Judgment Creditor’s Use of Clerk Default Fee Schedule Did Not Give Basis to Deny Fee Award, But Other Bases Did.
Under our category “Judgment Enforcement,” we previously have discussed the operation of Code of Civil Procedure section 685.040, which provides that attorney’s fees incurred in enforcing a judgment are recoverable as an element of costs if the judgment included a fee award to the judgment creditor. This provision was again involved in the next unpublished opinion that we examine.
Resnik v. Roberts, Case No. D050656 (4th Dist., Div. 1 June 24, 2009 ) (unpublished) involved a situation where judgment creditor with a default judgment tried to enforce it against an alleged fraudulent transferee of assets from the original judgment debtor. Judgment creditor prevailed and also sought to recover $261,948 in attorney’s fees incurred in the second action because the original judgment had a fees clause against judgment debtor. The trial court denied the fee request, principally on the ground that judgment creditor sought fees under local court rules for clerk default prove-ups rather than pursuant to an independent court default prove-up. Judgment creditor was miffed, appealing the fee denial ruling.
He did no better on appeal, but on other grounds.
The Court of Appeal did not like the trial court’s reasoning in support of its fee denial. The lower court relied mainly on the analysis in Molalla Holdings, Inc. v. Akers, 100 Cal.App.4th Supp. 6 (2002), which found section 685.040 inapt because the party seeking fees elected to recover clerk default prove-up fees based on the local court default schedule. This election, in effect, precluded postjudgment recovery of attorney’s fees under the CCP. The Resnik panel did not like this reasoning. “The analysis of Molalla is inapposite here given that [judgment creditor] obtained the underlying judgment from the court rather than from the clerk. Moreover, we question the soundness of its reasoning. Neither [Code of Civil Procedure] section 585 nor the applicable rule of court authorizes a recovery of attorney fees in a contract action that is resolved by default judgment under circumstances other than those provided for by section 1033.5 ….The fact that a plaintiff relies on the schedule adopted by the court pursuant to the Rules of Court does not render section 685.040 inapplicable and should not preclude one who complies with the statutory criteria for an award of postjudgment enforcement attorney fees from recovering thereunder.” (Slip Opn., at pp. 13-14.)
However, what did the judgment creditor in was the fact that the underlying judgment was against a judgment debtor other than fraudulent transferee. “[Judgment creditor] cites no persuasive authority, and we have found none, authorizing an award of fees under section 685.040 against someone who was not a party to the underlying judgment.” (Slip Opn., at pp. 14-15.) For this reason, the fee denial ruling was affirmed.