Enforcing Wage Rights

Collecting Unpaid Wages

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Materials on Judgment Enforcement Law, Asset Investigation and Defendant Research in California

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Prepared by:

The Wage Justice Center*

1930 Wilshire Blvd, Ste 500A

Los Angeles, CA 90057

Tel: 213-291-6883 Fax: 213-596-5991

Email:

Web: HU

*The Wage JusticeCenter is a nonprofit organization dedicated to enforcing the rights of low-income workers in California. Much of our work involves collecting and enforcing wage judgments against exploitative “underground economy” employers operating in low-wage industries such as garment manufacturing, janitorial subcontracting, restaurants, meat-packing and car washes. Employers in these industries routinely attempt to dodge accountability for unpaid wage judgments by creating shell corporations, hiding assets, transferring title to property, and changing locations.

UTable of Contents

Part 1 - Preand Post Judgment Defendant Investigation & Asset Research………………………...……………………………………………………..2

Part 2 - Prejudgment Remedies……………………………………………… 7

  1. Availability in wage and hour cases…………………………………… 7
  2. Attachment………………………………………………………………... 7
  3. Temporary Restraining Order and Temporary Protective Order…. 9
  4. Receiver……………………………………………………………………. 10
  5. Lis Pendens or “Notice of Pendency of Action” ……………………… 10

PART 3 - California Judgment Enforcement Law ...... …… 11

  1. Terminology and Definitions……………………………..…………….. 11
  2. Overview of the Process……………………………….………...……… 12
  3. Fundamental Types of Remedies: Liens, Levies,
  4. and Misc. Remedies ……………………..……………....…………………13
  5. Judgment Liens………………………………………………....…………. 14
  6. Levies………………………………………………………..…..….……. 16
  7. Miscellaneous Remedies including Court Orders

to Take Control of Property………………………………….…..…….18

  1. Additional Legal Action If Property or Business

Has Been Put in Another Name…………………………………...... ……19

  1. Recovering Costs of Enforcing Judgment and

Interest on Judgment………………………………………..……..…...…22

Part 1 - Preand Post Judgment Defendant Investigation

& Asset Research

Prior to filing the claim, time must be spent researching the assets of the defendant(s). When assets have been identified, if possible, ascertain the value in the assets in relation to the claim plus any costs and fees you may incur. If the assets are movable consider the use of pre-judgment remedies (attachment, lis pendens, claim and delivery, TRO/TPO, or appointment of a receiver) in order to preserve assets during litigation.

Goals of Pre-Judgment Research

1)Name all parties that may be found liable (consider potential alter egos)

2)Try to determine financial condition of the business and the individual owners/managers of the business (i.e. whether business is currently operating, liens, tax issues, bankruptcy, etc.).

3)Determine the assets of the defendant(s) and identify which ones could be used to satisfy a judgment.

4)Determine whether there is any danger of dissolution of the business, bankruptcy, or a sell off of assets justifying the use of pre-judgment remedies.

0BInformation on the Defendant Businesses

1)Goals: Determine correct name (including the exact spelling)and all of the locations of business and all potential defendants. Determine financial condition of potential defendants. Often clients who worked at the business will have information about the business, family members of the defendant, and homes of defendant.

2)Information on Corporations, LLCs and LLPs:

a)CA Business Portal – Free online information on California Business entities: Corporations, LLC, and LLPs (go to: H

b)Copies of original corporate records may be obtained from the secretary of state (in California use the “Business Entities Records Order Form,” which is available on the secretary of State’s website).The secretary of state will have copies of the articles of incorporation, amendments to the articles, and information statements showing the names of the CEO, CFO, and secretary of the corporation.

3)Fictitious Business Names (DBAs):

a)Consult internet resources for local county recorder’s office (e.g., in L.A.County:

b)Copies of original fictitious business name statements may be obtained from the county recorder’s office in the county where the fictitious business name is registered.

4)Local Business Licenses and Tax Permits:

a)Often issued by the city defendant is operating in for the purposes of local taxes (can usually be obtained by telephoning the city agency in charge of licensing, e.g., the Office of Finance in L.A.).

b)Additionally, certain business must obtain specific types of license—e.g., restaurants must obtain health permits—which will include the names and addresses of owners/managers of the business. This information can often be found on local government websites or by calling the appropriate city/county agency.

5)Industry-Specific Registrations: In California, there are several free, state-maintained databases for specific industries that may assist in learning information about the defendant:

a)Contractors - H You can check by License, Number, Contractor Business Name, or Personnel Name (individual licensee name).

b)Garment Manufacturers - : Has a link to current year database for licensed manufacturers. Can send a Public Records Act request to the DLSE to obtain the licensing application.

c)Car Washes - : Has link to current year database for licensed car washes. Can send a Public Records Act request to the DLSE to obtain the licensing application.

6)Business Credit Reports: Business credit reports are available from Dunn & Bradstreet (H These reports can have useful information about outstanding liens, judgments, and collections actions, as well as information on bank affiliations.

7)Useful Westlaw and Lexis Searches for Defendant Information:

a)Corporate Records and Business Registrations– Contains additional information beyond free secretary of state database, e.g., officer, corporate amendments, and when amendments filed.

i)Lexis: States Legal-US > California > Public Records > Business & Corporation Information > CA Secretary of State Corporation, LP and LLC Information.

ii)Westlaw: Corporate Records and Business Registrations Database (CORP-CA).

b)California Fictitious Business Name Records.

(1)Lexis: States Legal-US > California > Public Records > Business & Corporation Information > CA Business Leads and Fictitious Business Name Information.

(2)Westlaw: California Fictitious Business Name Records Database (FBN-CA).

c)UCC, Lien, and Civil Judgment Records– to find out if Defendant has other judgments against him/her. Use individual and business name as well as business address for search. The Lawsuit Filings database is sometimes useful for information about Defendant (need to have the individual and/or business name).

i)Lexis

(1)States Legal-US > California > Investigate Person, Property & Business > CA Uniform Commercial Code Lien Filings.

(2)States Legal-US > California > Investigate Person, Property & Business > CA Bankruptcy Filings.

(3) States Legal-US > California > Investigate Person, Property & Business > CA Federal Tax Lien Filings.

(4)States Legal-US > California > Investigate Person, Property & Business > CA Judgment and Lien Filings.

(5)States Legal-US > California > Investigate Person, Property & Business > CA Tax Liens Federal & State.

(6)Westlaw

(7)UCC, Lien, and Civil Judgment Records Database (ULJ-CA)

(8)Lawsuit Filings Database (LS-CA)

8)General Internet Searches:General internet/Google searches can also be very useful at turning up information on address and other businesses of the defendant. Online phonebooks can also be used for this purpose.

Information on Assets

  1. Real property records at the CountyRecorder’s office where the property is located.
  2. Useful Westlaw and Lexis Searches for Assets.

i)Real Estate Records (Transactions, Assessors, and Pre-Foreclosure) – to find location of defendants and to determine if property available for enforcement.

(1)Lexis: States Legal-US > California > Public Records > Real Property Locator > CA Deed Transfers, Tax Assessor Records and MortgageRecords-SelectedCounties.

(1)Westlaw: Real Property Assessors Records Database (RPA-CA); Real Property Transactions Records Database (RPT-CA)

ii)Asset Locator – to find property held by business owner or corporation.

(1)Lexis: States Legal-US > California > Public Records > Personal Property Locator.

(2)Westlaw: Asset Locator Database.

Post-Judgment Investigation and Asset Research

1)Request DMV records post-judgment (DMV Form INF 70). Make sure you use the proper form.

2)Post-Judgment Discovery: ORAPs (see CCP §§ 708.110-708.130), interrogatories (see CCP § 708.020), demands for inspection (see CCP § 708.030), and subpoenas duces tecum (pursuant to CCP § 708.130and CCP § 1985(c) when an ORAP is calendared).

3)All of the prejudgment research tools described above are also useful in the post-judgment setting.

Post-Judgment Discovery

1)Information is essential to enforcing a judgment, the more information the better. However, in a post-judgment setting, the available discovery tools are limited and the remedies for noncompliance are often ineffective. ORAPs are generally preferable to other discovery methods, since proper service of an ORAP allows the court to issue an arrest warrant if the examinee fails to appear, while failure to respond to interrogatories or document inspection request only results in monetary sanctions.

  1. The Civil Discovery Act only applies in the post-judgment setting to the extent authorized by the enforcement of judgment law. CCP § 2016.070 However there are other discovery tools available pursuant to CCP §§ 708.010-708.205.
  2. Note that post-judgment discovery may be initiated at any time after the judgment is final, but may be subject to the 120 limitation or to a court ordered stay. Generally, discovery may only be demanded once every 120 days (this is to avoid use of discovery as a form of harassment).

2)There are three main types of post-judgment discovery.

  1. Informal discovery: public records, information from the Judgment Creditor information from associates of the Judgment Creditor, etc. See “Pre and Post Judgment Investigation and Asset Research” (included with materials).
  2. ORAPs: Order for Appearance and Examination of Judgment Debtor and/or 3rd parties. Use Judicial Council Form EJ-125.
  3. Judgment Creditor can require the Judgment Debtor and/or 3rd parties to appear in court to answer questions to discover assets for the enforcement of the judgment. Note that the ORAP must be served personally on Judgment Debtor and/or 3rd party. Failure to appear for ORAP examination may be punished by monetary sanctions and issuance of a warrant for arrest. See CCP §§ 708.110 – 708.250.
  4. ORAP of Judgment Debtor should be accompanied with a Notice to Produce documents (pursuant to CCP § 1987)at the ORAP related to financial condition of Judgment Debtor.
  5. Subpoena duces tecum to 3rd parties: Judgment Creditor can subpoena 3rd Party documents in conjunction with the Judgment Debtor’s ORAP. See CCP § 708.130.
  6. Examination may be directed at 3rd parties that have possession or control of property of the Judgment Debtor or are indebted to the Judgment Debtor for more than $250 (CCP § 708.120). It may also be directed to a 3rdparty witness who has information about Judgment Debtor (see CCP § 708.130).
  7. Turnover Order: a blank turn over order should generally be brought to the proceeding, which can be filled out and issued at the proceeding, thereby creating a lien on all property discovered during the proceeding and requiring any property in the physical possession of the examinee to be immediately turned over. See CCP § 708.205.
  8. Interrogatories and demands for inspection of documents – Judgment Creditor may to send interrogatories (see CCP § 708.020) to Judgment Debtor and demand inspection of documents (see CCP § 708.030). Subject to the same rules as prejudgment interrogatories.
  9. The problem is that the sanctions available for ignoring these are usually limited to monetary sanctions, which may have little effect in a post-judgment setting.

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Part 2- Prejudgment Remedies

  1. Availability in wage and hour cases: Prejudgment remedies are authorized by statute in civil proceedings(see e.g., the Attachment Law, CCP §§ 481.01-493.060) but they are not available in Labor Commissioner proceedings. Attachment and other prejudgment remedies should be considered in wage and hour cases involving businesses that likely to dissolve or conceal assets. It is particularly important to consider prejudgment remedies when dealing with medium-sized and small businesses that can quickly liquidate assets or change ownership structure and when dealing with defendants who have a history of attempting to avoid judgments and/or taxes. Information about the background of the defendant can be obtained both from public records (such as tax lien filings) and from the worker, who will often be familiar with an employer’s history of attempting to avoid debts.
  2. Attachment (CCP §§ 481.01-493.060)
  3. Attachment is aprejudgment remedy that allows a creditor to have a lien recorded against the defendant’spropertyand/or have assets seized and heldpending adjudication of the claim. It is a powerful litigation tool that can ensure that the workers’ wages paid, particularly when dealing with fly-by-night employers or businesses on the verge of shutting down. Generally, wage and hour claims should meet the requirements for an attachment. Note that an undertaking/bond of at least $10,000 must posted to obtain an attachment. CCP §§ 489.210-489.220. If the plaintiff fails to prevail at trial the defendant may recover actual damages against this undertaking. CCP § 490.010(b).
  4. Requirements (CCP § 482.110)
  5. Claim is monetary and based on “express or implied” contract (wage and hour claims are based on contract, either express or implied by law)
  6. Claim amount is fixed or readily ascertainable
  7. Claim is for more than $500
  8. Claim based on commercial transaction
  9. Claim not already secured by real property lien Attachment is restricted to commercial transactions and has not been traditional used for the enforcement of workers’ rights.
  10. Note: Attachment is also available in claims brought under the Uniform Fraudulent Transfers Act. CC § 3439.07.
  11. Property Subject to Attachment
  12. SeeCCP § 487.010. Varies somewhat for business entity defendants and natural person defendants. Generally includes: real property, accounts receivable, general intangibles arising out of the conduct by the defendant of a trade/business/profession, inventory, equipment, farm products, securities, and money judgments.
  13. Exemptions: See CCP § 487.02. Exemption include: property exempt from enforcement of a money judgment, property necessary for support of a defendant or defendant’s family, defendant’s earnings as an employee (e.g., wages).
  14. Process
  15. Apply for Right to Attach Order (“RTAO”). At least 16 court days before hearing file and serve: Notice of Application and Hearing (Judicial Council form AT-115), Application (Judicial Council form AT-105) and supporting declarations, RTAO (Judicial Council form AT-120), and copy of summons and complaint (if not already served. CCP § 484.040.
  16. RTAO Application must be supported by declarations showing certain statutorily-mandated facts -- e.g., debt not discharged by bankruptcy -- (CCP 484.020) and that plaintiff would be entitled to judgment on the facts presented (CCP § 484.030).
  17. May be sought ex parte if delay would cause great or irreparable injury. See CCP §§ 485.010-485.540. Alternatively, Temporary Protective Order may be sought pending hearing on the RTAO. See CCP §§ 486.010-486.110.
  18. Hearing is required pursuant to CCP § 484.040.
  19. Court must find: (1) claim is a type for which attachment is available (see CCP § 482.110), (2) plaintiff has established the “probably validity” of the claim, (3) attachment not sought for purpose other than securing recovery of claim, and (4) the amount secured by the attachment would be greater than zero. CCP § 484.090.
  20. Court may also consider exemptions during this hearing. CCP § 484.090(b)-(c).
  21. If RTAO is granted, file undertaking/bond with court. CCP 489.210.
  22. Obtain Writ of Attachment from court clerk. Use Judicial Council form AT-135.
  23. Deliver Writ of Attachment to levying officer (e.g., sheriff’s office) for execution. See CCP §§ 488.010-488.140. For methods of levy on specific types of property see CCP §§ 488.300-488.485.
  24. Temporary Restraining Order and Temporary Protective Order
  25. Temporary Protective Order (“TPO”) can be sought under attachment statutes. See CCP 486.010-486.110. When seeking an ex parte attachment, it is a good idea to request a TPO as an alternative if the ex parte attachment is not issued.
  26. Temporary Restraining Order (“TRO”)and preliminary injunction. See CCP § 527. Since a TRO and preliminary injunction only result in punishment for contempt if the defendant liquidates or hides assets to avoid the judgment, it does not offer as powerful a remedy as an attachment, which secures the plaintiff against third party claims.
  27. Receiver (CCP §§ 564-570)
  28. A receiver may be appointed when necessary to secure the creditor’s rights. See CCP § 564.
  29. Because a receiver is extremely expensive, it is not typically justified unless the claim is substantial and there is no other way to secure the rights of the plaintiff.
  30. A receiver may only be appointed where there is no other adequate remedy available.See, e.g., Misita v. Distillers Corp. (1942) 54 Cal. App. 2d 244, 252.
  31. Lis Pendens or “Notice of Pendency of Action” (CCP §§ 405 – 405.61)
  32. A recorded document giving constructive notice that an action has been filed affecting title or right to possession of the real property described in the notice. A Lis Pendens is filed in order to preserve the Plaintiff/Claimant’s rights to specific real estate until the dispute with the owner is resolved. Without the Lis Pendens, the owner can encumber or convey the property to a third party who is not aware of the dispute, which can severely impair, if not eliminate the ability of the creditor to enforce their judgment. Lis Pendens clouds the property’s title and makes the property less marketable.
  33. May only be used if claim involves real property. CCP § 405.20. Thus, a lis pendens would not generally be available for wage and hour claim. However it would be available if the employer engages in a fraudulent transfer of real property to avoid payment of the wage claim.

Part 3 - California Judgment Enforcement Law

  1. UTerminology and Definitions
  2. Abstract of Judgment: A document issued by a court summarizing the critical facts regarding a judgment (i.e., the parties, the judgment amount, the judgment date, and the issuing court). This document is used to create real property liens, to obtain entry of the judgment in another state, and to have legal process issued in the courts of other counties.
  3. Acknowledgement of Satisfaction of Judgment: A form filed with the clerk of the court showing that the Judgment Debtor has fully or partially satisfied the judgment. Upon satisfying the judgment a Judgment Debtor may demand that such a form either be filed or delivered to the Judgment Debtor. CCP § 724.050.
  4. Enforcement of Judgments Law: The title of the California Code of Civil Procedure containing all of the statutory remedies for enforcement of judgments in California-- Part 2, Title 9; CCP § 680.010 to CCP § 724.260.
  5. Judgment Creditor: A person or entity owed money pursuant to a court judgment. Usually, but not always, a successful plaintiff (e.g., a successful defendant may become a Judgment Creditor if awarded costs and fees for defending a civil action).
  6. Judgment Debtor: A person or entity who owes money pursuant to a court judgment. Usually, but not always, an unsuccessful defendant. An unsuccessful plaintiff against whom costs or fees were awarded would become a judgment debtor.
  7. Levy: To seize property upon a writ of execution (an order to seize property) issued by the court to pay a money judgment granted in a lawsuit.
  8. Levying Officer: Sheriff or marshal who, pursuant to a writ of execution, actually performs a levy by seizing property.
  9. Lien: Any official claim or charge against property or funds for payment of a debt or an amount owed. In the judgment enforcement context, the Judgment Creditor may create a “judgment lien,” against the Judgment Debtor’s property, which is a type of involuntary lien.
  10. Order for Appearance and Examination (“ORAP” in So. California): An ORAP requires a person to appear in court and answer questions to facilitate enforcement of a judgment (a proceeding known as a “judgment debtor examination”). An ORAP may be served on a Judgment Debtor, a third party with an interest in the Judgment Debtor’s assets, or a witness. See CCP §§ 708.110-708.1130.
  11. Writ of Execution: Legal process issued by a court directing the sheriff to seize assets or funds pursuant to a judgment. See CCP §§ 699.510-699.560.
  1. UOverview of the Process

1)Entry of Judgment: An ODA issued by the Labor Commissioner becomes a judgment once it is entered by the local superior court. Once entered, it may be enforced in the same manner as a civil judgment issued by the court. Lab. Code § 98.2(e). The Labor Commissioner is responsible for sending a request to the court to enter the judgment.