DEBTORS’ PAYMENT OF JUDGMENT IN FULL BY CASHIER’S CHECK CUTS OFF CREDITOR’S RECOVERY OF POST-JUDGMENT ATTORNEY’S FEES 

This case highlights the necessity of creditors to act diligently post-judgment to file their motions for accrued fees as soon as possible in order to avoid cutting off their claims upon the debtor’s payment of the judgment in full. Accepting but not cashing a check that fulfills the judgment will not keep their claim open.

In Gray1CPB, LLC v. SCC Acquisitions, Inc. (2014) 225 Cal.App.4th 410, the Court considered whether the debtors’ payment of a judgment in full by cashier’s check cuts off the creditor’s right to move for attorney’s fees previously incurred in collection efforts. 

In August, 2010, Gray1 obtained a judgment against the debtors in excess of $9.1 million plus interest as a result of the debtors’ failure to make good on their guaranties of a loan made to a limited liability company.  The written guaranties provided for an award of attorney’s fees. 

In June, 2012, the debtors delivered a cashier’s check to Gray1 in the amount of $12.9 million which covered the amount of the judgment plus accumulated interest.  Gray1 did not immediately cash the check.  Rather, twelve days after receiving the cashier’s check, Gray1 filed a motion for post-judgment costs, including attorneys’ fees in attempting to enforce the judgment, and thereafter cashed the check.  Continue reading →