Collection Bureau, Inc. v. Dorsey
| Decision Date | 21 March 2011 |
| Docket Number | No. 36734.,36734. |
| Citation | 150 Idaho 695,249 P.3d 1150 |
| Court | Idaho Supreme Court |
| Parties | COLLECTION BUREAU, INC., Plaintiff–Appellant, v. John M. DORSEY, Defendant–Respondent. |
Hamilton, Michaelson & Hilty, LLP, Nampa, for appellant. Kerry E. Michaelson argued.
Redal & Redal, Coeur d'Alene, for respondent. John E. Redal argued.
This case relates to an effort to collect a fine in a criminal case. Collection Bureau, Inc. (Collection Bureau) appeals the district court's order granting John Dorsey's (Dorsey) motion for summary judgment on the grounds that the statute of limitations barred recovery of the fine imposed upon conviction. We reverse and remand for further proceedings consistent with this opinion.
Dorsey was charged by information with trafficking in methamphetamine by manufacturing in Shoshone County. At the conclusion of his trial, the jury found Dorsey guilty. On March 19, 2001, the district court entered a judgment of conviction, sentencing Dorsey to twenty years imprisonment, with five years fixed, and fining Dorsey $25,000, payable to the Shoshone County Clerk of the Court.
On August 8, 2005, Dorsey was released on parole. On that date, he executed a notarized written instrument that set forth the conditions of his parole (Parole Agreement). The Parole Agreement contained a special condition providing that Dorsey
Shoshone County (the County) made unsuccessful oral and written demands of Dorsey for payment. The County did not record or renew the judgment, nor did it seek to execute upon the judgment. Instead, it assigned the debt to Collection Bureau. By September 25, 2007, interest on Dorsey's fine had increased the amount due to $33,325. Collection Bureau filed a complaint seeking to collect that amount on January 28, 2008. Dorsey answered, asserting that the claim was barred by the statute of limitations.
Dorsey moved for summary judgment on those grounds.1 In response, Collection Bureau asserted that because the original judgment was in writing and benefited the state, it was excepted from the five-year statute of limitations by operation of I.C. § 5–216.2 In the alternative, Collection Bureau asserted that the Parole Agreement was an enforceable contract between Dorsey and the Department of Corrections that renewed Dorsey's obligation to pay the debt. Collection Bureau argued that the County, and Collection Bureau as its assignee, were third-party beneficiaries of that contract and therefore had the right to enforce the contract. Collection Bureau asserted that because the Parole Agreement was a contract with the state, enforcement of the document's terms was excepted from the statute of limitations provided by I.C. § 5–216, and therefore the cause of action was not barred. Collection Bureau also contended that even if the Parole Agreement did not inure to the benefit of the state, the action was not barred because it was a new written contract and the action was commenced within five years of the date of the Parole Agreement.
The district court found that the Parole Agreement could "potentially be construed as a contract between the State of Idaho Department of Correction and Mr. Dorsey." However, it held that the gravamen of that agreement was that Dorsey must engage in prosocial activities to maintain his release on parole. It held that since the benefit that would inure to the County if Dorsey paid the fine was only incidental to this prosocial purpose, Collection Bureau was not a third-party beneficiary vested with the authority to enforce the Parole Agreement. The district court thus granted Dorsey's motion for summary judgment.3 Collection Bureau timely appealed, requesting attorney fees and costs pursuant to I.C. §§ 12–120(3) and 12–121, as well as Idaho Appellate Rules 35(a)(5) and 41.
On appeal from an order granting a party's motion for summary judgment, we employ the same standard of review that the trial court used in ruling on the motion.
Baxter v. Craney, 135 Idaho 166, 170, 16 P.3d 263, 267 (2000). Summary judgment is appropriate when the pleadings, affidavits, and discovery documents before the district court indicate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. I.R.C.P. 56(c). The moving party carries the burden of proving the absence of a genuine issue of material fact. Baxter, 135 Idaho at 170, 16 P.3d at 267. This Court will liberally construe facts in favor of the non-moving party, together with all reasonable inferences from the evidence. Coghlan v. Beta Theta Pi Fraternity, 133 Idaho 388, 400–01, 987 P.2d 300, 312–13 (1999).
Collection Bureau contends there are two avenues by which this Court may find its complaint was timely filed. First, it argues that the March 19, 2001, judgment sentencing Dorsey to imprisonment and payment of a fine was a written instrument to which the state was a party, and therefore I.C. § 5–216, the statute of limitations governing liability upon written instruments, does not apply. Collection Bureau also argues that if this Court finds I.C. § 5–216 to be inapplicable to the judgment, the statute applies to the August 8, 2005, Parole Agreement signed by Dorsey. Collection Bureau asserts the Parole Agreement was a new written contract of which it is a third-party beneficiary. Collection Bureau argues that Dorsey acknowledged the debt owed to the County by signing the Parole Agreement and thereby renewed his obligation to pay it. Thus, Collection Bureau argues the I.C. § 5–216 five-year statute of limitations applicable to written instruments began to run on August 8, 2005, making the January 28, 2008 complaint timely. Dorsey responds that this action is governed by I.C. § 5–215,4 providing a six year statute of limitations, and because this action was not initiated within six years of the entry of the criminal judgment, the action is barred.
We find that Dorsey's execution of the Parole Agreement constituted an acknowledgement of the debt. For that reason, we do not decide which statute of limitations found within chapter 2, Title 5, Idaho Code applies.
Collection Bureau argues that Dorsey's act of signing the August 8, 2005, Parole Agreement was an acknowledgment evidencing a new or continuing contract between Dorsey and the state, sufficient to renew Dorsey's obligation to pay the fine. This acknowledgment, Collection Bureau asserts, triggered a new five-year statute of limitations for bringing an action on a written instrument under I.C. § 5–216. Since Collection Bureau's present action to enforce the acknowledgment was brought within that period, it argues its complaint was timely filed. Collection Bureau further argues that Shoshone County was a third-party beneficiary to the Parole Agreement, and thus Collection Bureau as the County's assignee has standing to enforce the agreement.
For over a century, Idaho law has provided that one may reinitiate the statute of limitations on an unpaid debt for which the statute's period has not yet expired by acknowledging the debt's existence in writing. E.g., Dern v. Olsen, 18 Idaho 358, 366, 110 P. 164, 166 (1910).
No acknowledgment or promise is sufficient evidence of a new or continuing contract by which to take the case out of the operation of this chapter, unless the same is contained in some writing, signed by the party to be charged thereby; but any payment of principal or interest is equivalent to a new promise in writing, duly signed, to pay the residue of the debt.
Idaho Code § 5–238. Where a debtor acknowledges a debt that has not yet been barred by the statute of limitations, a continuing contract is created because Dern, 18 Idaho at 366, 110 P. at 167. No additional consideration is necessary. Id.; see also Shepherd v. Thompson, 122 U.S. 231, 235, 7 S.Ct. 1229, 1231, 30 L.Ed. 1156, 1157 (1887) ().
The Idaho acknowledgment statute was originally borrowed verbatim from a preexisting California statute. Woods v. Locke, 49 Idaho 486, 493, 289 P. 610, 612 (1930). Thus, we presume that our legislature intended to adopt reasonable constructions of the statute that were established by California courts prior to its adoption in Idaho. Lawrence Warehouse Co. v. Rudio Lumber Co., 89 Idaho 389, 395, 405 P.2d 634, 637 (1965). When this Court was long ago confronted with the question of whether the statute is applicable to judgments, we looked to the California Supreme Court for guidance. Woods, 49 Idaho at 493, 289 P. at 612 (citing McCormick v. Brown, 36 Cal. 180 (1868) ). McCormick included judgment debts within the statute, and this Court reasoned that Id. (internal citations omitted). Collection Bureau thus correctly argues that the debt created by Dorsey's criminal judgment was capable of renewal by an acknowledgment.
The question then is whether the statements contained in Dorsey's Parole Agreement constitute an acknowledgment falling within the scope of I.C. § 5–238. "[A] clear and definite acknowledgment of the existence of the contract and liability, whether coupled with a direct promise to pay or not, carries with it an...
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