Tikosky v. Yehuda, No. B278052 (D2d1 Jan. 30, 2018)
This collections opinion is only 14 pages long, but like any collections story worth its salt, it has so many twists and turns that it’s pretty hard to follow without drawing a diagram. The gist is that a judgment creditor tried to execute against some of the debtor’s real property. But that property already secured a large amount of other debt from different creditors. So the insurer for one of those other creditors decided that it was in its interest to just pay the judgment creditor off, in exchange for his agreement to forego pushing the property into a foreclosure sale.
The question, then, is whether that payoff between the insurer and the judgment creditor should count as a satisfaction of the underlying judgment, to which the debtor is entitled to credit. It isn’t. The insurer wasn’t a joint tortfeasor. And it paid creditor to protect its insured’s security interest in the realty—thus avoiding paying a claim. It didn’t make the payment to pay off the judgment or otherwise benefit the debtor. Under those circumstances, the judgment debtor—who, FWIW, hasn’t paid a dime on the judgment—is not entitled to a partial satisfaction.
Affirmed.
Showing posts with label judgment debtors. Show all posts
Showing posts with label judgment debtors. Show all posts
Thursday, March 29, 2018
Thursday, November 9, 2017
Will the Judgment Ever Be Satisfied ...
Comercia Bank v. Runyon, No. G053691 (D4d3 Oct. 20, 2017)
Code of Civil Procedure §§ 881–883 provide procedures for joint judgment debtors other than joint tortfeasors—e.g., debtors jointly liable on a contract—to obtain contribution from one another. Section 883 requires an application for contribution to be filed within 30 days after “the judgment is satisfied in full.”
In this case, a joint judgement Debtor filed an application for contribution more than thirty days after the judgment been paid off to a zero balance, but while the creditor’s application to add costs to the judgment remained pending. The costs motion was ultimately partially granted to permit the addition of some costs, which had not been paid at the time Debtor filed his contribution application. But the trial court nonetheless denied the application as untimely.
That was error. A judgment can only be “satisfied in full” once—at the point where the creditor has been paid in full and the obligation fully extinguished. Once that happens, on written request of a debtor, the creditor is obliged to file and serve an acknowledgement of the full satisfaction. § 724.050(a)(1), (2). Te court here holds, as used in § 883, “satisfied in full” means the filing of that acknowledgement. A mere zero balance doesn’t cut it. And since the creditor hadn’t yet filed an acknowledgement when Debtor filed his contribution application, Debtor’s application was, in fact, timely under § 883.
Reversed and remanded.
Code of Civil Procedure §§ 881–883 provide procedures for joint judgment debtors other than joint tortfeasors—e.g., debtors jointly liable on a contract—to obtain contribution from one another. Section 883 requires an application for contribution to be filed within 30 days after “the judgment is satisfied in full.”
In this case, a joint judgement Debtor filed an application for contribution more than thirty days after the judgment been paid off to a zero balance, but while the creditor’s application to add costs to the judgment remained pending. The costs motion was ultimately partially granted to permit the addition of some costs, which had not been paid at the time Debtor filed his contribution application. But the trial court nonetheless denied the application as untimely.
That was error. A judgment can only be “satisfied in full” once—at the point where the creditor has been paid in full and the obligation fully extinguished. Once that happens, on written request of a debtor, the creditor is obliged to file and serve an acknowledgement of the full satisfaction. § 724.050(a)(1), (2). Te court here holds, as used in § 883, “satisfied in full” means the filing of that acknowledgement. A mere zero balance doesn’t cut it. And since the creditor hadn’t yet filed an acknowledgement when Debtor filed his contribution application, Debtor’s application was, in fact, timely under § 883.
Reversed and remanded.
Thursday, June 9, 2016
Tax Return Privilege Overriden to Prevent Fraud
Li. v. Yan, No. A144994 (D1d2 May 2, 2016)
This is a collections case. Like most collections cases that progress to an appeal, the facts are convoluted and difficult to follow. But the court’s rulings aren’t. First, when the debtor is subject to a judgment debtor exam, the creditor doesn’t need to personally serve a subpoena demanding that he bring docs to the exam. Service in the same manner as applies to pre-judgment party discovery (e.g., mail service to counsel) will suffice.
Second, although California recognizes a privilege against the discovery of tax returns, it can be overridden in difficult collection cases by a “public policy greater than that of the confidentiality of tax returns.” To wit, the “policy is to prevent fraud against creditors. And against lenders. And perhaps against the court.” The record here showed that debtor had engaged in a bunch of pretty egregious conduct designed to frustrate the collections process. Under the circumstances, the court finds the privilege overridden.
This is a collections case. Like most collections cases that progress to an appeal, the facts are convoluted and difficult to follow. But the court’s rulings aren’t. First, when the debtor is subject to a judgment debtor exam, the creditor doesn’t need to personally serve a subpoena demanding that he bring docs to the exam. Service in the same manner as applies to pre-judgment party discovery (e.g., mail service to counsel) will suffice.
Second, although California recognizes a privilege against the discovery of tax returns, it can be overridden in difficult collection cases by a “public policy greater than that of the confidentiality of tax returns.” To wit, the “policy is to prevent fraud against creditors. And against lenders. And perhaps against the court.” The record here showed that debtor had engaged in a bunch of pretty egregious conduct designed to frustrate the collections process. Under the circumstances, the court finds the privilege overridden.
Monday, February 8, 2016
(Re) Clearing the Decks
So I just moved, we are expecting a second daughter in May, and I have spent the last month pulling all-nighters in expedited preliminary injunction proceedings. Which is all a way to say that I’ve fallen really behind on posts here.
Friday, December 20, 2013
Too Late to the Collections Party to Strike the Judge
National Financial Lending, LLC v. Superior Court, No. D064226 (D4d1 as modified, Dec. 18, 2013)
Q: Can a third-party debtor from whom a judgment creditor tries to collect during post-judgment collections proceedings strike the judge under Code of Civil Procedure § 170.6.
A: No.
Q: Can a third-party debtor from whom a judgment creditor tries to collect during post-judgment collections proceedings strike the judge under Code of Civil Procedure § 170.6.
A: No.
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