A California state court entered a $40,000 judgment against defendant McMahon in favor of plaintiff homeowners association. The homeowners association tried to collect the money from McMahon, seeking a “turnover” of property McMahon owned. Among the items the homeowners association sought was the domain name ahrc.com, registered in the name of McMahon’s wife.
The trial court permitted the domain name to be turned over to the homeowners association to satisfy the judgment. McMahon sought review with the California Court of Appeal. That court reversed and vacated the turnover order.
The court gave several reasons for reversing the lower court. The most interesting reason, however, dealt with the very nature of domain names. The provision in California law allowing turnover of property limits itself to tangible property that can be “levied upon by taking it into custody.” Looking to the case of Network Solutions, Inc. v. Umbro International, Inc., 529 S.E.2d 80 (Va. 2000), the court held that a domain name registration is not property, but merely supplies the intangible contractual right to use a unique domain name for a specified period of time. Even if the registration were property, it was not something that could be taken into custody.
boo: At least there's some authority to the contrary. Maybe the court is distinguishing b/w satisfaction and levy (i.e., no turnover but you can always sell)?
As "intangible property," domain names appear to be covered by the California Code of Civil Procedure levy provisions. Section 695.010 thereof provides: "Except as otherwise provided by law, all property of the judgment debtor is subject to enforcement of a money judgment." (emphasis added). Section 699.710 provides, in pertinent part, that "all property that is subject to enforcement of a money judgment . . . is subject to levy under a writ of execution to satisfy a money judgment." Accordingly, the Court concludes that domain names owned by Zuccarini and existing in California are subject to levy under a writ of execution.