Lower Court Needed to Enter Final Judgment Under CCP § 708.470, But Appellate Court Preserved Priority Status Quo While This Was Being Accomplished.
Well-known Orange County law firm in Grabowski v. Rutan & Tucker, Case No. G044438 (4th Dist., Div. 3 Feb. 24, 2012) (unpublished) obtained a judgment against client for legal fees. Five years later, law firm learned that client would get a large settlement from resolution of a family dispute. Law firm files a notice of judgment lien in the family dispute action to claim its stake to the settlement proceeds. After the lower court ordered the parties to prepare a final judgment in the case (which apparently was never accomplished), the law firm filed a motion for order for satisfaction of judgment lien under CCP § 708.40. The trial court granted the motion, but the appellate court reversed with caveats.
Presiding Justice O’Leary (she was confirmed as P.J. on February 10, 2012–the first female P.J. of the 4/3 court), in a 3-0 opinion, did a nice job of explaining the notice of lien judgment creditor scheme, which indeed is creditor friendly but with due process protections for debtor and other competing creditors. However, you gotta have a final judgment in the pending action before the lien can be satisfied. Get a final judgment, the appellate court said, and everything will be okay for lien satisfaction. In the interim, the appellate court reiterated that law firm’s lien retained its priority as of the date of its initial filing in the family dispute action.