The Assignment Order Checklist
A judgment creditor may be able to satisfy a judgment in whole or part by moving for an assignment order under Civil Procedure Code Section 708.510(a). That provision authorizes a court to order a judgment debtor to assign to his or her judgment creditor all or part of a right to payment the judgment debtor is expected to receive.
California’s Unclaimed Property Law, Civil Procedure Code Section 1500 et seq., governs the state’s handling and disposition of property held by various entities on behalf of owners who have not acknowledged their interest in the property for several years. Under the law this “unclaimed property” escheats to the state; the holder must transfer the property to the State Controller and title vests in the state. The transfer of ownership, however, is not necessarily permanent. The property may be claimed from the Controller's Unclaimed Property Division. See Morris v. Chiang, 163 Cal. App. 4th 753, 755-56 (2008). The law, then, serves two purposes. First, it provides the unknown owners with a means to locate and reclaim their property. Second, it gives the state (rather than the holder) the benefit of the use of unclaimed property. Azure Limited v. I-Flow Corp., 46 Cal. 4th 1232, 1328 (2009).
When a judgment debtor’s unclaimed property has escheated to the State under the Unclaimed Property Law, the judgment debtor has an interest in that property-- the right to obtain payment from the state through the mechanisms set forth in Civil Procedure Code Section 1540. Weingarten Realty v. Chiang, 212 Cal. App. 4th 163, 167 (2012). Section 1540(a) provides that “[a]ny person ... who claims an interest [in escheated property] may file a claim to the property or to the net proceeds from its sale ... on a form prescribed by the Controller....” In Weingarten, the State Controller argued only “owners” who had a legal right to property before it escheated to the state could recover it under the Unclaimed Property Law. The court rejected the argument. “[T]he Legislature deliberately chose to permit any persons who claim an interest in unclaimed property, such as an assignee, to recover under section 1540.” Id. at 170.
The claimant need not be a voluntary assignee. As a result, a judgment creditor may be able to take advantage of the Unclaimed Property Law by moving for the assignment of the judgment debtor’s interest in unclaimed property. If granted, the judgment creditor stands in the shoes of the judgment debtor and can proceed under Civil Procedure Code Section 1540 to recover that property from the State Controller’s Office. Weingarten, 212 Cal. App. 4th at 167.
As a practical matter, this two-step procedure of moving for an assignment order and then claiming property from the State Controller’s Office will only rarely be useful to judgment creditors. The value of any unclaimed property at the State Controller's Office is likely to be low in comparison to the cost of going through the paperwork to seize it. If the judgment creditor is already moving for an assignment order to obtain some other payment right, however, it requires little effort to tack on an additional request for an assignment of the judgment debtor’s rights in unclaimed property. Therefore, the checklist for seeking an assignment order should include a search for a judgment debtor's unclaimed property at the State Controller's Office.
Copyright (c) 2017 Charles Q. Jakob. All Rights Reserved.