Friday, April 21, 2017

The Debt That Doesn't Die

H&E Equipment Services, Inc. v. Cassani, 2017 VT 17

By Andrew Delaney

I know a thing or thirty about debt following one around. Thanks to law school, I’ll be paying on loans until I die. There’s no sense in filing bankruptcy because student loans generally don’t go away even then. I’m not complaining. But debt can be a bit of a pain in the you-know-what. I’m not a fan. I’m guessing Mr. Cassani also is not a fan.

H&E Equipment Services, Inc. (H&E) got a judgment against Mr. Cassani in Arizona in 2001, and renewed the judgment twice in Arizona. In early 2015, H&E filed a complaint in Vermont to collect the judgment—a little over $56K plus interest—and attached a 2011 “judgment renewal affidavit” from Arizona.

Mr. Cassani moved to dismiss the complaint under this statute, which gives one eight years to collect on a judgment in Vermont or else it’s game over. Mr. Cassani apparently argued that the original 2001 date was the controlling date rather than the 2011 renewal. The trial court said, “Nice try, but no cigar.” Mr. Cassani moved for reconsideration. Still no cigar.

Then H&E moved for summary judgment. The trial court gave H&E a cigar before Mr. Cassani had thirty days to respond to the motion. He moved to set it aside on that basis. (One gets thirty days to respond to a motion for summary judgment under the rules.) He also argued that the Arizona court lacked jurisdiction over him and provided an affidavit that he wasn’t properly served. Even if there was jurisdiction, he argued, the statutory eight years from the original judgment was over and the judgment therefore couldn’t be enforced.

The trial court agreed that it had jumped the gun, but it didn’t find Mr. Cassani’s I-wasn’t-properly-served argument compelling. The judgment itself said that Mr. Cassani was “regularly and properly served,” and that was good enough for the trial court to presume the judgment valid. By way of background, a judgment is generally considered valid and the burden shifts to the defendant attacking it to show that the judgment is invalid. So the trial court gave Mr. Cassani sixty days to come up with something beyond his statement that he wasn’t properly served. The trial court also noted that it might renew the grant of summary judgment if Mr. Cassani didn’t come up with something to show a genuine issue of material fact.

Mr. Cassani didn’t file anything. H&E renewed its motion. Mr. Cassani didn’t respond. The trial court entered judgment in H&E’s favor for the amount owed.

Mr. Cassani appeals.

As with 99.99% of all appellate opinions, we begin with the standard of review. The SCOV reviews a grant of summary judgment de novo, using the same standard as the trial court. Y’all should know it by heart by now. So say it with me: “Summary judgment is appropriate if there’s no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The nonmoving party gets all the reasonable doubts and inferences. Or at least usually . . . .

The majority begins with the the-judgment-is-time-barred argument. The majority opines that Mr. Cassani’s interpretation would lead to absurd results. The majority reasons that the phrase “rendition of the judgment” isn’t limited solely to original judgments, it applies to renewed judgments as well—otherwise, there’d be no point in renewing a judgment. The majority spends a couple paragraphs explaining that this reasoning is consistent with the cases cited by Mr. Cassani in support of his arguments.

The majority reasons that valid judgments can be relied on, and because the judgment here was validly obtained, renewed, and filed in a new action within the statute of limitations in Vermont, the action isn’t time barred.

The majority also rejects Mr. Cassani’s suggestion that a judgment has to be renewed in Vermont and can’t be renewed in Arizona. In the majority’s view, this is not only illogical but it runs counter to that whole full-faith-and-credit thing. We even get a trip back to SCOTUS circa 1949 to illustrate.

The majority then turns to Mr. Cassani’s I-wasn’t-properly-served-in Arizona-and-my-affidavit-says-so argument. The majority explains, “The Arizona judgment is presumptively valid, and defendant had the ‘heavy burden’ of undermining it.” The majority agrees with the trial court that Mr. Cassani’s affidavit failed to establish a genuine issue of material fact. The majority acknowledges that under other circumstances a party’s affidavit is usually good enough to establish a genuine issue of material fact. But in this case, Mr. Cassani’s bald assertions that he wasn’t properly served don’t overcome the presumptively valid judgment.

The majority notes that the trial court gave Mr. Cassani more time to come up with more evidence and he didn’t. So, the majority holds that Mr. Cassani “failed to put forth sufficient evidence to rebut the presumptively valid foreign judgment or draw into question the express finding by the Arizona court that he was properly served. “

Accordingly, the majority concludes that summary judgment was proper and affirms.

Justice Robinson, joined by Justice Dooley, concurs and dissents. In the dissent’s view, the majority goes off the rails when it skips over well-established summary judgment principles and requires a party to provide more than sworn testimony about a critical fact to establish a genuine issue of material fact.

The dissent agrees with the legal framework as the majority sets it out. But that’s as far as it goes. The critical factual issue here is whether or not Mr. Cassani was properly served. If he was, then H&E can enforce the judgment. If he wasn’t, however, it can’t.

Mr. Cassani filed an affidavit that said he wasn’t served, that he had no contact regarding the alleged debt until the action was filed in Vermont, and that if he’d known about it, he would’ve fought it because he had many defenses to the claim. That, in the dissent’s view was more than enough to establish a genuine issue of material fact.

This wasn’t just a bare I-wasn’t-properly-served statement. Mr. Cassani’s statement “establishes the critical foundational fact from which a legal conclusion may follow.” The dissent reasons that Mr. Cassani “was entitled to rest on his testimony, hoping the court would find him sufficiently credible to overcome the presumption that the Arizona judgment was valid, or at least to shift a burden of production to H&E.”

I’ve gotta say I’m with team dissent on this one. Summary judgment is appropriate only when there’s no genuine issue of material fact and it sure looks like there’s a genuine issue of material fact here to me.

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