Commercial Code Section on Cashier’s Check Tender Went Hand in Hand With Judgment Enforcement Provisions.
You knew this one would be fun given the first paragraph in Gray1 CPB, LLC v. SCC Acquisitions, Inc., Case No. G047429 (4th Dist., Div. 3 Apr. 9, 2014) (published): “You cross continents and spend years trying to collect a judgment for your client. Late one Friday afternoon, the debtor’s lawyer walks into your office and hands you a cashier’s check for almost $13 million, covering the entire judgment and all accumulated interest. Do you accept the check or say, ‘no thank you, I need to make a motion for attorney fees first?’ Put another way, is a bird in the hand worth two in the bush?”
The particular conundrum faced by the judgment creditor in this case arose from these facts: Judgment creditor had spent more than $3 million in fees to seek collection upon a $9.1 million judgment; two years after the judgment was entered based on guaranties containing fee clauses, defendants paid the amount of the outstanding judgment and accrued interest with a cashier’s check for a little shy of $13 million, but it did not include the postjudgment fees incurred by judgment creditor. Judgment creditor field a motion for postjudgment fees and then deposited the cashier’s check, which was honored. Judgment debtor had tendered the check with a demand for satisfaction of judgment, which carries a penalty and some fee exposure if not honored properly or without proper excuse. The lower court denied judgment creditor’s fee motion, finding that the motion was made “before the judgment is satisfied in full” as required by Code of Civil Procedure section 685.080(a).) However, it did deny the judgment debtor’s request for penalties/fees after finding that judgment creditor’s failure to file a timely satisfaction of judgment was not without just cause.
Both parties appealed, but neither changed the result.
Here, to judgment creditor’s chagrin, the judgment was satisfied—making the postjudgment fee motion untimely—when judgment creditor accepted the cashier’s check even though depositing for honor later, the UCC equivalent of accepting cash. (Comm. Code, § 3310.) What judgment creditor could have done was reject the cashier’s check before judgment debtor actually tendered cash and then file a postjudgment fee motion. “In fact, for purposes of filing a timely motion for postjudgment costs, postjudgment creditors who are provided a cashier’s check may be in a better situation than those who are paid in cash. A judgment creditor must accept cash, but may reject a cashier’s check and instead file a motion for postjudgment costs, including attorney fees.” (Slip Opn., p. 13.)
The defense appeal lacked merit, because the judgment creditor did file a partial judgment satisfaction acknowledgment. However, given that the state of the law was such that even the appellate court published its decision in this matter, it could not be said that the trial court erred in determining that judgment creditor had some cause for not filing a complete satisfaction at the time.
Justice Moore authored the decision on the behalf of a 3-0 panel, using the same writing flair that we see from Justice Bedsworth (who just so happened to be on the panel).
