Sometimes Speed is the Key

September 15, 2022

So you have a judgment outside of California, but you want to enforce your judgment in California against your debtor in California, against his / her assets in California. There is a lot of money in Los Angeles, and many out of state judgments end up as judgment collections in Los Angeles.

Under the law, a remedy of a judgment creditor against a California Debtor when an out of state judgment is involved is the Sister State Judgment procedure, where a judgment is essentially just “moved” into California from another State. This is a relatively simple procedure. And that’s where this story starts - with a phone call to domesticate a judgment.

We had recently purchased a sizeable out of state judgment against a debtor in Los Angeles. The Defendant did not want to pay. His plan? Sell his house before we could collect, and abscond with the cash.

We called our judgment enforcement counsel in Los Angeles and told him the situation “Great” he said, “Let's domesticate and enforce.”

“Yeah, great, the problem is his house is currently in escrow, we have probably only days to get this done before the only asset is gone, we are screwed. ” I said.

The problem I was referencing is that under the CA Sister State Judgments Act you have to enter your out of state judgment in the Superior Court in Los Angeles, then serve the debtor the judgment papers, and then you must wait for 30 days before you can do any sort of enforcement (Code of Civil Procedure Section 1710.30).  This would mean the debtor’s house would be long gone if we did things the normal way.

Luckily, there are exceptions to every rule- the California Judgment Enforcement statutes provide that in an emergency situation, a creditor may bring an ex parte motion before the court- which can be done on an emergency basis, without telling the other side– for an order allowing the creditor to enforce the judgment immediately without serving the debtor anything and without any waiting period – due to special circumstances. (See Cal. Code of Civ. Proc. 1710.45(c)).

In this case, we immediately filed the judgment papers, then immediately made an ex parte-motion to the Court – on New Years Eve no less –  to allow immediate enforcement- which was granted-  as well as a special order from the court to have a real estate lien document issued immediately. We then drove the lien document to the recorder's office ourselves the same day, recorded it, and then hand delivered a copy of it to the escrow company. Within a few days of receiving the phone call from an out of state colleague with a judgment, the judgment was entered, a lien was recorded, and the debtor’s sale of his home was stopped on its tracks.

Fearing the judgment enforcement against his home, the debtor was forced to the negotiation table, and paid us a handsome settlement.

The moral of the story? Call an experienced Judgment Recovery Specialist if you have a collection issue, and never assume a situation is beyond repair. Judgment Collection Law has many many facets and a good judgment collection expert is likely to know them.

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Did you know over 80% of court judgments go uncollected according to the American Bar Association? Final Verdict Solutions is here to remedy that problem.
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