Investors Title Ins. Co. v. Herzig, 20100108.

• Decision Date: 12 January 2011
• Docket Number: No. 20100108.,20100108.
• Parties: INVESTORS TITLE INSURANCE COMPANY, Plaintiff v. David F. HERZIG, Southeastern Shelter Corporation, and Sheldon Smith, Personal Representative of the Estate of Alphild Herzig, substituted for Alphild Herzig, Deceased, Defendants. On Appeal Southeastern Shelter Corporation, Plaintiff and Appellant v. David F. Herzig; and Sheldon Smith, in his capacity as Personal Representative of the Estate of Alphild Herzig, substituted for Alphild Herzig, Deceased, Defendants and Appellees.
• Court: North Dakota Supreme Court

793 N.W.2d 371

2011 ND 7

INVESTORS TITLE INSURANCE COMPANY, Plaintiff

v.David F. HERZIG, Southeastern Shelter Corporation, and Sheldon Smith, Personal Representative of the Estate of Alphild Herzig, substituted for Alphild Herzig, Deceased, Defendants.

On Appeal Southeastern Shelter Corporation, Plaintiff and Appellant

v.David F. Herzig; and Sheldon Smith, in his capacity as Personal Representative of the Estate of Alphild Herzig, substituted for Alphild Herzig, Deceased, Defendants and Appellees.

No. 20100108.

Supreme Court of North Dakota.

Jan. 12, 2011.

Robert S. Rau, Minot, N.D., for plaintiff and appellant.

Arnold V. Fleck (argued), Bismarck, N.D., for defendant and appellee Sheldon Smith.

Daniel Harry Oster (appeared), Bismarck, N.D., for defendant and appellee David F. Herzig.

MARING, Justice.

[¶ 1] Southeastern Shelter Corporation ("Southeastern") appeals from an order declaring that a 1989 North Carolina judgment against David F. Herzig which Southeastern had attempted to collect from Herzig is no longer enforceable. We conclude that the district court had jurisdiction to rule on Herzig's motion and that the court did not err in concluding the judgment is unenforceable. We affirm.

I

[¶ 2] In 1989, Southeastern recovered a judgment against Herzig for $149,598.13 in a North Carolina court. The North Carolina judgment was transcribed and filed in North Dakota under the Uniform Enforcement of Foreign Judgments Act, N.D.C.C. ch. 28-20.1, in August 1998. The judgment was renewed in North Carolina on January 11, 2000, and was again transcribed and filed in North Dakota for enforcement purposes. Southeastern's efforts since 1998 to enforce the North Carolina judgment in North Dakota have resulted in a "long-running, tortured and unduly complicated saga" of litigation. Investors Title Ins. Co. v. Herzig, 2010 ND 138, ¶ 3, 785 N.W.2d 863 (" Herzig I "); see also Investors Title Ins. Co. v. Herzig, 2010 ND 169, 788 N.W.2d 312 (" Herzig II ").

[¶ 3] Herzig I involved a consolidated appeal by the personal representative of Alphild Herzig's estate and a cross-appeal by Southeastern stemming from Southeastern's motion for a debtor's examination in aid of execution under N.D.C.C. ch. 28-25, and Southeastern's efforts to collect money allegedly owed under 2006 contempt orders. 2010 ND 138, ¶¶ 1, 5, 17, 785 N.W.2d 863. Alphild Herzig, David Herzig's mother, had been named as a party in the proceedings and contempt orders had been entered against her for allegedly failing to produce documents in response to requests for production of documents. Id. at ¶ 37. Among other things, we affirmed orders substituting the personal representative of Alphild Herzig's estate for Alphild Herzig after her death and remanded to the district court "to determine the amount of remedial sanction necessary to compensate Southeastern under the court's 2006 contempt orders." Id. at ¶ 79. Herzig II involved Southeastern's appeal from an order entered in other post-judgment proceedings to enforce the 1989 North Carolina judgment. 2010 ND 169, ¶¶ 1, 2, 788 N.W.2d 312. We affirmed the district court's order denying Southeastern's motion to " 'Attach Res and Property in Trust for Benefit of Judgment Creditor,' " granting the application of the personal representative of Alphild Herzig's estate to cancel a lis pendens filed by Southeastern, and refusing to grant "Southeastern's motions for an order to prohibit the sale and transfer of property and to compel the production of documents by subpoena." Id. at ¶¶ 1, 46.

[¶ 4] On January 13, 2010, while the appeals in Herzig I and Herzig II were still pending in this Court, Herzig filed a motion in district court to "Purge Judgment." Herzig argued the North Carolina judgment expired on January 11, 2010, and requested the court to declare the North Carolina judgment "unenforceable and no longer valid due to the passage of time." The personal representative of Alphild Herzig's estate joined in the motion. Southeastern responded and asserted the district court had been divested of jurisdictionto rule on the motion because Herzig I and Herzig II were pending on appeal in this Court. On the merits, Southeastern argued that the actions of Herzig and the personal representative effectively "toll[ed] the statu[te] bar date from running." On March 11, 2010, the district court granted Herzig and the personal representative's motion. The court concluded that it retained jurisdiction to consider the motion, that the judgment expired on January 10, 2010, and that the statutory limitation period for enforcing a judgment was not tolled under the circumstances.

II

[¶ 5] Southeastern argues the district court lacked jurisdiction to rule on the January 2010 motion because Herzig I and Herzig II were pending on appeal in this Court.

[¶ 6] Generally, a district court loses jurisdiction when a notice of appeal is filed. See, e.g., Siewert v. Siewert, 2008 ND 221, ¶ 30, 758 N.W.2d 691; Peters-Riemers v. Riemers, 2003 ND 96, ¶ 16, 663 N.W.2d 657; Wilson v. Koppy, 2002 ND 179, ¶ 6, 653 N.W.2d 68. There are exceptions to this rule. "It is well settled in this State that an appeal does not operate to stay proceedings for the enforcement of a judgment." Verry v. Murphy, 163 N.W.2d 721, 725 (N.D.1968). The "enforcement of an order or judgment pending an appeal is 'an independent collateral proceeding,' and the appellate proceeding proper remains unaffected thereby." Bonde v. Stern, 72 N.D. 476, 483, 8 N.W.2d 457, 461 (1943) (internal citation omitted). This Court has noted, "[i]t is of course true that where a supersedeas bond is not furnished the judgment may properly be enforced pending the appeal; but it is equally true that if the judgment be reversed the appellant would be entitled to recover back whatever he had lost by reason of the interim enforcement of the erroneous judgment." Smith v. Grilk, 64 N.D. 163, 176, 250 N.W. 787, 793 (1933) (On Petition for Rehearing), overruled on other grounds, Skinner v. American State Bank, 189 N.W.2d 665 (N.D.1971). We have recognized that "post-judgment proceedings have been treated as separate litigations from the action which produced the underlying judgment," Herzig I, 2010 ND 138, ¶ 30, 785 N.W.2d 863, and that "a judgment creditor may engage in multiple separate proceedings in collecting a judgment." Herzig II, 2010 ND 169, ¶ 32, 788 N.W.2d 312.

[¶ 7] Courts have defined a "collateral matter" for which a lower court retains jurisdiction to act after a notice of appeal has been filed as a matter that "lies outside the issues in an appeal or arises subsequent to the judgment from which an appeal was taken." In re Marriage of Brackett, 309 Ill.App.3d 329, 242 Ill.Dec. 798, 722 N.E.2d 287, 293 (1999); see also Matter of Denaro's Estate, 112 Ill.App.3d 872, 68 Ill.Dec. 455, 445 N.E.2d 1308, 1312 (1983) ("Collateral or supplemental matters include those lying outside the issues in the appeal or arising subsequent to delivery of the judgment appealed from.") A proceeding on a matter collateral to the appeal may have a "potential effect on the appeal, if the proceeding could or would have occurred regardless of the outcome of the appeal," and may even "render the appeal moot." Varian Med. Sys., Inc. v. Delfino, 35 Cal.4th 180, 25 Cal.Rptr.3d 298, 106 P.3d 958, 965 (2005). In TSA Int'l Ltd. v. Shimizu Corp., 92 Hawai'i 243, 990 P.2d 713, 736 (1999), the court held that a circuit court retained jurisdiction during the pendency of an appeal to expunge a lis pendens because the action "was an exercise of the circuit court's power to enforce its judgment." See also Delfino, 25 Cal.Rptr.3d 298, 106 P.3d at 965 ("a proceedingto expunge a lis pendens is collateral to an appeal from the judgment in the underlying action"); Herzig II, at ¶ 33 (a district court is not divested of jurisdiction to cancel a lis pendens while related appeal was pending "where the lis pendens was filed post-judgment and during proceedings supplementary to the execution of the judgment"). These cases are instructive in analyzing the district court's jurisdiction to act on the motion to "Purge Judgment."

[¶ 8] In this case, Herzig I, Herzig II, and Herzig's motion to "Purge Judgment" were all interrelated but separate proceedings concerning Southeastern's attempt to enforce the North Carolina judgment registered under the Uniform Enforcement of Foreign Judgments Act., N.D.C.C. ch. 28-20.1. The issue raised in Herzig's motion to "Purge Judgment" fell outside the issues raised in either Herzig I or Herzig II. Herzig I concerned orders granting substitution and a continuing contempt order to sanction Alphild Herzig and her estate for failure to comply with discovery requests. Herzig II concerned cancellation of a lis pendens and other methods used by Southeastern to enforce the North Carolina judgment. Herzig and the personal representative's motion to declare the underlying foreign judgment unenforceable because it expired during the pendency of the appeals in Herzig I and Herzig II relates to a defense to Southeastern's efforts to enforce the judgment which arose after those appeals were filed. Enforceability of the underlying foreign judgment was not at issue in either Herzig I or Herzig II. Although the district court's ruling on the enforceability of the underlying foreign judgment did not affect this Court's ultimate decision in Herzig I, the ruling did potentially moot the issues decided by this Court in Herzig II. However, the district court's rulings in Herzig II, which we affirmed on appeal, were entirely consistent with its ruling on the motion to "Purge Judgment." Under these circumstances, we conclude the district court retained jurisdiction to rule on the continued enforceability of the North Carolina judgment during the pendency of the other appeals.

III

[¶ 9] Southeastern argues the district court erred in ruling the 1989 North Carolina judgment is no longer enforceable in North Dakota.

[¶ 10] Southeastern does not...