Gildea v. Wells Fargo Bank, N.A. ( 2015 )

This opinion is subject to revision before final
publication in the Pacific Reporter
2015 UT 11
IN THE
S UPREME C OURT OF THE S TATE OF U TAH
BRUCE GILDEA ,
Appellant,
v.
WELLS FARGO BANK, N.A., a National Association;
BARBARA MILES; CLASSIC CABINETS, INC .,
Appellees.
No. 20120999
Filed January 27, 2015
Fourth District, American Fork
The Honorable Thomas Low
No. 120100177
Attorneys:
P. Bryan Fishburn, Salt Lake City, for appellant
Joseph Skinner, Salt Lake City, for appellee
Wells Fargo Bank, N.A.
Chris Schmutz, Bountiful, for appellees Barbara Miles
and Classic Cabinets, Inc.
JUSTICE PARRISH authored the opinion of the Court, in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE NEHRING ,
JUSTICE DURHAM , and JUSTICE LEE joined.
JUSTICE PARRISH , opinion of the Court:
INTRODUCTION
¶1 We are asked to determine whether filing an action to
foreclose a judgment lien tolls the expiration of the underlying
judgment. Appellant Bruce Gildea filed an action against Wells
Fargo Bank, N.A., seeking to foreclose his judgment lien against
property owned by Wells Fargo. While the foreclosure action was
pending, the judgment lien expired and the district court dismissed
the action. In requesting that we reverse the district court, Mr. Gildea
asks us to either overturn our precedent holding that a foreclosure
action does not toll the expiration of a judgment or hold that Wells
Fargo should be estopped from asserting the expiration of the
GILDEA v. WELLS FARGO BANK, et al.
Opinion of the Court
judgment. Mr. Gildea also argues that the district court erred in
dismissing his claim of wrongful interference with property rights
against appellees Barbara Miles and Classic Cabinets, Inc.
¶2 We affirm the district court’s dismissal of Mr. Gildea’s
foreclosure action. In many statute-of-limitations contexts, the filing
of an action within the statutory period is sufficient to preserve the
underlying claim. However, the Legislature has set a clear expiration
period for a judgment, which is different from a statute of
limitations, and has provided a mechanism for renewing judgments.
Because Mr. Gildea failed to avail himself of this mechanism, the
district court correctly dismissed his foreclosure action. We also
affirm the district court’s dismissal of Mr. Gildea’s claim against
Classic Cabinets1 because that claim is legally insufficient.
BACKGROUND
¶3 We affirm a district court’s dismissal of an action under rule
12(b)(6) of the Utah Rules of Civil Procedure only when the plaintiff
has not alleged, or cannot prove, facts sufficient for relief. Hudgens
v. Prosper, Inc., 2010 UT 68, ¶ 14, 243 P.3d 1275. We therefore take the
facts alleged in Mr. Gildea’s compliant and view them in the light
most favorable to his claims.
¶4 Classic Cabinets obtained a judgment in the amount of
$11,069.25 plus 24 percent interest per annum against
Russell/Packard Development and Lawrence Russell (collectively,
R/P Development) on July 28, 2004. Classic Cabinets recorded the
judgment, thereby obtaining a judgment lien against all property
owned by R/P Development, including Marina Village Lot 11. For
about one and a half years, R/P Development made payments to
Classic Cabinets, reducing the amount due on the judgment to
1
On February 6, 2013, appellee Barbara Miles filed for chapter 13
bankruptcy in the United States Bankruptcy Court for the District of
Utah, Central Division. Pursuant to the automatic stay provisions of
11 U.S.C. § 362(a), this appeal is stayed as to all claims pending
against Ms. Miles until the conclusion of her bankruptcy proceed-
ings. We therefore resolve only those claims against Wells Fargo and
Classic Cabinets. See Fortier v. Dona Anna Plaza Partners,
747 F.2d 1324, 1330 (10th Cir. 1984) (explaining that the automatic
stay provision under the bankruptcy code “stays litigation only
against the debtor, and affords no protection to solvent co-defen-
dants”).
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Opinion of the Court
$3,457.06. Classic Cabinets subsequently sold all of its remaining
rights under the judgment to Mr. Gildea for $1,500. R/P
Development stopped paying on the judgment after Classic Cabinets
sold it to Mr. Gildea. Mr. Gildea took no action to satisfy the
judgment for over five years.
¶5 On August 16, 2006, Wells Fargo obtained its own judgment
against R/P Development for $300,257.27. Five months later, Wells
Fargo purchased Marina Village Lot 11 at a sheriff’s sale conducted
pursuant to a writ of execution. Because Mr. Gildea’s judgment lien
was senior to that of Wells Fargo, Wells Fargo acquired the lot
subject to Mr. Gildea’s lien.
¶6 Approximately four years after purchasing Marina Village
Lot 11, Wells Fargo sought and obtained from Classic Cabinets a
satisfaction of the judgment that Classic Cabinets had previously
sold to Mr. Gildea. Mr. Gildea alleges, and Wells Fargo stipulates,
that the satisfaction was invalid because, at the time it was entered,
Classic Cabinets no longer owned the judgment.
¶7 On April 16, 2012, approximately three months before his
judgment was due to expire, Mr. Gildea filed an action against Wells
Fargo seeking to foreclose the lien on Marina Village Lot 11. Wells
Fargo filed a timely answer to Mr. Gildea’s complaint, in which it
alleged several defenses and counterclaims. Mr. Gildea responded
to the counterclaims and amended his complaint to assert claims
against Classic Cabinets and Ms. Miles based on the invalid
satisfaction of judgment they had provided to Wells Fargo.2
¶8 On August 28, 2012, Wells Fargo filed a motion to dismiss
Mr. Gildea’s complaint pursuant to rule 12(b)(6) of the Utah Rules
of Civil Procedure. Wells Fargo argued that the judgment had
expired on July 28, 2012—eight years after the date of its entry. Wells
Fargo further alleged that because a foreclosure action does not
renew or extend a judgment, Mr. Gildea could no longer foreclose
his lien on Marina Village Lot 11, which had expired along with the
judgment. Classic Cabinets and Ms. Miles subsequently joined Wells
2
In their answer to Mr. Gildea’s amended complaint, Classic
Cabinets and Ms. Miles admitted that they had lacked authority to
execute the satisfaction of judgment but denied that they had
knowledge that Classic Cabinets had sold the judgment to Mr.
Gildea. They further admitted that the satisfaction of judgment was
without legal effect and was therefore null and void.
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Opinion of the Court
Fargo in its motion to dismiss, arguing that all claims against them
should likewise be dismissed. Mr. Gildea opposed the motion,
arguing that filing the foreclosure action extended the duration of
the judgment and related lien. The district court granted Wells
Fargo’s motion. Relying on the plain language of Utah Code section
78B-5-202 and our precedent interpreting that statute, the district
court ruled that Mr. Gildea’s “filing of the foreclosure action . . . did
not extend the duration of the underlying judgment” and that the
underlying judgment and lien thus expired on July 28, 2012. Mr.
Gildea filed a timely notice of appeal. We have jurisdiction pursuant
to Utah Code section 78A-3-102(3)(j).
STANDARD OF REVIEW
¶9 “We review the grant of a motion to dismiss for correctness,
granting no deference to the decision of the district court.” Hudgens
v. Prosper, Inc., 2010 UT 68, ¶ 14, 243 P.3d 1275.
ANALYSIS
¶10 Mr. Gildea appeals the district court’s dismissal of his
foreclosure action. Mr. Gildea argues that filing the foreclosure
action within the eight-year duration of the judgment should have
tolled its expiration. In so arguing, Mr. Gildea asks us to overturn
Federal Farm Mortgage Corporation v. Walker, in which we held that
filing a foreclosure action does not extend the duration of a
judgment. 206 P.2d 146, 147–48 (Utah 1949). Mr. Gildea argues that
our holding in that case “encourages defendants to stall and engage
in dilatory conduct in order to allow the judgment associated with
the lien to expire.”
¶11 Mr. Gildea alternatively argues that the district court erred
because it was inequitable to dismiss his suit. Specifically, Mr.
Gildea reasons that a foreclosure action was his only means of
enforcing the lien and therefore the filing of the action should have
tolled its expiration. He further asserts that Wells Fargo should be
estopped from raising the expiration of the judgment because, by
asserting unmeritorious defenses and counterclaims in its answer to
Mr. Gildea’s complaint, Wells Fargo unfairly extended the
foreclosure litigation past the judgment’s expiration. Finally, Mr.
Gildea asserts that the district court erred in dismissing his suit
without considering his cause of action against Classic Cabinets and
Ms. Miles for wrongful interference with property. We discuss each
argument in turn.
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Opinion of the Court
I. FILING A FORECLOSURE ACTION DOES NOT TOLL THE
EXPIRATION OF A JUDGMENT
¶12 Judgment liens are creatures of statute without any basis in
the common law. Cox Corp. v. Vertin, 754 P.2d 938, 939 (Utah 1988).
The rights of the parties to a judgment lien must therefore “be
determined within the statutory framework.” Id. The relevant
statutory framework arises from three sections of the Utah Code.
First, Utah’s judgment statute provides that “[j]udgments shall
continue for eight years from the date of entry in a court unless
previously satisfied or unless enforcement of the judgment is stayed
in accordance with law.” UTAH CODE § 78B-5-202(1). A judgment
“becomes a lien upon real property if” the judgment or other
verifying documentation “is recorded in the office of the county
recorder.” Id. § 78B-5-202(7). Second, the Renewal of Judgment Act
provides the procedure whereby a judgment creditor may renew a
judgment for an additional eight years beyond the judgment’s
original duration. Id. § 78B-6-1802. Once the judgment is renewed,
the creditor may then “renew . . . a lien created by a judgment” by
filing the appropriate documentation in the county recorder’s office.
Id. § 78B-5-202(9).
¶13 Third, the Utah Code establishes an eight-year statute of
limitations for an action “upon a judgment or decree of any court of
the United States, or of any state or territory within the United
States.” Id. § 78B-2-311. Thus, the relevant statutory framework
provides for two different, but concurrent, eight-year time frames:
(1) an eight-year duration for a judgment, plus eight additional years
if renewed, and (2) an eight-year statute of limitations for filing an
action upon a judgment.
¶14 In this case, Mr. Gildea filed his foreclosure action within
the eight-year statute of limitations, thus the foreclosure action was
timely when filed. But the foreclosure action did not conclude within
the eight-year duration of the judgment, and Mr. Gildea did not seek
to renew it. The issue thus presented is whether a timely-filed action
to foreclose a judgment lien prevents the underlying judgment from
expiring if it reaches the end of its eight-year duration during the
pendency of the foreclosure action.
¶15 The district court held that filing a judgment lien
foreclosure action does not extend the duration of the underlying
judgment. The court explained that “[w]hile the statute of limitations
[set forth in Utah Code section 78B-2-311] establishes the deadline
for commencing enforcement proceedings, [section] 78B-5-202(1)
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Opinion of the Court
effectively establishes the deadline for concluding them. There is no
authority to support [Mr. Gildea’s] position that meeting the one
extends the other.” The district court therefore held that Mr. Gildea’s
judgment expired because although Mr. Gildea had “eight years to
commence this action, . . . the judgment itself—unless renewed—also
expired after eight years.”
¶16 In dismissing Mr. Gildea’s foreclosure action, the district
court relied on our precedent in Federal Farm Mortgage Corporation v.
Walker, 206 P.2d 146 (Utah 1949). In that case, Federal Farm
Mortgage Corporation (FFMC) obtained a judgment and a lien
against Walker. Id. at 146. Nearly eight years later, FFMC
commenced an action to foreclose its judgment lien. Id. During the
pendency of the action, FFMC’s judgment expired, but the district
court nevertheless entered a decree of foreclosure against Walker’s
estate. Id. at 147. On appeal, we reversed the decree, holding that
“the lien of a judgment expires at the end of the statutory period
established by the legislature and . . . the courts are powerless to
extend it beyond that time.” Id. We concluded that “since [FFMC’s]
lien expired while this action was pending in the district court,” the
property at issue was “free of any lien arising by virtue of [FFMC’s]
judgment.” Id. at 148.
¶17 Mr. Gildea argues that we should overturn Federal Farm
Mortgage and hold that the filing of a foreclosure action before the
expiration of the judgment will prevent the judgment from expiring.
Parties asking us to overturn precedent have “a substantial burden
of persuasion.” Utah Dep’t of Transp. v. Admiral Beverage Corp.,
2011 UT 62, ¶ 16, 275 P.3d 208 (internal quotation marks omitted).
They must clearly and convincingly demonstrate that the precedent
“was originally erroneous or is no longer sound because of changing
conditions and that more good than harm will come by departing
from precedent.” Id. (internal quotation marks omitted); see also ASC
Utah, Inc. v. Wolf Mountain Resorts, L.C., 2010 UT 65, ¶ 23,
245 P.3d 184 (“[L]ong standing precedent should not be overruled
except for the most compelling reasons.” (internal quotation marks
omitted)).
¶18 Mr. Gildea has not satisfied this heavy burden. Indeed, he
does not even acknowledge the requirements we have set forth for
overturning precedent. He does, however, present two policy-based
reasons for overturning Federal Farm Mortgage. First, Mr. Gildea
asserts that we should overturn Federal Farm Mortgage because it
“denies persons in [his] position any reasonable opportunity to
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enforce a lien they have.” But Mr. Gildea provides no support for
this assertion. And our holding in Federal Farm Mortgage does not
prevent individuals in Mr. Gildea’s position from taking action to
enforce a lien well before its expiration. Federal Farm Mortgage stands
only for the proposition that filing a foreclosure action does not
prevent a judgment from expiring. In this case, Mr. Gildea had over
five years to enforce his judgment but took no action until just
months before it expired. Our holding in Federal Farm Mortgage did
not prevent him from filing a foreclosure action well before the
judgment was set to expire. Rather, it should have alerted him to the
necessity of taking timely action.
¶19 Mr. Gildea next argues that we should overturn Federal
Farm Mortgage because it encourages parties to drag out litigation
while waiting for the lien holder’s judgment to expire. But we need
not overturn Federal Farm Mortgage to prevent such dilatory behavior
because of the exception we carved out in Free v. Farnworth,
188 P.2d 731, 734–35 (Utah 1948). In that case, we held that a
judgment debtor cannot assert a judgment’s expiration as a defense
in an enforcement action when the debtor acted in bad faith to
prevent the judgment creditor from enforcing the judgment. Id.; see
also Fed. Farm Mortg. Corp., 206 P.2d at 147 (“The Free decision is
grounded upon the equitable principle that no one should be
allowed to profit from his own wrong.”). The Free exception
prevents parties from engaging in bad-faith, dilatory behavior to
force a judgment into expiration.3 We need not overturn Federal Farm
Mortgage to achieve the same result.
¶20 Overturning Federal Farm Mortgage would result in a judicial
override of clear statutory language setting an eight-year duration
of a judgment. And, as explained below, the Legislature has
explicitly provided a mechanism for renewing judgments. We
therefore see no reason to create a different judicial mechanism—the
filing of a foreclosure action—to fulfill the same purpose. To do so
would be contrary to the plain language of our statute.
¶21 Moreover, we find significant support for upholding Federal
Farm Mortgage. Without an encumbrance expiration, the passage of
time cannot clear a clouded title. And without clear title, bona fide
purchasers are left vulnerable and property rights are mired in
needless litigation. Overturning Federal Farm Mortgage could result
3
Indeed, Mr. Gildea asks us to apply this exception here, but we
decline to do so for the reasons discussed below.
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Opinion of the Court
in land remaining encumbered beyond the statutory time frame,
thereby prolonging the burden on the purchase and sale of real
property.
¶22 Finally, our holding in Federal Farm Mortgage aligns with the
majority of states, which agree that “unless the time for the duration
of the lien has been extended, the lien ceases to exist after the lapse
of the statutory period, [even if] the duration of the lien is fixed at a
period much shorter than that barring action on the judgment itself.”
50 C.J.S. Judgments § 815 (2009) (footnotes omitted).4 In support of his
contrary position, Mr. Gildea cites only to Texas case law and a
single property treatise—which also cites only to Texas law—to
support his argument that the filing of a foreclosure action “has the
effect of prolonging the duration of the lien.” 5 POWELL ON REAL
PROPERTY § 38.08[1] (2014) (citing Churchill v. Russey, 692 S.W.2d 596
(Tex. App. 1985)). But the Texas statute explicitly provides that “an
action of debt” may revive a dormant judgment if brought “not later
than the second anniversary of the date that the judgment becomes
dormant.” TEX. CIV . PRAC . & REM . CODE ANN . § 31.006 (2014).5
4
See also Great W. Exch., Inc. v. Walters, 819 P.2d 1093, 1095 (Colo.
App. 1991) (noting that the Colorado legislature “has neither
explicitly nor implicitly referred to an extension of the lien period
through the securing of a writ of execution and filing of a certificate
of levy,” and therefore holding that a judgment could expire during
the pendency of an action for a writ of execution); Tenney v.
Hemenway, 53 Ill. 97, 103 (Ill. 1869) (holding that “the levy of the
execution in this case did not have the effect of prolonging the lien
of the judgment beyond the period limited by the statute”); Newell
v. Dart, 9 N.W. 732, 733 (Minn. 1881) (holding that a creditor’s action
during a judgment’s life “neither creates a new lien nor extends the
judgment lien”); Rich v. Cooper, 286 N.W. 383, 386 (Neb. 1939)
(declaring that “the plaintiff’s judgment became barred, and ceased
to be a lien . . . notwithstanding the pendency of [an] action”); Lupton
v. Edmundson, 16 S.E.2d 840, 841 (N.C. 1941) (explaining that an
action on a judgment “does not have the effect of prolonging the
statutory life of the lien”).
5
Arizona law is similar to the law in Texas. See ARIZ. REV . STAT.
§ 12-1611 (2014). But adding another statutory framework to the
Texas side of the ledger adds no extra weight to Mr. Gildea’s
position because the Texas rule is based on a statutory scheme that
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Opinion of the Court
¶23 Unlike the Texas statute, there is nothing in the Utah Code
to support the proposition that filing a foreclosure action tolls the
expiration of the underlying judgment. Instead, the Legislature
provided a different mechanism—filing a motion to renew
judgment—whereby a judgment creditor can prevent his judgment
from expiring during the pendency of a foreclosure action. UTAH
CODE § 78B-6-1802. We will not disrupt clear statutory language and
over sixty years of precedent. Thus, we hold that filing a judgment
lien foreclosure action does not prevent the expiration of the
underlying judgment.
II. PRINCIPLES OF EQUITY DO NOT SUPPORT TOLLING THE
EXPIRATION OF GILDEA’S JUDGMENT
¶24 Mr. Gildea alternatively argues that we should invoke our
equitable power to extend his judgment. He first argues that it
would be inequitable to allow the judgment to expire in his case
because a foreclosure action was his only means of enforcing it.
Second, he argues that Wells Fargo should be estopped from
asserting the expiration of the judgment because, by alleging
unmeritorious counterclaims and defenses, Wells Fargo assured that
the judgment would expire before the foreclosure litigation could be
concluded. We address each argument in turn.
A. Filing a Foreclosure Action Was Not Mr. Gildea’s Only Option and
Would Not Justify Tolling the Judgment’s Expiration in Any Event
¶25 A judgment creditor may enforce his judgment through a
writ of execution or a foreclosure action. Capital Assets Fin. Servs. v.
Maxwell, 2000 UT 9, ¶ 15, 994 P.2d 201 (“Once a judgment lien
attaches, a judgment creditor may levy execution on the property or
foreclose on the lien . . . .”). Mr. Gildea argues that a writ of
execution was not available to him and therefore foreclosing on the
lien was his only enforcement option. Specifically, he relies on rule
64E(a) of the Utah Rules of Civil Procedure, which provides that “[a]
writ of execution is available to seize property in the possession or
under the control of the defendant following entry of a final
judgment.” (Emphasis added). And because rule 64(a)(2) defines
“defendant” as “the party against whom a claim is filed or against
whom judgment has been entered,” Mr. Gildea argues that R/P
Development, not Wells Fargo, is the defendant. Mr. Gildea
5
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differs significantly from Utah’s.
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Opinion of the Court
therefore contends that he could not have executed on Marina
Village Lot 11 once it became the property of Wells Fargo. But Mr.
Gildea ignores rule 64(e)(1), which explains that “[a]ny person
claiming an interest in the property has the same rights and
obligations as the defendant with respect to the writ.” Because Wells
Fargo claimed an interest in the property, it assumed the same
obligations with respect to a writ of execution as R/P Development.
Thus, Mr. Gildea could have levied execution on the lot.
¶26 Moreover, even if it were true that a foreclosure action was
Mr. Gildea’s only option, Mr. Gildea fails to explain how that
supports his equitable argument. Had foreclosure been Mr. Gildea’s
only option, he should have been all the more motivated to either
renew the judgment or file his foreclosure action well before the
judgment’s expiration.
¶27 Mr. Gildea also alleges that renewing the judgment was not
an option for him because renewing the judgment would have
resulted in a new judgment against R/P Development, and any liens
acquired pursuant to the new judgment would have attached only
to property now owned by R/P Development. Because Wells Fargo,
not R/P Development, owns Marina Village Lot 11, Mr. Gildea
reasons that he would have lost his lien on the lot had he renewed
the judgment. In so arguing, Mr. Gildea relies on Cox Corp. v. Vertin,
754 P.2d 938, 939 (Utah 1988), and Free v. Farnworth, 188 P.2d 731,
734–35 (Utah 1948). In Cox, we discussed the effect of renewing a
judgment. 754 P.2d at 938. At that time, Utah’s judgment lien statute
did not “authorize the renewal of a judgment subject to limitations
or restrictions imposed on it.” Id. at 939. We therefore held that
“[t]he lien of a renewal judgment attaches only from the date of
entry of the new judgment and does not relate back to the date of the
original judgment or extend the prior lien.” Id. (citing Free,
188 P.2d at 731). In other words, “[a] renewal of a judgment results
in a new judgment which . . . creates a new lien upon all the real
property of the judgment debtor.” Id. (internal quotation marks
omitted).
¶28 Our holdings in Cox and Free are consistent with Mr.
Gildea’s assertions that a renewal of the judgment would have
created an entirely new judgment against R/P Development. Thus,
any subsequent judgment lien would attach to property owned by
R/P Development, not Wells Fargo. But Mr. Gildea fails to
acknowledge that the Legislature changed the process for renewing
judgments in 2011 when it enacted the Renewal of Judgment Act
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(the Act). At the time of Cox, a party seeking to renew a judgment
did so by filing a completely new action in the district court. See Cox,
754 P.2d at 939; see also Renewal of Judgment Act: Hearing on HB10
Before the House Judiciary Standing Committee, General Session (2011)
(statement of Kirk Cullimore, bill drafter and attorney) (explaining
that, prior to the Renewal of Judgment Act, parties seeking to renew
a judgment did so by filing a completely new action). And it was this
renewal procedure that gave rise to our holdings in Cox and Free.
Because renewing a judgment required the filing of a new action, it
made sense that any judgments rendered in the new action would
result in a new judgment and new liens. But the Renewal of
Judgment Act completely changed the landscape by creating a new
mechanism for renewing a judgment. Parties seeking to renew a
judgment now do so by filing “a motion . . . within the original action”
in which the judgment was first obtained. UTAH CODE § 78B-6-1802
(emphasis added). Because renewing a judgment no longer requires
the filing of a new action, our Cox and Free decisions are no longer
consistent with the statutory framework. Indeed, the Act explains
that if a district court grants a motion to renew a judgment, the
district court’s order serves to “renew[] the original judgment” for
the same amount of time as the original judgment. Id. § 78B-6-1804.
And because a renewed judgment relates back to and extends the
life of the original judgment, a renewed lien likewise relates back to
the original lien. Thus, when a judgment creditor renews his
judgment and follows the proper procedure for renewing the
associated liens, see id. § 78B-5-202(9)(a), the original liens will be
extended for an additional eight years.
¶29 The Renewal of Judgment Act is consistent with the renewal
mechanism in several other states.6 The Act also brings Utah’s
6
See, e.g., N.D. CENT . CODE § 28-20-23 (2014) (stating that renewed
judgments operate “under the same conditions and with the same
force and effect within such renewal period as upon a judgment
originally rendered and entered at the date of such renewal”); S.D.
CODIFIED LAWS § 15-16-35 (2014) (“An execution may issue upon the
judgment as renewed under the same conditions and with the same
force and effect within such renewal period as upon the judgment
originally rendered . . . .”); Jonathan Neil & Assocs., Inc. v. Jones,
42 Cal. Rptr. 3d 350, 356 (Ct. App. 2006) (“[R]enewal does not create
a new judgment or modify the present judgment. Renewal merely
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Opinion of the Court
judgment renewal procedure more in line with states that follow a
dormancy/revival judgment system. In those states, a judgment
becomes dormant if the judgment creditor takes no action on the
judgment within a statutorily prescribed time frame. 46 AM . JUR. 2D .
Judgments § 385 (2006). The statutes of these states also provide
mechanisms for reviving a dormant judgment. Under the judgment
revival mechanism, parties who revive their judgment do not receive
a new judgment, but instead bring life back to their original
judgment.7
¶30 We therefore hold that under the Renewal of Judgment Act,
renewing a judgment gives new life to a party’s original judgment.
And we acknowledge that our holdings in Cox and Free have been
statutorily overruled. Mr. Gildea is therefore incorrect in arguing
that renewing the judgment would have resulted in a new judgment
and new liens. And even had the Legislature not passed the Renewal
of Judgment Act, we could not find an equitable justification for
allowing Mr. Gildea to foreclose a lien arising from an expired
judgment. Since renewing the judgment would not have renewed
the lien on Marina Village Lot 11 under prior law, Mr. Gildea should
have either pursued a writ of execution or a foreclosure action well
before the judgment’s expiration. Because Mr. Gildea did not enforce
the judgment for over five years, we see no equitable reason for
holding that his filing of a foreclosure action on the eleventh hour of
the judgment’s life should extend its duration.
B. Wells Fargo Is Not Estopped from Asserting the
Judgment’s Expiration
¶31 Mr. Gildea next argues that Wells Fargo should be estopped
from raising the judgment’s expiration because it extended the
foreclosure litigation until the judgment expired. Specifically, Mr.
Gildea claims that Wells Fargo acted in bad faith by including
6
(...continued)
extends the enforceability of the judgment.”).
7
See GA . CODE ANN . 9-12-62 (2014) (“[R]eviv[ing] a judgment is
not an original action but is the continuation of the action in which
the judgment was obtained.”); Eatman v. Goodson, 58 So. 2d 129, 131
(Ala. Ct. App. 1951) (explaining that “to revive a judgment is not to
seek a new judgment for debt, but . . . to revitalize a dormant
judgment so as to enable the creditor to enforce by execution the
judgment he has already obtained”).
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defenses and counterclaims in its answer to Mr. Gildea’s complaint,
which forced Mr. Gildea to file an amended complaint after the
judgment expired.
¶32 As explained above, under our holding in Free, a judgment
debtor cannot assert a judgment’s expiration as a defense when the
debtor acts in bad faith to prevent the judgment creditor from
enforcing the judgment. 188 P.2d at 734–35. This principle is
predicated upon the theory that once a party seeks equitable relief,
it consents to an equitable—even though undesired—result.
Id. at 735.
¶33 More recently, in Sittner v. Schriever, the court of appeals
relied on this principle to hold that where erroneous adverse rulings
prevent a judgment creditor from enforcing his judgment, the
expiration of the judgment can be tolled. 2001 UT App 99, ¶ 17,
22 P.3d 784. In Sittner, the district court and bankruptcy court
collectively made three adverse decisions against the judgment
creditor that rendered enforcement of the judgment impossible.
Id. ¶¶ 4–5. Because all three decisions were later reversed, and
because those erroneous decisions had prevented the judgment
creditor from enforcing the judgment before it expired, the court of
appeals held that the time it took to appeal and resolve the
erroneous decisions did not count against the judgment’s eight-year
duration. Id. ¶ 17.
¶34 Mr. Gildea argues that Wells Fargo should likewise be
estopped from asserting the expiration of the judgment because, by
including defenses and counterclaims in its answer to the foreclosure
action, Wells Fargo prevented Mr. Gildea from enforcing his
judgment before it expired. But Mr. Gildea’s situation is
distinguishable from Sittner and Free, because Wells Fargo’s answer
to Mr. Gildea’s foreclosure action did not prevent Mr. Gildea from
enforcing the judgment. Wells Fargo filed its answer in a timely
fashion, and Mr. Gildea fails to explain how Wells Fargo acted in
bad faith by including defenses and counterclaims in its answer. Mr.
Gildea has not shown how Wells Fargo’s answer was anything other
than a valid response to his complaint. We conclude that this case is
more like Federal Farm Mortgage because Mr. Gildea’s action to
enforce the judgment “before the lien expired was not made
impossible nor rendered fruitless by any wrongful or misleading act
or conduct of the defendants.” 206 P.2d 146, 147–48 (Utah 1949).
Thus, we find no principle of equity under which the judgment
13
GILDEA v. WELLS FARGO BANK, et al.
Opinion of the Court
should be extended past July 28, 2012.8
III. THE DISTRICT COURT CORRECTLY DISMISSED GILDEA’S
CLAIM AGAINST CLASSIC CABINETS
¶35 Mr. Gildea argues that even if the district court correctly
dismissed his foreclosure action against Wells Fargo, it erred in
dismissing the entire case without considering his claim against
Classic Cabinets. In answer to Mr. Gildea’s original complaint, Wells
Fargo asserted that the judgment was satisfied and produced a
satisfaction of judgment signed by Classic Cabinets. Mr. Gildea then
amended his complaint, alleging that Classic Cabinets wrongfully
interfered with the judgment when it signed the satisfaction of
judgment after having sold it to Mr. Gildea. Classic Cabinets
responds that Mr. Gildea did not preserve this issue in the district
court. We hold that the issue was preserved, but we are not
persuaded that the district court erred.
¶36 “We generally will not consider an issue unless it has been
preserved” in the court below. Patterson v. Patterson, 2011 UT 68,
¶ 12, 266 P.3d 828. Preservation turns on whether the district court
“has an opportunity to rule on [an] issue.” Pratt v. Nelson,
2007 UT 41, ¶ 15, 164 P.3d 366 (internal quotation marks omitted). In
this case, Classic Cabinets raised the sufficiency of the claim against
it and the district court ruled on the issue.
¶37 Classic Cabinets “join[ed] in the Motion to Dismiss filed . . .
by Defendant Wells Fargo.” In support of its motion, it argued that
[s]ince the judgment has expired by operation of law, the
property at issue in this case belongs to Wells Fargo Bank
free and clear of any claim by [Mr. Gildea], and since [he] has
no claim upon the property, [he] has no claim against [Classic
Cabinets] for alleged loss of the value of the property.
This argument was adequate to raise for the district court the
sufficiency of the claim against Classic Cabinets. And the district
court, in fact, thereafter ruled in favor of Classic Cabinets.
8
It is an unfortunate reality of our litigation system that, absent
a default by defendants, Mr. Gildea was extremely unlikely to obtain
a final judgment in his foreclosure action in fewer than three
months—he filed his case on April 16, 2012, and the judgment
expired on July 28, 2012.
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Cite as: 2015 UT 11
Opinion of the Court
¶38 Having concluded that the matter was preserved, we turn
to the merits. We conclude that the district court correctly dismissed
Mr. Gildea’s claim against Classic Cabinets. Classic Cabinets’
argument was that Mr. Gildea’s claim was legally insufficient
because the judgment had expired. After all, Classic Cabinets could
not interfere with an expired judgment. And Mr. Gildea never
contradicted this argument. Indeed, he could not. In his amended
complaint, Mr. Gildea had asked the district court to “enter
judgment in [his] favor against Classic Cabinets . . . in the full amount
which [he] would be entitled to recover under the Classic Cabinets
judgment, but for . . . Classic Cabinets’ wrongful interference with his
right to recover under that judgment.” (Emphasis added). In short,
Mr. Gildea’s claim against Classic Cabinets was admittedly
dependent upon the value of the judgment. And at the time Mr.
Gildea filed his claim against Classic Cabinets, the judgment was
worthless because it had expired. Thus, we affirm the district court
because the expiration of Mr. Gildea’s judgment rendered his claim
against Classic Cabinets legally insufficient.
CONCLUSION
¶39 Mr. Gildea’s filing of a foreclosure action on his judgment
lien did not toll the expiration of the underlying judgment. Because
the judgment expired during the pendency of the foreclosure action,
the district court correctly dismissed the action. We therefore affirm
the district court’s dismissal of Mr. Gildea’s foreclosure action and
his claim against Classic Cabinets.
15