AB774 - Civil actions: enforcement of judgments.

Assembly Bill No. 774 CHAPTER 708 An act to amend Sections 684.130, 703.520, 703.570, 706.021, 706.022, 706.105, and 706.126 of, and to add Sections 697.420 and 697.680 to, the Code of Civil Procedure, relating to civil actions. [ Approved by Governor October 13, 2025. Filed with Secretary of State October 13, 2025. ] LEGISLATIVE COUNSEL'S DIGEST AB 774, Bauer-Kahan. Civil actions: enforcement of judgments. (1) Existing law specifies procedures and requirements for a levying officer to serve documents, including a writ of execution issued by a court, on a judgment debtor. If the judgment upon which the writ is issued is for personal debt, the judgment creditor must provide the levying officer with a declaration stating that they have verified the judgment debtor’s address and specifying the method of verification. Existing law requires a judgment creditor to file with the court the declaration within 5 business days after delivering it to the levying officer. Existing law also requires a judgment creditor executing a levy on the earnings of an employee to serve the earnings withholding order on both the judgment debtor employee and their employer. This bill would specify that transmittal of a legal pleading by first-class mail, certified mail, or other method of transmission through the United States Postal Service providing a return receipt, as specified, is a permissible method of verification. The bill would instead require the judgment creditor to file with the court the declaration described above within 10 business days after delivering it to the levying officer. The bill would also permit the declaration to be signed by an individual with adequate knowledge of the verification process, including a custodian of records or an attorney for the judgment creditor. The bill would delete the requirement that a judgment creditor executing a levy on the earnings of an employee serve the earnings withholding order on the employee. (2) Existing law authorizes a judgment creditor to levy upon the property of a judgment debtor to satisfy a judgment, and authorizes the judgment debtor to claim that certain property is exempt from the levy by following a specified procedure. Existing law authorizes a claimant to file a claim of exemption with the levying officer either in person or by mail. The period for filing a claim of exemption is 15 days if the judgment debtor is personally served with a notice of levy on the property claimed to be exempt, and 20 days if the claimant is served with notice by mail. Existing law deems the filing by mail complete on the date the claim is postmarked if the mailing is assigned a tracking number. If the mailing is not assigned a tracking number, the filing by mail is deemed complete on the date the claim is received by the levying officer. Existing law authorizes a judgment creditor who opposes a claim of exemption to file a notice of opposition to the claim and a notice of motion for an order determining the claim within 15 days after service of the notice of claim of exemption. This bill would authorize, for a personal debt as specified by law, a claimant to file a claim of exemption more than 20 days after the date the notice of levy is served on the judgment debtor. The bill would permit a levying officer to release the funds to the judgment creditor at any time after the expiration of the 20-day period. (3) Existing law specifies various procedures and requirements for a judgment debtor to claim exemptions to property that has been levied upon to satisfy a judgment. Existing law places the burden of proof on the claimant at a hearing to determine the claim of exemption. If the judgment upon which a writ of execution is issued is for personal debt, a court must order the return of any property that was exempt without the need for a claim or that would have been exempt by a claim of exemption, and that was levied upon within specified periods. Existing law specifies procedures and requirements for a money judgment to be satisfied and for the court to enter a satisfaction of judgment. This bill would clarify that the filing of an ex parte application in lieu of a motion for purposes of the procedures described above does not constitute a general appearance for purposes of a court exercising its jurisdiction over a party. (4) Existing law, the Wage Garnishment Law, authorizes a levy of execution on an employee’s earnings by service of an earnings withholding order by the levying officer or the employer and requires the employer to provide the judgment debtor a copy of the earnings withholding order and notice of the earnings withholding order, as specified. Existing law requires the employer to complete an employer’s return and return it to the levying officer. Under existing law, the employer’s return and the form for its return are required to set forth specified information, including the name, address, and, if known, the judgment debtor’s social security number. This bill would require the employer’s return to include information setting forth the date on which the employer provided the judgment debtor with the earnings withholding order and the notice of earnings withholding order, the name and title of the person who provided the order and notice, and a short description of the manner in which the order and notice were provided. (5) Existing law authorizes a judgment creditor to enforce a money judgment by creating a judgment lien on the real or personal property of a judgment debtor. These judgment liens continue in existence for a specified time or until the money judgment is satisfied or the judgment creditor releases the lien. Existing law also authorizes a judgment creditor to enforce a money judgment by a writ of execution, pursuant to which a levying officer takes possession of the judgment debtor’s property to satisfy the judgment. Existing law authorizes a judgment debtor to exempt certain property, and, if the judgment is for personal debt, as defined, requires a court to order the judgment creditor to return to the judgment debtor any exempt property of the judgment creditor that was levied upon, as specified. This bill would authorize a judgment creditor to apply to the court for reinstatement of a released lien and its priority at the time of cancellation, as specified. The bill would require a court to enter in the court’s records that the judgment is no longer satisfied to the extent of the returned funds or property, and to issue to the judgment creditor a certificate and notice of reinstatement of judgment lien as specified. The bill would require the application for reinstatement of a lien to be filed with a declaration by the judgment creditor that certifies specified information, including, among other things, that the judgment creditor released a lien with the reasonable belief that the money judgment was satisfied and the date and amount of the original judgment and any renewals thereof. The bill would impose a civil penalty of not more than $1,500 for knowingly certifying false information in the judgment creditor’s declaration. The bill would give the judgment debtor an opportunity to object and, if an objection is filed, require the judgment creditor to proceed with a noticed motion for reinstatement of the lien. These provisions of the bill would become operative on July 1, 2026. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 684.130 of the Code of Civil Procedure is amended to read: 684.130. (a) If the levying officer is required by any provision of this title to serve any writ, order, notice, or other paper on any person, the judgment creditor shall include in the instructions to the levying officer the correct name and address of the person. The judgment creditor shall use reasonable diligence to ascertain the correct name and address of the person. (b) (1) Where the judgment upon which the writ is issued is for personal debt, as defined in subdivision (d) of Section 683.110, this subdivision shall apply. (2) The judgment creditor shall also provide the levying officer with a declaration stating that the judgment creditor has verified using reasonable diligence within the past 12 months that the judgment debtor’s address is correct to the best of the declarant’s knowledge, and describing the verification dates and the methods used, which may include, but are not limited to, the following methods: (A) Receipt of correspondence from the judgment debtor, dated no more than 12 months before the execution of the declaration, that includes a return address or other comparable verification of the judgment debtor’s address. (B) Transmittal of a letter or legal pleading by certified mail, or other method of transmission through the United States Postal Service providing a return receipt, to the judgment debtor’s address, with a return receipt dated no more than 12 months before the execution of the declaration that is signed by the judgment debtor. (C) Verification of the judgment debtor’s current address by a commercial address verification service, including skip-tracing, or, if reasonably available, a public record database, followed by dispatch of a letter or legal pleading, by first-class mail to the verified address, that was not returned to sender. (3) The levying officer shall not accept or serve any writ, order, notice, or other paper on any person if the judgment creditor fails to provide a declaration as described in paragraph (2). (4) Upon notice by the judgment debtor that the requirements of this section have not been met, the court shall stay the notice of levy or earnings withholding order until the requirements of this section have been satisfied. (5) The judgment creditor’s cost of verification of the judgment debtor’s address is not recoverable. (6) The judgment creditor shall file with the court the signed declaration within 10 business days after delivering the declaration to the levying officer. (7) The declaration required by this section may be signed by any individual with adequate knowledge of the verification, including, but not limited to, a custodian of records. If the judgment creditor is represented by an attorney, the declaration may be signed by any employee of the attorney or the attorney’s law firm with adequate knowledge of the verification, including, but not limited to, a custodian of records. (c) Unless the levying officer has actual knowledge that the name or address included in the instructions is incorrect, the levying officer shall rely on the instructions in serving the writ, order, notice, or other paper on the person. SEC. 2. Section 697.420 is added to the Code of Civil Procedure, to read: 697.420. (a) A judgment creditor may apply to the court for an order reinstating a judgment lien on real property with the same priority it held immediately before it was released. Subject to subdivisions (b) and (c), the court shall grant the application. Upon entry of the order the clerk shall do the following: (1) Note in the court’s records that the judgment is no longer satisfied to the extent of the returned funds or property. (2) Issue to the judgment creditor a certificate and notice of reinstatement of judgment lien. The certificate of reinstatement of judgment lien shall identify the judgment and parties, the unsatisfied judgment amount, and the relevant recording or filing information from the original abstract of judgment. (b) (1) The application for reinstatement of a lien under subdivision (a) shall be filed with a declaration by the judgment creditor that includes and certifies all of the following: (A) The title of the court, the case name and number, and the date and amount of the original judgment and any renewals thereof. (B) A statement that the judgment creditor released a lien or liens in the reasonable belief that the money judgment was satisfied. This statement shall include: (i) Information sufficient to identify the liens that were released, including the county or counties in which an abstract of judgment was recorded, and the recording dates and numbers of those recordings. (ii) The details of any acknowledgment of full or partial satisfaction of judgment that was filed or entered as a result of the prior application of funds, including the date, county, and recording number of any acknowledgment of full or partial satisfaction of judgment recorded by the judgment creditor. (C) A statement that after a lien was released, the judgment creditor was ordered pursuant to paragraph (2) or (3) of subdivision (d) of Section 703.580 to return to the judgment debtor property levied or wages garnished in satisfaction of the money judgment. A copy of the order shall be attached as an exhibit to the declaration. (D) A statement that the judgment creditor returned, and the judgment debtor received, all property and wages ordered returned. (E) A statement that but for the court’s order pursuant to paragraph (2) or (3) of subdivision (d) of Section 703.580, the money judgment would have been fully satisfied or that the property returned to the judgment creditor was identified in a recorded acknowledgment of full or partial satisfaction of judgment. (F) A statement that the judgment creditor is not appealing the order to return funds pursuant to subdivision (d) of Section 703.580. (2) Knowingly certifying the accuracy of false information under paragraph (1) shall be subject to a civil penalty of not more than one thousand five hundred dollars ($1,500). (c) (1) The judgment creditor shall serve upon the judgment debtor by first-class mail to the address verified pursuant to paragraph (2) of subdivision (b) of Section 684.130 a copy of the application for an order reinstating a released lien. (2) The judgment debtor may, within 15 days of service of the application, file a declaration stating that the funds or property identified by the judgment debtor pursuant to subparagraph (D) of paragraph (1) of subdivision (b) have not been returned. (3) If a declaration under paragraph (2) is filed, the court shall deny the application and the judgment creditor shall file a noticed motion to be heard by the court in order to reinstate a lien and its priority. (4) If no objection is filed under this subdivision, the clerk’s reinstatement of the lien and its priority shall be automatically effective. (d) An application under this section shall be filed in the action in which the judgment creditor was ordered, pursuant to paragraph (2) or (3) of subdivision (d) of Section 703.580, to return to the judgment debtor property levied or wages garnished in satisfaction of the money judgment. (e) Attorney’s fees are not recoverable under this section. (f) The judgment creditor may record the certificate in the same manner as an abstract of judgment, and that recordation shall have the effect of restoring the lien’s [Text truncated for display. Full text available on Congress.gov.]