American Discount Corp. v. Shepherd
| Decision Date | 08 September 2005 |
| Docket Number | No. 54017-3-I.,54017-3-I. |
| Citation | 120 P.3d 96,129 Wn. App. 345 |
| Court | Washington Supreme Court |
| Parties | AMERICAN DISCOUNT CORPORATION, a Washington corporation, Plaintiff, and United Collection Service, Inc., Respondent, v. W. Austin SHEPHERD Jr., and Joy L. Shepherd, husband and wife, Appellants. |
Marc S. Stern, Attorney at Law, Seattle, WA, for Appellants.
Walter David Palmer, Attorney at Law, Seattle, WA, for Respondent.
¶ 1 A judgment was entered in 1986 against appellant, Joy Shepherd, and her husband. The judgment creditor assigned it to United Collection Service in 1987. In 1996, prior to its expiration date, United obtained an order extending the judgment for ten years. In 2001, the Court of Appeals determined that under then-existing statutory law, only judgment creditors could seek extension orders; assignees could not. Shepherd argues the extension was therefore void and the judgment expired. United argues that subsequent statutory amendments in 2002 retroactively validated the 1996 extension. We hold that the judgment expired on its ten-year anniversary in 1996 and cannot be revived. We reverse.
¶ 2 On August 21, 1986, a judgment was entered in favor of American Discount, Inc. The judgment debtors were W. Austin Shepherd, Jr., and Jane Doe Shepherd, husband and wife.1 It is uncontested that Joy Shepherd is Jane Doe Shepherd (Shepherd). On October 15, 1987, American Discount assigned the judgment to United Collection Service. United did not collect on the judgment within ten years of its entry. On July 8, 1996, United obtained an order extending the judgment for ten years and the judgment was reset to expire in 2006. On January 29, 2004, United moved to appoint an appraiser for Joy Shepherd's real property, on which an execution was levied and for which she claimed a homestead exception.
¶ 3 Shepherd moved to vacate the 1996 extension as void ab initio, arguing that existing law in 1996 permitted only a judgment creditor, not its assignee, to extend judgments. In 1996, RCW 6.17.020 permitted judgment creditors to extend the time for expiration of a judgment:
(1) Except as provided in subsections (2), (3), and (4) of this section, the party in whose favor a judgment of a court of record of this state or a district court of this state has been or may be rendered, or the assignee, may have an execution issued for the collection or enforcement of the judgment at any time within ten years from entry of the judgment.
...
(3) After June 9, 1994, a party in whose favor a judgment has been rendered pursuant to subsection (1) or (4) of this section may, within ninety days before the expiration of the original ten-year period, apply to the court that rendered the judgment for an order granting an additional ten years during which an execution may be issued.
RCW 6.17.020 (1996).
¶ 4 RCW 6.17.020(3) was amended effective June 13, 2002 to give assignees as well as judgment creditors the right to obtain an extension:
(3) After June 9, 1994, a party in whose favor a judgment has been filed as a foreign judgment or rendered pursuant to subsection (1) or (4) of this section, or the assignee or the current holder thereof, may, within ninety days before the expiration of the original ten-year period, apply to the court that rendered the judgment or to the court where the judgment was filed as a foreign judgment for an order granting an additional ten years during which an execution, garnishment, or other legal process may be issued.
RCW 6.17.020(3) (emphasis added); see Laws of 2002, Ch. 261. The 2002 amendments explicitly provide for retroactive application:
(8) The chapter 261, Laws of 2002 amendments to this section apply to all judgments currently in effect on June 13, 2002, to all judgments extended after June 9, 1994, unless the judgment has been satisfied, vacated, and/or quashed, and to all judgments filed or rendered, or both, after June 13, 2002.
RCW 6.17.020(8) (emphasis added).
¶ 5 United argues that the 2002 amendments retroactively validated the 1996 extension, and the judgment had therefore not expired. The trial court denied Shepherd's motion to vacate the order extending the judgment. Shepherd appeals.
¶ 6 Questions of statutory construction are reviewed de novo. J.D. Tan, L.L.C., v. Summers, 107 Wash.App. 266, 268, 26 P.3d 1006 (2001). A statute is ambiguous when it is susceptible to more than one reasonable interpretation. J.D. Tan, 107 Wash.App. at 269, 26 P.3d 1006. A clear, unambiguous statute is not subject to judicial construction and its meaning must be derived from its language. J.D. Tan, 107 Wash.App. at 269, 26 P.3d 1006.
¶ 7 While RCW 6.17.020 (1996) allowed both judgment creditors and their assignees to execute on a judgment, only judgment creditors were permitted to apply for an extension order. Compare RCW 6.17.020(1) (1996) with RCW 6.17.020(3) (1996). In J.D. Tan, this court held that assignees were excluded from the benefits of RCW 6.17.020(3) (1996). J.D. Tan, 107 Wash.App. at 267, 26 P.3d 1006. The statute specifically entitled assignees to execute on judgments in section (1), but did not give assignees the right to extend judgments in section (3). J.D. Tan, 107 Wash.App. at 268, 26 P.3d 1006. The court noted that although the legislature probably intended to give assignees the power to extend, the statute was not written to do so. J.D. Tan, 107 Wash.App. at 268, 26 P.3d 1006. Because the statute was not subject to more than one reasonable interpretation, and thus not ambiguous, it was not susceptible to judicial construction. J.D. Tan, 107 Wash.App. at 268-69, 26 P.3d 1006. The court held that it should be enforced as written: only judgment creditors, and not assignees, were entitled to extend judgments under RCW 6.17.020(3). J.D. Tan, 107 Wash.App. at 269, 26 P.3d 1006.
¶ 8 The court in J.D. Tan vacated extensions obtained by an assignee under the 1996 version of the statute, and declared the judgments void as a matter of law. J.D. Tan, 107 Wash.App. at 267-68, 26 P.3d 1006. The same circumstances exist in this case. American Discount was the judgment creditor, and United was its assignee. United had no authority under RCW 6.17.020(3) (1996) to seek an order extending the judgment. Thus, under J.D. Tan, the judgment expired in 1996 and the order extending the judgment should have been vacated.
¶ 9 United argues that the 2002 amendments only changed a procedure in the enforcement of judgments, and that the judgment itself did not expire. United classifies the ten-year limitations period in RCW 6.17.020 as a "statute of limitation," citing cases which refer to it as such. See, e.g., In re Marriage of Capetillo, 85 Wash.App. 311, 317, 932 P.2d 691 (1997); Hunter v. Hunter, 52 Wash.App. 265, 270, 758 P.2d 1019 (1988). Courts have consistently held that when a statute of limitation expires, the underlying claim continues to exist even though the claimant cannot use the power of the courts to enforce it. See, e.g., Stenberg v. Pac. Power & Light, 104 Wash.2d 710, 714, 709 P.2d 793 (1985); Walcker v. Benson & McLaughlin, 79 Wash.App. 739, 904 P.2d 1176 (1995). United argues that RCW 6.17.020 only limited the right to obtain a writ of execution, and the legislature could retroactively change a procedure allowing the enforcement of the still-valid judgment.
¶ 10 But, when the allowable period to execute on a judgment expires, the judgment lien ceases to exist and no action can be taken under the judgment:
(1) Except as provided in subsections (2) and (3) of this section, after the expiration of ten years from the date of the entry of any judgment heretofore or hereafter rendered in this state, it shall cease to be a lien or charge against the estate or person of the judgment debtor. No suit, action or other proceeding shall ever be had on any judgment rendered in this state by which the lien shall be extended or continued in force for any greater or longer period than ten years.
RCW 4.56.210.2 RCW 4.56.210(3) provides that if a judgment is extended under RCW 6.17.020, the judgment lien remains in force until expiration of the extended period.
¶ 11 "A judgment lien is born by statute, and dies by statute." Grub v. Fogle's Garage, Inc., 5 Wash.App. 840, 843, 491 P.2d 258 (1971) (citations omitted); see also Mueller v. Miller, 82 Wash.App. 236, 247, 917 P.2d 604 (1996). In Grub, the judgment creditor obtained a writ of execution prior to the expiration of the judgment lien.3 But, the sheriff's sale was not completed before the judgment lien expired. Grub, 5 Wash.App. at 840-41, 491 P.2d 258. The Grub court held that when the lien expired, any execution that was not completed also expired. Grub, 5 Wash.App. at 843, 491 P.2d 258. RCW 4.56.210 was "not a mere statute of limitation affecting a remedy only." Grub, 5 Wash.App. at 842, 491 P.2d 258 (). The court held that the statute takes away all right of action under the judgment:
It not only makes a judgment cease to be a "charge against the person or estate of the judgment debtor" after six years from the rendering of the judgment, but also in terms expressly takes away all right of renewal of or action upon the judgment looking to the continuation of its duration or that of the demand on which it rests, for a longer period than six years from the date of its rendition.
Grub, 5 Wash.App. at 842, 491 P.2d 258 (quoting Roche, 136 Wash. at 326, 239 P. 1015).
¶ 12 Thus, expiration of the ten-year period extinguishes not only a remedy, but also the right of action on the judgment. This is the effect of a nonclaim statute:
There are two types of statutes which the courts had to apply. One of them is the statute which either by its plain terms...
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