[WSBARP] Question about collecting judgment

[Dwight Bickel]

Note that the entry of a Judgment in the Superior Court only attaches as a lien if the property is not exempt as homestead. Recording is also required as a condition to assert a lien upon property protected by homestead. The duration of the Judgment extends ten years from entry, not from recording.

The later conveyance from the debtor, whether a sale or a transfer without consideration, would not affect the lien upon the land. If that conveyance was done before the entry of the Judgment, that would prevent the automatic attachment. The creditor would have to pursue an action against the grantee under Chapter 19.40 RCW to set aside that conveyance.

There is no assurance that the creditor can rely upon the escrow and title company to pay the judgment upon a sale. I recommend diligent prosecution of the creditor's rights by timely execution procedures. It can be reasonable to await several years for the property to inflate in value before execution proceedings. Also, during such time the debtor owner may have incentive to pay the debt or may have need to sell or refinance.

There are instances where the parties to a conveyance do not seek title insurance. The escrow will assume no duty to search for liens. Even if a title policy is purchased, there are instances where a Judgment is not properly indexed, there are instances where the title company fails to search, there are instances where a Judgment is not properly found during a search, there are instances where a Judgment is found but fails to be shown on a commitment, there are instances where a Judgment is shown on a title report but the seller offers an indemnity to the title company to accept the risk that the creditor might execute later against the purchaser. I am just warning that the title company has no duty to the creditor to pay a Judgment.

I have witnessed all of those instances. I remember long ago an angry lawyer called me while I was counsel for the title company, because the title company had closed a sale without payment of his client's Judgment. The odd part was that the incompetent lawyer did not realize that the lien was perfected and remained enforceable after the sale. Instead, he thought the lien was lost due to the sale, so he alleged he had a case against the title company. I let him think that, and still feel a little badly about it. That lawyer never enforced, nor pursued his faulty claim. The title company would have been required to pay under the owner's title policy to avoid the execution against the insured purchaser.

Dwight A. Bickel
Washington Title Professional
dwightbickel at hotmail.com
www.linkedin.com/in/dwightbickel
206-484-1976



________________________________
From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> on behalf of Kaitlyn Jackson <kaitlyn at dimensionlaw.com>
Sent: Monday, November 23, 2020 10:00 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Question about collecting judgment

Hi all -

In the case where a money Judgment is awarded in Superior Court against a defendant who owns a couple of properties in the same county that the judgment was awarded, I think that such judgments automatically attach to the properties so that if the defendants attempt to sell either in the next 10 years, title would require this judgment to be paid out of escrow. However, what happens if the defendants execute a quit claim deed of the property(ies) into a trust or to a family member or a company and then the other entity sells the Property? Would escrow catch this issue? Does anyone have any general collection information here?

Thanks in advance for any push in the right direction here.

--
Thank you,

Kaitlyn R. Jackson | Attorney| DIMENSION LAW GROUP PLLC
130 Andover Park East, Suite 300 | Tukwila, WA 98188
t: 206.973.3500 | f: 206.577.5090| e: kaitlyn at dimensionlaw.com| www.dimensionlaw.com<https://eur01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.dimensionlaw.com%2F&data=04%7C01%7C%7C7febbed3b18540f3125808d88fda4e08%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637417515070606213%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=qbEhwDdgT%2Be7xcdSHoXA9O6IocgCaXVHwN%2FfQx6gjac%3D&reserved=0>


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