September 01, 2015

Practical Considerations When Enforcing Judgments

Failing to investigate collectability issues at the outset of a case may have costly consequences.

Tracy A. DiFillippo, Conor P. Flynn, and Michelle D. Alarie

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This article addresses practical considerations involved in the enforcement of judgments and identifies common traps that could land lawyers and their clients in hot water. We begin with pre-suit considerations for evaluating a party’s ultimate ability to pay, identify ongoing considerations for evaluating the defendant’s assets, and review post-judgment considerations that frequently arise these days. Finally, we conclude with practice pointers for complying with that nemesis of all judgment creditors, the Fair Debt Collection Practices Act.

Any representation must begin with an engagement letter that carefully defines counsel’s role in post-judgment collection efforts. Silence can lead to client dissatisfaction or counsel finding that the scope of the job is much broader than anticipated. A well-crafted engagement letter should state whether the representation includes post-judgment enforcement work and the exact nature of it.

For example, assume an engagement letter says nothing about enforcement of the judgment. Then, after obtaining a judgment, counsel records it in a city or county where the debtor may have property. Thereafter, counsel does no further work on the matter, as the client seems uninterested in throwing good money after bad to pursue collection. Counsel then sends a termination letter to the client noting that the representation has concluded and that no further work will be performed.

What happens if the judgment needs to be renewed several years later and counsel fails to do so? For example, some states require a judgment to be renewed after a certain period of time or it may be deemed unenforceable. See, e.g., Cal. Civ. Proc. Code § 683.020 (California judgment may become unenforceable after 10 years if not renewed). Is this malpractice? Does it matter that counsel sent a termination letter explaining that the representation had concluded? An argument can be made that, by recording the judgment, counsel undertook efforts to enforce it, thereby placing enforcement within the scope of representation. This same scenario can be played out in connection with writs of execution, writs of garnishment, and so on.

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