Article 5 - Duties and Liabilities of Third Persons After Levy

California Code of Civil Procedure — §§ 701.010-701.070

Sections (8)

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)Except as otherwise provided by statute, when a levy is made by service of a copy of the writ of execution and a notice of levy on a third person, the third person at the time of levy or promptly thereafter shall comply with this section.

(b)Unless the third person has good cause for failure or refusal to do so:

(1)The third person shall deliver to the levying officer any of the property levied upon that is in the possession or under the control of the third person at the time of levy unless

the third person claims the right to possession of the property.

(2)To the extent that the third person does not deny an obligation levied upon, or claim a priority over the judgment creditor’s lien, the third person shall pay to the levying officer both of the following:

(A)The amount of the obligation levied upon that is due and payable to the judgment debtor at the time of levy.

(B)Amounts that become due and payable to the judgment debtor on the obligation levied upon during the period of the execution lien.

(3)If the third person makes a delivery or payment to the levying officer pursuant to this section, the third person shall execute and deliver any documents necessary to effect the transfer of the property.

(c)For the purposes of this section, “good cause” includes, but is not limited to, a showing that the third person did not know or have reason to know of the levy from all the facts and circumstances known to the third person.

§ 701.020

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)If a third person is required by this article to deliver property to the levying officer or to make payments to the levying officer and the third person fails or refuses without good cause to do so, the third person is liable to the judgment creditor for whichever of the following is the lesser amount:

(1)The value of the judgment debtor’s interest in the property or the amount of the payments required to be made.

(2)The amount required to satisfy the judgment pursuant to which the levy is

made.

(b)The third person’s liability continues until the earliest of the following times:

(1)The time when the property levied upon is delivered to the levying officer or the payments are made to the levying officer.

(2)The time when the property levied upon is released pursuant to Section 699. 060.

(3)The time when the judgment is satisfied or discharged.

(c)If the third person’s liability is established, the court that determines the liability may, in its discretion, require the third person to pay the costs and reasonable attorney’s fees incurred by the judgment creditor in establishing the liability.

§ 701.030

Amended by Stats. 2024, Ch. 222, Sec. 3. (AB 2067) Effective January 1, 2025.

(a)At the time of service of a copy of the legal process on a third person, the levying officer shall request the third person to give the levying officer a garnishee’s memorandum containing the information required by this section. Within 10 days after the legal process is served, the third person shall mail or deliver the garnishee’s memorandum to the levying officer whether or not the levy is effective.

(b)The garnishee’s memorandum shall be executed under oath and shall contain the following information, as applicable:

(1)A description of any property of the judgment debtor sought to be levied upon that is not delivered to the levying officer and the reason for not delivering the

property.

(2)A description of any property of the judgment debtor not sought to be levied upon that is in the possession or under the control of the third person at the time of levy.

(3)A statement of the amount and terms of any obligation to the judgment debtor sought to be levied upon that is due and payable and is not paid to the levying officer, and the reason for not paying the obligation.

(4)A statement of the amount and terms of any obligation to the judgment debtor sought to be levied upon that is not due and payable at the time of levy.

(5)A statement of the amount and terms of any obligation to the judgment debtor at the time of levy not sought to be levied upon.

(6)A

description of claims and rights of other persons to the property or obligation levied upon that are known to the third person and the names and addresses of those other persons.

(7)A statement that the garnishee holds neither any property nor any obligations in favor of the judgment debtor.

(c)If a garnishee’s memorandum is received from the third person, the levying officer shall retain a copy and promptly mail or deliver a copy of the memorandum to the judgment creditor.

(d)Except as provided in subdivisions (e) and (f), if a third person does not give the levying officer a garnishee’s memorandum within the time provided in subdivision (a), or does not provide complete information, the third person may, in the court’s discretion, be required to pay the costs and reasonable attorney’s fees incurred in any

proceedings to obtain the information required in the garnishee’s memorandum.

(e)Notwithstanding subdivision (a), when the levy is made upon a deposit account or upon property in a safe-deposit box, the financial institution need not give a garnishee’s memorandum to the levying officer if the financial institution fully complies with the levy and, if a garnishee’s memorandum is required, the garnishee’s memorandum needs to provide information with respect only to property that is carried on the records available at the office or branch where the levy is made provided that if a levy has been served at a central location designated by a financial institution in accordance with Section 684.115, the garnishee’s memorandum shall apply to all offices and branches of the financial institution except to the extent acceptance of the levy at those central locations is limited pursuant to paragraph (3) of subdivision

(b)of Section 684.115.

(f)Notwithstanding subdivision (a), the third person need not give a garnishee’s memorandum to the levying officer if both of the following conditions are satisfied:

(1)The third person has delivered to the levying officer all of the property sought to be levied upon.

(2)The third person has paid to the levying officer the amount due at the time of levy on any obligation to the judgment debtor that was levied upon, and there is no additional amount that thereafter will become payable on the obligation levied upon.

(g)The garnishee may electronically transmit the garnishee’s memorandum to the levying officer pursuant to Chapter 2 (commencing with Section 263) of Title 4 of Part

§ 701.035

Added by Stats. 1983, Ch. 155, Sec. 14.6. Effective June 30, 1983. Operative July 1, 1983, by Sec. 32 of Ch. 155.

A third person who gives a garnishee’s memorandum pursuant to this title is not liable to any person for the disclosure in the garnishee’s memorandum of any information contained in the garnishee’s memorandum.

§ 701.040

Amended (as added by Stats. 1990, Ch. 1125, Sec. 1.5) by Stats. 1999, Ch. 991, Sec. 24.5. Effective January 1, 2000. Amending action operative July 1, 2001, by Sec. 75 of Ch. 991. Section initially operative (in amended form) January 1, 2002, pursuant to Stats. 1990, Ch. 1125, Sec. 5, as amended by Stats. 1998, Ch. 932.

(a)Except as otherwise ordered by the court upon a determination that the judgment creditor’s lien has priority over the security interest, if property levied upon is subject to a security interest that attached prior to levy, the property or obligation is subject to enforcement of the security interest without regard to the levy unless the property is in the custody of the levying officer; but, if the execution lien has

priority over the security interest, the secured party is liable to the judgment creditor for any proceeds received by the secured party from the property to the extent of the execution lien.

(b)After the security interest is satisfied, the secured party shall deliver any excess property, and pay any excess payments or proceeds of property, remaining in the possession of the secured party to the levying officer for the purposes of the levy, as provided in Section 9615 of the Commercial Code, unless otherwise ordered by the court or directed by the levying officer.

§ 701.050

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

After service of a copy of the writ of execution and a notice of levy on an account debtor obligated on an account receivable, chattel paper, or general intangible:

(a)If the account debtor has been making payments or is required to make payments to the judgment debtor, the account debtor shall make payments to the levying officer as they become due unless otherwise directed by court order or by the levying officer. Payments made to the judgment debtor after the account debtor has received notice of the levy do not discharge the obligation of the account debtor to make payments as

required by this subdivision.

(b)If the account debtor has been making payments to a third person or is required to make payments to a third person (whether pursuant to a security agreement, assignment for collection, or otherwise), the account debtor shall continue to make such payments to the third person notwithstanding the levy until the account debtor receives notice that the obligation to the third person is satisfied or is otherwise directed by court order or by the third person. After the account debtor receives notice that the obligation to the third person is satisfied, the account debtor shall make payments to the levying officer as they become due unless otherwise directed by court order or by the levying officer.

(c)If pursuant to a security agreement the judgment debtor has liberty to accept the return of goods or make repossessions under the account receivable or

chattel paper, the account debtor shall deliver to the levying officer property returnable to the judgment debtor unless otherwise directed by court order or by the levying officer.

§ 701.060

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

If the levying officer obtains custody of an instrument levied upon and serves the obligor under the instrument pursuant to the levy, the obligor shall make payments to the levying officer as they become due. Payments made to a person other than the levying officer do not discharge the obligation of the obligor to make payments as required by this section if the payments are made after the obligor has received notice of the levy.

§ 701.070

Added by Stats. 1984, Ch. 538, Sec. 25.5.

If a final money judgment has been levied upon and the levying officer has served the judgment debtor under the final money judgment levied upon, the judgment debtor shall make any payments due under the judgment to the levying officer. Payments made to a person other than the levying officer do not discharge the obligation of the judgment debtor under the final money judgment levied upon if the payments are made after the judgment debtor has received notice of the levy.