California state court money judgments automatically expire 10 years after they become “final”. After that date, the judgment is unenforceable. In order to prevent a judgment from expiring, a judgment creditor should renew the judgment before 10 years runs out. This is done by filing and serving a couple of simple court forms, Application for Renewal of Judgment (EJ-190) and Notice of Renewal of Judgment (EJ-195). If these forms are timely filed and served, the judgment is renewed for another 10 years.
It is commonly believed that if a judgment creditor misses the 10 year deadline, the judgment is extinguished and is unenforceable. This is clear from Code of Civil Procedure Section 683.020. However, unbeknownst to even many seasoned practitioners, an alternative method of renewal may be used if the 10 year period has elapsed and certain other conditions are met.
This alternative method is to file a new lawsuit with a claim for an “Action on a Judgment”. In fact, Code of Civil Procedure section 683.050 specifically allows for the bringing of such an action, which must be “commenced within the period prescribed by Section 337.5.” Section 337.5 establishes a 10 year statute of limitations for bringing an Action on a Judgment. However, this statute of limitation can be tolled.
Eanet, PC attorneys Matthew Eanet and Brian Lauter recently litigated this issue in state court in Los Angeles, California. Our client did not timely renew his judgment but the judgment debtor had been in and out of bankruptcy proceedings during the 10 year period. Hence, because of the automatic stay of enforcement imposed by the bankruptcy code, we filed a new Action on the Judgment and argued that the 10 year statute of limitations was tolled. The trial court agreed and granted our client’s motion for judgment on the pleadings. A new judgment was entered in our client’s favor (with approximately 13 years of accrued interest). Defendant/judgment debtor appealed. On June 24, 2019, the Court of Appeal for the State of California, Second Appellate District, Division Seven, issued its decision affirming the trial court decision. As the Court of Appeal explained:
California law provides a judgment creditor may generally not enforce a money judgment more than 10 years after the date of entry of a money judgment. (Code Civ. Proc., § 683.020, subd. (a) [“Except as otherwise provided by statute, upon the expiration of 10 years after the date of entry of a money judgment . . . [¶] [t]he judgment may not be enforced.”]; Kertesz v. Ostrovsky (2004) 115 Cal.App.4th 369, 372 (Kertesz) [“Code of Civil Procedure section 683.020 . . . provides after the expiration of 10 years after the date of entry of a money judgment or a judgment for possession or sale of property the judgment may not be enforced.”].) To avoid the bar of Code of Civil Procedure section 683.020, a judgment creditor may preserve the judgment by filing an application for renewal of the judgment under sections 683.120 and 683.130 before expiration of the 10-year enforceability period. (Kertesz, at p. 372.) Alternatively, “[a] judgment creditor may bring an independent action on a judgment even after the 10-year enforceability period
Code of Civil Procedure section 356 provides, “When the commencement of an action is stayed by injunction or statutory prohibition, the time of the continuance of the injunction or prohibition is not part of the time limited for the commencement of the action.” A bankruptcy stay is a “statutory prohibition” within the meaning of section 356, “so that the period of time of the automatic stay is not counted as part of the limitations time.” (Inco Development Corp. v. Superior Court, supra, 131 Cal.App.4th at p. 1019; accord, Kertesz, supra, 115 Cal.App.4th at pp. 376, 378 [“Because the commencement of appellants’ new action on the judgment was stayed during the pendency of the automatic stay, the California statute of limitations was tolled during this period and appellants’ complaint is not time barred.”].)
Although the decision is unpublished, it relied heavily on two published decisions, Inco and Kertesz which stand for a similar proposition. Thus, even if the 10 year period for renewal has already passed, a judgment creditor should determine whether any basis for tolling may exist and act swiftly to protect their rights.