Domain name not tangible property that could satisfy judgment

Palacio del Mar Homeowners Assn., Inc. v. McMahon, — Cal.Rptr.3d —, 2009 WL 1668294 (Cal. App. 4 Dist. June 16, 2009)

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.

7 thoughts on “Domain name not tangible property that could satisfy judgment

  1. Venkat

    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.

    Office Depot, Inc. v. Zuccarini, 2007 U.S. Dist. LEXIS 69774 (N.D. Cal. Sept. 10, 2007)

  2. Dave Zan

    I seriously doubt there'll ever be some kind of "all-in-one" decision saying domain names are property under any and all circumstances. If anything, certain laws and/or judges can say domain names are so-called property under certain, limited conditions like the two cases mentioned above.

  3. SHERMAN TANK

    Good decision. It appears that the homeowner's association that targeted the McMahons for countless years, finally got its comeuppance. One cannot get blood out of a turnip, it appears it wasn';t enough for the association to take their home–they wanted more, and more, and more. Anyone who sat through these trials and followed them closely at the trial level, would have questioned the myriad of "trumped up charges" with questionable evidence being entered into the record against them. Without belaboring the point, the McMahons are a biracial couple and endured the "unthinkable."

  4. Mike Glassic

    Good win for property owners across the country. Our associations is doing the same thing, saying they have a right to a domain we purchased to setup an informational website for the property owners. The associations name is Stillwater Lakes Civic Association, the planned community is Stillwater Lakes Estates so we choose the name stillwaterlakes.net. We were even told by the associations layer at an annual meeting that "anyone can start a website, so start one", so we did. Now that we are informing the property owners about what is going on, they want the site shut down.

    Cheers to McMahon.

  5. Steve Syracuse

    This is completely wrong law — Domain name ARE tangible property that could satisfy judgment

    news.findlaw.com/hdocs/docs/cyberlaw/kremencohen72503opn.pdf

  6. Dave Zan

    @Steve Syracuse

    That decision stated only that domain names are property in that specific situation. It doesn't dictate such under any and all circumstances, and not every jurisdiction has to obey it other than those that agree to it.

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