In Conservatorship of McQueen the California Supreme Court decided a unique issue concerning the interpretation of Code of Civil Procedure Section 685.040. Under that statute, a judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment, including statutory attorney fees. A petition to claim enforcement costs must, however, be made before a judgment is “fully satisfied.”
The plaintiff had physical and mental disabilities. A testamentary trust was established for her, giving her the right to live in a home and to receive the net income from a trust for her lifetime. Subsequently, the trustee of the trust sold the residence, without the plaintiff’s consent, arguably in violation of the terms of the trust. The family attorney then distributed the proceeds of the sale, but failed to distribute any money to the plaintiff. A conservator was then appointed for the estate, who filed suit against the lawyer who made the distribution. A jury found the lawyer liable for financial elder abuse, breach of fiduciary duty and conversion. A judgment was entered on that basis against the lawyer.
The trial court also ordered the lawyer to pay $300,000 in attorney fees and costs. The conservator then filed a second suit against the lawyer, alleging a cause of action for fraudulent transfer, to avoid paying the judgment. The conservator later agreed to dismiss the fraudulent transfer action in consideration of payment of amounts sufficient to fund the underlying judgment.
The conservator filed a petition for fees and costs incurred in the second fraudulent transfer action. The trial court granted the conservator’s motion and awarded fees, and the lawyer then appealed that decision.
The Court of Appeal reversed the judgment of the lower court granting attorney fees. The court of appeal noted that under Code of Civil Procedure Section 685.040, a judgment creditor is entitled to the costs incurred in enforcing a judgment. These costs may include reasonable attorney fees. However, the court of appeal noted that a motion for enforcement costs must be made before the judgment is satisfied. Here, because the lawyer had satisfied the original judgment by payment, the court of appeal ruled that the conservator’s fee petition should have been denied.