O.C. IN BANKRUPTCY : Plaintiffs Await Payout of Judgments : Collections: Court awards seized from defendants are being withheld by the county auditor-controller’s office.

For less than $1,200, it has hardly been worth it.

But Ed Schaum believes that there is a principle involved here. The way he sees it, he won a judgment, fair and square, in an Orange County small-claims court. County officials helped him collect his money from the company he had sued.

The next thing he knew, the county was holding onto the money.

“I was just stunned when I learned they had appropriated money that was never theirs to begin with,” said Schaum, 52, a mortgage broker in Costa Mesa.

The Newport Beach resident is among an unknown number of plaintiffs awaiting perhaps hundreds of thousands of dollars in court judgments that were frozen as a result of the county’s bankruptcy, a county official said. The money, seized from defendants by the county marshal’s office, is not being paid out by the county auditor-controller’s office.

Such awards range from “small-claims fender-bender judgments” to Superior Court judgments against large corporations, said Don Spears of the marshal’s office. Spears, whose office enforces court orders authorizing seizure of the money from bank accounts and elsewhere, said that the vast majority of judgments his agency enforces are well under $100,000. The orders for seizure can come from courts throughout the state.

Spears did not know how much money was being withheld or how many other plaintiffs are affected. No one in the auditor-controller’s office could be reached for comment. But Spears said he learned late Wednesday that the office is planning to start releasing money collected after the bankruptcy was filed--including Schaum’s--early next week. The fate of awards collected before Dec. 6 remains unclear.

“There’s been no hue and cry” among plaintiffs yet, Spears said. In fact, before a reporter made an inquiry, Spears thought that judgments were being paid as usual. Apparently, checks to plaintiffs were being issued immediately after the Dec. 6 bankruptcy filing but were stopped sometime later, he said.

Schaum got the bad news just a few days before Christmas when he called the auditor’s office to inquire about his money. He had wanted the extra cash for the holidays.

“I was just astounded,” he said. “I said, ‘What do you mean you’re not writing any checks?’ They said, ‘We’re broke.’ ”

From the get-go, this has not been an easy quest for Schaum.

First, the company that owed Schaum a commission for work he did as a contractor had its accounts frozen by court order as a result of a lawsuit by the state attorney general’s office. So he pursued a small-claims action against the company, Nationwide Mortgage Group Inc., in Harbor Municipal Court to recover the $5,015 he was owed.

Schaum said that he won the case Oct. 12 and that the county marshal’s office seized the only funds it could from a company bank account--$1,146 and change. The money was forwarded to the county auditor’s office for processing on Dec. 15--but the bucks stopped there.

Schaum believes his money should have been held in a separate account so that it would not have been affected by the county’s financial misfortune.

“I think that if an attorney or a real estate agent or somebody in the private sector did this, it would be looked upon as a criminal offense,” he said.