BILL ANALYSIS Ó
SB 551
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Date of Hearing: July 2, 2013
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
SB 551 (Gaines) - As Introduced: February 22, 2013
PROPOSED CONSENT (As Proposed to Be Amended)
SENATE VOTE : 36-0
SUBJECT : WRITS OF EXECUTION: JUDGMENT DEBTOR
KEY ISSUE : SHOULD THE NAME OF A JUDGMENT DEBTOR WHOSE LIABILITY
FOR THE JUDGMENT HAS CEASED BE EXCLUDED FROM APPEARING ON A
RENEWAL OF JUDGMENT OR APPLICATION FOR WRIT OF EXECUTION TO
COLLECT AGAINST A REMAINING DEBTOR OR DEBTORS WHOSE LIABILITY
HAS NOT CEASED?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
According to the California Association of Collectors, the
sponsor of this bill, existing law inexplicably does not permit
the name of a debtor who is named on the judgment to be omitted
from the application for a writ of execution, even if
subsequently that judgment debtor has, for example, satisfied
the judgment in full or obtained a discharge in bankruptcy
proceedings. The sponsor reports that courts in some counties,
strictly interpreting the current statute, will simply not omit
the judgment debtor's name without a specific court order to do
so, consequently creating confusion and mistakes in collection
practices because banks or other collecting agencies are not
aware that the debt has been satisfied and attempt to collect
that debt again. As proposed to be amended, this bill requires
the judgment creditor to omit the name of a judgment debtor from
an application for a writ of execution, or an application for
renewal of judgment, if the liability of that judgment debtor
has ceased with regard to the judgment. This bill was approved
by the Senate without receiving any "No" votes, and other than
the sponsor, there is no registered support or opposition on
this bill.
SUMMARY : Clarifies that a judgment debtor whose liability for
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the judgment has ceased shall not subsequently be named by the
judgment creditor on an application for writ of execution or
renewal of judgment. Specifically, this bill :
1)Requires the judgment creditor to omit the name of a judgment
debtor from an application for a writ of execution if the
liability of that judgment debtor has ceased with regard to
the judgment, including but not limited to the following
occurrences:
a) The judgment debtor has obtained a discharge of the
judgment pursuant to Title 11 of the United States Code and
notice thereof has been filed with the court.
b) The judgment creditor has filed an acknowledgement of
satisfaction with regard to the judgment debtor pursuant to
Chapter 1 (commencing with Section 724.010) of Division 5
of the Code of Civil Procedure.
2)Requires the judgment creditor to also omit the name of a
judgment debtor from an application for renewal of judgment if
the liability of that judgment debtor has ceased with regard
to the judgment, including but not limited to the same
occurrences described above.
EXISTING LAW :
1)Provides that a money judgment may 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 of Civil Procedure
Section 724.010(a). Unless otherwise stated, all further
references are to this code.)
2)Requires the court clerk to enter satisfaction of a money
judgment in the register of actions when the following occur:
a) A writ is returned satisfied for the full amount of a
lump-sum judgment.
b) An acknowledgment of satisfaction of judgment is filed
with the court.
c) The court orders entry of satisfaction of judgment.
(Section 724.020.)
3)Requires the judgment creditor to immediately file with the
court an acknowledgment of satisfaction of judgment when a
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money judgment is satisfied, except in where the judgment is
satisfied in full pursuant to a writ. (Section 724.030.)
4)Requires an application for renewal of the judgment to include
all of the following:
a) The title of the court where the judgment is entered and
the cause and number of the action.
b) The date of entry of the judgment and of any renewals of
the judgment and where entered in the records of the court.
c) The name and address of the judgment creditor and the
name and last known address of the judgment debtor.
d) In the case of a money judgment, the information
necessary to compute the amount of the judgment as renewed,
and in the case of a judgment for possession or sale of
property, a description of the performance remaining due.
(Section 683.140.)
5)Provides 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. Allows
writs to be issued successively until the money judgment is
satisfied, except as specified. (Section 699.510(a).)
6)Requires the writ of execution to be issued in the name of the
judgment debtor as listed on the judgment and to 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. (Section 699.510(c)(1).)
7)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. Prohibits the
levying officer from requiring a 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. (Section 699.510(c)(2).)
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COMMENTS : This bill seeks to enact a common-sense solution to a
perplexing problem that the bill's sponsor, the California
Association of Collectors (CAC), reports experiencing when they
seek to renew judgments or apply for writs of execution in the
ordinary course of their business of enforcing money judgments
against judgment debtors. According to CAC, the problem arises
most commonly when there are two or more joint debtors on a
single judgment, and through either bankruptcy discharge or
payment of the debt or portion thereof, the liability of only
one of the debtors ceases with respect to the judgment. For
example, a judgment may be obtained against a husband and wife
with joint assets, and after a subsequent divorce or bankruptcy
proceeding, only one spouse is still liable under the judgment.
In such a case, according to the author and sponsor:
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.
Existing law, Section 699.510(c) of the Code of Civil Procedure,
simply states "The writ of execution shall be issued in the name
of the judgment debtor as listed on the judgment . . . (further
language omitted.)" According to the sponsors, some courts are
strictly interpreting this language to require the judgment
creditor to reproduce the name of every debtor that appears on
the judgment on the application for writ of execution-even the
name of a judgment debtor that is no longer liable for the
judgment, and even, presumably, when the court clerk may have
information demonstrating the debtor is no longer liable for his
or her debt.
This bill seeks to prevent these reported problems affecting
enforcement of judgments. Under existing law, a money judgment
may 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. Existing
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law also requires the judgment creditor to immediately file with
the court an acknowledgment of satisfaction of judgment when a
money judgment is satisfied, except where the judgment is
satisfied in full pursuant to a writ. In those cases, the
creditor is not required to immediately file an acknowledgment
of satisfaction with the court because the court clerk is
required to enter satisfaction of the judgment after the writ is
returned satisfied for the full amount. In any case, once the
judgment debtor has satisfied the judgment by payment in full,
it stands to reason that he or she should no longer be subject
to further efforts to enforce the judgment, including being
named on any subsequent writ of execution.
The same, of course, should be true for any judgment debtor who
has obtained a discharge of the judgment in bankruptcy court,
because at that point the debtor's liability for the debt has
legally ceased. Because neither the filing of a bankruptcy
petition nor the grant of an automatic stay is legally
sufficient to cease liability, the author proposes to amend the
bill to clarify that discharge of the judgment pursuant to
U.S.C. Title 11 bankruptcy is a valid occurrence to cease
liability, but not the former two occurrences.
In short, this bill reflects the author's laudable intent to
ensure that judgment debtors whose liability has ceased are not
erroneously subject to further collection efforts because
existing law might be erroneously construed to be too inflexible
to allow their names to be omitted from an application for
renewal of judgment or writ of execution. As proposed to be
amended, the bill clarifies that a judgment debtor whose
liability for the judgment has ceased shall not subsequently be
named by the judgment creditor on an application for writ of
execution or renewal of judgment. This bill does not negate or
diminish any existing obligation or liability of any party with
respect to enforcement of a judgment.
Author's amendments regarding writs of execution. This bill
seeks to prevent possible mistake or confusion, as reported by
CAC, that may stem from the unnecessary inclusion of the names
of debtors whose liability has ceased on an application for writ
of execution. The author's amendments are intended to provide
clear guidance to creditors, debtors, court clerks, and levying
officers that the name of a person whose name appears on the
judgment may be omitted from a subsequent writ of execution. As
proposed to be amended, this bill requires the judgment creditor
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to omit the name of a judgment debtor from the application for
renewal of the judgment or writ of execution if the liability of
that judgment debtor has ceased, including but not limited to
when the judgment is satisfied or discharged in bankruptcy. The
amendments appear below:
On page 2, delete lines 13 through 26 and replace with the
following:
(c) (1) (A) The writ of execution shall be issued in the
name of the judgment debtor as listed on the judgment ,
except that the judgment creditor shall 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, including but not
limited to the following occurrences:
(i) The judgment debtor has obtained a discharge of the
judgment pursuant to Title 11 of the United States Code and
notice thereof has been filed with the court;
(ii) The judgment creditor has filed an acknowledgement of
satisfaction with regard to the judgment debtor pursuant to
Chapter 1 (commencing with Section 724.010) of Division 5.
(B) The writ of execution and shall 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 in Section 680.135, filed by the
judgment creditor with the application for issuance of the
writ of execution. Prior to the clerk of the court issuing
a writ of execution containing any additional name or names
by which the judgment debtor is known that are not listed
on the judgment, the court shall approve the affidavit of
identity. If the court determines, without a hearing or a
notice, that the affidavit of identity states sufficient
facts upon which the judgment creditor has identified the
additional names of the judgment debtor, the court shall
authorize the issuance of the writ of execution with the
additional name or names.
Author's amendments regarding renewals of judgment . According
to the sponsor, it is also commonplace for some courts to
require the name of every debtor that appears on the judgment to
be entered on the application for renewal of judgment, pursuant
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to Section 683.140. This causes a similar problem when, for
example, the creditor seeks to renew a judgment that has expired
after ten years, and in that period, one of the debtors has
become no longer liable for the judgment because of discharge in
bankruptcy, satisfaction of the debt, or other reason.
Consequently, the author proposes to amend the bill so that the
same provisions that seek to solve the problem with respect to
an application for writ of execution also apply identically to
an application for renewal of judgment. The amendment appears
below:
On page 3, below line 17, insert the following:
SECTION 2. Section 683.140 of the Code of Civil Procedure is
amended to read:
683.140. The application for renewal of the judgment shall be
executed under oath and shall include all of the following:
(a) The title of the court where the judgment is entered and
the cause and number of the action.
(b) The date of entry of the judgment and of any renewals of
the judgment and where entered in the records of the court.
(c) The name and address of the judgment creditor and the name
and last known address of the judgment debtor. However, the
judgment creditor shall omit the name of a judgment debtor
from the application for renewal of the judgment if the
liability of that judgment debtor has ceased with regard to
the judgment, including but not limited to the following
occurrences:
(1) The judgment debtor has obtained a discharge of the
judgment pursuant to Title 11 of the United States Code and
notice thereof has been filed with the court;
(2) The judgment creditor has filed an acknowledgement of
satisfaction with regard to the judgment debtor pursuant to
Chapter 1 (commencing with Section 724.010) of Division 5.
(d) In the case of a money judgment, the information necessary
to compute the amount of the judgment as renewed. In the case
of a judgment for possession or sale of property, a
description of the performance remaining due.
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Related Pending Legislation: AB 1167 (Dickinson) seeks to
require instructions given to a levying officer to include
specified information if the instructions are accompanied by a
specified writ of execution issued by the court as an electronic
record or document printed from an electronic record issued by
the court, and would authorize the levying officer to proceed in
the same manner as if in possession of a paper version of the
original writ, except as specified. This bill is currently on
third reading in the Senate.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Collectors (sponsor)
Opposition
None on file
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334