Let us, for once cut to the chase of the case. The central issue before the SCOV today
concerns the life of a judgment.
What, you say. Judgments
have life spans? A judgment can
die? I thought a judgment was the end. You know, the judge bangs the gavel, orders
defendant to pay. Defense counsel hangs
her head low, and that’s it.
Come on you didn’t think it would be that easy. A judgment, despite what television teaches
us, is just a piece of paper. Mind you,
it is a piece of paper that carries the force of law behind it, but like all
paper, it is not self-actualizing. It
still requires the holder to seek what the paper says is owed.
Moreover, a judgment is only good for eight years. That means once you obtain a judgment, you
have eight years to seek your post-judgment remedies or the judgment ends,
along with your claim.
Sit down. There is a
good reason for all of this. A judgment
is simply a legal determination rendered by a judge or judge and jury that you,
the claimant, have a right as a matter of law or equity from the defendant.
That is it. A judgment is a decision,
nothing more.
Now, do not dismiss the power of a judgment. It is final and binding on the issues that
the parties litigated, and it carries the weight and force of the law. Like a promissory note, it is an obligation
that will follow the defendant and can only be cured by payment. Failure to pay carries penalties and
post-judgment interest. Most defendants
recognize this power and all that it entails and pay their judgments.
But occasionally, defendants do not pay their judgment. That forces the plaintiff to seek
post-judgment remedies. These range from
wage garnishment to attaching property to judgment liens. Plaintiff may take advantage of these
remedies 30 days after a judgment becomes final or even sooner if it looks like
the defendant is unlikely to pay or abscond with her assets.
A lot of people make the mistake of thinking that a judgment
automatically entitles them to post-judgment relief. (On that note, a lot of defendants probably
do too, which no doubt motivates them to pay quicker than they might
otherwise.) But the two are separate
because they ask different questions. A
judgment has nothing to do with ability to pay, and a post-judgment cannot
re-open the merits of the underlying judgment.
The latter is simply a question of ability to pay and availability of the
asset.
So if a plaintiff finds herself with a judgment in her favor
and a recalcitrant defendant, she has a whole slate of remedies at her
disposal. The only limitation is defendant’s
ability to pay and plaintiff’s will to attach it.
Plaintiff has eight years to pursue these remedies, but once
those eight years are over, the law decrees finality. This limitation rests on the idea that if a
plaintiff cannot obtain satisfaction of a judgment within eight years, one or
more of the following is true:
- The judgment has been
settled;
- defendant cannot pay or her
assets are exempt from attachment; or
- plaintiff has sat on her
rights and now they are at an end.
Of course there is an out.
Plaintiff, by bringing an independent action, may renew the judgment at
any time, and by bringing such renewals periodically, may keep a judgment alive
indefinitely.
This is what the Plaintiffs in today’s case thought they had
done.
In 2001, Plaintiffs obtained a judgment against defendant Contractor. Following this judgment, Contractor—who did
not even show up to contest the claim—did not pay, and Plaintiffs obtained a
non-possessory writ of attachment on Contractor’s non-exempt goods and
estate. In 2004, Plaintiffs filed for a
possessory writ of attachment.
The difference between these two writs lies in their
names. In the first instance, the writ
gave notice (non-possessory) to others that Plaintiffs were judgment creditors
and had a right to payment. Such a writ
does not give Plaintiffs the right to foreclose, but it does effectively put a
lien on the property and makes sure that the asset is not sold without the
creditor’s knowledge. The second, “possessory
writ,” transforms that first writ into a security interest akin to a mortgage
with a right of foreclosure.
Contractor disputed this second writ and alleged that he had
made some payments but stopped when Plaintiffs forged larger amounts from his
checks. Plaintiffs denied this. The matter ended in a stipulated amended and “updated”
judgment that consolidated the amount Contractor still owed, including the
post-judgment interest of 12% per year that Plaintiffs were entitled to
collect. As part of this order,
Contractor agreed to a payment plan with a reduced interest rate.
Following this judgment, Plaintiffs filed, in 2008, a notice
of judgment lien against Contractor’s real estate in the land records.
In 2010, Defendant 2 sued Contractor on an unrelated
claim. Contractor conveyed two parcels
to Defendant 2 to settle the claim, and the Court approved a stipulated order
granting Defendant 2 a judgment equal to the outstanding balance owed to Plaintiffs,
pending Contractor’s remaining payments to Plaintiffs.
When Contractor ceased payments the next year, Plaintiffs
moved to foreclose on the property and brought the present action against both
Contractor and Defendant 2 (who now owned the properties in question).
If you were paying attention above, you know what comes
next. Defendant 2 filed a motion to
dismiss the foreclosure action noting that the original judgment was over 10
years old and had not been renewed.
Plaintiffs were trying to enforce a stale judgment and could not
foreclose. The trial court agreed and
Plaintiff appealed.
The main argument on appeal is whether the 2006 action
effectively renewed the judgment. There
is some debate as to whether the 2008 notice of judgment lien referred to the
2001 judgment or the 2006 modification, but the import of this appears to be
largely evidence for the eye of the beholder.
For the SCOV majority, the issue is one of procedure. The SCOV notes that it recently
ruled on the limitation of judgments and the process necessary to renew
unsatisfied judgments. Plaintiffs did
not follow this procedure, and the 2006 “update” judgment was
insufficient.
The problem, which Justice Robinson picks up on in her lone
dissent, is less procedural than practical.
In 2006, Plaintiffs were attempting to obtain a security interest on the
judgment and transform it into something more permanent, and they secured a
“new amended judgment” in the case. What
more could they have received? The new
judgment that Plaintiffs received should have re-set the clocks. The dissent looks to the plain meaning of the
word judgment to show that there is no special magic in the rules that requires
Plaintiffs to enter a whole new judgment action when they and the court have
essentially done this work by entering a new judgment. Particularly in this case it would seem
difficult to obtain such relief since the trial court and Contractor had
stipulated to what everyone likely understood was the functional equivalent.
The dissent’s underlying point is one of practicality. The limitation on judgment exists to prevent
never-ending collections or sudden post-judgment actions on ancient claims. It prevents Plaintiffs from sitting on their
hands, but in this case, Plaintiffs were anything but reticent. They actively sought to collect from
Contractor and launched at least three separate filings or motions in
pursuit.
But none of those actions were specifically addressed to
renewing the judgment, as the majority points out. Without a clear renewal, the SCOV is
unwilling to look into the equities or even the nuances that the dissent
raises. The line has been drawn in the
sand and the rest of the cases will be judged accordingly.
This means Plaintiffs lose their foreclosure action, and
their judgment is not worth the paper it is printed on. The SCOV helpfully points out that Plaintiffs
may have new causes of action against the Contractor and Defendant 2, but that
will meaning starting over with a new claim for injury and damages—that is a
case on the merits.
The majority’s suggestion is meant as one of hope, but Plaintiffs
no doubt are left at the end feeling a bit like George Jetson on the
treadmill.
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