Attachment, Execution and Levy

ATTACHMENTS, EXECUTIONS AND LEVIES

Attachment is a pre-judgment remedy created by state statute that is generally confined to actions for the recovery of money. Its purpose is to secure a means of payment in the event the plaintiff prevails in its lawsuit. This remedy is not granted to all plaintiffs that desire to tie up a defendant's property to ensure a recovery. Instead, it is limited to instances where the plaintiff demonstrates there is a likelihood the defendant will attempt to delay, hinder or defraud the plaintiff's recovery by removing assets (as well as himself) out of the jurisdiction, or otherwise beyond the reach of available post-judgment recovery procedures.

Not all property may be attached. Generally attachments may be levied on non-exempt real estate or personal property of the defendant within that jurisdiction. Since attachment creates a lien that can be enforced by seizure upon execution, attachment is similarly limited to property subject to seizure upon execution.

Attachment is sought through an ancillary proceeding to a pending lawsuit. An affidavit is typically filed that identifies the property sought for attachment, the amount of the claim, and the statutory grounds for seeking the attachment. The plaintiff usually must post a bond to protect the defendant from damages caused by the attachment should the defendant prevail in the principal suit. If relief is granted, a writ of attachment is issued and the sheriff levies on the property by filing said writ in the proper real estate recording office (levy on personal property requires physical possession and custody). A lien is created at the time of filing the levy of attachment. This lien generally continues until judgment has been entered and docketed, whereupon the attachment lien merges with the judgment lien.

An attachment lien can be released in many states upon a motion after a specific time period elapses. It can also be released upon filing in the proper recording office: 1) a certified copy of an order of the court vacating the attachment; 2) a satisfaction of the plaintiff's judgment; or 3) a deed of release of the attached property. The defendant typically may also discharge an attachment lien by posting a bond that is usually double the amount of plaintiff's claim. A discharge by the plaintiff, sheriff or plaintiff's counsel (depending on the statute) will also render the attachment ineffective.

Execution is the ordinary and usual remedy afforded by law to enforce and collect on a judgment if the judgment debtor does not voluntarily pay. Like attachment, this remedy is statutorily created, and the specific requirements and procedures for execution will vary from state to state. It differs from attachment in that it is a post-judgment remedy. The writ of execution directs the sheriff, constable or marshal (depending on the state) to seize and sell the identified property to satisfy the outstanding judgment. It can only be levied upon non-exempt property of the judgment debtor (which is similar to the property limitations for attachment). In some states a demand of the monies owing must be made after entry of judgment before a levy can lawfully occur. An attempt to satisfy the judgment by levying against the judgment debtor's personal property is also generally required before a levy against real property can be pursued.

In some states the issuance of the writ of execution creates a lien on the judgment debtor's real property. More often the lien first arises upon the levy of the writ (levy is the physical act of seizing or constructively seizing the personal or real property). An execution sale is thereafter conducted, usually in auction format. Perhaps the most critical aspect of such a sale is compliance with the statutory notice requirements. The sale purchaser generally bears the same relationship to the judgment debtor as would a grantee under a voluntary conveyance, and acquires all right, title, and interest of the judgment debtor in the property. In some jurisdictions title does not transfer to the purchaser until after the redemption period expires and a sheriff's deed is delivered. In most states no title passes if: 1) the underlying judgment is void; 2) the judgment is vacated or satisfied before the execution; or 3) the execution itself is void (as occurs if the sale is held after the death of the judgment debtor).

Most execution statutes provide a redemption period (generally one year), during which the judgment debtor or junior lienor may redeem the property by paying the sale price, costs of sale, and such other sums required by statute. The redeeming party must also present the documentation that forms the basis

© 2009 Old Republic National Title Insurance Company All Rights Reserved 0509 for their redemption right (and comply with all other statutory mandates) before they receive a certificate of redemption. Redemption by the judgment debtor or his successors extinguishes the rights of the sale purchaser since the act of redemption abrogates the effects of the execution sale. After redemption by the judgment debtor or his successors, the original liens on the property remain in effect as if no execution sale occurred. In contrast, redemption by a creditor does not destroy the effect of the execution sale. The redemptioner merely succeeds to the interest of the execution sale purchaser.

Knowledge of the pertinent attachment and execution statutes and the decisional law of the governing jurisdiction is necessary to determine whether there has been compliance with the substantive and procedural requirements for a valid attachment or execution.

Finally, the procedures that the United States must follow in asserting its pre- and post-judgment remedies are set forth in The Federal Debt Collection Procedures Act of 1990 (28 USC §3001 et. seq.). The attachment, garnishment and execution procedures contained in this Act are exclusive (unless another Federal law contains inconsistent procedures). The term `United States' is broadly defined to include Federal corporations and any instrumentality, agency, department, commission, board, or other entity of the United States. Knowledge of this Act is necessary in the event the chain of title to the subject real estate reveals that the `United States' held an interest in the real estate and obtained said interest through the utilization of one of the remedies contained within this Act. If so, it must be determined that the procedural requirements of this statute were satisfied. For more information, see the manual section entitled “Federal Debt Collection Procedures Act of 1990.”