BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 551
          Author:   Gaines (R)
          Amended:  As introduced
          Vote:     21

           
          SENATE JUDICIARY COMMITTEE  :  6-0, 5/7/13
          AYES:  Evans, Anderson, Corbett, Jackson, Leno, Monning
          NO VOTE RECORDED:  Walters


           SUBJECT  :    Writs of execution:  judgment debtor

           SOURCE  :     California Association of Collectors


           DIGEST  :    This bill allows judgment debtors who 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.

           ANALYSIS  :    

          Existing law:

           1. 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  
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             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 of Civil Procedure (CCP) Section 680.135)  

           2. 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.  (CCP Section  
             699.510(a))

           3. Requires, in relevant part, the writ of execution 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.  (CCP Section 699.510(c)(1)) 

           4. 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.  (CCP Section 699.510(c)(2)) 

           5. Provides that, where a person who is not the judgment debtor  
             has property erroneously subject to an enforcement of  

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             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.  (CCP Section  
             699.510(c)(3))  

           6. 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.   
             (CCP Section 699.520) 

           7. 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.  (CCP Section 724.010(a)) 

           8. Provides that where a money judgment is satisfied by payment  
             to the judgment creditor by check or other form of 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.  (CCP Section 724.010(c))

          This bill provides 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


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             The judgment creditor files an acknowledgement of  
             satisfaction of judgment with read to the judgment debtor, as  
             specified.

           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, California Procedure Enforcement of  
          Judgment Section 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  
          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.  (CCP Section  
          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.  (CCP Section  
          680.135)  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  
           No

           SUPPORT  :   (Verified  5/9/13)

          California Association of Collectors (source)

           ARGUMENTS IN SUPPORT  :    According to the author's office, there  

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          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.


          AL:k  5/9/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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