Articles & News
Can’t get no satisfaction (of judgment)
Los Angeles Daily Journal
By Ira M. Friedman and David H. Friedman
As Mick Jagger famously belts out, “I can’t get no Satisfaction,” so too judgment debtors in some cases can’t get their satisfaction of judgment documents once the judgment has been satisfied. Of course, we all know in reality Mr. Jagger got his satisfaction, and attorneys for the judgment debtors want their satisfaction too.
In most cases, our efforts are spent in trying to enforce a judgment. As a result, very little time is spent and very little is written regarding what to do when a judgment or a portion of a judgment has been satisfied. How do you get the creditor, flush with the fruits of their labor, to provide you with an “acknowledgment” of satisfaction of judgment? Also, why would you bother taking this step since the judgment is satisfied?
As soon as a judgment or a portion of a judgment has been satisfied, the debtor’s attorney should insist – and the creditor’s attorney should see to it – that an acknowledgment of satisfaction of judgment or an acknowledgment of partial satisfaction of judgment is prepared, filed with the clerk of the court where the judgment was obtained, and recorded with the county recorder’s office in each county which an abstract of judgment has been recorded.
As a result, very little time is spent and very little is written regarding what to do when a judgment or a portion of a judgment has been satisfied.
It is extremely important to record the acknowledgment with the county recorder if an abstract of judgment has been filed. Once recorded, an abstract acts as a lien on any real property owned by the judgment debtor. Should a judgment debtor try to sell, or refinance real property, the abstract will seek a pay off demand from the judgment creditor. By recording an acknowledgment, the judgment debtor lets the world know that the debt has been satisfied and the judgment debtor can proceed with any real property transaction.
One important tip is to get a notarized acknowledgment. The county recorder requires documents that will be recorded to be notarized. If you don’t get a properly notarized document, you will then be asking the attorney for the judgment creditor, or the judgment creditor himself, for another acknowledgment of satisfaction that is notarized.
In some cases the acknowledgment is deposited into an escrow which requires the deposit of the acknowledgment before the escrow can close. The escrow company will record the acknowledgment.
In cases where there has been an abstract of judgment recorded and the judgment satisfied, the creditor may run the risk of a lawsuit to establish or quite title unless the acknowledgment has been filed and recorded. This means that he judgment creditor an face potential liability for clouding the title to real property owned by the judgment debtor since the judgment has already been satisfied. That is not a apposition you want to put your client in.
So now you know the important of getting the acknowledgment of satisfaction of judgment – but how do you get one?
Code of Civil Procedure Section 724.030 puts an affirmative obligation on the judgment creditor to file with the court an acknowledgment, which is served on the judgment debtor either personally or by mail. Section 724.040. The acknowledgment is judicial council Form #105.
This section does not apply where the judgment is satisfied in full pursuant to a writ of execution. Section 724.020 authorizes the court clerk to enter satisfaction of judgment in the register of action when a writ is returned to court satisfied for the full amount of the judgment.
Sometimes you might be required to forward to the judgment debtor the acknowledgment that the judgment debtor will record, or in some cases the acknowledgment is deposited into an escrow which requires the deposit of such before the escrow can close. The escrow company will record the acknowledgment.
If you do not get voluntary compliance with a request for acknowledgment of satisfaction of judgment, then Section 724.050 provides that the judgment debtor may serve personally or by mail on the judgment creditor a demand in writing that the judgment creditor do one or both of the follow: (1) file an acknowledgment of satisfaction of judgment with the court; (2) execute, acknowledge and deliver an acknowledgement of satisfaction of judgment to the person who made the demand.
The code requires that the demand include certain specified language. Compliance by the judgment creditor with the demand must be no later than 15 days after actual receipt of the demand.
By recording an acknowledgment, the judgment debtor lets the world know that the debt has been satisfied and the judgment debtor can proceed with any real property transaction.
If there is no compliance with the demand, the person making the demand may apply to the court on noticed motion for an order requiring compliance. The motion requires 15 court days notice pursuant to Section 1005. The notice of motion shall be served on the judgment creditor personally or by mail.
If the court determines that the judgment has been satisfied and that the judgment creditor has not complied with the demand, the court shall either (1) order the judgment creditor to comply with the demand or (2) order the clerk of the court to enter a satisfaction of the judgment. Section 724.050 2(d). The same procedure exists for a partial satisfaction of judgment as contained in Section 724.110.
The code also provides for forfeiting $100, which is somewhat antiquated; however, a judgment debtor can recover the attorney fees incurred in filing a motion to seek an acknowledgment of satisfaction of judgment pursuant to Section 724.080.
The question comes up as to why even bother with a partial satisfaction of judgment since there is money still owed. One such reason may be that the debtor is applying for credit and it may adversely affect that person’s ability to obtain credit.
If you are representing a judgment debtor in a case that provides for installment payments, as defined in Section 724.210 it is a better practice to insist on a partial satisfaction of judgment as to mature installments. The procedure for this is found in Section 724.220, which described the required demand. This procedure is virtually identical to the demand for a full satisfaction of judgment as to the procedure for filing a motion for compliance. Section 724.230.
It is a wise practice and habit to obtain an abstract of judgment upon entry of judgment and the record the abstract. It is also prudent to file and/or record an acknowledgment of satisfaction of judgment, whether partial or full, upon payment of the judgment.
The bottom line is you have to get some satisfaction (of judgment.)
Ira M. Friedman is a partner in Friedman & Friedman, Lawyers in Los Angeles. He is a certified family law specialist, and can be reached at imf@f-f-law.com.
David H. Friedman is a partner in Friedman & Friedman, Lawyers in Los Angeles. He is a certified family law specialist, and can be reached at david@f-f-law.com.
click here to return to articles page