BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
SB 551 (Gaines)
As Introduced
Hearing Date: May 7, 2013
Fiscal: No
Urgency: No
RD
SUBJECT
Writs of Execution: Judgment Debtors
DESCRIPTION
This bill would specifically allow judgment debtors that seek a
writ of execution to enforce a money judgment to omit the names
of judgment debtors whose liability to the judgment creditor has
ceased in one of two ways: (1) the debtor has filed for Chapter
11 bankruptcy, as specified, and the bankruptcy court grants an
automatic stay or a discharge that applies to the judgment; or
(2) the judgment creditor files an acknowledgement of
satisfaction of judgment with regard to the judgment debtor.
BACKGROUND
Under existing law, the most common procedure for collection of
a money judgment is execution. A writ of execution from the
court requires a levying officer to enforce the judgment and the
officer enforces the judgment by levying on the property, i.e.,
by seizing the property under the writ, either constructively or
actually. (8 Witkin Cal. Proc. Enf. Judg. Sec. 99.)
Generally, the process begins after entry of a money judgment
and on the application of the judgment creditor, whereby the
clerk of the court must issue a writ of execution, directed to
the levying officer in the county where the levy is to be made
and to any registered process server. The writ of execution
must be issued in the name of the judgment debtor listed on the
judgment, but may also include the additional name or names by
which the judgment debtor is known, as set forth in an affidavit
of identity filed by the judgment creditor with the application
(more)
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for issuance of the writ. Additionally, the court must approve
the affidavit of identity before the clerk issues a writ of
execution containing the additional name or names. (Code Civ.
Proc. Sec. 699.510(a), (c)(1).)
At the time that the judgment creditor files for a writ of
execution, the judgment creditor must execute an affidavit of
identity, under penalty of perjury, setting forth certain
information, including the name of the judgment debtor stated in
the judgment and the additional name or names by which the
judgment debtor is known, among other things. (Code Civ. Proc.
Sec. 680.135.)
This bill, sponsored by the California Association of
Collectors, would authorize a judgment creditor to omit from the
application for a writ of execution the name of a judgment
debtor who has satisfied his or her debt in specified ways.
CHANGES TO EXISTING LAW
Existing law defines "affidavit of identity" as an affidavit or
declaration executed by a judgment creditor, under penalty of
perjury, that is filed with the clerk of the court in which the
judgment is entered at the time the judgment creditor files for
a writ of execution or an abstract of judgment. The affidavit
of identity must set forth the case name and number, the name of
the judgment debtor stated in the judgment, the additional name
or names by which the judgment debtor is known, and the facts
upon which the judgment creditor has relied in obtaining the
judgment debtor's additional name or names. The affidavit of
identity shall not include the name or names of persons,
including any corporations, partnerships, or any legal entities
not separately named in the judgment in which the judgment
debtor is a partner, shareholder, or member, other than the
judgment debtor. (Code Civ. Proc. Sec. 680.135.)
Existing law provides, in relevant part, that after entry of a
money judgment, and upon application of the judgment creditor, a
writ of execution shall be issued by the clerk of the court and
shall be directed to the levying officer in the county where the
levy is to be made and to any registered process server. Writs
may be issued successively until the money judgment is
satisfied, except as specified. (Code Civ. Proc. Sec.
699.510(a).)
Existing law , in relevant part, requires the writ of execution
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be issued in the name of the judgment debtor as listed on the
judgment and include the additional name or names, and the type
of legal entity, by which the judgment debtor is known, as set
forth in the affidavit of identity, as defined, filed by the
judgment creditor with the application for issuance of the writ
of execution. (Code Civ. Proc. Sec. 699.510(c)(1).)
Existing law provides that in any case where the writ of
execution lists any name other than that listed on the judgment,
the person in possession or control of the levied property, if
other than the judgment debtor, shall not pay to the levying
officer the amount or deliver the property being levied upon
until being notified to do so by the levying officer. The
levying officer may not require the person, if other than the
judgment debtor, in possession or control of the levied property
to pay the amount or deliver the property levied upon until the
expiration of 15 days after service of notice of levy. (Code
Civ. Proc. Sec. 699.510(c)(2).)
Existing law provides that, where a person who is not the
judgment debtor has property erroneously subject to an
enforcement of judgment proceeding based upon an affidavit of
identity, the person shall be entitled to the recovery of
reasonable attorney's fees and costs from the judgment creditor
incurred in releasing the person's property from a writ of
execution, in addition to any other damages or penalties to
which an aggrieved person may be entitled to by law, including
specified law relating to third party claims. (Code Civ. Proc.
Sec. 699.510(c)(3).)
Existing law provides that the writ of execution must require
the levying officer to whom it is directed to enforce the money
judgment and requires the writ of execution to contain specified
information, including, among other things, whether the writ of
execution includes any additional names of the judgment debtor
pursuant to an affidavit of identity, as specified. (Code Civ.
Proc. Sec. 699.520.)
Existing law permits a money judgment to be satisfied by payment
of the full amount required to satisfy the judgment or by
acceptance by the judgment creditor of a lesser sum in full
satisfaction of the judgment. (Code Civ. Proc. Sec.
724.010(a).)
Existing law provides that where a money judgment is satisfied
by payment to the judgment creditor by check or other form of
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noncash payment that is to be honored upon presentation by the
judgment creditor for payment, the obligation of the judgment
creditor to give or file an acknowledgment of satisfaction of
judgment arises only when the check or other form of noncash
payment has actually been honored upon presentation for payment.
(Code Civ. Proc. Sec. 724.010(c).)
This bill would provide that the judgment creditor may omit the
name of a judgment debtor from the application for a writ of
execution, if the liability of that judgment debtor has ceased
with regard to the judgment. For purposes of this provision, a
judgment debtor's liability has ceased with regard to a judgment
if, before the writ of execution is issued, either of the
following occur:
the judgment debtor files a petition in bankruptcy pursuant to
Title 11 of the United States Code, and the bankruptcy court
grants an automatic stay or a discharge that applies to the
judgment; or
the judgment creditor files an acknowledgement of satisfaction
of judgment with read to the judgment debtor, as specified.
COMMENT
1. Stated need for the bill
According to the author,
There is no current procedure to leave off a judgment debtor
from a Writ of Execution, even if that judgment debtor is
satisfied or bankrupt, and some counties, including Los
Angeles, will not remove that Judgment Debtor without a
specific court order to do so. This creates confusion and,
often, mistakes in collecting because the banks or other
collecting agencies are not aware that the debt has been
satisfied and attempt to collect that debt again. This can
lead to bank accounts being debited in error, and other
mistakes in collection. This bill seeks to remedy that
problem by allowing the satisfied debtors be left off of the
writ.
Specifically, this bill would allow a debtor to be left off of
a Writ of Execution if their debt has been satisfied either by
payment, bankruptcy, or other means agreed upon. Their name
would not have to be added to the Writ, which causes confusion
when the banks or other enforcement entities go to collect and
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the individual has already satisfied their debt.
2. This bill aims to prevent mistakes in collection at the
outset
When a creditor or collector (judgment creditor) goes to enforce
a money judgment against a judgment debtor, the judgment
creditor must fill out an affidavit of identity as part of the
application to obtain the writ of execution. That writ enables
a levying officer to attach the judgment creditor's property or
account to fulfill the judgment. This bill would permit a
judgment creditor to omit the name of a judgment debtor from the
application under certain circumstances.
Existing Code of Civil Procedure Section 699.510 requires, in
relevant part, that the writ of execution be issued in the name
of the judgment debtor as listed on the judgment, as set forth
in the affidavit of identity, as defined, filed by the judgment
creditor with the application for issuance of the writ of
execution. (Code Civ. Proc. Sec. 699.510(c)(1).) The
affidavit of identity is an affidavit or declaration executed by
a judgment creditor, under penalty of perjury, that is filed
with the clerk of the court in which the judgment is entered at
the time the judgment creditor files for a writ of execution or
an abstract of judgment. In completing this affidavit, the
judgment debtor must set forth, among other things, the name of
the judgment debtor stated in the judgment. (Code Civ. Proc.
Sec. 680.135.)
Ensuring that the correct person is identified for the purposes
of obtaining a writ of execution and securing payment for a
money judgment is critical. However, this procedure can be
complicated by the fact that in cases involving more than one
judgment debtor, one judgment debtor may have satisfied his or
her portion of the judgment (or otherwise been declared bankrupt
under federal law), while a writ is still required to collect
from another judgment debtor who still owes an outstanding debt.
Seemingly, because there is no express authorization under
existing law allowing for the judgment creditor to omit the name
of the judgment debtor who has satisfied his or her debt, or who
otherwise cannot be collected from, and to simply provide the
name of the outstanding judgment debtors, the author reports
that some counties, including Los Angeles, will not remove a
judgment debtor's name without a specific court order.
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At the same time, the author and sponsor have not provided
specific information as to what provision(s) of existing law
those counties are relying upon in refusing to accept
applications that omit the name of judgment debtors who the
judgment creditor reports have either satisfied their debt or
cannot be collected from due to bankruptcy. However, the sponsor
of this bill, the California Association of Collectors (CAC),
argues that the absence of any provision expressly allowing a
name to be omitted is the cause of the problem. CAC writes:
"One would think that current law would address this situation
(removal of a co-debtor from a writ of execution" but
"[u]nfortunately, it does not and the failure of current law to
address this creates a variety of problems for creditors and
debtors. "
Committee staff notes that this problem may be due to an
existing law requirement that a writ of execution be issued in
the name of the judgment debtor as listed on the judgment. (See
Code Civ. Proc. Sec. 699.510(c).) Despite the requirement for a
writ to contain the names of the debtors listed in the judgment,
it remains unclear why a court clerk would order a writ
directing a levying officer to debit the account of a person
whom the judgment creditor reports has satisfied their debt or
otherwise cannot be collected from because of an order from a
bankruptcy court. However, to the extent existing law's silence
on the ability of judgment creditors to omit names can lead to a
levying officer debiting the bank account of a party in error,
this would raise serious concerns.
It should also be noted, however, that the bill would only allow
a judgment creditor to omit the name of a judgment debtor from
the application for a writ of execution if (1) there is a stay
or discharge in bankruptcy; or (2) the judgment creditor has
filed an acknowledgement of satisfaction of judgment with the
courts. The author and sponsor should continue to work with
Committee staff to ensure that the language does not
inadvertently allow a judgment creditor to leave a judgment
debtor's name on the writ after the liability has ceased due to
a reason not accounted for by the bill.
Support : None Known
Opposition : None Known
HISTORY
SB 551 (Gaines)
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Source : California Association of Collectors
Related Pending Legislation : None Known
Prior Legislation : None Known
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