Before you sue....

Capture all of the Defendant's aliases.

A surprising percentage of judgments must be amended to correct a judgment debtor's name. Most people have some variations on their name, some more than others. If your judgment is entered in the name of "Deborah Smith", for example, it's possible that the debtor also goes by the name of Debra Ann Smith aka Debbie A. Smith. She may also use a maiden name or a hyphenated name combining a maiden and married name.

 A detailed search of public records or restricted databases must be undertaken to grab all of the aliases. This is important because the debtor could be holding assets in a name which doesn't match the name on the judgment. Only the names on the judgment can be added to a writ of execution to attach assets. While it's possible to add names to the writ by subsequent court order, this takes time and resources. To avoid this extra step get the names right from the beginning.

 Sue in the state where the debtor's assets are.

If you are located outside the State of California and can legally sue in your own state, it is best to bring suit in California if the defendant lives and holds assets there.  The problem arises when a foreign state enters judgment. If the defendant holds no assets in the foreign state --and since California only recognizes California judgments -- you must go through a lengthy process of 'domesticating' the judgment into California. This requires the filing of a 'sister-state application' and a filing fee. It further requires service on the debtor and a waiting period where the Defendant can challenge the domestication. You may eliminate this step by filing your complaint in California.

 Use due diligence.

Before dedicating resources, especially if you will incur legal fees, do extensive research on your debtor. Who else is chasing them? Are there assets? Is your debt the kind of debt that can be discharged in bankruptcy? I have seen a case where the Plaintiff spent $1 million dollars to obtain an uncollectible judgment. The debtor filed bankruptcy and the judgment was the type  of debt that could be discharged. The only beneficiary in this sad scenario was the law firm representing Plaintiff. A detailed investigation would have revealed the debtor was circling the drain and that pursuing a judgment was throwing good money after bad.

Beware the uncollectible corporation.

Do not get stuck with an uncollectible judgment against an LLC or corporation if there are grounds to add additional defendants.

Do the facts show that the individual and the corporation are one and the same? Will there be an inequitable result if only the corporation is held liable?

Individuals can be named as defendants If they participated in a fraud or made false representations which resulted in injury. The corporate umbrella does not protect officers from fraudulent or criminal acts. Officers may further be identified as an alter ego of the corporation if, for example, they failed to observe formalities. Neglecting to keep adequate records, comingling funds and failing to be adequately capitalized may lead to ‘piercing the corporate veil’.

As set forth by the seminal case, Associated Vendors, Inc. v. Oakland Meat Co., 210 Cal.App. 2d 825 (1962): "Purpose of doctrine of piercing of the corporate veil is not to protect every unsatisfied creditor, but rather to afford him protection where some conduct amounting to bad faith makes it inequitable for the equitable owner of a corporation to hide behind corporate veil.

 The two requirements are (1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist, and(2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow."