Can defendants purchase claims against themselves to avoid liability? Bradburn v. APT Explained

In a striking example of legal maneuvering, the Utah Supreme Court in Bradburn v. APT addressed whether a defendant can purchase a plaintiff’s claims against itself and then substitute as plaintiff to dismiss those claims. The court’s holding demonstrates how confession of judgment provisions can create unexpected procedural advantages for defendants.

Background and Facts

Ryan Bradburn worked as a sales representative for Alarm Protection Technology (APT) and signed a confession of judgment for $24,000 in exchange for commission advances. After his employment ended, Bradburn sued APT for $348,434 in unpaid commissions. APT then filed the confession of judgment in a separate district, obtained judgment against Bradburn, and sought a writ of execution for a constable sale of all Bradburn’s “rights, claims, interest and choses in action” against APT. At the constable sale, APT purchased Bradburn’s claims against itself for $2,500.

Key Legal Issues

The central issue was whether the district court abused its discretion in allowing APT’s complete substitution as plaintiff under Utah Rule of Civil Procedure 25. Bradburn argued that Utah law should prohibit defendants from purchasing claims against themselves, particularly when the underlying judgment was obtained through confession rather than on the merits.

Court’s Analysis and Holding

The Utah Supreme Court applied an abuse of discretion standard to the substitution ruling. The court noted that Utah law expressly permits the purchase of choses in action, even against oneself, through the statutory framework governing judgments by confession, writs of execution, and constable sales. Once APT lawfully purchased Bradburn’s claims, it “stepped into the shoes” of the former plaintiff and gained control over the litigation, including the right to dismiss the claims.

Practice Implications

This decision highlights the significant strategic value of confession of judgment provisions in commercial agreements. Defendants facing substantial claims can potentially neutralize litigation by executing on confessions of judgment to purchase the plaintiff’s claims at constable sales. Practitioners should carefully counsel clients about the risks of signing confessions of judgment and monitor any execution proceedings that might affect pending litigation.