BRILLIANT. BOLD. EFFECTIVE.
Entering a Satisfaction of Judgment
In Colorado and Denver courts, once a monetary judgment is awarded against a party in a lawsuit, a record of that judgment is kept by the courts. When the party that judgment was entered against pays that judgment, either in whole or in part, a satisfaction of judgment may be entered on the record reflecting that payment.
More specifically, Colorado Rule of Civil Procedure (“C.R.C.P.”) 58(b) indicates that a satisfaction of judgment may be entered “upon an execution returned satisfied in whole or in part, or upon the filing of a satisfaction with the clerk, signed by the judgment creditor’s attorney of record unless a revocation of authority is previously filed, or by the signing of such satisfaction by the judgment creditor, attested by the clerk, or notary public, or by the signing of the judgment record (Rule 79(d) ) by one herein authorized to execute satisfaction.”
Further, where a judgment is satisfied other by execution, “it shall be the duty of the judgment creditor or the judgment creditor’s attorney to give such satisfaction, and upon motion the court may compel it or may order the entry of such satisfaction to be made without it.” C.R.C.P. 58(b).
In essence, the rule provides that where a judgment is entered and has been paid off in whole or in part, it is the duty of the party receiving the payment – that is, the “judgment creditor” – to enter a satisfaction of judgment in the court record reflecting that payment. If the party receiving the payment refuses to enter a satisfaction of judgment, a motion may be made requesting a satisfaction of judgment and the court may enter one without approval from the other party. Osborn Hardware Co. v. Colorado Corp., 510 P.2d 461, 32 Colo.App. 254 (Colo.App. 1973) (finding that courts have authority to enter a satisfaction of judgment even without acknowledgment by the judgment creditor).
If, however, the judgment is satisfied by execution – that is, where a sale of property is authorized and held by the sheriff, and the proceeds of the sale are put towards paying off the judgment – then the party receiving the proceeds has no obligation to file a satisfaction of judgment. Instead, the return of the execution will indicate the amount of the proceeds applied to the judgment. Notably, only the amount of proceeds from the sale will be applied to the judgment, a judgment is not completely satisfied merely by the sale of some property. See Gale v. Rice, 636 P.2d 1280 (Colo.App. 1981) (saying a levy and sale under an execution constitutes a satisfaction only to the extent of the proceeds of the sale).
Practically speaking, obtaining a satisfaction of judgment on the record is important because it gives notice that the judgment has been satisfied and there are no outstanding debts owed. This prevents parties from coming back and claiming that there is still money owed on the judgment which can be important where the judgment is assigned to another person or entity who may be unaware that the debt has been paid in full. Assignment of debts is not an uncommon thing and giving notice that a debt has been paid through a satisfaction of judgment can be important in preventing attempts to “double collect” on a judgment.