the lower court found Hodge's testimony unconvincing.

On appeal, Hodges argued to throw out the unsworn and uncertified supplemental affidavit, but the 7th Circuit said the issue was irrelevant.

"The parties spill a lot of ink addressing each other's contentions, but the dispute about the supplemental is immaterial to the resolution of this appeal ... the return of service and original affidavit Relational offered were sufficient to discharge its prima facie burden," Judge Diane Sykes wrote for the court.

Sykes deferred to the district court's credibility determination and upheld the judgment.

"Credibility is earned, and here, Hodges simply failed to persuade the court that he was telling the truth," Sykes wrote.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit