January 28, 2009 (Original publish date) • By Dennis Beaver
In September of 1998 Penny was sued for eviction, but never received any court papers after being served the lawsuit. She didn’t go to court, simply moved out. For over 10 years, Penny never thought of the eviction — hearing absolutely nothing about the matter. That difficult time in her life was past.
Or so she thought. But something happened in December of 2008 which would change everything, as she explained in an e-mail.
“Today, I received a letter from my personnel department, saying they have a wage garnishment and will take $3,000 from my earnings to pay for the 10-year-old eviction judgment. I never even knew there was a judgment against me.”
“This really seems odd, as I just bought a house in May of 2008, and my credit report does not show any judgments,” she added.
“I am sure that if the 1998 judgment was on my credit report, I would never have qualified for the loan. What is also strange is that if I owed any rent 10 years ago, it was at most about $400 — but the judgment is more than $3,000. Is this legal? I thought there was some kind of a limit where they could not attach your wages or other property after a certain period of time.”
“I just don’t understand. How can my credit report be clean and yet this judgment pop up from out of nowhere? Can they really take that money from me? Is there anything I can do? If they take that much money out of my pay, I will not be able to make my house payments!”
The result of doing nothing — except moving out — is that the landlord appeared court, told the judge she owed him so much money, and, without Penny there, or her answer to the lawsuit on file, it was judgment for the landlord — judgment by default. That’s the danger in doing nothing after being served with a lawsuit. Yet, I can’t tell you how often I’ve heard, “Well, I called the landlord and told him I would move out, and he said, fine, the suit will be dismissed.” So, Penny “heard nothing in all of these years.” Shouldn’t she have gotten some kind of notice of a judgment? And, how do you get $3,000 out of a — maybe- — $400 past due rent charge? The answer is that a judgment in all probability was mailed to Penny, at her last known address as required by California law. We have to assume that was the same apartment. Did she put in a mail forwarding address? Was the judgment lost in the U.S. mail?
Once a money judgment is granted, it will “earn” interest at a yearly rate of 10 percent. Penny’s rental agreement might have had an attorney’s fee clause, in which several hundred dollars more would be tacked on. But all of this happened over 10 years ago — isn’t there some kind of “statute of limitations” on judgments? And what about her clean credit report?
The answer is that a judgment comes off your credit report after seven years — but it is still valid. That’s why it did not show up in May 2008.
A money judgment is good for 10 years in California and can be renewed. So the only way the landlord could garnish her wages is if the judgment had been properly renewed. This requires filing a renewal application with the court which must be served personally or by first-class mail at their last known address before actual collection efforts may legally be attempted.
Two days before the judgment was to expire, HS Collections Services, in Barstow, filed for the renewal, mailing the notice to Penny’s old address. A collector there admitted to me they knew she was not living at that address, but was in Corcoran. Smugly, he stated, “Sure, we pay for expensive skip-tracing services and knew she had been living in Corcoran for years. But we sent it to the apartment address. She should have put in a change of address!” (They only last six months.)
Also, I spoke with the owner of HS Collections who incredibly claimed to “not be familiar with what my collectors do.”
Despite the requirements of California law, the collection agency’s attorney told me, “We do not feel notice is required.”
I spoke with a number of collection agencies, all of whom research a debtor’s current address before filing for a renewal. “After 10 years, few people will be at the same address — the law requires we give them actual notice of what we are doing,” I was told by Hal Ennis, president of Southern California based Commercial Trade Bureau.
Penny has since worked out an agreement with HS Collections so that she can make her house payments. This was a story without a happy ending.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.