Note: To stay execution of a judgment lien, debtor agreed to provide an LC payable to judgment creditor as beneficiary. The LC secured payment in full of the amount of the judgment plus interest. The agreed entry on the court's docket provided that the judgment creditor, the beneficiary, was barred from taking "any action whatsoever" to collect from the applicant any judgments against him and that beneficiary's sole means of collecting judgment was through the negotiated LC. Applicant then filed for declaratory relief, requesting that the judgment lien be removed from the public records and declared invalid. He argued that maintenance of the lien was inconsistent with the agreed entry, that it was inequitable considering that the beneficiary had full security under the LC, and that the lien created hardship. Beneficiary filed a cross motion for summary judgment, arguing that the maintenance of the judgment lien was not an action to collect on the lien, and not in violation of the agreed entry. Beneficiary also contended that the filing of the judgement lien was a necessary protection, since the LC was not provided until late in the day on the last day of the 10- day grace period.

The trial court concluded that beneficiary's judgment lien was valid and effective. On appeal, the Court of Appeals of Ohio, Young, J., affirmed, stating that the LC secured applicant's property for only a limited time, "during which there was a good chance that the appeals process might not be completed".


The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.