California: Court Has No Authority to Order Return of Funds Erroneously Disbursed to Creditor Pursuant to Writ of Execution

by Michael Brodheim

In May 2013, the California Court of Appeal held that the judiciary lacked authority to order the return of funds erroneously disbursed by a levying officer to a creditor pursuant to a writ of execution.

In October 2012, Fusion Industries (Fusion) prevailed in an action against Adir International, LLC (Adir). The jury rendered a verdict in an amount exceeding $90,000.

In December 2012, Fusion obtained a writ of execution which it filed with the Los Angeles County Sheriff. By statute, the sheriff was required to execute the writ.

The sheriff levied on funds in Adir’s bank account. The levy created an “execution lien.” on the property levied.

Adir then filed a notice of appeal and an appeal bond. This had the effect of extinguishing the lien on the funds in Adir’s bank account. Nonetheless, levied funds were subsequently disbursed by the sheriff to Fusion.

Adir filed an application for an order requiring Fusion to return the erroneously disbursed funds. The trial court denied the application on the ground that it had no authority to issue such an order.

On writ position, the Court of Appeal noted that had Adir timely sought an order from the trial court to recall and/or quash the writ of execution, the court would have been required to issue that order and the sheriff would then have been required to release the levied funds to Adir. But Adir failed to seek court intervention until the funds had already been disbursed (to Fusion). At that point, the Court of Appeal held, the trial court had no authority to order the funds returned to it. See: Adir International, LLC v. Superior Court, 216 Cal.App.4th 996 (Cal. App. Ct. 2013).

Subscribe today

Already a subscriber? Login

Related legal case