- How to Pursue Out-of-State Judgments
- April 1, 2014 | Author: Joseph J. Dinardo
- Law Firm: Smith, Currie & Hancock LLP - Atlanta Office
Periodically, we receive calls from contractors and suppliers who have obtained judgments against debtors in other states only to find out that the debtors have relocated to, set-up shop, or have assets in Georgia. These “judgment creditors” want to know if there is anything that can be done to collect on their out-of-state judgments in Georgia. Fortunately, the answer to this question is yes!
Uniform Enforcement of Foreign Judgments Act
Georgia, like almost all of the other states in the country, has adopted the Uniform Enforcement of Foreign Judgments Act (“Act”). As a result, Georgia gives “full faith and credit” to judgments, decrees, or orders rendered by out of state courts which have also adopted the Act. O.C.G.A. § 9-12-131. In other words, a judgment from a “foreign” state can be “domesticated” in Georgia and will be enforceable as if the judgment was rendered by a Georgia court. Similarly, judgments obtained in Georgia will be recognized and enforceable in other states if that state has adopted the Act.
Where to Domesticate
While Georgia’s domestication statutes do not contain any venue provisions, a domestication action should be filed in the county where a corporate debtor maintains its registered office or in the case of an individual debtor, where he or she resides. As to corporations, this general rule comes from the Georgia Constitution and the General Assembly determining that “venue for ‘civil proceedings generally, [lies] in the county of this state where the corporation maintains its registered office.’” Cherwood, Inc. v. Marlin Leasing Corp., 601 S.E.2d 356 (2004). Other states which do not have venue provisions in their domestication statutes tend to default to their general venue statutes as well. The easiest way to determine where a domestication action should be brought is to log onto the Georgia Secretary of State’s webpage and search the corporation’s name under the “Corporations - Entity Search” tab. The county where the corporation’s registered agent is located is the proper place to file a domestication action.
When to Domesticate
It is important to have the judgment domesticated and to place a lien on the debtor’s real property or lienable assets located in Georgia before other creditors are able to do so. A lien on the debtor’s real property is obtained by recording a Writ of Fieri Facias (“Writ of Fi. Fa.”) which requires a valid Georgia judgment. Before a domestication action can be filed, a creditor must first obtain an “authenticated” copy of the foreign judgment. A “certified” copy of a judgment is not the same thing as an “authenticated” copy. A certified copy only contains a clerk’s attestation that the document is a true, correct, and complete copy of an official court record. An authenticated copy however, contains not only a clerk’s attestation, but also a judge’s Certification stating that the clerk’s Attestation and court’s Seal are proper and in due form with the judge’s Certification being signed by the judge.
Once an authenticated copy of the foreign judgment is obtained, a domestication action is initiated by filing an Affidavit to Domesticate Foreign Judgment (“Affidavit”) and a Notice of Filing Foreign Judgment (“Notice”). The Affidavit is completed by the judgment creditor or its attorney and contains the name and last known addresses of the judgment debtor and creditor. The Notice must also contain the name and address of the judgment creditor, and its attorney (if one exists) and usually also contains a statement that the foreign state has adopted the Act “in substantially the same form” as that law exists in Georgia. It is also common for the Notice to include basic information regarding the foreign judgment (i.e. the court of origin, the amount of the judgment, interest, and attorneys’ fees awarded, plus the rate of interest) with an authenticated copy of the judgment being attached to the Notice. Not only are the domestication forms simple, but courts in Georgia are even willing to adopt pre- and post-judgment interest rates from other states given that the foreign judgments are to be given full faith and credit.
Due Process and Defenses
It is very important that the judgment debtor be provided with notice that a domestication action has been filed. While the domestication statute provides that the Clerk of Court will provide the judgment debtor with notice of the domestication action, it is a good idea for the judgment creditor or its attorney to also mail a copy of the Affidavit and Notice to the judgment debtor by certified mail. In fact, even if the clerk does not send notice to the judgment debtor that a domestication action has been filed (as required by statute), if the judgment creditor files proof of mailing of the same, the court will allow the domestication action to go forward.
Any defenses which the judgment debtor may have had in the foreign proceeding resulting in the judgment are also available to the debtor in the domestication action. Additionally, if the judgment debtor has appealed (or plans to appeal) the foreign judgment or if a stay of execution has been obtained, enforcement of the domesticated judgment is forbidden until the appeal is concluded or the stay is lifted.
In most Georgia counties, the Clerk of Court will send the judgment creditor a document reflecting that the clerk has sent notice of the domestication action to the judgment debtor. The clerk will also provide the judgment creditor with a court Order reflecting that the foreign judgment has been “officially” domesticated.
Once the judgment has been domesticated, it is essential for the judgment creditor to have the judgment recorded in the property records of any and all counties in Georgia where the judgment debtor owns real property or has any assets. Having a recorded writ not only provides notice to the world of the domesticated judgment but also provides the judgment creditor with a lien and priority over subsequent creditors. A Writ of Fi. Fa. Serves as the sheriff’s “authority” to seize equipment, personal property, or other assets of the judgment debtor located in the sheriff’s county.
A domesticated judgment also allows a judgment creditor to garnish a judgment debtor’s bank accounts, wages, or proceeds from any construction projects or other accounts receivable to satisfy the judgment. A domesticated judgment sends a clear message to the judgment debtor that the creditor is serious about collecting on its judgment (having filed an action across state lines to do so) and oftentimes is the impetus for a debtor paying the judgment in full to avoid further collection activities.
Judgments obtained in out-of-state federal courts can also be domesticated in Georgia just as state court judgments. The procedures for domesticating judgments between federal courts can be even simpler than what is required for state court domestications. 28 U.S.C. § 1963. Given Georgia’s favorable domestication rules, there is no reason not to pursue judgments across state lines.