Satisfied in Full

Wertheim, LLC v. Currency Corp., No. B277633 (D2d1 Jun. 6, 2019)

This case involves a 10 year saga to collect on a $40k judgment, since swollen to almost $300k in interest and enforcement costs. Between the underlying action and related collections actions, this is the fourth appeal of the matters. 

Under Code of Civil Procedure § 685.080, a creditor needs to move to add collection costs to a judgment before it is “satisfied in full.” In this case, the insurer on an appellate bond in the underlying action tendered the money to the court years ago. The parties, however, have been fighting about the calculation of interest ever since. And while an appeal on the interest calculation dispute was pending, creditor moved to add yet more costs onto the judgment. So the question is this: Has the judgment already been satisfied by the tender, precluding a levy of costs under § 685.080.

The Court of Appeal holds that a full satisfaction had not yet occurred. A satisfaction generally requires a tender of cash to the creditor, or the tender of some other instrument (like a check) and the debtor’s acceptance of it. So until the creditor is actually paid off, there’s no satisfaction.

That’s the case even though there’s a different satisfaction rule for the purpose of accruing post-judgment interest. There, a satisfaction can occur by tender to the court. See § 685.030(d)(2). The point being that the creditor shouldn’t be able to reject a non-cash tender in order to keep racking up interest. (10 percent guaranteed is a pretty good ROI nowadays.) But the Enforcement of Judgments Act makes clear that is a special rule “for the purpose of” calculating interest. Neither the rule nor its rationale apply in other contexts. So a creditor can keep collecting costs and fees incurred until the judgment is actually paid off.

Reversed.