Judgment Recovery Methods in California

Judgment recovery methods in California are the topic of this article. This article will discuss some of the more commonly used methods for collecting on an unpaid judgment in the State of California. These are very common as there are estimates stating that approximately 80% of them are never collected.

I have been collecting unpaid judgments in California since 1992 when I worked in commercial and industrial property management and over the years I have collected on many both large and small as an employee and as a judgment recovery professional.

Anyone who has ever obtained a judgment soon discovers that while the Court may enter it they will not collect it for you. In the real word few debtors if any ever voluntarily pay which makes the judgment creditor responsible for collecting the judgment. However the Court will issue certain documents that are very useful in collecting such as writs of execution, abstracts of judgment, order to appear for examination for a judgment debtor, etc.

There are two major collection methods that can be used in collecting which are discussed briefly below. Anyone attempting to collect on an unpaid judgment should carefully consider which of the two methods they wish to use.

The first method is what I call the active method. The active method involves actively taking steps to collect such as levying on bank accounts, scheduling judgment debtor examinations, serving wage garnishments, requesting assignment orders, etc. The active method is my personal favorite for collecting as it increases the odds of collection. However it does have one major disadvantage which is that it takes time and money to pursue the active method. Another disadvantage is that it may persuade the judgment debtor to take certain actions to avoid having to pay the judgment such as filing for bankruptcy, moving out of state, etc.

The second method is what I call the passive method. The passive method works best in situations where you know that the judgment debtor owns or has an ownership interest in real property located in a certain county. In that case you could record an abstract of judgment in the county where the real property is located and that will place a recorded lien on any present or future ownership interest by the judgment debtor in any real property located in that county that will last in most cases until the judgment expires or the judgment is paid off. Another situation would be if the judgment debtor owns a business in which case you can file a notice of judgment lien with the California Secretary of State. The major advantage of the passive method is that in most cases it takes less time and money to utilize the passive method. However the major disadvantage to the passive method is that you may have to wait a long time before the judgment is paid off.

This article provides only a brief overview of the basic strategy for California recovery. While some individuals do well collecting their own unpaid judgments many do not have the time, money or inclination to attempt collection on their own. Those individuals may want to consider assigning the judgment to a judgment recovery professional.

DISCLAIMER:

The author of this article, Stan Burman, is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this article is NOT intended to constitute legal advice.

Motion to Correct Clerical Error in California Judgment

A motion to correct a clerical error in a California judgment is the topic of this article. Correcting a clerical error in a judgment entered in California requires the filing of a motion to amend the judgment in California to correct a clerical error under the provisions of Code of Civil Procedure section 473(d).

This procedure is used to correct inadvertence or errors in recording the judgment. However it should be noted that it cannot be used to contest the intended terms of the judgment. The motion can also request that the judgment be amended nunc pro tunc as of the date the original judgment was entered.

A motion to amend a California judgment to correct a clerical error is filed on the grounds that the recorded terms of the judgment do not agree with the outcome indicated when the judgment was initially declared. This motion is a very limited tool as it is authorized to be used only to correct clerical errors.

However the trial court is given very broad discretion in classifying such errors as an omission or mistake in a judgment; a misdescription in a judgment, inadvertence in signing a faulty judgment, and an ambiguity in a judgment.

The characterization of an error in a judgment as clerical rather than judicial is critical as a clerical error can be corrected at any time, sua sponte by the court or on a motion from one of the parties, even years or decades after the case has closed. But a judicial error can be only corrected on a motion for new trial or on a motion to vacate and enter a new judgment.

Thus the party who is seeking to persuade the court that the error was merely clerical must be very careful and also aware of how to properly characterize the error, and should be sure that the error is in fact clerical and not judicial.

However it should also be noted that there are many instances in the California Supreme Court and the California Courts of Appeal have ruled in which an omission or mistake in a judgment has been characterized as a clerical error. These instances include:

An omission in the determination of an account and decree of distribution involving the probate of an estate;

The failure to include a direction that one party pay another party’s attorney’s and accountant’s fees when recording a judgment, and

The failure of a judgment to clearly name the defendants, and to state their liability to the plaintiff.

The California Supreme Court stated in a case decided over 75 years ago that California Courts have the power to correct clerical errors in their judgments at any time, regardless of how much time has passed since the error was made or the judgment entered. In that case the Supreme Court stated that a hearing and the resulting order nunc pro tunc correcting a clerical error in a decree of final distribution of an estate 35 years after the original entry was valid.

The California Supreme Court also stated in a case decided over 40 years ago that all courts have the inherent power to enter an order entering a judgment nunc pro tunc All courts have the inherent power to enter orders for judgments nunc pro tunc so that the judgment will be held effective as of the date on which it was actually entered.

Used in the right situations, a motion to amend a judgment to correct a clerical error can allow the moving party to correct a clerical error in a judgment, even if years or decades have passed since the date of the original judgment or decree. But the motion should only be used in the right situations when the error is clearly a clerical error and not a judicial error.

DISCLAIMER:

The author of this article, Stan Burman, is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this article is NOT intended to constitute legal advice.

Stay of Enforcement of California Judgment

A stay of enforcement of a California judgment is the topic of this article. Code of Civil Procedure section 918 is the California statute authorizing a trial court to stay the enforcement of any judgment but only for a limited period of time. For most California judgments such as money judgments the trial court can stay enforcement for no more than 10 days beyond the last date on which a notice of appeal could be filed.

A request for a stay of enforcement of a California judgment requires that the moving party file a noticed motion or more commonly an ex-parte application for what is known as a stay of execution of the judgment.

Any parties in California that have had a money judgment entered against them in California need to realize the vital importance of immediately seeking a stay of execution of any money judgment as soon as possible after the judgment has been entered. The reason for this is Code of Civil Procedure section 683.010 states that, “Except as otherwise provided by statute or in the judgment, a judgment is enforceable under this title upon entry.” This means that California law allows a judgment creditor to begin collection proceedings to enforce the judgment as soon as the judgment has been entered by the clerk of the court, in some cases that may be the same day!

In cases where the judgment creditor appears to be particularly aggressive and a party believes that they may begin collection efforts right away that party may wish to file an ex-parte application for a stay of execution.

The period of time in which the execution of a judgment may be stayed varies depending on whether the case is a limited civil or unlimited civil case and whether or not a notice of entry of judgment has been served by either the clerk of the court or any other party to the action. Therefore every case is unique and this is the reason there are several different deadlines for filing a notice of appeal for both limited civil case and unlimited civil cases. Examples of the different deadlines will be given below.

California Rule of Court 8.822 governs the deadline for filing a notice of appeal in limited civil cases.

For most limited civil cases in which the clerk of the court or any party has served a notice of entry of judgment on the defendant the deadline to file a notice of appeal is 30 days from the date that the notice of entry of judgment is served on the defendant.

For most limited civil cases if no notice of entry of judgment was served on the defendant the deadline to file a notice of appeal is 90 days from the date that the judgment is entered by the clerk of the court.

California Rule of Court 8.104 governs the deadline for filing a notice of appeal in limited civil cases.

For most unlimited civil cases in which the clerk of the court or any party has served a notice of entry of judgment on the defendant the deadline to file a notice of appeal is 60 days from the date that the notice of entry of judgment is served on the defendant.

For most unlimited civil cases if no notice of entry of judgment was served on the defendant the deadline to file a notice of appeal is 190 days from the date that the judgment is entered by the clerk of the court.

Although the trial court has the power to stay enforcement of the judgment whether or not a notice of appeal has been filed in the real world there are some judges who may only grant a stay of enforcement in the following situations:

The moving party had a judgment obtained against them through default and they have filed or will file a motion to vacate that judgment that shows valid grounds for vacating the judgment.

The moving party has already filed a notice of appeal or will file a notice of appeal and can show at least facially plausible grounds for appealing the judgment and the moving party can make a strong showing that they will suffer irreparable injury if execution of the judgment is not stayed.

The moving party should include a detailed declaration with specific facts and evidence detailing the irreparable harm they will suffer if a stay of execution is not granted and should also include any relevant documents as exhibits.

Possible grounds could include that the judgment was obtained by default and the moving party has filed or will file a motion to vacate the judgment, that allowing enforcement of the judgment will cause the sale of a key asset of significant value, would devastate an ongoing business or would likely result in insolvency or bankruptcy proceedings.