Creditor Stung By Academy Of Motion Picture Arts And Sciences Bylaws

When a judgment creditor sought delivery of her debtor’s Oscar statuette, under the Enforcement of Judgments Law (EJL). (Code Civ. Proc., § 680.010 et seq., the Academy of Motion Picture Arts and Sciences ("AMPAS") intervened.  Juarez v. Ward, 2023 WL 2202483. Since 1951, AMPAS’ bylaws mandate that a member who receives an Oscar must afford AMPAS a right of first refusal to purchase it for $10.00  if it is to be sold or disposed of.  Receipt of an Oscar is conditioned on execution of the Agreement, which the debtor in this case had signed in 1974.   The debtor received his Oscar for his work on the movie, The Sting.

The creditor in this case argued that  AMPAS' contractual right of first refusal did not eliminate her lien under California's Enforcement of Judgments Law, Code Civ. Proc., § 680.010 et seq.;  no equitable servitude was established; the restriction on sale is unreasonable; and AMPAS's payment of only $10 for the Oscar is a voidable transfer from an insolvent debtor.   The trial court disagreed and the Court of Appeal affirmed, holding that the creditor is subject to the same restriction  imposed by the agreement and bylaws on the judgment debtor.  Accordingly, the creditor had no greater rights than her debtor.   This result should come as a relief to anyone who has drafted a right of first refusal.  

AMPAS was incorporated in California in 1927.  The Academy's initial 15 directors who signed its articles of incorporation included such film luminaries as Mary Pickford, Douglas Fairbanks, Louis B. Mayer, and Jack S. Warner.