BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 551| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED SB 551 Page 2 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 CONTINUED SB 551 Page 3 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 CONTINUED SB 551 Page 4 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 CONTINUED SB 551 Page 5 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 **** END **** CONTINUED