Legal Question in Credit and Debt Law in New York
Holding on to property until a debt is settled
As an independent consultant, a foreign-based client offered me the use of corporate products and materials to utilize for the completion of project-specific work. We have since severed the alliance, yet the client still owes outstanding fees and expenses and now demands I return these materials and have no right to claim them. They dismiss that they owe any additional fees or months of unpaid expenses. As they are out of the country, I have no other recourse to settle this dispute or the dollars to fight it through the legal process otherwise. Can I rightfully hold on to the materials as collateral/possession until there is a settlement reached? They perceive my safekeeping the materials as blackmail and I believe that in principle they should pay what is owed, as they signed an agreement and are now trying to get the materials back and leave me unjustly empty-handed. I worked very hard for them and know they will never pay the outstanding debt. Suggestions on rightful terminology for corresponding with them and how to manage this dispute would be greatly appreciated.
1 Answer from Attorneys
Re: Holding on to property until a debt is settled
Tell them whether or not you have a legal obligation to return the products and materials will be up to a Judge to decide. Until then tell them you have a possessory lien on their property to secure the funds they owe you. Tell them you have the right to convert the goods into funds through a sale of the materials to the highest bidder. Any surplus will be returned to them. Not that this is actually true, but they'll have to come here to get their stuff and have to sue you to get it...at which time you can bring your action (or counteraction) against them for the funds you claim they owe you.
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