Judgment Enforcement: Trial Court’s Denial Of Judgment Assignee’s Motion for Code Civ. Proc. § 685.040 Attorney’s Fees, Where Underlying Judgment Entitled Judgment Creditors To Fees, Reversed And Remanded

Although Original Judgment Creditors Did Not Move For Fees In The Underlying Judgment, The Underlying Judgment Obligating Judgment Debtor To Pay Reasonable Attorney Fees Was Sufficient To Trigger § 685.040.

            Code Civ. Proc. § 685.040 entitles a judgment creditor to the reasonable and necessary costs of enforcing a judgment – including attorney fees which can be included as costs – if the underlying judgment includes an award of fees to the judgment creditor pursuant to Code Civ. Proc. § 1033.5.

            An assignee of a judgment may seek attorney fees for enforcement of the judgment under § 685.040 if the original judgment creditor would be entitled to recovery under that statute. (Miller v. Givens, 30 Cal.App.4th 18, 22 (1994).)

            In Guo v. Moorpark Recovery Service, LLC, Case No. A159195 (1^st Dist., Div. 5 February 8, 2021) (published), an assignee of the original judgment creditors engaged in collection efforts against judgment debtors and moved for attorney fees under § 685.040. Although the original judgment creditors had been deemed the prevailing parties under Code Civ. Proc. § 1032 and entitled to recover their costs of suit and reasonable attorney fees, the trial court denied assignee’s motion – relying on Imperial Bank v. Pim Electric, Inc., 33 Cal.App.4^th 540 (1995), and concluding it could not award attorney’s fees or paralegal fees because the original judgment creditors never filed a motion for fees and, therefore, fees were not “awarded” in the underlying judgment.

            Assignee appealed, and the 1/5 DCA reversed and remanded.  Case law interpreting section 685.040 looks to the judgment rather than the contract itself when determining a party’s entitlement to fees.  (Jaffe v. Pacelli, 165 Cal.App.4th 927, 935 (2008); Tomaselli v. Transamerica Ins. Co., 25 Cal.App.4th 1766, 1770 (1994).)  Though the underlying judgment did not specify an amount to be awarded, it clearly provided for an award of fees to the original judgment creditors.  As such, the judgment included an obligation by judgment debtor to pay reasonable attorney fees, and no more was required for § 685.040 to apply.  Additionally, the panel disagreed with Imperial’s conclusion that a judgment awarding reasonable attorney fees is not an award of attorney fees for purposes of § 685.040 – also finding that Imperial did not address whether a judgment that includes an award of “reasonable attorney fees” but not an award of a specified amount is an “award” of fees under § 685.040.  As a result, the 1/5 DCA found Imperial was not authority for this case.