[WSBARP] Question about collecting judgment

Mon Nov 23 11:10:58 PST 2020

Dwight,

I'm not seeing that the sale of property subject to a judgment would 
necessarily be an avoidable fraudulent conveyance due to the many 
situations you mention later in your email.  One of those could simply 
be that the buyer was taking subject to the judgment, and taking that 
risk.  Even actual intent could be difficult since the judgment creditor 
could still reach the property (unless maybe a purchase money mortgage 
gained priority????).  So wouldn't  just enforcing the judgment against 
the property would be the more prudent way to go assuming there's value 
such that this is really an issue?

But here's a question you could probably answer.  I've always been under 
the impression that a title company will look at the nature of prior 
conveyances, and give ones that appear to be outside ordinary course 
more scrutiny.  So for example, if Jones gave a QCD to Smith three years 
ago, and that appears to be a private party transaction, the title 
company will be more likely to look for judgments against Jones than if 
that prior transaction was a SWD with a related DOT to Bank of America, 
and presumably title insurance involved.  Is that impression correct or 
incorrect?

Kary L. Krismer
206 723-2148

On 11/23/2020 10:30 AM, Dwight Bickel wrote:
> 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|DIMENSIONLAWGROUPPLLC
> 130 Andover Park East, Suite 300 | Tukwila, WA 98188
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