§ 1327.Proceedings to determine adverse claims

Attachment sometimes catches property that more than one person has a stake in, a co-owner, a lienholder, a secured lender. Section 1327 gives that outside person, someone who is not a party to the forfeiture action, a way to sort out the competing claim before the property gets applied to satisfy a judgment. That person commences a special proceeding against the claiming authority, serving a notice of petition on the claiming agent and on each party the same way a notice of motion would be served, in the county where the property was levied upon or where the order of attachment is filed.

The court has broad tools to resolve the dispute: it can vacate or discharge the attachment, void the levy, direct how the property or debt should be handled, require or release an undertaking, or award damages. If the facts are truly disputed, the court orders a separate trial and decides, in the meantime, who holds the property and what undertaking that person must give.

The section also discourages bad-faith claims. If the court finds the adverse claim was fraudulent or made without reasonable basis, it can order the claimant to pay the claiming authority's reasonable expenses, including attorney's fees, along with any other damages suffered. And commencing this kind of proceeding does not open the door to personal jurisdiction over the claimant for anything beyond the specific claim asserted.