In California, a judgment creditor is entitled to reasonable and necessary costs of enforcing a judgment. See CCP 685.040. However, attorneys’ fees are not included in the recoverable cost of enforcing a judgment unless otherwise provided by law. See CCP 685.040. Attorneys’ fees incurred in enforcing a judgment are recoverable as costs if the underlying judgment includes an award for fees authorized by contract under CCP 1033.5(a)(10)(A). This also applies to assignees of the judgment.
In other words, ordinarily a judgment creditor in California cannot add her attorney’s fees to the amount of the judgment, unless the underlying judgment includes an award for attorney’s fees pursuant to CCP 1033.5(a)(10)(A). Often times the ability to add attorney’s fees to a California judgment is critical to gaining leverage over the debtor, so creditors are wise to consider whether attorney’s fees can be added. To determine this, we must look to CCP 1033.5(a)(10), which provides:
“(a) The following items are allowable as costs …: (10) Attorney’s fees, when authorized by any of the following: (A) Contract, (B) Statute, (C) Law.”
If attorney’s fees are authorized by “contract,” “statute” or “law” then the attorney’s fees are allowable as “costs” and can be added to the judgment pursuant to CCP 685.040. “Contract” is the most common of the three. Attorney’s fees can be authorized by contract if the creditor’s lawsuit against the debtor involves a contract that includes an attorney’s fees provision. For example, many contracts provide that, in any lawsuit relating to the contract, the prevailing party is entitled to recover attorney’s fees from the losing party. If the contract contains such language, then attorney’s fees are arguably “authorized by contract” and therefore can be added as “costs” to the judgment.
Judgment creditors in California can often gain substantial leverage against debtors by increasing the amount of the judgment to include attorney’s fees. For help with these issues, feel free to contact our firm to discuss.