Mergenthaler v. Triumph Mortgage Corp. ( 2018 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
LAWRENCE E. MERGENTHALER, )
a resident of the State of Delaware, )
)
Plaintiff, )
)
v. ) C.A. No. 09C-09-203 AML
)
TRIUMPH MORTGAGE CORP., )
a Delaware Corporation, )
)
Defendant. )
Submitted: September 7, 2018
Decided: November 26, 2018
OPINION
John A. Sergovic, Jr., Esquire, SERGOVIC & CARMEAN, P.A., Georgetown,
DE; Attorney for Plaintiff.
Richard L. Abbott, Esquire, ABBOTT LAW FIRM, Wilmington, Delaware;
Attorney for Defendant.
LeGROW, J.
The judgment creditor in this case obtained a judgment against the debtor in
2010. The creditor executed on the judgment, but it remains unsatisfied. More
than five years after the entry of judgment, the creditor filed a writ of attachment to
garnish stock held in an account and pledged to the debtor. The debtor moved to
quash the writ as invalid because it was issued more than five years after the
judgment’s entry and without the judgment first being renewed. After two years of
motion practice, hearings, a stay pending the Supreme Court’s resolution of a legal
question in a separate case, and supplemental motion practice, the parties’
arguments with respect to the validity of the writ of attachment finally are before
the Court for resolution.
The fundamental issues in this case are whether the judgment creditor was
required to renew the judgment after five years and, if so, whether the Court should
grant the creditor’s request to renew the judgment retroactively because the
creditor’s failure to seek renewal was based on the Court’s practice of not requiring
such motions until ten years after the entry of judgment. Based on the Supreme
Court’s recent ruling in the unrelated case, it is settled law that the creditor was
required to renew the judgment after five years. But, because the creditor’s
decision not to renew was based on this Court’s practice of not requiring such
motions until ten years after a judgment’s entry, and that failure to renew was not
attributable to the creditor’s negligence or carelessness, I grant the creditor’s
1
motion to renew the judgment retroactively. The challenged writ of attachment
therefore is valid, and the motion to quash is denied.
FACTUAL AND PROCEDURAL BACKGROUND
The parties do not dispute the facts of this case. The plaintiff, Lawrence E.
Mergenthaler, obtained a judgment in this Court against the defendant, Triumph
Mortgage Company (“Triumph”), on January 15, 2010. Mergenthaler transferred
the judgment to Kent and Sussex counties by means of a Testatum Fieri Facias
and later filed several writs of attachment in an effort to collect the judgment.
The issues presently before this Court arose when Mergenthaler filed a Writ
of Attachment Fieri Facias (the “Challenged Writ”) addressed to the account
manager of a Merrill Lynch account (the “Account”). The Account’s owner
previously pledged her stock to Triumph to secure a debt on which she later
defaulted, and Mergenthaler sought to garnish the funds owed to Triumph.1 After
the stock was liquidated, the Account held $131,107.30, less than the amount
necessary to satisfy Triumph’s debt to Mergenthaler. The Challenged Writ was
filed on November 29, 2016, more than five years after it was entered. Triumph
later filed two motions to quash the Challenged Writ. In the second such motion,
Triumph alleged the Challenged Writ was invalid because it was issued more than
1
See D.I. 91.
2
five years after the judgment was entered and without Mergenthaler taking any
action to “refresh” the judgment (the “Second Motion to Quash”).
The parties agreed to deposit the Account proceeds with the Prothonotary
while the Court determined which party, Mergenthaler or Triumph, was entitled to
receive the funds.2 The parties then litigated the motions to quash. The Court
referred the motions to a Commissioner, who issued a report (the “Commissioner’s
Report”) recommending that the Court deny both motions to quash. In his Report,
the Commissioner concluded that although 10 Del. C. § 5072 requires a judgment
creditor to refresh a judgment every five years, that statute was superseded by
Superior Court Civil Rule 69(a), which requires a judgment creditor to refresh a
judgment only every ten years.3 The Commissioner reasoned that the time period
for refreshing a judgment was a procedural rule, rather than a substantive right, and
10 Del. C. § 561 therefore required the Court to resolve the inconsistency between
Rule 69 and Section 5072 in favor of the rule.4 Triumph appealed the
Commissioner’s recommendation that the Court deny the Second Motion to
Quash.5
2
D.I. 131.
3
Mergenthaler v. Triumph Mortg. Corp., 2017 WL 1550252, at *5 (Del. Super. Apr. 27, 2017)
(hereinafter Commissioner’s Report).
4
Id. at *6.
5
See D.I. 135. Because Triumph did not appeal the Commissioner’s Report recommending that
the Court deny the first Motion to Quash, Triumph effectively has abandoned that motion. See
Super. Ct. Civil R. 132(a)(4)(iv).
3
At the time the Commissioner issued his Report, the precise issue raised by
the parties was a matter of first impression in Delaware. Shortly after the parties
finished briefing Triumph’s appeal, however, another judge of this Court issued a
letter (the “Schatzman Letter”) to a member of the Delaware bar explaining why
the Superior Court Prothonotary’s Office in Sussex County rejected praecipes that
sought the issuance of execution writs more than five years after the judgments in
those cases were entered.6 As explained in more detail below, in rejecting the
praecipes in those cases, the Schatzman Court disagreed with the reasoning in the
Report and concluded the writs could not be issued until the judgments were
refreshed. In so holding, the Schatzman Court concluded that the period to refresh
judgments was a substantive right, not a procedural rule, and therefore Rule 69 did
not supersede Section 5072. While Triumph’s appeal of the Commissioner’s
Report was pending before this Court, the judgment creditor in Schatzman
appealed that decision to the Delaware Supreme Court. This Court therefore
stayed decision on Triumph’s appeal pending resolution of the Schatzman appeal.
On January 23, 2018, the Delaware Supreme Court affirmed the Superior
Court’s judgment in Schatzman.7 Under Supreme Court Rule 8, the Court
expressly declined to address the judgment creditor’s argument that the ruling left
6
Delaware Acceptance Corp. v. Schatzman, S10J-03-032 and Evans v. G-33, Inc., SS08J-03-068
(Del. Super. June 1, 2017) (LETTER ORDER) (hereinafter “Schatzman Letter”).
7
2018 WL 526596 (Del. Jan. 23, 2018).
4
unresolved the apparent inconsistencies in the Superior Court’s interpretation of
when a judgment must be refreshed.8 The judgment creditor filed a motion to
reargue the appeal, which the Supreme Court denied.9 Accordingly, under the
Supreme Court’s ruling in Schatzman, when a civil judgment is entered in the
Superior Court and remains unsatisfied after five years, the judgment creditor must
file a motion to renew the judgment before continuing to execute on the judgment.
While the Schatzman Motion for Reargument was pending before the
Supreme Court, Mergenthaler filed a Motion to Renew Execution on Judgment
(the “Motion to Renew”), and shortly thereafter Triumph filed a Motion for
Withdrawal of Funds on Deposit (the “Motion for Withdrawal”). The parties
briefed and argued those motions and filed supplemental submissions responding
to questions the Court raised during oral argument.
Mergenthaler’s Motion to Renew asks the Court to “renew execution against
[Triumph] nunc pro tunc to the date of January 14, 2015.”10 Mergenthaler first
asserts, however, that renewal is not necessary because Section 5072 does not
apply to this case. If the Court disagrees, however, Mergenthaler contends the
Court should renew the judgment nunc pro tunc because Mergenthaler diligently
has pursued execution and did not renew the judgment after five years based on the
8
Id.
9
Delaware Acceptance Corp. v. Schatzman, No. 245, 2017 (Del. May 2, 2018) (ORDER).
10
Mot. to Renew Execution on J. at 1.
5
Superior Court’s practice of not requiring renewal until ten years after a
judgment’s entry. Triumph argues Schatzman unequivocally requires renewal after
five years, renewal nunc pro tunc is not warranted in this case, and in any event
retroactive renewal would not revive the Challenged Writ because that writ was
“void ab initio and cannot be revived.”11
In the Motion for Withdrawal, Triumph argues the Schatzman decision is
dispositive, and the Court therefore should grant the Second Motion to Quash and
enter an order authorizing Triumph to withdraw the funds on deposit with the
Court. In response to the Motion for Withdrawal, Mergenthaler again asserts that
the five-year renewal under 10 Del. C. § 5072 does not apply to this case.
ANALYSIS
The parties have filed numerous motions with the Court, to say nothing of
the serial responses, replies, supplemental responses, and positions advanced at
oral argument. Presently pending before the Court are Triumph’s Second Motion
to Quash, Mergenthaler’s Motion to Renew, and Triumph’s Motion for
Withdrawal. Those motions collectively present two fundamental issues: (1) does
the five-year renewal required by 10 Del. C. § 5072 apply to this case, and (2) if
so, should the Court renew the judgment nunc pro tunc.
11
Opp’n to Mot. to Renew Execution on J. ¶ 10.
6
I. Under Section 5072 and Delaware Supreme Court precedent,
Mergenthaler was required to renew the judgment after five
years.
This decision explores the somewhat arcane, but undeniably important
procedures by which parties execute upon judgments. Given the complexity of
those procedures and the interplay of the various statutes and court rules, it first is
necessary to set forth the relevant statutes, rules, and precedent.
A. The governing statutes and rules
There are a variety of means by which a judgment creditor may execute on a
judgment in an attempt to satisfy a debt. Pertinent to this case, 10 Del. C. § 5072
governs execution on judgments in civil actions. That statute provides:
§ 5072. Execution on judgments in civil actions.
(a) An execution may be issued upon a judgment in a civil action at
any time within 5 years from the time when such judgment was
entered or rendered, or from the time when such judgment became
due; or to collect any instalment of a judgment within 5 years from the
time when such instalment fell due.
This section shall only apply to cases when no execution has been
previously issued to collect such judgment or instalment, and to cases
where 1 or more have been issued for such purpose, and it appears by
the return of the officer that such judgment or instalment, as the case
may be, has not been paid or satisfied. As to all other cases the law
shall remain unaffected.
(b) No judgment shall be deemed to be paid or satisfied, in whole or
in part, by a levy on execution process, unless it appears otherwise
than by the fact of such levy that such payment or satisfaction has
been made.
7
Section 5072 was adopted in 1857 and has not been amended substantially
since that time.12 The Delaware Supreme Court has acknowledged ambiguity in
Section 5072 and therefore has interpreted it by relying on the statute’s legislative
history and the explanation of the statute and common law provided in Victor B.
Woolley’s well-recognized treatise, “Practice in Civil Actions and Proceedings in
the Law Courts in the State of Delaware” (hereinafter, “Woolley’s”).13
As interpreted by the Delaware Supreme Court and this Court, Section 5072
extended the period in which a creditor could execute on a judgment.14 Under the
common law, that execution period was one year and one day; under Section 5072,
that execution period is five years. For a period of time, New Castle and Sussex
counties extended that common law year-and-a-day period to twenty years through
a writ of vices comes, which Woolley’s explains was a fictitious writ that
“enable[d] subsequent executions without sci. fa. at any time during twenty
years.”15 The writ of vices comes was abolished, however, by Rule 69(a), and
thereafter the year-and-a-day period was the common law practice in all counties.
The time period in Section 5072 does not, however, bar execution altogether
after five years. Rather, in Delaware, there is no statute of limitations on
judgments, and the Delaware Supreme Court has held that Section 5072 and
12
Knott v. LVNV Funding, LLC, 95 A.3d 13, 15-17 (Del. 2014).
13
Id. at 16.
14
Id. at 16-18; Platinum Fin. Servs. Corp. v. Colbert, 2013 WL 6917144, at *2 (Del. Super. Nov.
7, 2013).
15
Woolley § 957.
8
similar statutes simply require a judgment creditor to move to refresh a judgment
after the specified time period before further executing on the judgment.16
Mergenthaler maintains the five-year period in Section 5072 was expanded
to ten years by Rule 69(a), which provides:
Rule 69. Execution.
(a) In general. Except as herein provided the procedure on execution
shall be as heretofore. An execution may be issued upon a judgment
in a civil action at any time after such judgment was entered or
rendered during the period that such judgment would constitute a lien
upon the real property of the judgment debtor. The fictitious writ of
vice comes or v.c. is hereby abolished.
Rule 69(a)’s provision that a judgment may be executed upon at any time “during
the period that such judgment would constitute a lien upon real property of the
judgment debtor” refers to 10 Del. C. § 4711, which states that a judgment shall
continue as a lien on real property for ten years before it must be renewed.17
16
Knott, 95 A.3d at 18-19; Gamles Corp. v. Gibson, 939 A.2d 1269, 1271-72 (Del. 2007)
(interpreting 10 Del. C. § 4711 as creating a ten-year period before a judgment creditor must
refresh a lien on real estate); Gyayaquil & Quito Railway Co., 50 Del. (11 Terry) 424, 433 (Del.
1957) (holding there is no statute of limitations on judgments in Delaware). The procedure for
refreshing a judgment may differ depending on the type of judgment at issue. See also Delmarva
Auto Fin. Servs. v. White, 100 A.3d 1059 (Del. Super. Aug. 15, 2014).
17
10 Del. C. § 4711 (“No judgment for the recovery of money entered or recorded in the
Superior Court . . . shall continue a lien upon real estate for a longer term than 10 years next
following the day of entry or recording of such judgment . . . unless, within the term of 10 years,
the lien of such judgment is renewed . . . .”); see also Gamles, 939 A.2d at 1272 (“Section 4711
provides only that a judgment lien upon real estate will expire unless it is renewed within 10
years after its entry.”).
9
Throughout these proceedings, Mergenthaler argued the inconsistency
between Section 5072 and Rule 69(a) must be resolved in favor of the rule.
Mergenthaler relied on 10 Del. C. § 561, which states:
§ 561. Rules of Court in civil actions.
(a) The Judges of the Superior Court, or a majority of them, may,
from time to time, adopt and promulgate general rules which
prescribe, establish and regulate the form, issuance and return of
process and writs, the form and system of pleading, and all other
practice and procedure with respect to the commencement, trial,
hearing and determination of civil actions in the Superior Court.
(b) Such rules shall be for the purpose of securing the just and, so far
as possible, the speedy and inexpensive determination of every such
action. The rules shall not abridge, enlarge or modify any substantive
right of any party, and they shall preserve the right of trial by jury as
at common law and as declared by the statutes and Constitution of this
State.
(c) The rules so adopted and promulgated, and all amendments
thereof, shall, after they have taken effect, supersede all statutory
provisions in conflict or inconsistent therewith.
(d) Any inconsistency or conflict between any rule promulgated
under the authority of this section or prior law, and any of the
provisions of this Code or other statute of this State dealing with
practice or procedure in the Superior Court, shall be resolved in favor
of such rule of court. Nothing in this Code, anything therein to the
contrary notwithstanding, shall in any way limit, supersede or repeal
any rule heretofore promulgated governing practice or procedure in
civil actions in the Superior Court.
(e) As used in this section, the phrase “civil actions in the Superior
Court” includes proceedings of every kind or character within the
jurisdiction of that Court except criminal proceedings.
10
To summarize, Section 561 permits the Superior Court to adopt rules
governing “practice or procedure” for civil actions in the Court. In the event there
is an inconsistency or conflict between any rule and a law adopted before the rule,
the rule supersedes the statute if it relates to “practice or procedure in the Superior
Court” and does not “abridge, enlarge or modify any substantive right of any
party.”18
In Schatzman, the Delaware Supreme Court affirmed this Court’s holding
that the time period for renewing judgments is a substantive right, rather than a
procedural rule, and the ten-year period referenced in Rule 69 therefore does not
preempt the five-year period in Section 5072. Mergenthaler, however, argues
Section 5072 does not apply to the Challenged Writ because this case does not fall
within the category of cases to which that section applies.
In support of this argument, Mergenthaler contends a judgment creditor’s
execution within five years of the entry of judgment “without a return by the
Sheriff[] in some way confirming that the judgment remains open, allows a
judgment creditor to execute after five [] years from the date of the judgment under
the provision of the second paragraph of [Section 5072(a)].”19 Mergenthaler
18
10 Del. C. § 561(b)-(d). See Williams v. Singleton, 52 Del. (2 Storey) 488 (Del. 1960); Ellison
v. City of Wilmington, 301 A.2d 303 (Del. Super. 1972).
19
Mot. to Renew Execution on J. ¶ 20. Mergenthaler’s argument on this point is, at best,
muddled. Despite reading and rereading Mergenthaler’s briefs and asking extensive questions at
oral argument, the Court has not been able clearly to understand Mergenthaler’s argument, which
11
argues Woolley’s analysis of Section 5072 “is of no moment” in this case because
Woolley interpreted an earlier version of Section 5072.20 In that previous version
of the statute, the last sentence of the second paragraph of Section 5072(a) read
“[a]s to all such cases the law shall remain as at present,” rather than the current
statutory language, added in the 1915 codification, which states that “as to all other
cases the law shall remain as at present.”21 Mergenthaler argues the 1915
amendment to Section 5072 “is a clear expression of legislative intent and an
apparent rejection of the result Woolley opined to be the legislative intent of a
reversion to the year and a day common law rule.”22 In other words, Mergenthaler
contends the “‘As to all other cases’ [language] can only be interpreted to confirm
a legislative intent to exclude the requirement to [renew a judgment] if creditors
executed within five years . . . of a judgment’s entry.”23
In this case, Mergenthaler argues that because he executed on the judgment
within five years of its entry, and because there is no sheriff’s return on the docket
indicating the judgment remains unsatisfied, “Mergenthaler thus meets both
exceptions to the [sic] only allowing execution within the first five years of entry”
makes it difficult to compose a coherent summary of that argument. I therefore have resorted to
quoting the argument so as to not misstate it.
20
Reply to Opp’n to Mot. to Renew Execution on J. at 4-5.
21
Id. at 5-6.
22
Id. at 6.
23
Id.
12
and Section 5072 does not apply.24 Mergenthaler therefore contends he can
execute for the life of the judgment, i.e., twenty years, without having to renew the
judgment with the Court.
Mergenthaler’s proffered interpretation of Section 5072 and the record in
this case cannot be reconciled with the statutory language or the cases interpreting
it. First, Mergenthaler argues Section 5072 does not apply to this case because one
or more executions have been issued to collect on the judgment and there is no
“return of the officer” indicating the judgment has not been satisfied. Put
differently, Mergenthaler argues that because he has executed on the judgment and
nothing on the docket indicates the judgment remains unpaid, he may execute for
twenty years without filing a motion to renew the judgment.
Accepting this argument would require the Court to ignore modern
execution practice and Rule 69(a). First, as even Mergenthaler concedes, the
current language of Section 5072 regarding a “return” is not consistent with
“modern garnishment practice.”25 As Mergenthaler puts it, the reference to a
“return” is a reference to a largely bygone era in which the sheriff would “sell
property after execution and levy thereon and enter a return on such things as the
sale of cows and other chattels.”26 Now, Mergenthaler acknowledges, when the
24
Id. at 8.
25
Mot. to Renew Execution on J. ¶ 19.
26
Id.
13
sheriff executes a writ of garnishment on a judgment debtor, the judgment creditor
typically receives the funds without the sheriff making any return on the writ.27
Given the parties’ agreement that a return is not filed in most modern cases, an
interpretation of Section 5072 that excludes from the statute all cases in which a
return is not filed would, effectively, create an exception that completely swallows
the rule and thereby nullifies the statute.
Rather than adopt such an absurd interpretation, this Court must accord
Section 5072’s somewhat antiquated and admittedly ambiguous language the
meaning the General Assembly presumably intended.28 As Woolley’s explains and
the Delaware Supreme Court has held, the General Assembly adopted Section
5072 to “broaden the use of judgments and executions for commercial purposes.”29
According to Woolley’s, the “return of the officer” language refers to cases in
which one or more executions have been issued “without producing payment.” Or,
in more modern terms, Section 5072 applies to cases where execution has been
issued within five years, but the judgment remains unsatisfied. This interpretation
is consistent with execution process as it existed at the time Section 5072 was
adopted and accords the statute a meaning that is logical and consistent with
27
Id.
28
LeVan v. Independence Mall, Inc., 940 A.2d 929, 932-35 (Del. 2007) (“An ambiguous statute
should be construed ‘in a way that will promote its apparent purpose and harmonize it with other
statutes’ within the statutory scheme.”) (quoting Eliason v. Englehart, 733 A.2d 944, 946 (Del.
1999)).
29
Knott, 95 A.3d at 17.
14
modern execution process. Rather than placing undue emphasis on the existence
of a “return” of the executing officer, the interpretation is consistent with the result
the legislature presumably intended: to apply the longer five-year execution period
to cases in which the judgment was not satisfied after a year and a day. Because
both parties agree Mergenthaler’s judgment remains unsatisfied, Section 5072’s
five-year period applies to this case.
Second, even if Mergenthaler is correct and Section 5072 does not apply to
this case, his contention that he therefore may execute for twenty years is a logical
leap too far and inconsistent with Rule 69(a). That is, Section 5072 applies to the
specified subset of cases and further states that “as to all other cases, the law shall
remain as at present.” The Delaware courts consistently have interpreted that
language as indicating that the common law rule continues to apply to cases not
falling within Section 5072’s scope. The common law rule was not, as
Mergenthaler vaguely argues, that a judgment creditor could execute for the
twenty-year life of a judgment without renewal. Rather, as previously explained,
under the common law, a judgment creditor only could execute for a year and a
day before seeking to refresh a judgment. The twenty-year execution period
afforded in some counties by use of a writ of vices comes has no application in this
case because that writ was abolished and no such writ was issued in this case.
Accordingly, even if Section 5072 did not apply to this case, the Challenged Writ
15
would be untimely because it was not issued within a year and a day of the
judgment’s entry. In my view, however, Section 5072 applies and Mergenthaler
was required to refresh the judgment after five years.
II. The judgment should be renewed retroactively to correct the
Court’s ministerial error.
Mergenthaler argues that even if Section 5072 applies to this case, the Court
should renew the judgment nunc pro tunc to January 14, 2015. Mergenthaler
argues that renewing the judgment nunc pro tunc would correct a ministerial or
clerical error by the Court because his failure to renew within five years was based
on the Superior Court’s pre-Schatzman practice of not requiring renewal of a
judgment until ten years had passed. Triumph argues the Court cannot and should
not renew the judgment retroactively and, in any event, to do so would not revive
the Challenged Writ.
A. The practice for refreshing judgments in New Castle County before
the Schatzman decision
The Schatzman decision, juxtaposed with the Commissioner’s Report,
revealed an inconsistency within the Superior Court regarding the Court’s
interpretation of the time period in which writs of execution could be issued
without a judgment first being refreshed. Before Schatzman, it was the Court’s
practice to issue execution writs within ten years of a judgment’s entry, provided
the judgment creditor had executed on the judgment within the five years before a
16
new writ was filed.30 Mergenthaler contends he relied on that practice and
therefore did not first file a motion to refresh the judgment against Triumph.
Consistent with its practice, the New Castle County Prothonotary issued the
Challenged Writ without requiring a renewal motion.
The Superior Court’s pre-Schatzman interpretation of Section 5072, which
was the interpretation adopted by the Commissioner in his Report, implicitly was
rejected when the Supreme Court affirmed Schatzman. Before that time, however,
the precise issue raised in Schatzman had not been addressed. Although the
Schatzman Court ultimately concluded that the time period for refreshing a
judgment was five years under Section 5072, rather than ten years under Rule
69(a), the Prothonotary’s conclusion that the ten-year period was controlling was
not an unreasonable interpretation of the statute and rule. That is, as explained in
the Commissioner’s Report, there is authority to support the conclusion that the
period for refreshing a judgment is a procedural rule, thereby allowing Rule 69(a)
to supersede Section 5072. That authority, summarized below, is the context
30
Under this interpretation, the execution praecipes in Schatzman that related to the Superior
Court judgment still would have been rejected because, although the judgment was less than ten
years old, no execution process had been issued within five years of the execution praecipes’
filing. That was not, however, the reason given by the Superior Court for rejecting the praecipes
in that case. See Schatzman Letter at 2 (“the Prothonotary’s Office rejected the execution
praecipe because it had been over 5 years since the judgment was entered.”); id. at 10 (“if a
creditor wants to execute on a Superior Court civil judgment over 5 years after the judgment was
entered, then he or she must file a motion to renew pursuant to Rule 64.1.”)
17
underlying Mergenthaler’s decision to not move to refresh the judgment and the
Court’s decision to not require such motions until ten years had passed.31
The distinction between a procedural rule and a substantive right is a blurry
line in certain cases. Although no Delaware case directly has addressed the
distinction between a procedural rule and a substantive right, the United States
Supreme Court’s decision in Shady Grove Orthopedic Associates, P.A. v. Allstate
Ins. Co. is helpful authority.32 The Shady Grove Court examined a federal law
that, like Section 561(b), enables federal courts to adopt rules of procedure as long
as those rules do not “abridge, enlarge or modify any substantive right.”33 In
Shady Grove, the Supreme Court concluded that the federal statute required the
Court to determine whether a rule “really regulate[s] procedure, – the judicial
process for enforcing rights and duties recognized by substantive law and for justly
administering remedy and redress for disregard or infraction of them . . . .” 34 The
Supreme Court explained that the test “is not whether the rule affects a litigant’s
substantive rights; most procedural rules do.”35 Rather, the inquiry focuses on
31
By outlining this authority, I do not intend to express disagreement with the Schatzman
decision, which I respect and which is binding precedent. Rather, this context is important to the
Court’s decision to renew the judgment nunc pro tunc because it supports the ultimate
conclusion that the practice of issuing writs for the first ten years of a judgment was a ministerial
act based on the Court’s interpretation of its own rules, rather than carelessness attributable to
Mergenthaler.
32
559 U.S. 393 (2010).
33
Id. at 407 (addressing 28 U.S.C. § 2072(b)).
34
Id. (quoting Sibbach v. Wilson & Co. Inc., 312 U.S. 1, 14 (1941)).
35
Id.
18
what the rule regulates. If a rule regulates “‘the manner and the means’ by which
the litigants’ rights are ‘enforced,’” it is procedural, whereas, if it “alters ‘the rules
of decision by which the court will adjudicate those rights,’” it is substantive.36
The Shady Grove test for distinguishing substantive rights and procedural
rules appears consistent with the Delaware Supreme Court’s application of Section
561. In Fleming v. Jackson, the Delaware Supreme Court concluded that the
computation of the statute of limitations for a personal injury action was controlled
by Superior Court Civil Rule 6(a), which provides that when a weekend or legal
holiday is the last day of any period of time prescribed in the rules, the period shall
continue until the next day on which the Court is open.37 The Court in Fleming
considered the effect of Section 561 and at least implicitly concluded Rule 6(a)
supplemented or supplanted the statute of limitations to the extent the last day of
the limitations period fell on a weekend or legal holiday.38 Although that rule
affects a litigant’s substantive right to pursue litigation altogether, it does not alter
the rules of decision by which those rights are adjudicated, and the inconsistency
between the rule and the statute therefore was resolved in favor of the rule.
In Shatzman, the Superior Court concluded the period after which a
judgment must be refreshed was a substantive right because Section 5072 provides
36
Id.
37
2005 WL 3146828 at *1 (Del. Nov. 23, 2005).
38
Id. at *1-2. The Court’s opinion transposed the statutory section number and therefore
referred to Section 516 rather than Section 561. The context of the Court’s opinion makes clear
that the Court was referring to Section 561 and, in any event, there is no 10 Del. C. § 516.
19
“the debtor with the opportunity to object to the delayed collection efforts [and
provides] the court the opportunity to decide whether those rights of the debtors
preclude an extension of the judgment.”39 Conversely, the Commissioner
concluded the renewal period was a procedural rule, relying in part on a recent
federal district court decision that “[t]he requirements for vacating a final judgment
are procedural in nature because such requirements merely regulate ‘the judicial
process for enforcing rights and duties recognized by substantive law . . . .’” 40 By
affirming Shatzman, the Delaware Supreme Court implicitly concluded the period
for refreshing a judgment was a substantive right, and all judgment creditors now
are on notice that judgments must be refreshed after five years. Before that
decision, however, it was reasonable for creditors and their counsel to rely on the
Prothonotary’s practice in light of the then-unresolved inconsistency between
Section 5072 and Rule 69(a).
B. Renewing the judgment nunc pro tunc is appropriate in light of the
Court’s and Prothonotary’s previous interpretation of Delaware law.
Pointing to the Prothonotary’s interpretation of Section 5072 at the time the
Challenged Writ was issued, Mergenthaler argues the Court should refresh the
judgment nunc pro tunc to allow the Challenged Writ to be effective as of the time
it was issued. The Court’s authority to enter an order nunc pro tunc, that is to enter
39
Schatzman Letter at 13.
40
Aspic Eng’g & Constr. Co. v. ECC CENTCOM Constructors, LLC, 2017 WL 2289219, at *2
(N.D. Cal. May 25, 2017) (quoting Sibbach, 312 U.S. at 14).
20
an order retroactive to an earlier date, is “limited to corrections of clerical errors or
ministerial defects to the end that the original intention of the Court will be
implemented.”41 As the United States Supreme Court previously explained, an
order may be entered retroactively “where the delay in rendering a judgment or a
decree arises from the act of the court,” whether for the Court’s convenience, the
press of business, the intricacy of the questions involved, or any other cause not
attributable to the parties’ laches.42
Entry of an order nunc pro tunc may be granted as justice requires in a
particular case.43 Mergenthaler, relying on the Court’s long-standing practice of
issuing writs within ten years of a judgment’s entry and of informing attorneys
they need not file motions to renew before such time, did not file a motion to
renew before obtaining the Challenged Writ.44 That is, Mergenthaler’s failure to
renew the judgment resulted from the Court’s practice, rather than from any
carelessness or negligence on his part.45 Entering the order nunc pro tunc would
correct the Court’s ministerial act – issuing the writ – that was based on its
interpretation of its rules. To refuse to renew the judgment retroactively unfairly
41
Handler Const., Inc. v. CoreStates Bank, N.A., 633 A.2d 356, 359 n. 2 (Del. 1993) (quoting
Angelli v. Sherway, 560 A.2d 1028, 1034 n.2 (Del. 1989)).
42
Mitchell v. Overman, 103 U.S. 62, 64-65 (1880).
43
Id. at 65.
44
The Court has confirmed this was the Prothonotary’s practice before the Schatzman Letter was
issued.
45
Compare 49 C.J.S. Judgments § 156 (“[R]elief by entry nunc pro tunc will not be granted
where the failure to enter judgment at the proper time was due to the party’s own carelessness or
negligence.”)
21
would prejudice Mergenthaler for relying on the Court’s established practice.
Although Triumph argues that retroactive renewal of the judgment unfairly would
prejudice Triumph’s “legal right to the Merrill Lynch account proceeds,” Triumph
has not argued that it would have had a legal basis to resist a timely-filed motion to
renew the judgment. 46 In other words, had Mergenthaler moved to renew before
issuing the Challenged Writ, Triumph would not have had a basis to oppose
renewal, and Mergenthaler would have successfully attached the account proceeds.
Accordingly, correcting the Court’s error places the parties back in the position
they would have been in but-for that error.
Triumph, however, argues the Court should deny the Motion to Renew
because Mergenthaler did not seek to renew the judgment retroactively in his
response to the Second Motion to Quash and therefore waived that argument. The
record in this case is replete with the parties offering new and shifting arguments
regarding the Challenged Writ, which is indicative of the nuanced and arcane area
of the law in issue rather than any gamesmanship by the parties. In any event,
Triumph did not have occasion to argue that the judgment should be renewed nunc
pro tunc based on the inconsistency between the Prothonotary’s practice and the
Schatzman decision because such inconsistency was not present at the time
46
D.I. 172 at 4-5.
22
Triumph responded to the Second Motion to Quash.47 Accordingly, the Motion to
Renew the judgment nunc pro tunc is granted, and judgment is renewed effective
January 14, 2015.
C. Because the Motion to Renew has been granted nunc pro tunc,
Triumph’s Second Motion to Quash and Motion for Withdrawal are
denied.
Having concluded that the judgment should be renewed retroactively to a
date before the Challenged Writ was issued, it follows that Triumph’s Motion to
Quash the Challenged Writ as untimely and Triumph’s related Motion for
Withdrawal of Funds must be denied. Triumph argues, however, that even if the
Motion to Renew nunc pro tunc is granted, the Second Motion to Quash and the
Motion for Withdrawal also should be granted because refreshing the judgment
retroactively “does not change the fact that the [Challenged Writ] was void ab
initio and cannot be revived.”48 Triumph argues the Challenged Writ is “incapable
of revival” because “nothing ever existed that could be revived.” 49 That argument,
however, is circular. The authority Triumph cites for the proposition that the
execution process issued on a dormant judgment is void does not address the effect
of retroactive renewal or revival of that dormant judgment. Because entry of
judgment nunc pro tunc is premised on equitable principles and corrects ministerial
47
The Superior Court’s decision in Schatzman was not issued until several months after Triumph
filed the Motion to Quash and Mergenthaler responded to it. It appears the parties were not even
aware of the Schatzman Letter until the Court brought it to their attention. See D.I. 138.
48
Opp’n to Motion to Renew Execution on J. ¶ 10.
49
Triumph Suppl. Response dated Sept. 7, 2018 at 5.
23
defects to the end that the Court’s original intention will be implemented, 50 it
stands to reason that retroactive renewal of the judgment also corrects any defect in
the execution process. That conclusion is supported by the United States Supreme
Court’s decision in Mitchell, in which the Court concluded that a judgment that
was “absolutely void” at the time it was entered could be corrected by entry of an
order nunc pro tunc. Triumph’s contention that the defect in the Challenged Writ
cannot be resolved with retroactive renewal of the judgment therefore is rejected as
inconsistent with the intent of the nunc pro tunc doctrine.
CONCLUSION
For the foregoing reasons, Triumph’s Second Motion to Quash the Writ of
Attachment Fi. Fa. is DENIED, Mergenthaler’s Motion to Renew Execution on
Judgment is GRANTED, and Triumph’s Motion for Withdrawal of Funds on
Deposit is DENIED. Mergenthaler shall file a conforming proposed order within
five days. IT IS SO ORDERED.
50
See Mitchell, 103 U.S. at 65.
24