Judgment Enforcement: Parties Who Were Not Original Debtor And Who Were Not In Contractual Privity With Judgment Creditor Still Liable For Post-Judgment Collection Fees For Conspiring With Original Debtor To Evade Enforcement of Judgment

 

CCP § 685.040 Sufficiently Broad to Cover Conspiring Parties Who Were Not Original Judgment Debtor and Who Were Not Parties to the Contract Having a Fees Clause Carrying Through to the Judgment.

     Judgment creditor went through a lot of litigation to finally obtain a judgment against parties neither originally the original debtor nor in contractual privity with judgment creditor on the agreements with contractual fee clauses. Creditor obtained a $2.17 million compensatory award, $900,000 punitive award (aggregately against certain defendants), and a $293,937.50 attorney’s fees award.

     Some defendants appealed the fee award that was based on California Code of Civil Procedure section 685.040, which allows post-judgment recovery of attorney’s fees to enforce a judgment “if the underlying judgment includes an award of attorney’s fees to the judgment creditor [if there is a contract allowing fees to be awarded as costs].” They made two principal arguments, namely, they could not be chargeable with fees because they were not the original judgment debtors under the judgment and they were not parties to the contracts with the fee clauses.

     The appellate court disagreed in Cardinale v. Miller, Case Nos. 132011/A133065 (1^st Dist., Div. 3 Jan. 8, 2014) (partially published; fee discussion published). It found that nonparties to the original judgment or original contracts conspiring to help the judgment debtor to evade a judgment can be subject to fees under section 685.040, with the language not just restricted to original debtors and with the survival of the contract from where the fees were awarded not being necessary (but only the existence of the fees and costs in the underlying judgment being the necessary predicate).