Judgments against real estate come in a variety of forms. If a judgment is obtained in a superior court against an individual, it becomes an automatic lien on all their real estate in that county. When that property is sold, the lien has to be paid off at closing by the escrow officer, also known as a limited practice officer (LPO).
An LPO’s nightmare is dreaming that it’s midnight, a closing is at 8:30 a.m. the next morning and she hasn’t started the title search. What a relief when she wakes up realizing it was only a bad dream. Actually every once in a while an LPO does look at the prelim’ only to pinch herself, thinking, “This can’t be happening to me.” There’s nothing like a little surprise judgment. Or, how about a mortgage still on the record and paid off but never satisfied? Try this: back in 1946 the property was sold on a bill of sale. LPOs love a challenge, don’t they?
Here’s a true story about how a title problem and a judgment lien got lost in the legal process. A superior court judgment was obtained against the defendant Pedersen, but there was a typographical error. On the judgment, “Pedersen” was misspelled “Pederson”. [Wilson Sporting Goods v. Steven Pedersen]
The Pedersens filed a Chapter 7 bankruptcy, listing the judgment. Subsequently a Writ of Execution was issued and the sheriff levied on the Pedersen’s real estate. Pedersen filed a motion to quash the sheriff’s sale on the basis that the bankruptcy discharged the judgment. The trial court ruled that the judgment had never been perfected as a lien against the Pedersen’s real estate because of the misspelling.
The end result for Wilson Sporting Goods is that they failed to perfect their judgment against the Pedersens, and they had the equivalent of an unsecured debt which was discharged in the bankruptcy.
Interesting . . . Brush up on your spelling skills, so you don’t lose what you thought was a secured interest. How do you spell that? Johnson or Johnston? Jenson or Jensen? Benson or Bensen? Richard or Richards? MacDonald or McDonald? It makes a difference.
Sequim and Port Angeles Real Estate, LLC
Last Updated on April 3, 2010 by Chuck Marunde
