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In California, Did You Know You Can Collect Fees for Time Spent Collecting Fees?

February 12, 2018 | Posted in : Article / Book, Fee Collection

A recent CEBblog articles by Judy Brook, “Did You Know You Can Collect Fees for Time Spent Collecting Fees?reports on collecting on attorney fee awards and enforcing judgments.  This article was posted with permission.  The article reads:

Collecting attorney fee awards and enforcing judgments can be very time-consuming. Don’t forget to collect attorney fees for time spent chasing down your fees in collection efforts.

Under California law, attorney fees incurred in enforcing a judgment are compensable post-judgment enforcement costs when the judgment includes a fee award based on a contract (see, e.g., Chelios v Kaye (1990) 219 CA3d 75) or a fee-shifting statute (see, e.g., Ketchum v Moses (2001) 24 C4th 1122, 1141 n6). CCP §685.040. This is consistent with the general principle that “reasonable” attorney fees include compensation for time litigating the fee portion of the judgment (see Serrano v Unruh (1982) 32 C3d 621).

Here are a few finer points to know:

  1. Seek collections fees within two years. Fee motions must be filed within two years after the enforcement fees have been incurred. CCP §685.080(a). Keep in mind that the Enforcement of Judgments Law generally doesn’t apply to enforcement actions against governmental entities (CCP §§680.010–724.260).
  2. Consider seeking collections fees from nonsignators. In Cardinale v Miller (2014) 222 CA4th 1020, the court held that under the plain language of CCP §685.040, enforcement fees could be awarded against nonsignator brokers who conspired with the judgment debtor to avoid collection because the judgment included an award of contractual fees. Under this interpretation, the fact that the fees couldn’t have been awarded against the nonsignators under the contractual fee clause was irrelevant; CCP §685.040 authorized fees to the judgment creditor for expenses incurred in enforcing the judgment. 222 CA4th at 1026.
  3. Don’t limit collection fees to trial court activities. In Downen’s Inc. v City of Hawaiian Gardens Redev. Agency (2001) 86 CA4th 856, the court held that the plaintiffs’ entitlement to fees in an inverse condemnation action included fees for bringing a petition for writ of mandate to collect the judgment.
  4. Consider including collection fees for separate actions. In Globalist Internet Technols., Inc. v Reda (2008) 167 CA4th 1267, 1276, the court held that under CCP §685.040, plaintiff was entitled to recover the fees incurred in defending a separate action filed by the defendant/judgment debtor because, if that action had been successful, it would have reduced the judgment collectible by the plaintiff. In Slates v Gorabi (2010) 189 CA4th 1210, 1214, however, the court refused to extend Globalist to defending attacks on a judgment by third parties unrelated to the judgment debtor.
  5. Include collection efforts in bankruptcy court. Actions taken in bankruptcy court to collect a judgment also may be recovered under CCP §685.040. See Chinese Yellow Pages Co. v Chinese Overseas Mktg. Serv. Corp. (2008) 170 CA4th 868, 885; Jaffe v Pacelli (2008) 165 CA4th 927, 929.

The procedure for claiming collection fees is stated in CCP §685.080. You’ll need to file a noticed motion no more than two years after the costs were incurred, supported by a declaration stating, among other things, that the costs were “reasonable and necessary.” CCP §685.080.