It Will Never Be Satisfied...

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.