When a money judgment is satisfied, the judgment creditor shall immediately file an acknowledgment of satisfaction of judgment. (Code of Civ. Proc., § 724.030; Horath v. Hess (2014) 225 Cal.App.4th 456, 468.) If a judgment creditor fails to file the acknowledgment immediately, the judgment debtor may mail a demand that creditor file an acknowledgment. (Code of Civ. Proc., § 724.050.) If the judgment creditor does not comply, the judgment debtor may seek an order acknowledging satisfaction of judgment. (Code of Civ. Proc., § 724.050(d); Schumacher v. Ayerve (1992) 9 Cal.App.4th 1860, 1863.) Section 724.050 of the Code of Civil Procedure provides the sole statutory procedure to require a judgment creditor to file an acknowledgment of satisfaction of judgment or, if he or she refuses, to obtain a satisfaction of judgment entered by the court clerk. (Quintana v. Gibson (2003) 113 Cal.App.4th 89, 91.)

Legal Standard

A court may only order satisfaction of judgment when a judgment has been satisfied in fact by full payment or release. (Schumaker v. Ayerve (1992) 9 Cal.App.4th 1860, 1863.) “A money judgment may be satisfied by payment of the full amount required to satisfy the judgment or by acceptance by the judgment creditor of a lesser sum in full satisfaction of the judgment.” (Code of Civ. Proc., § 724.010(a).) “This section has been interpreted to require the trial court to first determine whether the judgment has been satisfied in fact before ordering entry of satisfaction of judgment.” (Schumacher v. Ayerve (1992) 9 Cal.App.4th 1860, 1863.)

When a judgment debtor files a motion for acknowledgement of satisfaction of judgment, the court may determine whether there was an agreement for satisfaction of the judgment by payment of less than the full amount of the judgment. (Horath v. Hess (2014) 225 Cal.App.4th 456, 467.) If a contract is susceptible to two different reasonable interpretations, the contract is ambiguous. (Id. at 464; Walton v. Mueller (2009) 180 Cal.App.4th 161, 174.)

“Payment to a judgment creditor is governed by the cases and statutes which govern commercial transactions. Like a contract creditor, a judgment creditor may demand payment in cash.” (Long v. Cuttle Constr. Co. (1998) 60 Cal.App.4th 834, 837.) Nonetheless, a judgment creditor may agree to accept some other consideration in satisfaction of the judgment. (Rettner v. Shepherd (1991) 231 Cal.App.3d 943, 950.) “The acceptance of any valuable thing in discharge of the debt amounts to payment, but it is the distinct agreement of the creditor to accept the thing in discharge of the debt that gives it the character of payment. Without this, the transaction is regarded either as furnishing matter of setoff or as security collateral to the original debt, according as the subject received is in possession or in action.” (Strain v. Security Title Ins. Co. (1954) 124 Cal.App.2d 195, 200.)

Set Aside

A satisfaction of judgment which has been filed and entered may be set aside by appropriate proceedings and for proper cause; fraud, undue influence, and mistake are the generally recognized grounds for vacating a satisfaction of judgment. (Remillard Brick Co. v. Dandini (1950) 98 Cal. App. 2d 617, 622.) Where a satisfaction of judgment has been erroneously entered, it may be cancelled either upon motion made in the original action or by means of an independent action in equity between the parties. (Kinnison v. Guar. Liquidating Corp. (1941) 18 Cal. 2d 256, 265.) A satisfaction of judgment may be vacated and the judgment revived under appropriate circumstances. (Kachiq v. Boothe (1971) 22 Cal. App. 3d 626, 632.)