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So Your Client has a Judgment; Now What?

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6 Nevada Lawyer May 2014
BY JOHN FUNK, ESQ.
SO YOUR CLIENT HAS A
JUDGMENT; NOW WHAT?
Compensation for your client does not end with a judgment; it only ends when your client has
successfully executed on that judgment by realizing a monetary return. Many attorneys consider
a successful jury verdict, or the granting of a motion for summary judgment, to be the victory for
their client. However, most clients have a sense of lasting victory only after they are actually paid
what they are owed. Thus, the question becomes: so your client has a judgment; now what?
Discovering Assets
As a prerequisite to fling any complaint, attorneys should
ask their clients whether or not the defendant has a way to pay
them what they are owed. If the client cannot answer with a
sense of confdence, it is the attorney’s obligation to suggest
various informal ways to ascertain whether or not the potential
defendant will be able to pay a judgment should the client
ultimately prevail.
These informal collection techniques can include a review
of a county assessor’s records, county recorder’s offce, a UCC-
1 search and the retention of a private investigator. If your
research reveals the existence of only a few assets, it may be
wise to seek a prejudgment writ of attachment or garnishment,
assuming you can make the requisite showing.
Once your client obtains a judgment, you can access the
full array of discovery techniques available pre-judgment to
learn about the debtor’s assets.
1
As a judgment creditor, you
can serve interrogatories, requests for production of documents
and even requests for admissions, as long as they are for the
purpose of collecting the judgment. The judgment creditor
can also schedule a debtor’s examination by following the
procedures set forth in NRS 21.270.
Converting Property to Payment
Pursuant to NRS 21.080, the judgment creditor can only
garnish or attach non-exempt property that the judgment debtor
owns or in which the judgment debtor has an interest. Once
you fnd the judgment debtor’s asset or assets, the next hurdle is
properly seizing and converting that asset to cash. The method
used to properly liquidate an asset depends on the type of asset.
This article will discuss some of the more common types of
property against which a judgment can be executed. Remember
that your client’s collection efforts are subject to the judgment
debtor’s exemption claims.
2
Real Property
Judgments may be recorded with a county recorder’s
offce, which causes the judgment to become a lien “upon
all real property of the judgment debtor not exempt from
execution in that county, owned by the judgment debtor at
the time, or which the judgment may afterward acquire, until
the lien expires.”
3
However, to properly record the judgment
in the county recorder’s offce, the attorney must pay careful
May 2014 Nevada Lawyer 7
attention to certain statutory requirements. For instance, the
judgment creditor must record an affdavit stating, among other
things, the judgment debtor’s name, address, last four digits
of the driver’s license number or social security number, the
APN for each parcel of real property and confrmation from the
judgment creditor that the judgment debtor is the legal owner of
that property. The judgment creditor should also be aware that
Nevada allows a judgment debtor to exempt up to $550,000 of
equity in their homestead.
Once the judgment is recorded against the property, the
judgment creditor may force a foreclosure of the real property
by following certain specifc procedures. However, sales
pursuant to a judgment lien are subject to a debtor’s statutory
right of redemption.
4
Personal Property
Possessed By the
Judgment Debtor
The judgment debtor’s personal property,
in his/her/its possession, may be seized with a
writ of execution. That writ of execution must
be executed by the court’s clerk and provided
to the sheriff’s offce with specifc instructions
on what to seize and where the property is
located. The sheriff’s offce will charge certain
fees to seize and hold the property, which can
be added to the judgment as a cost of collection.
Once personal property is seized, the county sheriff’s offce
is tasked with selling that property. Certain notices must be
provided and the sales must follow certain procedures, set forth
in NRS Chapter 21. As the judgment creditor’s counsel, you
must understand and closely read each applicable requirement to
ensure compliance.
Personal Property Possessed
By Third Parties
The judgment debtor’s personal property, in the possession
of a third party, may be seized with a writ of execution and a writ
of garnishment. These writs are provided to the sheriff’s offce
with specifc instructions and the necessary fees. The sheriff’s
offce will then make attempts to seize the property and sell it, in
accordance with NRS Chapter 21.
Wages/Earnings
Many individuals receive a periodic paycheck from their
employers. Certain portions of these paychecks can be garnished
by serving a writ of execution and a writ of garnishment upon
that person’s employer. The judgment debtor is entitled to exempt
75 percent of their disposable earnings, leaving the remaining 25
percent subject to garnishment.
5
Disposable earnings are defned
as the part of the earnings remaining after certain deductions are
made. Earnings are defned as the compensation paid or payable
for personal services rendered by a judgment debtor in the regular
course of business. A wage garnishment is only effective for 120
days or until the judgment is satisfed, whichever comes frst, and
the judgment creditor must pay the employer certain fees.
6
Bank Accounts
Bank accounts can be garnished with a writ of execution
and writ of garnishment served upon an appropriate
representative of the fnancial institution.
7
However, if money
has been deposited into the account electronically within the
preceding 45 days from the date the writ was served, which
is reasonably identifable as exempt from execution, the sums
contained in the account, up to $2,000, must remain accessible
to the judgment debtor.
8
In all events, $400 in the judgment
debtor’s personal bank account is not subject to execution
and must remain accessible to the judgment debtor, unless the
garnishment is for the recovery of money owed for the support
of any person.
Term of Judgments
A judgment remains enforceable for
only six years. However, the judgment
creditor may renew a judgment that has not
been satisfed by fling an affdavit with the
appropriate court clerk within 90 days before
the date the judgment expires.
9
The affdavit
must contain specifc information set
forth in NRS 17.214 in order to ensure the
judgment renewal is effective. For instance,
the affdavit must specify the names of the
parties; if the party fling the renewal is a
successor in interest, the source of their
successor interest; if the judgment is recorded, information
concerning the recording; whether or not there is an outstanding
writ of execution; whether or not there are any setoffs; the exact
amount owed on the judgment; etc. A failure to properly renew
a judgment will render it unenforceable.
10
In conclusion, merely obtaining a judgment is not the end
of your client’s litigation journey. Whether your client utilizes
your services or the services of another, you should understand
the basics of Nevada’s procedures for collecting on judgments,
so that you may inform your client accordingly.
1 NRCP 69(a) (“…in aid of the judgment or execution, the judgment
creditor or a successor in interest when that interest appears
of record, may obtain discovery from any person, including the
judgment debtor, in the manner provided in these rules….”)
2 See NRS 21.090
3 NRS 17.150(2)
4 NRS 21.200
5 NRS 21.090(g); NRS 31.295
6 NRS 31.296
7 NRS 31.291
8 NRS 21.105(1)
9 NRS 17.214
10 O’Lane v. Spinney, 110 Nev. 496, 874 P.2d 754 (1994)
JOHN R. FUNK of Gunderson Law Firm in Reno
has represented a wide variety of clients across
Nevada, in matters concerning commercial and
business litigation, real estate and commercial
transactions, and business organization and
governance. Prior to joining Gunderson Law Firm,
Funk earned his Juris Doctorate, Magna Cum Laude from the
University of Nevada Las Vegas, William S. Boyd School of
Law. He can be contacted directly at (775) 829-1222, or jfunk@
gundersonlaw.com.

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