Unreported / Non-Citable
Background
Damian Early recorded a judgment lien against property owned by Terese and Douglas Harding based on a Sacramento County Superior Court judgment against their daughter, Renee Harding. Early's complaint sought, among other relief, judicial foreclosure of the property or a declaration that it was subject to a constructive trust for his benefit. Renee Harding had originally been a defendant in the federal action, but she was dismissed by stipulation after a Bankruptcy Court discharged Early's state-court judgment against her, leaving Terese and Douglas Harding as the sole remaining defendants.
Terese and Douglas Harding moved to release the lien, arguing that it was invalid because they were not the judgment debtors and were the property's sole owners. Early responded that they were undisclosed principals of Renee Harding and that the lien therefore was not invalid. The motion was fully briefed, and the parties also submitted supplemental briefs addressing a district court's power to release a lien under California Code of Civil Procedure section 697.410. The motion was submitted without oral argument under Local Rule 230(g).
The Court’s Holding
The court explained that section 697.410 governs release of erroneous judgment liens where the property owner's name is the same as or similar to the judgment debtor's name. The statute requires a written demand and proof that the owner is not the debtor and that the property is not subject to enforcement. If the creditor does not deliver a recordable release within 15 days, the owner may seek a court order. The court also cited Rule 69(a)(1), which generally makes execution and supplementary proceedings follow the procedure of the state where the federal court sits, and Duchek v. Jacobi for district courts' authority to enforce state judgments or conduct supplementary proceedings even when state law literally designates a particular state court.
The court found that the Hardings satisfied the statutory requirements. Early did not dispute their ownership, that the lien was recorded against Renee Harding, or that they had provided a written demand and proof of ownership. The court rejected Early's theory that Renee Harding acted as her parents' agent in contracting with him for property improvements and that this alleged agency allowed him to enforce her now-discharged judgment against property he conceded she did not own. It stated that Early cited no apposite authority for that position.
The Hardings supplied evidence that they were not Early's judgment debtors, that their property was not subject to enforcement of his judgment, and that Early failed to release the lien within 15 days after receiving their evidence. The court therefore concluded that the lien was erroneous and ordered its release. It also granted the requested $100 statutory forfeiture and $6,000 in attorney's fees, finding the fee request reasonable and noting section 697.410's fee and forfeiture provisions. The conclusion expressly granted the motion and ordered Early to pay those amounts.
Key Takeaways
- A judgment creditor cannot maintain a lien against property merely by alleging an agency relationship between the judgment debtor and the property's actual owners.
- Property owners seeking relief under section 697.410 must provide the required written demand and proof before applying to the court after the creditor fails to act within 15 days.
- The court relied on the parties' undisputed facts and the Hardings' exhibits in finding that they were not judgment debtors and that the lien was erroneous.
- Rule 69(a) and Ninth Circuit authority supported the federal court's use of California's lien-release procedure in proceedings connected to enforcement of a state-court judgment.
- The prevailing property owners received both the statute's $100 forfeiture and reasonable attorney's fees, which the court fixed at the requested $6,000.
Why It Matters
The order applies California's erroneous-lien remedy in federal court and distinguishes ownership of real property from liability on the underlying judgment. Early's concession that Renee Harding did not own the property, combined with the absence of supporting authority for his agency theory, left no basis for continuing to encumber her parents' property with her discharged judgment debt.
The decision also shows the financial consequences of not releasing an erroneous lien after receiving the statutory demand and proof. Beyond removing the lien, the court required Early to pay the statutory forfeiture and the Hardings' reasonable attorney's fees.