How can my husband get a judgment due to identity theft removed?

If the collection agency accepted your settlement in 2004 and released the claim of its client against you, you need to prove it. Did you get anything in writing to show that the judgment claim was released? If so, show it to the new collection agency, and it should back off. If you can't get the new agency to go away, you may need an attorney to get the court to intervene. In court, you will have to attest that you were never "served" with a summons calling you to court to answer the creditor's claim, and the claim has no merit against you because you are not the person who incurred the debt in question. You might be able to make the new collection agency withdraw from chasing you simply by pointing out the significant passage of time. Under California law a judgment is enforceable initially for ten years, and then it terminates. More than ten years has passed since the judgment was entered in 1994. However, judgment creditors can petition the court for a single ten year extension. Tell the collection agency that the judgment is unenforceable because it is more than ten years old, and the agency should leave you alone unless and until the agency can show you that the court granted the judgment creditor's petition for a ten year extension of the judgment.

The only way I can think of is to ask the Court to vacate the judgment nd reopen the case based upon the settlement. Or use the settlement as a defense if they attach your property. But without proof of the settlement your chances are not very good.

Learn to keep records. Hire counsel to try and set aside judgment and fix credit report.

You have a lot of stuff going on here. First, this is an extremely old debt, and an extremely old judgment. Why would anyone settle a debt that wasn't theirs? Let alone ten years after the fact? Why wouldn't someone keep record of payment of a settlement? Yes, it's possible to get this cleared up for good (usually I sue 'em and that takes care of that) but you're going to need some professional help here, because unfortunately but clearly you haven't been able to resolve this going on for twenty (20) years now!

Setting aside a judgment that is 18 years old, especially if you knew about the judgment 8 years ago is almost certainly impossible.