Fourth District, Division 3 Found Fee Recovery Justified Even Though Satisfaction Demand Not Delivered Per Statute.
Code of Civil Procedure section 724.050 provides the exclusive procedure for compelling an acknowledgment of satisfaction of judgment, requiring the party demanding the acknowledgment to deliver its demand with certain warnings either personally or by U.S. mail. A statutory penalty (section 724.050(e)) and mandatory attorney’s fees to the prevailing party (section 724.080) can be awarded in satisfaction demand disputes.
So, what happens if the judgment debtor delivers the satisfaction demand by fax and it is actually received? Is the failure to strictly comply with statutory delivery requirements fatal to receiving the penalty and fees?
No, said the Fourth District, Division 3 in Western Ethanol Co. v. Midwest Renewable Energy, Case No. G041841 (4th Dist., Div. 3 Feb. 24, 2010) (unpublished), a 3-0 decision authored by Justice Bedsworth.
The appellate court found that judgment creditor had actually received the satisfaction demand such that the fax delivery (versus personal or U.S. mail delivery) was not prejudicial in nature. There could be no confusion because section 724.050(c) provides that the 15-day deadline for satisfaction demand compliance runs from “actual receipt of the demand,” and judgment creditor did not deny that it received the demand. The Court of Appeal affirmed a lower court’s award of $7,400 in fees and $350 in penalties to the judgment debtor requesting the satisfaction acknowledgment (and all this over satisfaction of a principal judgment of $45,165.39).
The decision also has a nice discussion of “accord and satisfaction” principles in the context of a potential future appeal and retention of an uncashed check by the judgment creditor for an unreasonable length of time.
BLOG FAVORITE QUOTE—In discussing one of appellant’s technical arguments on appeal and an objection to the form (rather than substance) of respondent’s compliance, Justice Bedsworth summarized the challenge this way: “In effect, [appellant] is asserting [respondent] failed to say “Mother may I.’”