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Collecting a judgment in California with an assignment order

by Stan Burman

Collecting a judgment in California with an assignment order is the topic of this blog post.

Collecting a judgment in California with an assignment order is an excellent idea for anyone attempting to collect a judgment in California.  However they should only be used in the appropriate situations.

Many judgment creditors that attempt to collect a judgment in California are unable to collect as they cannot locate any assets such as a bank account or car that may be seized to satisfy the judgment. Or a wage garnishment may be impossible due to the fact that the judgment debtor is self-employed or their main source of regular income may be from rents or royalties. It is in these situations where an assignment order can allow someone to collect on a judgment that would otherwise never be collected. Many if not most individuals working in the judgment recovery field in California will testify to the effectiveness of an assignment order.

Code of Civil Procedure § 708.510 authorizes a Court to issue an order directing the Judgment debtor to assign to a judgment creditor, all or part of a right to payment due, or to become due, including

1. Wages due from the federal government that are not subject to withholding under an earnings withholding order;

2. Other payments such as rents, commissions, royalties, payments due from a patent or copyright, insurance policy loan value, accounts receivable, general intangibles, judgments and instruments.

Although the Court may take into consideration all relevant factors, the sole constraints placed on the Court are that the right to payment be assigned only to the extent necessary to satisfy the creditor’s money judgment and that, where part of the payments are exempt, the amount of the payments assigned should not exceed the difference between the gross amount of the payments and the exempt amount.

Note that a California Court of Appeal has ruled that just because a right to payment has been ordered assigned under Code of Civil Procedure § 708.510, that does not preclude a challenge to whether the claims were assignable ab initio; the Legislature specifically noted that § 708.510 does not make any property assignable that is not already assignable. See Kracht v. Perrin, Gartland & Doyle (1990) 219 Cal App 3d 1019, 1022. In this case the Court ruled that a right to receive payment from a malpractice suit could not be assigned.

In an unusual case involving the Estate of Ferdinand Marcos, the Court ordered his Estate to assign the funds held in Swiss bank accounts in favor of the plaintiffs who had sued the Estate for damages resulting from torture, summary execution, and disappearances during his regime. The judgment which was entered in the United States District Court in Hawaii, had been transferred to a district court in California for enforcement purposes.

Estate of former Philippines president ordered to execute assignment of funds in Swiss banks in favor of the class and individual plaintiffs. Case law interpreting California statute on assignment of right to payment in enforcement of a judgment has consistently upheld a court's power to require debtors to assign their interests in debts or other property. The statute and its case law permitted an order of assignment of the estate's interests in the foreign bank accounts for the benefit of the judgment creditors, class action plaintiffs. See In re Estate of Marcos Human Rights Litig. (1995, DC Hawaii) 910 F Supp 1470, 1473.

This case clearly shows that an assignment order can be used to reach almost any asset of a Judgment Debtor.

Code of Civil Procedure § 708.520 authorizes the Court to restrain the Judgment Debtor from assigning or otherwise disposing of the right to payment sought to be assigned upon a showing of need. This is important as otherwise the Judgment Debtor may assign the right to payment to someone else or otherwise attempt to evade collection efforts.

Attorneys or parties in California who wish to view a portion of a sample motion for assignment order for California sold by the author can use the link shown below.

Sample Motion for Assignment Order for California by Stan Burman on Scribd

 

The author of this blog post, Stan Burman, is an entrepreneur and freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for California and Federal litigation.

You can view portions of over 300 sample legal documents for California and Federal litigation at View over 300 sample legal documents for sale

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DISCLAIMER:

Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.

The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.

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