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Domain name not tangible property that could satisfy judgment

By Evan Brown

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.

Full post as published by InternetCases.com on June 17, 2009 (boomark / email).