Commercial Credit Loans, Inc. v. Riddle

• Decision Date: 18 January 1999
• Docket Number: No. 2929.,2929.
• Citation: 512 S.E.2d 123,334 S.C. 176
• Parties: COMMERCIAL CREDIT LOANS, INC., Appellant, v. Roy RIDDLE, Beverly Riddle, and One Stop Mortgage, Defendants, Of whom Roy Riddle and One Stop Mortgage are Respondents.
• Court: South Carolina Court of Appeals

334 S.C. 176

512 S.E.2d 123

COMMERCIAL CREDIT LOANS, INC., Appellant, v. Roy RIDDLE, Beverly Riddle, and One Stop Mortgage, Defendants, Of whom Roy Riddle and One Stop Mortgage are Respondents.

No. 2929.

Court of Appeals of South Carolina.

Submitted January 12, 1999.

Decided January 18, 1999.

Rehearing Denied March 27, 1999.

John Gulledge, of Greenwood, for appellant.

James S. Verner, of Harley & Verner, of Newberry, for respondent One Stop Mortgage.

Roy Riddle, of Newberry, pro se.

HEARN, Judge:

In this supplemental proceeding, Commercial Credit Loans, Inc. seeks to enforce a judgment it originally obtained against Roy and Beverly Riddle in Illinois. The special referee found South Carolina's ten year enforcement period for execution on a judgment barred the present proceeding. Commercial Credit appeals. We reverse in part, and affirm in part.¹

Facts/Procedural History

On July 26, 1985, the Riddles purchased property in Newberry County. After receiving notice of Commercial Credit's pending suit in Illinois, the Riddles conveyed the property to Ezell Kyzer on February 5, 1986. The deed was promptly recorded in Newberry County and recited a consideration of $2,000 plus assumption of the existing mortgage. Commercial Credit obtained a default judgment against the Riddles in Illinois on May 27, 1986, and subsequently brought an action in South Carolina to domesticate the foreign judgment.² Pursuant to a circuit court order dated February 13, 1989, granting judgment against the Riddles, the South Carolina judgment was enrolled in the Book of Abstracts for Newberry County on February 21, 1989. On May 11, 1990, Commercial Credit issued an execution against the Riddles in Newberry County; it was returned nulla bona.

The admitted purpose of the original transfer of the Newberry property from the Riddles to Kyzer was to avoid the Illinois judgment. On October 25, 1996, Kyzer and Roy Riddle recorded a document declaring that "Mr. Riddle is in fact the true owner of the property." According to this document, the property was titled to Kyzer to "protect his interest in the down payment funds which he loaned to Mr. Roy Riddle to purchase said property and the names will be changed on the titled [sic] at such time as Mr. Riddle fully pays back the down payment money to Mr. Kyzer."

Riddle reacquired legal title to the Newberry County property from Kyzer by deed dated April 21, 1997, and recorded on April 30, 1997. Contemporaneous with this transaction, Riddle refinanced the indebtedness on the property by giving a mortgage to One Stop Mortgage. The HUD-1 settlement statement refers to the refinance as a Transaction Without Sellers.

Commercial Credit, through this action, attempted to execute upon the Newberry property in September 1997. The action was referred to the special referee for entry of a final order with direct appeal to the South Carolina Supreme Court.

The special referee concluded the primary legal issue in the case was the enforcement period for judgments as specified in South Carolina Code section 15-39-30. He held the date of "original entry" as specified by the statute was the date the judgment was originally entered in the rendering state, Illinois. Accordingly, he ruled the judgment was extinguished as of May 27, 1996, ten years after its date of entry in Illinois, even though the judgment was not domesticated in South Carolina until February 21, 1989.

The referee also concluded Commercial Credit failed to pursue diligently its efforts to collect on the judgment. Therefore, any fraudulent actions taken by the Riddles to conceal property from Commercial Credit did not extend the time for execution. With respect to One Stop Mortgage, the referee held its mortgage did not have priority over Commercial Credit's judgment because it was not a purchase money mortgage.

Discussion

A. Interpretation of "Original Date of Entry"

Commercial Credit argues the special referee erred in relating the date of original entry back to the date of entry in Illinois. It argues the proper date of original entry when calculating the enforcement period of a South Carolina judgment is the date it was entered in South Carolina. We agree.

Prior to this state's adoption of the Uniform Enforcement of Foreign Judgments Act, a judgment creditor who possessed a foreign judgment against a South Carolina judgment debtor was required to domesticate the foreign judgment before it could be enforced against property of the debtor in this state. This was accomplished by the creditor bringing a suit in South Carolina and pleading the foreign judgment as the cause of action. By this process, the foreign judgment was recognized by a South Carolina court, and a South Carolina judgment was obtained. Mitchell v. Mitchell, 266 S.C. 196, 222 S.E.2d 499 (1976).

A South Carolina judgment entered upon the book of abstracts and duly indexed constitutes a lien upon the real estate of the judgment debtor located in the county where the judgment is indexed for a period of ten years. S.C.Code Ann. § 15-35-810 (1976); Wells ex rel A.C. Sutton & Sons, Inc. v. Sutton, 299 S.C. 19, 22, 382 S.E.2d 14, 16 (Ct.App.1989). Code section 15-39-30 governs the duration of judgments in this state and provides:

Executions may issue upon final judgments or decrees at any time within ten years from the date of the original entry thereof and shall have active energy during such period, without any renewal or renewals thereof, and this whether any return may or may not have been made during such period on such executions.

Our state courts have held a judgment is extinguished ten years from the date of entry. LaRosa v. Johnston, 328 S.C. 293, 493 S.E.2d 100 (Ct.App.1997) (dealing with an original South Carolina judgment); Sutton, 299 S.C. 19, 382 S.E.2d 14.

The institution of an action to domesticate a foreign judgment specifically contemplates that a South Carolina judgment will be issued by a South Carolina court.³ At that point, pursuant to section 15-35-810, this South Carolina judgment may then be abstracted and indexed so as to constitute a lien upon the debtor's real property for a period of ten years. It logically follows that section 15-39-30 also deals with the date of original entry of the South Carolina judgment which may then be executed upon for a period of ten years. See also Chester & Cheraw R.R. v. Marshall, 40 S.C. 59, 63, 18 S.E. 247, 249 (1893) ("`The execution is [the] only process to enforce the judgment, and it cannot have active energy unless the underlying judgment has a lien'" (citations omitted)); Bayne v. Bass, 302 S.C. 208, 394 S.E.2d 726 (Ct.App.1990) (final decree becomes effective only when it has been delivered by the judge to the clerk of court for the clerk to file as the order in the case); Rule 58(a), SCRCP ("Every judgment shall be set forth on a separate document. A judgment is effective only when so set forth and entered in the record."). In the context of this case, the Illinois judgment was transmuted into a South Carolina judgment when it was domesticated and the judgment duly enrolled on February 21, 1989. Thus, both the ten year lien period on real estate and the ten year period for enforcement of the judgment began on that date. See TranSouth Fin. Corp. v. Cochran, 324 S.C. 290, 478 S.E.2d 63 (Ct.App.1996)

(The wording of sections 15-35-810 and 15-39-30 indicates the judgment lien continues for ten years and that execution upon judgments must issue within ten years.).

We believe this construction of section 15-39-30 is consistent with the manner in which other states have dealt with the issue of enforcement of registered or domesticated foreign judgments.⁴ In Drllevich Constr. Inc. v. Stock, 958 P.2d 1277 (Okla.1998), the Oklahoma Supreme Court held a foreign judgment which is enforceable at the time the judgment creditor registers it in Oklahoma will be considered, for the purpose of enforcement, as a new judgment of the state of Oklahoma. Similarly, the Nebraska Court of Appeals held that the count for dormancy of a judgment begins on the date the foreign judgment is brought to a state and registered. St. Joseph Dev. Corp. v. Sequenzia, 7 Neb.App. 759, 585 N.W.2d 511, 516 (1998). The Utah Supreme Court held a foreign judgment properly filed in Utah under the Utah Foreign Judgment Act created a new Utah judgment for purposes of enforcement. Pan Energy v. Martin, 813 P.2d 1142 (Utah 1991). Also, the Virginia Supreme Court in Carter v. Carter, 232 Va. 166, 349 S.E.2d 95 (1986), discussing the distinction between the time period for bringing an action on a foreign judgment and the time period for enforcement of a judgment, stated:

Code § 8.01-251 imposes a 20-year limitations period on the enforcement of judgments. Code § 8.01-252, however, imposes a period limiting to 10 years the time in which a party may bring an action in Virginia on a foreign judgment. Once the foreign judgment is reduced to a Virginia judgment under this provision, enforcement of the judgment, like any originating in Virginia, is subject to the 20-year limitation period of § 8.01-251. Thus, a foreign judgment creditor may actually have as many as 30 years to enforce his judgment.

Id. at 98 (emphasis in original).⁵

We conclude the special referee erred in his interpretation of section 15-39-30. The language "from the date of original entry thereof" refers to the date of entry of a South Carolina judgment. In this case, that date was February 21, 1989. Consequently, the ten year enforcement period runs through February 21, 1999.

B. Tolling the Enforcement Period

Commercial Credit also argues the special referee erred in concluding it was not entitled to relief from the enforcement period limitation because it did not diligently pursue its collection efforts. Commercial Credit argues the admitted purpose of the conveyance from the Riddles to Kyzer was to avoid the Illinois judgment. Although we disagree with the special referee that...