May 15, 2015

A Cautionary Tale: Should You Turn Down a Check Offered as Satisfaction of Your Judgment?

In the recently published case, Gray1 CPB LLC v. SCC Acquisitions, Inc., the Court of Appeal determined that an attorney’s acceptance of a $13 million certified check covering his client’s entire judgment plus interest prevented the client from also obtaining attorney fees for enforcing the judgment. This meant that the client was out more than $3 million in fees.

While it is a daunting proposition to turn down such a substantial check, the court explained that the creditor had that very option. “If a judgment creditor is presented with a cashier’s check for the amount of the judgment plus accrued interest and awarded costs, but the judgment creditor wants to seek additional fees incurred in enforcing its judgment, the judgment creditor ‘retains, at the least, the option of rejecting the certified check and filing the motion for memorandum for enforcement costs and fees.'” The court noted that the judgment creditor was lucky. If the judgment debtor had proffered cash, there would be no ability to reject it.

The lesson is to make sure that your attorney periodically files motions and supplemental motions for fees to lock in the additional costs rather than waiting until payment. While it is possible you still may not recover all your fees if the creditor rushes over with a suitcase of cash, you will be best protected with incremental filings.