Procedural Posture

Plaintiff judgment creditor appealed an order from the Superior Court of Los Angeles County (California), which denied the creditor’s request pursuant to Code Civ. Proc., § 685.040, for postjudgment attorney fees and costs incurred in a bankruptcy proceeding brought by defendant judgment debtor.

California Business Lawyer & Corporate Lawyer, Inc. understands CACI 406

Overview

The creditor sought an award of postjudgment fees and costs after the automatic stay had expired in the bankruptcy court. The court held that § 685.040 permitted the recovery of reasonable and necessary attorney fees and costs incurred in enforcing a judgment. Moreover, nothing in federal bankruptcy law prevented the trial court from reaching the merits of the creditor’s motion for fees and costs. Federal bankruptcy law did not affect the power of a trial court to impose reasonable and necessary attorney fees and costs pursuant to a state statute such as § 685.040 after the automatic stay had expired. A postbankruptcy § 685.040 state court contractual attorney fees award did not interfere with the estate or any federal interest. The court further stated that the calculation of fees and costs under § 685.040 was a matter addressed to the discretion of the trial court on remand. The evidence could support a finding that reasonable and necessary attorney fees were incurred. A statement made by the bankruptcy court that was critical of the creditor’s motives did not have collateral estoppel effect because the issue of fees and costs was not litigated.

Outcome

The court reversed the order and remanded with directions to the trial court to rule on the merits of the motion for attorney fees and costs.