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Congratulations on Your Judgment! ... Now What?
By: Nicole Munoz & Cameron E. Jean

In law school you learned to spot issues, establish liability, and seek remedies. However, without the ability to collect, a final judgment is worth little more than the paper on which it is printed. Here are a few tips to get you started on collecting your judgment:

1: Find Their Assets and Go to the Appropriate Jurisdiction.

Determining the location of your judgment debtor’s assets dictates where you will enforce your judgment. Before you filed your lawsuit, you probably researched collectability on your soon-to-be defendants and where their nonexempt assets are located. (After the entry of final judgment, if you still do not know where the judgment debtor’s assets are, Texas Rule of Civil Procedure (“TRCP”) 621a allows you to conduct post-judgment discovery to obtain this information.)  If the judgment debtor’s assets are within the judgment-rendering court’s jurisdiction, then you can proceed with enforcing it in the same court. However, if the assets are outside the rendering court’s jurisdiction, then you will need to domesticate the judgment in another court.

For instance, if you want to domesticate a foreign judgment in a Texas court, section 35 of the Texas Civil Practice and Remedies Code (“TCPRC”) provides the steps to domesticate a judgment from another state, and section 36 lays out the steps to domesticate a judgment from another country. On the other hand, if you are domesticating a judgment from one federal district court in another, then there are certain rules you should keep in mind:  

First, 28 U.S.C. § 1963 typically requires waiting until the appeal window—30 days—closes before the clerk of court can issue the required form certifying your judgment, which allows it to be domesticated in other federal district courts. Second, the federal form required to certify the final judgment for domestication in other federal district courts is Form AO 451.¹ Third, even if your judgment debtor files an appeal, the judgment debtor must post a supersedeas bond with the appeal, otherwise the appeal does not stay enforcement, collection, or domestication. However, sometimes the clerk’s office will refuse to issue a certified judgment and AO 451 if there is an appeal, even though there is no supersedeas bond. If this occurs, file a motion in the rendering court showing no supersedeas bond under FRCP 62(d) has been posted and “good cause” exists,² and thus the clerk’s office is required to issue these documents. Structure the proposed order to explicitly direct the clerk’s office to proceed with issuing AO 451. Fourth, once you have your AO 451 certification, file your collection action in any federal district court as a “Miscellaneous Action.” The laws of the state in which you file your “Miscellaneous Action” will apply to your future collection efforts. Finally, watch your judgment debtor closely during the 30-day waiting period to see if they: (1) try to move their assets; or (2) appeal the final judgment.  

2: After your judgment is domesticated in the right court…

There are several vehicles through which you can enforce your judgment. Assuming Texas law applies, you will first want to record an abstract of the judgment pursuant to § 52.001 of the Texas Property Code in all the counties where you suspect the judgment debtor may own an interest in real property. This places a lien on the property, and it should be your first move because you can do this right away after the judgment is rendered or domesticated. 

After 30days from the entry of the final judgment—or 30 days after you domesticated a foreign judgment in Texas state court—you will want to file an application for execution of your judgment pursuant to TRCP 622 (i.e. a writ). But which writ you request depends on what type of relief your judgment entitles you to. If the judgment entitles you to the possession of property, file a writ of possession pursuant to TRCP 632. If your judgment entitles you to money damages, pursue either a writ of execution pursuant to TRCP 622 and 630 or a writ for garnishment pursuant to TCPRC § 63.001. The writ of execution is the principal method for the collection of money judgments. It allows the officer (sheriff or constable) to levy on a debtor’s nonexempt real and personal property within the officer’s county, sell the property at public auction, and apply the proceeds toward satisfaction of the judgment. Lastly, if the judgment debtor has negotiable instruments, corporate stock certificates, etc., then consider filing an application for a turnover order pursuant to TCPRC § 31.002 et seq.

Again, congratulations on your win. Now, take these tips and make your final judgment worth all those fees your client incurred to obtain it!

Ms. Muñoz and Mr. Jean are associates at Figari + Davenport LLP, which is a premier commercial litigation boutique in Dallas, Texas. They can be reached at nicole.muñoz@figdav.com and cameron.jean@figdav.com.

¹ http://www.uscourts.gov/sites/default/files/ao451.pdf. 

² See Lear Siegler Servs. v. Ensil Int'l Corp., No. SA-05-CV-679-XR, 2010 WL 2594872, at *1 (W.D. Tex. June 23, 2010) (good cause explained).