Christopher P. Valle-Riestra
Attorney at Law 

Does a Judgment Debtor Have to Pay the Creditor's Attorney's Fees for Collecting the Judgment?

In some cases, yes. A person against whom a court has entered a money judgment is called a "judgment debtor."  Code of Civil Procedure §685.040 states, "Attorney's fees incurred in enforcing a judgment are included as costs collectible under this title [the Enforcement of Judgments Law] if the underlying judgment includes an award of attorney's fees...." However, this is limited to cases in which the award of attorney's fees was included in the judgment because it was "authorized by contract." It is also necessary that the attorney's fees in the judgment have been awarded as costs, rather than as damages. (Code of Civil Procedure §§685.040 and 1033.5(a)(10)(A).)

These limitations raise a number of issues:

• First, even if the attorney's fees you incur in obtaining a default judgment are minimal, it may be important to ask for an award of those fees in the judgment, or you will later have no possibility of obtaining an award of attorney's fees incurred in enforcing the judgment.
• Second, there will be cases in which you will have the option, when judgment is entered, of asking for attorney's fees under two or more alternative sources of authority. For example, the party prevailing in a lawsuit on a retail installment sales contract is entitled by statute (the "Unruh Act") to an award of reasonable attorney's fees. In most cases, such a contract also contains a term specifically granting the creditor thereunder the right to an award of attorney's fees in any action to enforce its terms. It will be important to ask for attorney's fees pursuant to the contract term, rather than pursuant to the statute, where you have a choice. This will protect your right to reimbursement of attorney's fees incurred in enforcing the judgment.
• Third, while there have been no reported decisions on point, the right to reimbursement of attorney's fees incurred in enforcing the judgment may be limited to cases in which the fees included in the judgment were actually based on the terms of the contract, rather than on Civil Code §1717. That statute, in effect, converts an otherwise one-sided attorney's fee clause into a reciprocal clause, benefiting whichever party prevails in the lawsuit. It states that in any action on a contract containing an attorney's fee clause, "the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees." If a contract contains an attorney's fee clause in favor of a party, and that party wins the lawsuit, then technically there are two bases for an award of attorney's fees in favor of that party: the contract, and Civil Code §1717. To protect your right to reimbursement of attorney's fees incurred in enforcing the judgment, be sure to choose the right one--the contract clause.
• Fourth, while today it is rare for anyone to do so, it is possible to plead contractual attorney's fees as damages, and prove their amount at trial, as damages. Don't do this if you want to preserve the right to additional attorney's fees later. Instead, claim your fees as costs, through the usual proceedings just after the entry of judgment, or at the time of requesting default judgment.
• Finally, when drafting a judgment including an attorney's fee award, you should include very explicit language making it clear that those fees are being awarded as costs and pursuant to a contract. This will avoid debates down the road, and the possible forfeiture of your right to attorney's fees incurred in enforcing the judgment. I recommend that you prepare a judgment saying something like, "Plaintiff Polly Truehart shall have and recover from defendant Norbert Neerdowell ... $1,000.00 attorney's fees authorized by contract as costs of suit."

Author: Christopher P. Valle-Riestra