Practical Considerations When
TRACY A. DIFILLIPPO, CONOR P. FLYNN, AND MICHELLE D. ALARIE
The authors are with Armstrong Teasdale LLP, Las Vegas.
This article addresses practical considerations involved in the
enforcement of judgments and identifies common traps that
could land lawyers and their clients in hot water. We begin with
pre-suit considerations for evaluating a party’s ultimate ability
to pay, identify ongoing considerations for evaluating the defendant’s assets, and review post-judgment considerations that
frequently arise these days. Finally, we conclude with practice
pointers for complying with that nemesis of all judgment creditors, the Fair Debt Collection Practices Act.
Any representation must begin with an engagement letter
that carefully defines counsel’s role in post-judgment collection efforts. Silence can lead to client dissatisfaction or counsel
finding that the scope of the job is much broader than anticipated. A well-crafted engagement letter should state whether
the representation includes post-judgment enforcement work
and the exact nature of it.
For example, assume an engagement letter says nothing about
enforcement of the judgment. Then, after obtaining a judgment,
counsel records it in a city or county where the debtor may have
property. Thereafter, counsel does no further work on the matter, as the client seems uninterested in throwing good money
after bad to pursue collection. Counsel then sends a termination
letter to the client noting that the representation has concluded
and that no further work will be performed.
What happens if the judgment needs to be renewed several
years later and counsel fails to do so? For example, some states
require a judgment to be renewed after a certain period of time
or it may be deemed unenforceable. See, e.g., Cal. Civ. Proc.
Code § 683.020 (California judgment may become unenforceable after 10 years if not renewed). Is this malpractice? Does it
matter that counsel sent a termination letter explaining that the
representation had concluded? An argument can be made that,
by recording the judgment, counsel undertook efforts to enforce
it, thereby placing enforcement within the scope of representation. This same scenario can be played out in connection with
writs of execution, writs of garnishment, and so on.
Thus, adequately explaining the scope of representation with
respect to post-judgment enforcement work in an engagement
letter can help to avoid allegations of malpractice. For example,
in Wise v. DLA Piper, LLP (US), the Wises were represented by
a predecessor law firm to DLA Piper, LLC (US), which aided
them in obtaining a judgment in 1994. 220 Cal. App. 4th 1180
(Cal. Ct. App. 2013). But the firm “did not advise the Wises of the
necessity to renew the judgment, and after 2004 the judgment
became unenforceable.” Id. at 1183. A jury found that failure to
renew the judgment constituted malpractice, though the court
of appeals reversed the Wises’ award because it concluded that
the judgment was uncollectable.