1. Karen L. Hart, Partner
Bell Nunnally & Martin LLP

2. Getting to a Judgment Lawsuit is a process
End game of suit is a Judgment
But overall objective is to be paid

3. U.S. Court System
FEDERAL COURTS
CIVIL LAW
STATE COURTS
CRIMINAL LAW

4. Intermediate Court of Appeal
Federal Court
State Court (e.g., Texas)
U.S. Supreme Court
US District Courts
Circuit Courts
(1-11th Cir.)
Texas Supreme Court
Intermediate Court of Appeal
Municipal Courts JP
Texas Court of Appeals
County Court
Trial Court
District Court
Bankruptcy
Requirements
Constitutional or Federal issue
Diversity – (e.g. TX Plaintiff vs. CA Defendant)
At least $75,000 in controversy
County Court & District Court
Have certain jurisdictional limitations in some counties in Texas

5. Anatomy of a CIVIL LAWSUIT
Dispute
Federal
Petition or
Complaint
State
Default Judgment
Answer
Documents
Depositions
Discovery
Evidence
Admissions
Mediation
Interrogatories
Motions
Trial
Judge
Jury
Enforcement
Judgment
Appeal

6. Judgment!
Without enforcement & collection…
Not self-enforcing

7. Enforcement Options Writs of Execution Garnishment
Abstracts and Judgment Liens
Turnover Applications & Charging Orders
Post –Judgment Discovery

8. Eyes on the Prize!
Increase odds of collection by doing due diligence on front end
Gather information about the customer when it is readily available that can assist later in enforcement
Credit Application
Checks received in course of business
Business intelligence and word on the street re: operations

9. Writs of Execution Sheriff typically:
serves writ on judgment debtor
seizes non-exempt property
sells property at sheriff’s sale, after providing required notices
subtracts out sheriff’s fees from sale proceeds
Net proceeds applied or credited to judgment
Good for identified/located, significant non-exempt assets
Exempt assets
Defined by state law
Typically apply to assets of individuals

10. Exempt Assets
(e.g., Texas)
Urban Homestead
-Up to 10 acres
Rural Homestead
-200 acres –family
-100 acres - single person
Exceptions:
-Purchase money lien
-Tax lien
-Mechanics lien

11. Exempt Assets (e.g., Texas)
Families – up to $60,000
Singles – up to $30,000
home furnishings and family heirlooms;
provisions for consumption;
farming or ranching vehicles and implements;
tools, equipment, books and apparatus, including boats and motor vehicles, used in a trade or profession;
clothes;
jewelry, as long as it does not exceeds 25% of the value of the
aggregate exemption;
two firearms;
athletic and sporting equipment, including bicycles;
a motor vehicle for each member of a family or single adult who (A)
holds a driver’s license or (B) does not hold a drivers license but
relies on another person to operate the vehicle for the unlicensed
person;
the following animals, including forage on hand for their
consumption: (A) horses, mules, or donkeys, including a saddle ,
blanket and bridle for each one; (B) 12 head of cattle; (C) 60 head
of other types of livestock; and (D) 120 fowl;
household pets

12. Exempt Assets
(e.g., Texas)
Retirement accounts
401K
Annuities
Alimony
College savings plan
Wages (until paid) (Texas)

13. Garnishment Powerful collection tool
Writ served on bank to seize funds in bank account(s), safe deposit boxes
Writ may also be served on other third party who is indebted to or holding property belonging to judgment debtor
Ex parte – sneak attack (Texas)

14. Garnishment Bank may have offset defense
Judgment debtor may have defenses and may file a motion to dissolve the writ of garnishment
Bank may be entitled to its attorneys’ fees
Judgment creditor may not be entitled to additional attorneys’ fees
Proceeds received in garnishment applied to underlying judgment
Some states allow wage garnishment
Check applicable state laws

15. Turnovers/Charging Orders
For assets that are not readily seize-able or that cannot be seized
Intangibles
Stock certificates
LLC membership interests (charging orders specifically)
Ask court to order judgment debtor to “turnover” asset to sheriff (typically) for sale, etc.
Can often seek appointment of a receiver and seek an accounting
Asset must be in possession of judgment debtor

16. Abstracts/Judgment Liens
Clerk issues an abstract of judgment
Recorded in real property records in county(s) where judgment debtor has or may have real property
Creates a judgment lien on real property of the judgment debtor
Typically foreclose on the judgment lien through a judicial foreclosure lawsuit
Property sold pursuant to order of sale by sheriff
Proceeds applied to underlying judgment
Check equity in property, preexisting liens

17. Post-Judgment Discovery
Post-judgment discovery is broad
Point is to discover judgment debtor’s executable assets
Aimed at collecting any information that will aide in enforcing (e.g., collecting) the judgment
Written discovery: document requests, interrogatories
Depositions
Directed to Judgment Debtor and to Third Parties through Subpoenas

18. Multi-State Enforcement?
Judgment entered in one state is generally enforceable in other states in the U.S.
By virtue of the “full faith and credit clause” of the U.S. Constitution
For example, judgment entered in state court in CA may be “domesticated” in Texas state court
Subject to special defenses, such as CA court lacked personal jurisdiction over defendant
Federal judgments - federal judgment “registration” statute

19. Life of a Judgment J Judgments have a life. . .
10 years (TX)
Check applicable state law
But they can be kept alive forever if they are timely renewed!
In TX, judgments may be renewed every 10 years through proper, timely issuance/service of writ of execution

20. Q&A
Questions?
Thanks!