Q: In a receivership I just wrapped up, the court approved by final account and report and awarded me final fees. Because there were insufficient funds in estate to pay my fees in full, the court ordered the defendant to pay my outstanding approved fees. The defendant, however, has not paid me. Am I entitled to interest on my outstanding fees even though I don’t have a judgment?
A: Actually, you do have a judgment and you are entitled to interest on your unpaid fees. As explained in a prior Ask the Receiver, “judgment” is defined differently in different sections of the Code of Civil Procedure. Code of Civil Procedure § 557 defines “judgment” as: “The final determination of the rights of the parties in an action or proceeding.” Because you, as receiver, were not a “party” in the underlying action, the court’s direction that the defendant pay your fees would be an order, which is defined in C.C.P. §1003 as: “Every direction of a court or judge, made or entered in writing, not included in a judgment, is denominated an order.” The Enforcement of Judgments Law (C.C.P. § 680.010 et.seq.), however, has its own definition of “judgment”. Code of Civil Procedure § 685.010 states: “ ‘Judgment’ means a judgment, order or decree entered in a court of this state.” Therefore, the court’s “order” that the defendant pay your fees is a “judgment” for collection purposes. This means it can enforced like any other judgment.
As for interest, the California Constitution, Article XV, Section 1 (2) states in part: “The rate of interest on a judgment rendered in any court of this State shall be set by the Legislature at not more that 10 percent per annum…In the absence of the setting of such rate by the Legislature, the rate of interest on any judgment rendered in any court of the State shall be 7 percent per annum.” The Legislature did act by providing in C.C.P. §685.010 ( part of The Enforcement of Judgments Law): “ Except as provided in paragraph (2), interest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied.” Therefore, you are entitled to 10 percent per annum interest on your unpaid fees, from the entry of the court’s order (“judgment”).
Paragraph (2) referred to in the statute was added, effective January 1, 2023, for judgments added or renewed on or after that date, reducing the interest accrual to 5 percent for judgments under $200,000, remaining unsatisfied, for a claim related to medical expenses or for a money judgment under $50,000, remaining unsatisfied, for a claim related to “personal debt”. These reductions only apply to debtors who are a ‘natural person”. C.C.P. § 685.010 (c)(1). “Personal debt” means money due or owing from a transaction “primarily for the debtor’s personal, family, or household purposes.” C.C.P. § 685.010 (c)(111). It is unlikely either reduced rate would apply to awarded receiver’s fees.
The way the amendment to the statute is written, it appears the 10 percent interest rate applies to medical or personal debts, so long as the amount of the judgment remains in excess of the indicated dollar amounts ($200,000 and $50,000) and then drops to 5 percent once the “remaining unsatisfied” amount falls below those dollar amounts.
When money is collected on your “judgment” it is to be credited first, for specific costs that go to the levying officer or for court fees, then first toward accrued interest and then toward the judgment principal. C.C.P. § 695.220.