Congratulations, you obtained a judgment. Now what? This article takes a step by step approach in analyzing post judgment satisfaction in California.

Step 1 – Satisfaction of Money Judgment

A money judgment may be satisfied by (1) paying the full amount required to satisfy the judgment or (2) the judgment creditor’s acceptance of a lesser sum in full satisfaction of the judgment.  (Cal. Code Civ. Proc. § 724.010, subd. (a).)

Satisfaction by Levy – A judgment creditor’s obligation to give or file an acknowledgement of satisfaction arises only when the judgment creditor received the full amount required to satisfy the judgment from the levying officer.  (Cal. Code Civ. Proc. § 724.010, subd. (b).)

Satisfaction by Check/Other Non-cash Payment – A judgment creditor’s obligation to give or file an acknowledgement of satisfaction of judgment arises only when the check or other form of noncash payment has actually been honored upon presentation for payment.  (Cal. Code Civ. Proc. § 724.010, subd. (c).)

Step 2 – Judgment Creditor’s Duty to File Acknowledgement of Satisfaction of Judgment

Money Judgment Satisfied – When a money judgment is satisfied, a judgment creditor immediately shall file with the court an acknowledgement of satisfaction of judgment.  However, this does not apply if the judgment is satisfied in full pursuant to a writ.  (Cal. Code Civ. Proc. § 724.030.)

Abstract of Judgment Recorded – If an abstract of a money judgment was recorded with the recorder of any county and the judgment is satisfied, the judgment creditor must (1) file an acknowledgement of satisfaction with the court and (2) serve an acknowledgement of satisfaction of judgment on the judgment creditor either personally or by mail.  (Cal. Code Civ. Proc. § 724.040.)

Step 3 – Judgment Debtor’s Rights

Judgment Debtor – The judgment debtor is the owner of real or personal property or a person having a security interest in or a lien on personal property subject to a judgment lien created under the judgment. (Cal. Code Civ. Proc. § 724.050, subd. (a).)

Money Judgment Satisfied – Once satisfied, the judgment debtor may serve, personally or by mail, a demand in writing on the judgment creditor that the judgment creditor do either of the following:

(1)  File an acknowledgement of satisfaction of judgment with the court; or

(2) Execute, acknowledge, and deliver an acknowledgement of satisfaction of judgment to the person making the demand.

(Cal. Code Civ. Proc. § 724.050, subd. (a).)

Judgment Creditor Duty to Comply – If the judgment has been satisfied, the judgment creditor shall comply with demand no later than 15 days after actual receipt of the demand.  (Cal. Code Civ. Proc. § 724.050, subd. (c).)

Court Intervention – If the judgment creditor fails to comply, the judgment debtor may apply to the court on noticed motion for an order requiring the judgment creditor to comply with the demand.  The notice of motion shall be served to the judgment creditor personally or by mail.  If the court determines the judgment creditor failed to comply with the demand, the court shall either (1) order the judgment creditor to comply with the demand or (2) order the clerk to enter satisfaction of judgment.  (Cal. Code Civ. Proc. § 724.050, subd. (d).)

Judgment Creditor Liability – If the judgment is satisfied and the creditor fails without just cause to comply with the demand within the time allowed, the judgment creditor is liable to the person who made the demand for all damages sustained by reason of such failure and shall also forfeit $100 to such person.  Liability is determined in the proceedings on the motion pursuant to subdivision (d) or in action.  (Cal. Code Civ. Proc. § 724.050, subd. (e).)

Step 4 – Demand/Acknowledgement Procedures

Demand – A demand for an acknowledgement of satisfaction requires the following statement:

“Important warning.  If this judgment has been satisfied, the law requires that you comply with this demand not later than 15 days after you receive it.  If a court proceeding is necessary to compel you to comply with this demand, you will be required to pay my reasonable attorney’s fees in the proceeding if the court determines that the judgment has been satisfied and that you failed to comply with the demand.  In addition, if the court determines that you failed without just cause to comply with this demand within the 15 days allowed, you will be liable for all damages I sustain by reason of such failure and will also forfeit one hundred dollars to me.”

(Cal. Code Civ. Proc. § 724.050, subd. (b).)

Acknowledgement of Satisfaction – The technical requirements are found in California Code of Civil Procedure section 724.060(a).  Further, the acknowledgement must be made in the manner of an acknowledgement of a conveyance of real property.  (Cal. Code Civ. Proc. § 724.050, subd. (b).)  It must be executed and acknowledged by either the judgment creditor, assignee of record, the attorney of either party, or the local child support agency director or their designee.  (Cal. Code Civ. Proc. § 724.060, subd. (c).)

Step 5 – Liability for Requiring Additional Performance/Payment

If the judgment creditor intentionally conditions delivery of an acknowledgement of satisfaction upon performance of an act or payment of an amount exceeding the amount the judgment creditor is entitled under the judgment, the judgment creditor is liable to the judgment debtor for all damages sustained by reason of the action or $250, whichever is greater.  (Cal. Code Civ. Proc. § 724.070, subd. (a).)

However, subdivision (a) does not apply if the creditor agreed to deliver an acknowledgement to the debtor before full satisfaction of the judgment in consideration for the judgment debtor’s agreement either to furnish security or execute a promissory note, or both, the principal amount not exceeding the amount the creditor is entitled to under the judgment.  (Cal. Code Civ. Proc. § 724.070, subd. (b).)

Step 6 – Entry of Satisfaction of Money Judgment

The court clerk shall 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 acknowledgement of satisfaction of judgment is filed with the court; or

(c)  The court orders entry of satisfaction of judgment.

(Cal. Code Civ. Proc. § 724.020.)

Step 7 – Certification of Satisfaction of Judgment

If the satisfaction of judgment has been entered in the register of actions, the court clerk shall issue a certificate of satisfaction of judgment upon application and payment of the fee as provided in California Government Code section 70626 subdivision (a).

Conclusion

Post judgment satisfaction can be a tricky area to navigate. But, breaking the procedure down into steps makes it much easier to comply with your requirements under the Code and ensures your rights are adequately protected.

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