Enforcing California Family Court Orders and Awards for Money
One of the most effective ways to end the misery of high-conflict divorce with a recalcitrant spouse or co-parent is to enforce the money related orders of the Court by pursuing collection with such vigor that the obligor finally becomes exhausted and stops their evasive activity. Often, a party who has flouted court orders without consequence cannot be brought to heel until their wallets and pocket books are pried open. But with a stubbornly evasive obligor, given the complexities of the law in this area, this is no small task. And it is really a challenge for self-represented non-lawyers.
While I've written generally about enforcement remedies in divorce, legal separations, and child support cases in our Blog, this article gives pin-pointed suggestions about how you might succeed in collecting money orders and awards issued by a family court judge. The law favors nonpayment by its complexity.
At our office, Michael Peterson recently was faced with navigating the labyrinthine challenges presented by California's rules relating to debt collection practices. He succeeded in collecting $100,000 from a local real estate broker who, despite being ordered to disclose all pending escrows (where he earned substantial commissions) and declining to do so, had also refused to pay court ordered spousal support, attorney fees, and Family Code section 271 sanctions. While our client was" lucky" (she might disagree given the time it took to recover her money) because her former husband had escrows to intercept - it nonetheless required considerable attention on Mike's part to meet all the technical requirements for Writ Enforcement, which as a practical matter meant convincing the in-house attorneys for the escrow companies that our client was in compliance with the technical requirements for perfecting Writ enforcement and that we would hold the escrow company directly liable to our client if it wrongly ignored our Writs.
We apologize for the length of this article! We must use obtuse terms in describing family law debt collection procedures, because the statutes use that language.
Multiple Family Law Judgments: How Does A Party Collect the Money? Writ of Execution, Income Withholding, and Wage Garnishments
By Michael C. Peterson
The law of enforcement of money orders and judgments within family law contexts is piggy-backed onto the statutory schemes that exist for collecting monies within the general civil legal universe. This creates challenges for applying enforcement tools, because missteps in the enforcement process can result in botched opportunities to collect the monies that are due. Sometimes a person who has been awarded money orders in a family law case gets a window for intercepting funds or assets that are "on the move". If the timing of the enforcement attempt is off, by the time a Writ of Execution is served upon a third party that holds funds (i.e., a bank or an escrow company), the funds may already have been distributed.
A greater frustration can occur because a third party that temporarily holds funds belonging to the debtor may itself misapprehend the rules pertaining to enforcing money judgments, and so wrongly decide to ignore a Writ of Execution. In our office, we recently experienced this scenario when an escrow company that had properly been served with an execution writ followed the advice of its in-house counsel, who somewhat haughtily told us that his client had no obligation to withhold the debtor's commissions (a real estate broker) because on the day that the Writ was served certain escrow contingencies had not yet been fully satisfied. The escrow company's attorney mistakenly applied pre-1984 law that was changed by legislative enactments and waited until the escrow closed and the funds were paid over to the real estate broker spouse to explain his position. While he had mis-read of the current law, the horse had left the barn. This forced us to alert that attorney that he had possibly committed legal malpractice, having exposed the escrow company to an independent lawsuit to now collect the monies it should have withheld and paid over to the sheriff's office on behalf of our client. But, who wants the hassle and expense of going after his client?
The last thing that a family law judgment creditor wants is to be forced to sue some third party entity in order to collect - the judgment creditor wants and needs their money now! Ironically, in that case because the broker spouse once managed to avoid the intercept of their funds, he used it for his next escrow hoping to achieve the same result. By that time, however, and following our notice of intention to sue the company the escrow attorney recognized he'd screwed up, and promptly honored the next Writ that we served upon his client. Ultimately all the funds owing our client were recovered using the procedures described in this article, and the case thereupon settled.
Family law cases present unique collection difficulties. Unlike general civil cases where there is a single money judgment at the conclusion of the case, family law orders may result in multiple, separate monetary judgments issued at different times, for different reasons, and concerning different subjects.
For instance, a spouse might receive a "beneficial order" (i.e. payable by the other party) for spousal support of $1,000 per month on January 1, receive a $10,000 attorney's fee order on May 1, receive a $15,000 expert witness fee order on July 1, and a $5,000 monetary sanctions order on September 1. Assume that the obligor spouse (i.e. the person ordered to pay) has not voluntarily paid any of these amounts, and it is now December 1. How does the obligee spouse (i.e. the person ordered to receive payment) collect? The answer is discussed below, but some preliminary collection/enforcement principals should first be explained.
GENERAL RULES FOR ENFORCING MONEY JUDGMENTS
The authority for enforcement of family law orders is FC section 290. Judgments or orders entered under the Family Code are enforceable by the family court by "execution, the appointment of a receiver, or contempt, or by any other order as the court in its discretion determines from time to time to be necessary." FC § 290.
Unlike general civil actions, where a judgment creditor is entitled to the automatic issuance of a writ of execution by the court clerk under CCP section 699.510(a), family court judges have the discretion to determine whether execution is an appropriate remedy to enforce its prior Family Code orders and judgments. Messenger v. Messenger (1956) 46 C2d 619, 630. Thus, the first step on the road to collection of funds that have become due by execution (or by any other method) is to have the particular order in question reduced to a formal judgment and "entered" as such. See CCP section 664: "In no case is a judgment effectual for any purpose until entered".
Non-support orders require a further court order after a noticed (or in some situations an ex parte) motion reducing the previously ordered amount to a formal judgment, and support orders merely require an appropriate, documented application to the clerk to have the ordered amount(s) reduced to a formal judgment under FC section 5100, et seq. Once a judgment is obtained by the obligee spouse, she becomes a "judgment creditor" and the obligor spouse becomes a "judgment debtor."
The next step is to determine which enforcement method(s) would achieve the desired result of cash in hand. An obligee is not limited to a single enforcement method.
Which Collection Process Should a Family Law Creditor Employ?
Several issues must be weighed before deciding on a collection method:
- Does the obligor have a source of income or otherwise have the ability to pay the money (e.g. did he or she did become unemployed after the order was made)?
- Is the obligor a traditional wage or salary employee or a self-employed person such that their wages/salary can or cannot be garnished directly from the employer? Collecting against business owners obligor spouses presents special problems and limits the useful remedies of the obligee. Garnishing wage-earning employees is generally much more simple.
- Does (or will) the obligor have non-community property assets in their possession that can be seized and sold by the sheriff? If so, what is the nature of these assets - do they include bank accounts (optimal), or are the only assets items of personal property like cars, equipment, and the like that could be seized and sold?
- Does (or will) a third-party have possession of assets held for the benefit of the obligor spouse (such as with a self-employed realtor whose commissions earned from the sale of a property is or will be held by an escrow company, or an attorney whose contingency fee is, or will be, held by an insurance company or client even if only for an instant in time)?
- What county, state, or country is the obligor spouse's property located in?
Of the FC section 290 enforcement methods, contempt is an expensive and slow avenue of recourse for the obligee/judgment creditor spouse that can effectively put a hold on the entire case (given the contemnor's 5th Amendment rights to not be forced to self-incriminate), but it can be extremely effective because most people are highly averse to jail time and will finally pay to avoid it. This article does not focus deal with contempts.
ENFORCEMENT BY WRIT OF EXECUTION
A writ of execution orders a law enforcement officer to satisfy a judgment by seizing tangible real or personal property or funds of the judgment debtor for delivery (or for sale and delivery of the proceeds) to the judgment creditor. CCP section 699.010, et seq. Generally, all of the obligor's property is subject to execution, even if in the possession of a third person. CCP section 699.710. So too is an obligor's co-ownership interests in property with a third person (such a partnership interest), but subject to a vast set of specific property-type statutory limitations and special procedures (discussed below).
In order for a writ of execution to issue, there must be an underlying judgment. Once a family law judgment is entered and if the obligee/judgment creditor spouse is looking to non-wage/salary property of the obligor/judgment debtor spouse to satisfy it, obtaining a writ of execution is simply a matter of submitting a Writ of Execution Form EJ-130 to the clerk for signature and seal. Alternatively, an obligee/judgment creditor spouse looking to satisfy from the wages/salary of the obligor/judgment debtor will prepare and obtain the judge's signature on either an Income Withholding Order or a Wage Assignment Order. In either scenario, the next step is then to levy on the property sought to satisfy the judgment.
EXECUTION BASICS AND CLAIMS OF EXEMPTION
An execution lien attaches onto the judgment debtor's interest in the property (i.e., not to interests of third parties). Execution liens are subject to specific statutory exemptions under CCP section 704.010, et seq. A list of the CCP section 704.010 exemptions is published by the California Judicial Council, form number EJ-155, which is downloadable on-line at www.courts.ca.gov; this list should be approached with caution as it can be misleading in its simple descriptions of exemptions, and further review to the particular exemption statute itself and a practice guide on the particular statute is highly recommended.
Exemptions can be partial as to the total value/sale price of the asset such that the obligor/judgment creditor can only receive back a portion of the seized property or its sale proceeds (where the property is sold because it is not capable of division), and the balance is delivered to the debtor.
A money judgment can be enforced against the following types of property, but not by writ of execution; other enforcement procedures must be utilized to reach these assets (CCP section 699.720(b): An alcoholic beverage license; a partnership interest held by the judgment debtor (where the partnership itself is not a judgment debtor); the judgment debtor's interest as a member of a limited liability company (where the limited liability company is not a judgment debtor); a cause of action that is the subject of a pending lawsuit; a judgment in favor of the judgment debtor that is not yet final; a debt, other than earnings, owing to the judgment debtor by a public entity; the loan value of an unmatured life insurance, endowment or annuity policy; a franchise (license) granted by a public entity and all the rights and privileges thereof; the interest of a trust beneficiary; any non-vested interest in property (including contingent remainders, executory interests, etc.); patents or copyrights; and property in a guardianship or conservatorship estate. CCP § 699.720(a).
Levying against non-cash personal property can be a real hassle, and the costs of collection, storage and sale can itself be formidable and eat up some of the value of the money award in terms of attorney fees and costs for collection in the first instance. Let us apply the foregoing principles in an example: Say a husband owns an antique collector car (acquired by he and his father prior to the marriage with his wife) and both the father and the husband are on title to the car. The wife is awarded $10,000 for attorney's fees (hopefully to be used to litigate the family law case, not to be used up in collecting the $10,000), payable by the husband forthwith. A couple months after the $10,000 attorney's fee order is made, the husband has paid nothing to the wife under the attorney's fee order. The wife goes back to the judge (on a noticed motion basis) and obtains a money judgment for the $10,000. She takes the judgment and a filled-in writ of execution to the family law clerk, who seals and signs the writ, gives her the original writ and several certified copies, and tells her the next step is to have the sheriff levy on assets of the husband. She then takes the writ, a filled-in notice of levy, sheriff's instructions describing the antique collector car to the sheriff to seize and sell the car, and the appropriate levying fee to the sheriff's court services office (this step is a bit more complicated than stated here, as discussed below). However, the wife can only reach the husband's one-half interest in the antique car by execution because it is also half owned by a third-party, the husband's father.
Upon levy/seizure, the car is sold for $22,000. One-half of the sale proceeds of this vehicle (i.e. $11,000) is given to the father (who files and obtains a third-party claim order) by the sheriff, and the 'other one-half' (i.e. the other $11,000) would remain with the levying officer until one of two events occur: (1) there is a statutory 15-day time period (measured from the date the husband was served with a copy of the writ of execution and a copy of the notice of levy – by mail to the husband's last known address okay, but mail service cannot simply not merely to the husband's attorney alone – good practice is to serve both the husband and his attorney) for the husband to file a claim of exemption that must first pass without husband having filed a claim of exemption or other challenge, at which point wife's $10,000 claim (plus the levy fees and daily interest from the date of entry of the formal money judgment – not the date of the original attorney's fees order) would be paid out to her by the sheriff (according to statute, the sheriff must do so within 30 days of the sheriff's receipt of the car's sale proceeds if no claim of exemption is filed by the husband) of the remaining balance of the "other one-half" (i.e. $1,000, less the levying fee and daily accrued interest) is given to the husband, or (2) the husband files a claim of exemption for automobiles under CCP section 704.010, the matter is heard, and the court decides he is entitled to the $2,300 exemption under CCP § 704.010. The Court would order that the sheriff distribute $8,700 (less levying fees and daily interest) to the wife (i.e. $11,000 of remaining proceeds, minus the $2,300 exemption) and $2,300 to the husband. The wife's writ of execution for the remaining, unsatisfied portion of the writ's balance (i.e. $2,300, plus levying fees and daily interest) would still be good to levy on other (non-employment income, non-community property) assets she can find of the husband.
Levying against non-cash personal property a remedy of last resort.
COLLECTING SUPPORT ARREARS
Certain types of obligations receive expedited treatment, like child and spousal support. Other orders issued at the same time, like attorney fee orders, don't. Enforcement of support orders as against non-wage/salary property of a support obligor are afforded essentially ex parte (i.e., without notice) treatment under FC section 5100.
FC section 5100 provides that, notwithstanding Section 290, child, family and spousal support orders are enforceable by writ of execution without prior court approval. Under FC section 5104, an application for writ of execution to enforce a support judgment pursuant to FC § 5100 can be filed in the clerk's office. It must be accompanied by an affidavit stating: (1) the total amount of support due and unpaid on the date of the application, and (2) if interest on the overdue installments is sought, the total amount of interest, and the amount of each due and unpaid installment and the date it became due (per CCP § 685.010, the legal rate of interest on money judgments is 10% simple interest per year).
Attorneys often use a computer program called the CFLR Executioner or another called Xarrears, into which they input the applicable information (date the orders issued, date installments due, and credits for those that are received), and attach the program's printout to the obligee spouse's application to show the correct calculation of the information required by FC § 5104, including statutory interest. The FC section 5104 affidavit must be filed in the action and a copy must be attached to the Writ of Execution delivered to the levying officer for service on the judgment debtor. A writ will issue from the court clerk pursuant to the FC § 5100, et seq. procedure on mandatory Judicial Council Form EJ–130 (Writ of Execution), but it must be filled in properly by the obligee upon submission to the court clerk.
If the writ relates only to a single money judgment (e.g. a $10,000 attorney's fee order), preparing and submitting the writ to the clerk (and next to the sheriff's department for levy on property) for issuance (i.e. getting the clerk's signature and court seal on the writ) is a simple matter.
The California Judicial Council has approved for optional use an official form Writ of Execution (Form EJ–130). This is a multipurpose form that can also be used as a writ of possession (e.g. for evicting tenants) or sale. The judgment creditor must take care to check the appropriate boxes.
You need the form in front of you for the next paragraphs to make sense. The form should be completed in full except for the seal and signature of the clerk. At items "11" through "18," the oblige/judgment creditor spouse must provide the following information about the judgment (see CCP section 699.520(e)-(g)): the total amount of the money judgment as entered or renewed (item "11"); post-judgment costs added pursuant to CCP § 685.090 (item "12"); the total of the judgment and costs added together (item "13"); the amount of any applicable credits (item "14"); the subtotal after the credits are subtracted from the judgment and costs (item "15"); accrued interest, reduced by any partial satisfactions or amounts no longer enforceable (supported by an affidavit (item "16"); the fee for issuance of the writ (item "17"); and the total amount needed to satisfy the judgment on the day the writ is issued (i.e., the total of items "15," "16" and "17" as item "18"). Item "19(a)" provides for the levying officer to add daily interest accruing from the date the writ is issued (i.e., at the legal rate on the amount shown in item "15"). Item "19(b)" provides for the levying officer to pay directly to the court costs included in the judgment (item "11") and the fee for issuing the writ (item "17").
To obtain accrued interest, the judgment creditor spouse must also file an affidavit with the court clerk stating the basis for interest (i.e. the amount of interest due from the date of entry or renewal of the judgment until the date of the affidavit). Adjustments/credits must be included for any prior partial satisfactions of the judgment (i.e. payments received by the obligee/judgment creditor spouse under the judgment), something that the legal software programs mentioned above are very useful for. CCP section 685.050. The Judicial Council form Memorandum of Costs After Judgment, Acknowledgment of Credit and Declaration of Accrued Interest (Form MC–012) is used for these purposes. The Clerk of the Court will issue a Writ of Execution upon the judgment creditor's properly documented request and payment of the required fee (currently $25). CCP section 699.510(a). A separate writ of execution must be issued for each county in which a levy is to be made (i.e. should be issued for each county in which the obligor/judgment debtor spouse has property located), because writs of execution are directed to the levying officer of a particular county. CCP section 699.510(a).
However, returning to the example above, where multiple orders have been made in a family law case, some for support and some for non-support, the matter becomes problematic. The clerk is not permitted to issue multiple writs from a single case number for different orders/judgments issued at different times; they can only issue one writ per case number per county at any given point in time.
At our courthouse in Indio, California I ran into this exact problem a month ago – the Judicial Counsel Writ of Execution Form EJ-130 is structured for general civil execution where only one money judgment issues from a general civil law courtroom. I prepared a writ that mathematically totaled all the past judgments onto page one of the writ for items 5 and 11 to 19 – WRONG. What the sheriff requires (based on the method of its tracking writs and levies in its computer system) is that the information required on page one of the writ, items 5 and 11 to 19, is to separate out each judgment onto pleading paper attached to the writ, and for each judgment described the items 5 and 11 to 19, individually.
WAGE GARNISHMENT ASSIGNMENT AND WITHHOLDING ORDERS
For most cases, the obligor spouse is a regular wage or salary employee such that the obligee spouse can collect by a Wage Assignment Order or Income Withholding Order pursuant to FC section 5200, et seq. This type of execution is one of the least problematic ways to enforce family court financial orders. A Writ of Execution Form EJ-130 is not needed for wage/salary seizure and satisfaction of an obligation, whether for support or for non-support.
Whenever a support order is made, the court must include in the order an earnings assignment for support that requires the obligor's employer to pay to the obligee a portion of the obligor's earnings as will be sufficient to pay (a) the support amount ordered by the court, and (b) an amount ordered to be paid toward liquidation of any arrearage. FC section 5230(a)(1) & (2). Like an earnings assignment, an earnings withholding order intercepts earnings to be paid to an obligor. As to the difference between garnishment and withholding, withholding orders for support issue solely to collect delinquent amounts (arrearages). CCP section 706.030(a). In comparison, an earnings assignment order applies to the obligor's earnings to collect both past arrearages and future installment obligations. Best practice is to get an earnings assignment ordered early on in a family law case to assure the prompt collection of support obligations as they become due (usually on a two week or monthly periodic basis). This helps to avoid, for example, problems such as non-payment and build-up of arrearages from the outset. FC sections 5208(a), 5230(a)(1) & (2).
In terms of priority regarding the application of the garnishment/withholding proceeds to past obligations, priority is given first to the current child support obligation, then the current spousal support obligation, then to child support arrears and lastly, to spousal support arrears. FC section 5238(a). When there are multiple assignment orders for the same employee obligor spouse (for example if the obligor spouse has an unpaid judgment balance from a past car accident), the withheld amounts/payments must be prorated by the employer as follows, per FC § 5238(b): if the obligor has more than one assignment for support, the amount of support due for each assignment must be added together; if 50% of the obligor's net disposable earnings will not fully pay all of the assignments for support, the employer must prorate it first among all of the current support assignments in the same proportion that each assignment bears to the total current support owed; and any remainder must be applied to the assignments for arrearage support in the same proportion that each assignment bears to the total arrearage owed. These allocation instructions are contained in the Form FL–435 Earnings Assignment Order for Spousal or Partner Support.
There are three separate sets of earnings assignment orders for support forms used for difference scenarios; all three are available and downloadable on line at www.courts.ca.gov. In spousal/partner support cases, the Form FL–435 Earnings Assignment Order for Spousal or Partner Support must be used. This assignment order for spousal/partner support form is not to be used for child or family support order collection and enforcement. Rather, all earnings assignments for child or family support "shall be issued" on the standardized federal form (in California, Form FL–195) as required by federal law (42 USC section 666). FC section 5208(b). The Form FL–196 form has instructions for properly completing the FL–195 form. An order assigning retirement benefits for child or spousal support is enforceable against an ERISA-governed plan only if it satisfies federal law requirements for a Qualified Domestic Relations Order (QDRO). 29 USC § 1056(d). The Judicial Council has approved for optional use a form Qualified Domestic Relations Order for Support, Form FL–460, that when properly completed, will satisfy QDRO requirements.
Once a wage assignment/withholding order issues by the Clerk of the Court pursuant to a judgment/order, it must then be served on the obligor/judgment debtor's employer. It may be served on the employer by first-class mail as provided by in CCP section 1013, or it may be personally served on the employer. FC section 5232. Service on the employer must include the documents the employer is required to deliver to the obligor under FC section 5234. FC section 5232. Within 10 days of service of the assignment/withholding order, the employer must deliver to the obligor/spouse a copy of the assignment/withholding order, a statement of the obligor's rights to seek to quash, modify or stay service of the order, and a blank form the obligor can file to request a hearing to quash, modify or stay service of the order and instructions on how to file the form and obtain a hearing date (FC section 5234(b)). It is the obligee/judgment creditor spouse's responsibility to serve these required documents upon the employer for delivery to the obligor/judgment creditor spouse. FC section 5232.
Unless automatically exempt by statute or unless a claim of exemption has been filed, unpaid earnings for personal services (wages, salary, bonuses, etc.) may also be enforced by execution orders to satisfy non-support order debt (i.e. an enforcement method concurrently available with a wage assignment for support; however, earnings assignments for support have priority over court-ordered monies for things like attorney's fees when accounting for credits). Except for earnings assignments for support and garnishment of a federal employee's pay, levy by execution for non-support orders against an employee/obligor's earnings is governed exclusively by the Wage Garnishment Law (CCP section 706.010, et seq.), including exemptions thereunder available to the obligor spouse. CCP section 706.020. In comparison, levy by execution for non-support orders against a non-employee's income (e.g. in the case of a realtor who is paid by an escrow company at the close of a realty transaction) is governed by Enforcement of Judgment Law, including its applicable exemptions, generally applicable to all civil case judgments. The procedures for both obtaining and for defending against earnings withholding for non-support financial orders is set forth in CCP sections 706.100–706.109. These procedures are unique to earnings withholding for non-support financial orders as to wage/salary employee judgment debtor spouses.
Upon a spouse's service of a wage withholding order on the obligor's employer, the employer must withhold the employee's nonexempt earnings for all pay periods during the withholding period, and must pay the withheld amount to the levying officer no later than the 15th of each month. In DCSS cases, special rules apply. A levying officer is required to pay the amounts received to the obligor spouse at least once every 30 days. CCP sections 706.021, 706.022, 706.025, 706.026. The withheld earnings must be properly credited to the obligor spouse in satisfaction of the support order in the manner specified by CCP section 695.221. CCP section 706.030(c)(7). An employer who fails to comply with the withholding order (assuming proper service, etc.) is liable to the support obligee for the amount not withheld that is otherwise paid to the support obligee. CCP section 706.030(c)(4). The Judicial Council has adopted a special set of "wage garnishment" (earnings withholding order) forms with strict regulation as to content (Judicial Council forms WG–001, et seq.). CCP § 706.120. When withholding is ordered to satisfy a support judgment, Form WG–004 should be used. For non-support judgments (e.g. an attorney's fees judgment) are being enforced by wage garnishment, Form WG–002 should be used.
The obligor/judgment debtor spouse is entitled to an exemption under any wage garnishment scenario, but this is not necessarily true for non-wage garnishment (i.e. a realtor paid commissions by the third-party escrow company). Under federal law, for an employee the maximum amount subject to execution (garnishment, etc.) to enforce money judgments generally is the lesser of (i) 25% of the employee's weekly "disposable earnings" (net earnings after deductions required to be withheld for federal, state and local taxes, social security, and other governmental retirement programs required by law, 15 USC § 1672 (b)), or (ii) the amount by which the disposable earnings for the week exceed 30 times the federal minimum hourly wage. Thus, up to 75% of the employee obligor spouse's weekly disposable earnings is automatically exempt. 15 USC section 1673(a). In addition to the automatic federal (and essentially equivalent state) exemption, an exemption may be claimed by the judgment debtor for those employment earnings determined by a judge to be necessary for personal and family support. CCP section 706.051(a),(b). This additional state law claim of exemption is not available if: The debt was incurred pursuant to an order or award for payment of attorney fees under FC sections 2030, 3121 or 3557; the debt was incurred for personal services rendered by a present or former employee of the debtor; the order is a CCP section 706.030 withholding order for support (if so, maximum exemption is determined by 15 USC section 1673(b)(2) and CCP section 706.052; or the order is a withholding order for taxes.
ENFORCEMENT BY LEVY OF EXECUTION
More problematic situations arise in cases where an obligor spouse is self-employed and income or assets cannot be reached by the above-described wage garnishment procedures. But at the same time, many claims of exemption available to an obligor-employee relating to earnings are not available to a self-employed obligor spouse if the asset is levied upon before it reaches the self-employed obligor spouse.
FC section 4600, et seq., provides for an obtuse and expensive way to enforce child support arrearages by way of an asset deposit and sale order as "an extraordinary remedy for cases of bad faith failure to pay child support obligations." FC section 4600. However, I believe the standard Writ of Execution procedures more easily accomplish the substantially similar effects of the asset deposit procedure of FC section 4600, and focus on the writ and levy in the rest of this article.
Say an obligee/judgment creditor spouse has obtained a Writ of Execution with multiple separate judgments included therein. What is the next step? In a simple word: levy. More specifically, levy on the obligor/judgment debtor spouse's non-wage/salary property.
Generally, after a Writ of Execution is issued, it must be delivered to the levying officer with instructions and the required fee. The levying officer then levies upon specified property of the judgment debtor spouse by taking it into custody or otherwise subjecting it to a lien in favor of the judgment creditor. The property levied upon may thereafter be sold at an execution sale to satisfy the judgment (or, in some cases as with cash, collected and disbursed to the obligee/judgment creditor spouse).
How To Execute With a Levy
The first step in the levy process is to deliver to the levying officer the original writ (and required copies), written instructions and required fee. The "levying officer" is the sheriff or marshal of the county to which the writ is directed (CCP section 680.260). Exactly who performs this function differs from county to county; in Riverside County it is the Sheriff's Court Services division. Moreover, although they are not "levying officers," registered process servers may initiate many types of levies (subject to the general exception where seizure of property is required – only a duly authorized peace officer may levy by seizure). In either case, the levying officer's fee must still be paid; and the levying officer must return the writ to court. Use of a registered process server is very helpful in scenarios where the obligee/judgment creditor spouse learns about money that will be paid in the near future to the obligor/judgment debtor spouse, and it is urgent that you move quickly – the Indio Sheriff's Court Services department presently has a two-month backlog of levies for mere service such that money or assets may be lost to the obligor/judgment debtor spouse should the obligee/judgment creditor spouse wait for the sheriff to come to his or her levy file.
A levying officer will only levy the Writ of Execution as instructed by the judgment creditor spouse. The instructions are in writing, and must include the information "needed or requested by the levying officer" to make a valid levy. CCP section 687.010(a). In other words, the instruction form must be completely filled out and its own internal instructions complied with. The creditor's instructions must also include: An adequate description of the property to be levied upon, its location; a statement of whether the property is a dwelling and, if so, whether it is real or personal property; the correct legal name of the judgment debtor; and the correct name and address of any third person upon whom the levying officer is required to serve the writ or notice of levy.
Many levying officers have preprinted instruction forms; if so, they should generally be used. Before submitting instructions it is a good idea for a judgment creditor spouse to contact the levying officer at their office and find out exactly what information is required for the particular levy; different types of property require different types of information and procedure. Helpful information is often available on-line. For Riverside County, the applicable forms and other helpful information can be found at: http://www.riversidesheriff.org/services/process-services-forms.asp
The judgment creditor must deposit with the levying officer money sufficient to cover the costs of carrying out the instructions. The basic fee for levying a writ is $35. Gov.C. section 26720.9. However, some levies cost a great deal more (e.g., some levying officers may require a deposit of $700 or more to levy upon an automobile, and $500 to levy upon and sell real property).
The levying officer's authority to levy begins upon receipt of the Writ of Execution and continues for 180 days after the date of its issuance. Thereafter, no further levies may be made thereunder. However a successive Writ of Execution may be issued by the Clerk of the Court upon the levying officer's return of the original (i.e. predecessor) writ to the clerk.
Writs of Execution
There are four basic methods by which a Writ of Execution can be levied on property to create an execution lien on non-wage property of the obligor/judgment debtor spouse: physical seizure of the property; garnishment; recording a copy of the writ and notice of levy with the County Recorder's office for real property; or delivery of a copy of the writ to the levying officer. The method required in a particular case depends upon whether the property involved is real or personal and, if personal, whether tangible or intangible; the particular method also depends on whether the property subject to levy is in the possession of the judgment debtor spouse or in the possession of a third party. Generally, the levying officer seizes (i.e. takes custody) of tangible personal property if it is in the judgment debtor's possession. However, if tangible personal property is in the control of a third party the levying officer may not seize it; garnishment is the proper term for collection and enforcement this scenario (and bear in mind, I am not discussing wage garnishment; that is governed by the Wage Garnishment Law procedures described above). To effectively garnish, the third person must be served with a copy of the Writ of Execution and a Notice of Levy issued by the levying officer (this process can be completed by a registered process server to speed up the garnishment process). The third person must thereafter deliver the property to the levying officer or file a memorandum with the levying officer as to why the property cannot be delivered. This same procedure (i.e. garnishment) is used to levy upon a debt owed by a third person to the obligor judgment debtor spouse, other than for employment wages/salary). For real property, a copy of a Writ of Execution and a copy of a Notice of Levy is recorded with the property's situs county clerk's recording office, including for growing crops, timber and minerals. For property that is already in the custody of the levying officer (e.g., under attachment), levy upon it is completed simply by delivering a copy of the Writ of Execution to the levying officer (a so-called "book levy").
All of the above execution methods require the preparation and filing of a Notice of Levy (Form EJ-150) by the judgment creditor spouse with the levying officer at the same time as filing the Writ of Execution and instructions (in cases where property of the obligor/judgment debtor spouse is held by multiple third-parties, a Notice of Levy for each third-party must be prepared and filed with the levying officer). Some of the above methods of levy (e.g., garnishment) also require service of a Notice of Levy on the judgment debtor when (or promptly after) the levy is made. CCP section 700.010. In the Notice of Levy, the property of the judgment debtor spouse that the judgment creditor spouse seeks to levy upon must be described at item "1b." This description should be worded as broadly as possible, and words of limitation should be avoided. The total amount necessary to satisfy the judgment must be stated at item "2." The total amount due (less partial satisfactions), levy fee, sheriff's disbursement fee, recoverable costs and daily interest may be specified here as well. The capacity in which the person is being served or notified must be indicated at item "3" (i.e. specify whether the Notice of Levy is being directed to a judgment debtor spouse or a third-party 'garnishee', etc.).
In a garnishment scenario, promptly after a levy is made, the levying officer (or registered process server if levy is by such person) must serve on the judgment debtor spouse (personally or by mail is fine) with the following: A copy of the Writ of Execution; a copy (or copies) of the Notice of Levy; if the judgment debtor is a natural person, a copy of Judicial Council form EJ–155, listing the state and federal exemptions that may be available to the judgment debtor and the published list of CCP section 703.140(b) exemption dollar amounts; and any affidavit of identity for names of the debtor listed on the writ of execution. CCP section 700.010.
As stated above, there can be situations where having a registered process server is optimal to perfect a levy. Again, a registered process server may levy a writ of execution only where authorized by CCP section 699.080, below (essentially levies that do not require actual seizure of the property). Specifically, a registered process server may levy on: real property, pursuant to CCP section 700.015; growing crops, timber to be cut, or minerals (including oil and gas) to be extracted, and accounts receivable resulting from the sale thereof at the wellhead or mine-head, pursuant to CCP section 700.020; personal property in the custody of a levying officer, pursuant to CCP section 700.050; personal property used as a dwelling (e.g. mobile homes), pursuant to CCP section 700.080(a); deposit accounts, pursuant to CCP sections 700.140, 700.160; contents of a safe deposit box, pursuant to CCP section 700.150; accounts receivable or general intangibles, pursuant to CCP section 700.170; final money judgments, pursuant to CCP section 700.190; and the judgment debtor's interest in personal property in the estate of a decedent, pursuant to CCP section 700.200. CCP section 699.080(a).
Before levying the Writ of Execution, a registered process server must deposit a copy of the writ with the levying officer of the county where the levy is to be made, and pay the fee provided in Gov.C. section 26721. CCP section 699.080(b). At the time of the levy, the registered process server must comply with the same levy, posting and service requirements applicable to the levying officer as if a formal levying officer was conducting the levy. The registered process server must also request any third person served (i.e. a garnishee) to send a memorandum to the levying officer as required by CCP section 701.030. Within five court days after the levy's initial issuance by the levying officer, the registered process server must file with the levying officer the following documents: the original writ of execution; a proof of service by the process server stating how the writ was levied and proof of service of a copy of the Writ of Execution, Notice of Levy on each person required to be served (i.e. the obligor/judgment creditor spouse, and each third-party garnishee, the latter must also receive a form Garnishee's Memorandum); and the written levying officer instructions from the judgment creditor. CCP section 699.080(d). It is crucial that the registered process server complies with this requirement precisely; if the levying officer does not have the proper documents within the five day period, any property it receives under the levy (e..g from third party garnishees) will be immediately returned to such tendering person for want of a perfected levy. The process server may levy more than once under the same Writ of Execution so long as the writ remains valid (i.e. for 180 days after its issuance by the Clerk of the Court), such that multiple assets or rights to payment can be reached by a single writ where a balance still remains outstanding. CCP § 699.080(g).
In deciding whether to go forward on a levy on a given, specific asset, a judgment creditor spouse and his/her attorney should consider: (a) the value of the judgment debtor spouse's interest in the asset; (b) the marketability of the asset; (c) the cost of the levy (d) if applicable, the time it will take to sell the asset; (e) whether the levy is actually necessary to satisfy the judgment (considering the value of the asset and the amount of the judgment); and (f) what exemptions could be available to the judgment debtor spouse with respect to the particular asset. Always remember, only the judgment debtor spouse's net equity (i.e. he or she may own a $50,000 car, but a bank might hold a lien of $48,000 in the same car) in non-exempt property may be reached, that levies on marketable personal property will likely result in quicker and less costly satisfaction of a judgment compared to liens on real property, and that levy on intangible property such as bank accounts and accounts receivable is optimal as it is less expensive (no sale or storage fees) and are less likely to be subject to a third-party's prior encumbrance (i.e. a security interest by a bank in a vehicle).
Levying on Real Property
To levy upon real property, the levying officer (or registered process server) must record with the county recorder of the situs county where the property is located: a copy of the Writ of Execution and a Notice of Levy. CCP section 700.015(a). The Notice of Levy must contain a legal description and state that the judgment debtor's interest in the real property. CCP section 700.015(a). Immediately after recording, the levying officer (or registered process server) must (in addition to service on the judgment debtor) serve a copy of the Writ of Execution and a Notice of Levy on at least one adult occupant of the property or on a management level employee/agent of the occupant, or an adult member of the occupant's household found on the property. If unable to effect personal service in the above manner, the levying officer (or registered process server) must post a copy of the Writ of Execution and the Notice of Levy at a "conspicuous place" on the real property (CCP section 700.015(c); primary doorways affixed by heavy duct tape is a good method).
Levying on Personal Property
To levy upon a judgment debtor spouse's tangible personal property in the possession or control of a third person, the levying officer (or registered process server) must personally serve a copy of the Writ of Execution and a Notice of Levy on the third person (who becomes a garnishee). As discusses above, it is advisable to also serve the third-party with a blank Memorandum of Garnishee (Form EJ-152). Within 10 days after service, the third party must either deliver the property or debt levied upon, or provide the levying officer with the Form EJ-152 garnishee's memorandum stating the third party's reasons for failure to deliver the judgment debtor spouse's property to the levying officer. Absent "good cause" for the third party's refusal, such garnishee ordinarily must: tender to the levying officer the property of the judgment debtor levied upon that was in the possession or control of the third person at the time of levy; execute and deliver to the levying officer any documents necessary to transfer title to such property; and where the levy is upon an "obligation" owing to the judgment debtor, pay to the levying officer amounts currently due at the time of the levy and amounts coming due and payable thereafter while the execution lien remains in effect (i.e. two years from issuance of writ). CCP section 701.010(b). Absent "good cause", a garnishee who fails to comply with the turnover orders in the Notice of Levy becomes personally liable to the judgment creditor spouse for damages resulting from such non-compliance; in such a situation the judgment creditor spouse may file a motion under CCP section 701.020 to enforce this liability and seek damages from the third party.
In my collection efforts regarding a self-employed judgment debtor realtor spouse, I ran into the problem of the attorney for the third party escrow company claiming that the spouse's realty commissions were not subject to the levy because the commission was not due and payable at the moment that the Writ of Execution and Notice of Levy was served on the escrow company. The attorney's position was claimed to be supported by some pre-1984 case law, First Central Coast Bank v. Cuesta Title Guarantee Co. (1983) 143 Cal.App.3d 12 [holding that a levy was ineffective to realtor commissions that became due and payable to a judgment debtor after the service of the writ and notice of levy]. I pointed out that his cited case (indeed all the line of cases dealing with a judgment debtor's contingent interests in property such as escrow commissions) predated the enactment of CCP section 701.010, particularly subsection (b)(2)(B). It provides: "(b) Unless the third person has good cause for failure or refusal to do so: (1) The third person shall deliver to the levying officer any of the property levied upon that is in the possession or under the control of the third person at the time of levy unless the third person claims the right to possession of the property. (2) To the extent that the third person does not deny an obligation levied upon, or claim a priority over the judgment creditor's lien, the third person shall pay to the levying officer both of the following: (A) The amount of the obligation levied upon that is due and payable to the judgment debtor at the time of levy. (B) Amounts that become due and payable to the judgment debtor on the obligation levied upon during the period of the execution lien" (emphasis added). In essence, I believe (and was successful in convincing the escrow company's attorney to agree) that the legislative effect of the 1984 enactment of CCP section 701.010(b)(2)(B) is that the line of contingent property interest cases are moot (although no reported appeal has expressly held so). In other words, prior to 1984, a judgment creditor of a realtor had to play a timing game of collection; the levy was only effective for 'a snapshot in time', but after 1984 the game changed such that the same judgment creditor had a two year 'dragnet' to capture all monies that became due and payable to the judgment debtor by the third party after the service requirements for the levy were satisfied. Suffice it to say, we collected the money for our judgment creditor spouse client.
Levying on Banks and Safe Deposit Boxes
To levy on bank deposits or property in safe deposit boxes, these assets can be reached only if the levying officer (or registered process server) personally serves a copy of the Writ of Execution and a Notice of Levy on: (1) the branch where the deposit account or safe deposit box is maintained; or (2), in the case of deposit accounts, at a centralized location within the state designated by the financial institution. CCP sections 700.140(a), 700.150(a). Sometimes a wily judgment debtor will deposit monies or assets into the deposit account of safe deposit of a third person A specific court order must first be obtained by the judgment creditor spouse in order to levy on a deposit account or safe deposit box held in the name of a person or persons other than the judgment debtor, and a copy of the order (along with the Writ of Execution and Notice of Levy) must be served on the third-persons along with the writ and a notice of levy (CCP section 700.160(a)). There are a couple of exceptions to this pre-levy order requirement: if the third-person is the judgment debtor's spouse, a fictitious name used only by the judgment debtor or his or her spouse, or an additional name of a spouse as described in an affidavit of identity then the levy can proceed without a prior court order. Where a deposit account or safe deposit box is held in the name of the judgment debtor's spouse, the judgment creditor can prepare a declaration or affidavit attesting to the marital relationship and file it with the financial institution at the time of levy (in lieu of a pre-levy court order). CCP section 700.160(b)(2). Where the account or box is held in a fictitious business name, the Writ of Execution and Notice of Levy must be served on the financial institution with a certified copy of an unexpired fictitious business name statement (obtainable from the county assessor/record's office) showing that only the judgment debtor and/or his/her spouse is doing business under the fictitious business name. CCP section 700.160(b)(3). An execution levy on a bank deposit account reaches all funds in the account at the instant of levy, and it also reaches uncollected funds (i.e. checks or items that have been deposited but not yet credited). CCP section 700.140(a). The bank may not permit removal of any of the contents of a safe deposit box while the lien is in effect, except as directed by the levying officer. CCP section 700.150(c).
What a nightmare! I have a headache too!
Collection and enforcement of judgments, even in the narrower context of family law cases only, is still a huge and complex area of the law. Technical precision is required for valid enforcement methods to be effective. Readers are cautioned not to rely fully on this article as it relates to their particular circumstances, and they should consult with an attorney with substantial experience in collection and enforcement within the family law context. This article is written as an introductory primer and to be used for educational purposes only. Nevertheless, I hope many will find its contents helpful, insightful, and result in a just outcome.
Btw, if you appreciate the effort this article required, why not give it a Facebook Like?
~ M.C.P. ~