Judgment Domestication
Enforcing Out-Of-State Judgments in California
If you have a judgment from outside of California, but the debtor lives or owns assets in California, domesticating your judgment in California is quick and inexpensive. Our firm typically charges a flat fee of only $500 to domesticate a judgment in California. After the judgment has been domesticated, it can be enforced just as any other judgment entered in California. Given the simplicity and low cost, creditors are wise to domesticate their sister-state judgments in California if the debtor either lives in California or owns assets in California.
Please contact us at 949-203-3870 for a free consultation regarding your potential judgment domestication matter.
The following paragraphs summarize the judgment domestication process:
A judgment entered in any state can be enforced anywhere in California. In other words, the creditor can use an out-of-state judgment to collect from the debtor’s assets located in California, in exactly the same manner as a judgment originally entered in California. For example, suppose the creditor obtained judgment in Texas and the debtor owns real property in California. By complying with the Sister-State and Foreign Money-Judgment Act (“SSFMJA”), the creditor can turn the New York judgment into a California judgment, then pursue the debtor’s real property in California.
Step 1: The first step is to file an Application for Entry of Judgment on Sister State Judgment (Form EJ-105) (see below for link to form). The application should be filed in the county where the judgment debtor resides or, if the debtor lives outside of California, in any county. See Code of Civil Procedure § 1710.20(b).
Step 2: The California court will then enter a California judgment identical to the out-of-state judgment.
Step 3: After the California judgment has been entered, the creditor must then personally serve the debtor with the judgment, in the same manner as summons are served in California. See Code of Civil Procedure § 1710.30(a).
Step 4: After the California judgment has been personally served, the creditor must wait 30 days before taking enforcement action. For example, the California court will not issue a writ of execution until 30 days after the California judgment has been entered. See Code of Civil Procedure § 1710.35.
Before creditors decide to domesticate a sister-state judgment in California, it is important to understand California’s service requirements with respect to the domestication of judgments in California. In other words, after the California judgment has been entered, how must service be made?
The answer depends on the specifics of the judgment debtor.
Code of Civil Procedure § 1710.45(a) states:
“Except as otherwise provided in this section, a writ of execution on a judgment entered pursuant to this chapter shall not issue, nor may the judgment be enforced by other means, until at least 30 days after the judgment creditor serves notice of entry of the judgment upon the judgment debtor, proof of which has been made in the manner provided by Article 5 (commencing with Section 417.10 ) of Chapter 4 of Title 5 of Part 2.”
CCP § 1710.45(a) means that, ordinarily, a judgment domesticated in California cannot be enforced until: (1) the domesticated judgment has been served on the debtor, and (2) 30 days have passed since the date of service.
In what manner must the domesticated judgment be served? The answer is: In the same manner as service of a summons and complaint filed in California (e.g., personal service on the debtor, substituted service, Notice and Acknowledgment and Receipt).
Despite the general rule, sometimes the creditor is not required to serve the domesticated judgment on the debtor. For example, Code of Civil Procedure § 1710.45(b)(1) states:
“A writ of execution may be issued, or other enforcement sought, before service of the notice of entry of judgment if the judgment debtor is any of the following:
(1) An individual who does not reside in this state.”
When a creditor domesticates a sister-state judgment or foreign judgment in California, the debtor often seeks to stay enforcement of the judgment using Code of Civil Procedure § 1710.50. CCP § 1710.50 states as follows:
“(a) The court shall grant a stay of enforcement where:
(1) An appeal from the sister state judgment is pending or may be taken in the state which originally rendered the judgment. Under this paragraph, enforcement shall be stayed until the proceedings on appeal have been concluded or the time for appeal has expired.
(2) A stay of enforcement of the sister state judgment has been granted in the sister state. Under this paragraph, enforcement shall be stayed until the sister state stay of enforcement expires or is vacated.
(3) The judgment debtor has made a motion to vacate pursuant to Section 1710.40. Under this paragraph, enforcement shall be stayed until the judgment debtor’s motion to vacate is determined.
(4) Any other circumstance exists where the interests of justice require a stay of enforcement.
(b) The court may grant a stay of enforcement under this section on its own motion, on ex parte motion, or on noticed motion.
(c) The court shall grant a stay of enforcement under this section on such terms and conditions as are just including but not limited to the following:
(1) The court may require an undertaking in an amount it determines to be just, but the amount of the undertaking shall not exceed double the amount of the judgment creditor’s claim.”
In other words, the California court can stay enforcement of the judgment if (1) an appeal is pending in the sister-state or foreign state; (2) the sister-state has ordered a stay of enforcement; (3) the debtor has filed a motion to vacate the domesticated California judgment; or (4) “any other circumstance where the interests of justice require a stay of enforcement.”
This gives the judge a lot of discretion as to staying enforcement of the judgment.
But if the judge chooses to stay enforcement of the California judgment, the judge is permitted to do so “on such terms and conditions as are just.” This also gives the judge a great deal of discretion. If the debtor seeks to stay enforcement of a sister-state judgment in California, the creditor should usually ask that the debtor be required to post a bond in the amount set forth in Code of Civil Procedure § 917.1 (i.e., 1.5 times or 2.0 times the amount of the judgment). The creditor should also argue, in opposition to the request for a stay, that the California court should not stay enforcement unless the sister-state has decided to stay enforcement. The state that entered the original judgment knows the matter best. If that state did not find it necessary to impose a stay, then the California court should not impose any stay.
Our firm can quickly turn your judgment into a California judgment. We can then utilize California’s judgment collection tools to collect from the debtor. Please contact us at (949) 203-3870 to discuss the specifics of your situation. We are always willing to provide a complimentary collection analysis.
The Wallin Firm is dedicated to collecting large debts from businesses and individuals throughout California. We understand that collecting is extremely important to our clients, and we take our responsibility very seriously.
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