Fid. Nat'l Fin., Inc. v. Friedman

• Decision Date: 22 August 2019
• Docket Number: No. 17-15913,17-15913
• Parties: FIDELITY NATIONAL FINANCIAL, INC., a Delaware Corporation; Fidelity Express Network, Inc., a California Corporation, Plaintiffs-Appellants, v. Colin H. FRIEDMAN, individually and as trustee of Friedman Family trust UDT Dated 7/23/87; Hedy Kramer Friedman, individually and as trustee of Friedman Family trust UDT Dated 7/23/87; Farid Meshkatai, an individual; Anita Kramer Meshkatai, individually and as trustee of Anita Kramer Living Trust Dated 7/23/87, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

935 F.3d 696

FIDELITY NATIONAL FINANCIAL, INC., a Delaware Corporation; Fidelity Express Network, Inc., a California Corporation, Plaintiffs-Appellants,

v.Colin H. FRIEDMAN, individually and as trustee of Friedman Family trust UDT Dated 7/23/87; Hedy Kramer Friedman, individually and as trustee of Friedman Family trust UDT Dated 7/23/87; Farid Meshkatai, an individual; Anita Kramer Meshkatai, individually and as trustee of Anita Kramer Living Trust Dated 7/23/87, Defendants-Appellees.

No. 17-15913

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 12, 2018 San Francisco, California

Filed August 22, 2019

Thomas H. Case (argued) and Michael G. King, Hennelly & Grossfeld LLP, Marina del Rey, California, for Plaintiffs-Appellants.

David M. Bass (argued), David M. Bass & Associates Inc., Los Angeles, California; Dominica J. Minore, The Law Offices of Dominica J. Minore P.C., Scottsdale Arizona; for Defendants-Appellees.

Before: A. Wallace Tashima and Mary H. Murguia, Circuit Judges, and Robert N. Chatigny,^* District Judge.

TASHIMA, Circuit Judge:

In order to facilitate the enforcement of federal judgments, 28 U.S.C. § 1963 provides that a judgment entered in a federal court may be registered in any other federal district by "filing a certified copy of the judgment" in that district. In this case we address, as a matter of first impression in our Circuit, whether personal jurisdiction over the judgment debtors in the district of registration is required for such registration of a judgment. We hold that it is not, because neither § 1963 nor due process imposes such a personal jurisdiction requirement. We therefore reverse the order and judgment of the district court, and remand.

BACKGROUND

In 2002, Plaintiffs-Appellants Fidelity National Financial, Inc., and Fidelity Express Network, Inc. (collectively, "Fidelity"), obtained a multimillion dollar civil fraud judgment (the "California Judgment") against Defendants-Appellees the Friedmans and Meshkatais (collectively, "Defendants") in the U.S. District Court for the Central District of California. This judgment became final on May 15, 2003, after this Court dismissed Defendants’ appeal from the judgment.

While Defendants’ appeal in the original case was pending, Fidelity registered the California Judgment in the District of Arizona pursuant to the federal registration statute, 28 U.S.C. § 1963. In 2007, Fidelity attempted to renew the Arizona judgment. However, on March 2, 2012, the District Court of Arizona ruled that Fidelity’s 2007 renewal or re-registration of the Arizona registered judgment were void as untimely, because the judgment had already expired under Arizona’s five-year statute of limitations for the enforcement of judgments.

Unable to enforce the Arizona registered judgment or re-register the original California Judgment in Arizona, Fidelity came up with a creative alternative. Fidelity registered the California Judgment in the Western District of Washington (the "Washington Judgment") Fidelity then registered the newly-obtained Washington Judgment in the District of Arizona (the "Second Arizona Judgment").

Several months later, Defendants moved the Arizona District Court under Federal Rule of Civil Procedure 60(b) to vacate the newly-registered Second Arizona Judgment as void, arguing that § 1963 did not allow successive registration of federal judgments. That is, Defendants argued that registering the California Judgment in Washington did not create a new Washington judgment that could then be registered in Arizona under § 1963. Defendants also argued that, in any case, the Washington Judgment was invalid for lack of personal jurisdiction over Defendants. The Arizona district court granted Defendants’ motion and vacated the Second Arizona Judgment, holding that § 1963 did not allow successive registration of judgments—in other words, that only an original judgment, such as the California Judgment in this case, may be registered in another district under § 1963. See Fid. Nat’l Fin., Inc. v. Friedman , 939 F. Supp. 2d 974, 979–87 (D. Ariz. 2013). The district court did not reach Defendants’ second argument regarding lack of due process and personal jurisdiction. Id. at 986–87.

Fidelity appealed, and this Court reversed. Fid. Nat’l Fin., Inc. v. Friedman , 803 F.3d 999 (9th Cir. 2015) (" Fidelity I "). We held that registering the California Judgment in Washington created a "new" Washington judgment that, like any other Washington judgment, could be re-registered in another state under the plain terms of § 1963. Id. at 1003. We remanded the case to the Arizona district court on that basis, without reaching Defendants’ alternative argument that the Washington Judgment was void for lack of jurisdiction over Defendants. See id. at 1003 n.3.

On remand, the district court again granted Defendants’ Rule 60(b) motion for relief from judgment, after allowing supplemental briefing on Defendants’ contention that the Washington Judgment was void because the Western District of Washington lacked personal jurisdiction over Defendants at the time of registration. See Fid. Nat’l Fin. Inc. v. Friedman , No. CV-15-2288-PHX-DJH, 2017 WL 6049376 (D. Ariz. May 1, 2017). The district court held that registration of a judgment pursuant to § 1963 requires that the court of registration have personal jurisdiction over the judgment debtors. See id. at *6–7. In reaching this conclusion, the district court first noted that a judgment is void if the court that "rendered" the judgment lacked jurisdiction over the parties. Id. at *5. It then reasoned that because we suggested in Fidelity I that registering a judgment under § 1963 creates a "new" judgment, the court of registration can be said to have "rendered" a judgment such that the normal jurisdictional requirements apply. See id. at *5–7. Because Defendants had no assets or other contacts in Washington, the district court concluded that the Washington court lacked personal jurisdiction over Defendants; consequently, that the Washington Judgment was void and could not have been validly registered in Arizona. Id. at *4, *7. As a result, the district court vacated the Second Arizona Judgment. Fidelity again appealed.

STANDARD OF REVIEW

This Court "review[s] de novo ... a district court’s ruling upon a Rule 60(b)(4) motion ... because the question of the validity of a judgment is a legal one." Export Grp. v. Reef Indus., Inc. , 54 F.3d 1466, 1469 (9th Cir. 1995) ; see also Fidelity I , 803 F.3d at 1001.

DISCUSSION

On appeal, Fidelity asserts that the district court improperly granted relief from judgment because a court need not have personal jurisdiction over a judgment debtor in order to "merely register" a previously obtained judgment pursuant to § 1963. For the reasons explained below, we agree.

First, neither the relevant statute’s plain language nor its purpose supports a personal jurisdiction requirement for registration of a judgment. Section 1963 provides:

A judgment in an action for the recovery of money or property entered in any court of appeals, district court, bankruptcy court, or in the Court of International Trade may be registered by filing a certified copy of the judgment in any other district ... when the judgment has become final by appeal or expiration of the time for appeal or when ordered by the court that entered the judgment for good cause shown. ... A judgment so registered shall have the same effect as a judgment of the district court of the district where registered and may be enforced in like manner.

28 U.S.C. § 1963. Nothing in this provision limits the district courts in which a judgment may be registered to only those that can assert personal jurisdiction over the judgment debtors. Instead, the provision’s text is extremely broad, allowing a judgment entered in "any ... district court" to be registered "in any other district." Id. Furthermore, the fact that registering a judgment in another district simply requires "filing a certified copy of the judgment" suggests that the registration process is intended to be simple, essentially an administrative task that does not require any additional judicial action. See id.

Giving effect to this broad statutory language also accords with the provision’s purpose, which is "to simplify and facilitate collection on valid judgments." Fidelity I , 803 F.3d at 1003 (citation omitted). Section 1963 aims to spare creditors and debtors "the additional cost and harassment of further litigation which would otherwise be required by way of an action on the judgment in a district court other than that where the judgment was originally obtained." S. Rep. No. 83-1917 (1954), as reprinted in 1954 U.S.C.C.A.N. 3142; see also Stanford v. Utley , 341 F. 2d 265, 270 (8th Cir. 1965) ("[T]he purposes of § 1963 were to simplify and facilitate the enforcement of federal judgments, ... to eliminate the necessity and expense of a second lawsuit, and to avoid the impediments, such as diversity of citizenship, which new and distinct federal litigation might otherwise encounter."). Adhering to the statutory text’s expansive license to register judgments in other districts effectuates those purposes;¹ reading a non-existent jurisdictional requirement into the statute would contravene Congress’ intent by placing limits on registration that would make the process more onerous and potentially require additional litigation regarding jurisdiction.² Thus, we hold that § 1963 itself does not require that a court have personal jurisdiction over a judgment debtor in order to register an existing judgment.

We next turn to the due process basis of the district court’s ruling. The district court noted that under this Court’s ruling in Fidelity I , registering a judgment in another district pursuant to § 1963 creates a "new judgment" that is treated as if it had been rendered in the new district and that "[a] judgment is void ‘if the court that rendered the judgment lacked...