Jones v. Weston

• Citation: 212 P.3d 835
• Decision Date: 22 April 2009
• Docket Number: No. 2 CA-CV 2008-0145.,2 CA-CV 2008-0145.
• Parties: Charles L. JONES, Grace Jones, Robert W. Nichols, Mary Ann Nichols, and Robert E. Hebert, Plaintiffs/Counterdefendants/Appellees, v. W. David WESTON, assignee of Edson Whipple and Louise Whipple, Defendant/Counterclaimant/Judgment Creditor/Appellant.
• Court: Court of Appeals of Arizona

212 P.3d 835

Charles L. JONES, Grace Jones, Robert W. Nichols, Mary Ann Nichols, and Robert E. Hebert, Plaintiffs/Counterdefendants/Appellees, v. W. David WESTON, assignee of Edson Whipple and Louise Whipple, Defendant/Counterclaimant/Judgment Creditor/Appellant.

No. 2 CA-CV 2008-0145.

Court of Appeals of Arizona, Division 2, Department B.

April 22, 2009.

Gibson, Nakamura & Green, P.L.L.C. by Scott D. Gibson, Tucson, Attorneys for Plaintiffs/Counterdefendants/Appellees.

W. David Weston, Salt Lake City, Utah, In Propria Persona.

OPINION

VÁSQUEZ, Judge.

¶ 1 In this action involving a partnership dispute, appellant David Weston appeals from the trial court's order quashing writs of garnishment entered to enforce a judgment against appellees Robert and Mary Ann Nichols (Nichols). Weston argues the court erred in finding the underlying judgment had expired. Specifically, he contends the judgment was renewed by garnishment proceedings and the time period for renewing the judgment was tolled during Nichols's bankruptcy proceedings and during the interval between the trial court's order vacating the judgment and its reinstatement on appeal. Because we agree a judgment cannot be renewed during the period it has been vacated, such period should not be included in the calculation of the time for renewing a judgment pursuant to A.R.S. §§ 12-1551 and 12-1612; accordingly, we reverse.

Facts and Procedural Background

¶ 2 Robert Nichols, Charles Jones, and Robert Hebert (the partners) and Edson Whipple formed a partnership, whose sole asset was a mining lease. In 1996, the partners initiated this action against Whipple, alleging Whipple had assigned his interest in the partnership to them and seeking declaratory relief. Whipple counterclaimed, alleging fraud and breach of fiduciary duties.¹ A jury found in favor of Whipple, determining "[Whipple's] interest in the partnership to be 50%," and that the partners had committed fraud. Based upon the jury's verdict and findings, the trial court concluded that the partners had "acted in concert to breach their fiduciary duties to and defraud ... Whipple" and entered a "joint and several judgment in the amount of $848,947.10" against them on July 18, 2001. The partners moved to amend the judgment pursuant to Rule 59(a)(8), Ariz. R. Civ. P., arguing the fraud claim was barred by the statute of limitations. The court granted the partners' motion, and on January 16, 2002, entered an amended judgment (the first amended judgment), which dismissed the fraud count but maintained joint and several liability against the partners.

¶ 3 In May 2002, Nichols filed a bankruptcy petition pursuant to Chapter 7 of the bankruptcy code. See 11 U.S.C. §§ 701-784. However, Whipple successfully moved to have the debt declared non-dischargeable, and in April 2004 filed applications for writs of garnishment in the trial court to collect the judgment against Nichols. In July 2004, the trial court issued a "Judgment on Garnishment," placing "a continuing lien upon the earnings of the Judgment Debtors, Robert W. Nichols and Mary[A]nn Nichols, until the lien in favor of Judgment Creditor has been satisfied in full, or further order of this Court." The same month, Nichols filed a motion in the trial court pursuant to Rule 60(c)(1) and (6), Ariz. R. Civ. P., seeking relief from the first amended judgment. He contended that, given the dismissal of the fraud count, it was a "mistake" that "the joint and several liability provision remained in the judgment." On August 26, 2004, the court granted Nichols's motion, vacated the first amended judgment, and entered a second amended judgment in favor of Whipple and against the partners severally in proportion to the amounts each had received from the partnership distributions.

¶ 4 Whipple filed a notice of appeal from the second amended judgment in September 2004. Later the same month, Nichols filed a motion in federal bankruptcy court to convert his Chapter 7 bankruptcy proceeding into one pursuant to Chapter 13 of the bankruptcy code. See 11 U.S.C. §§ 1301-1330. We stayed the appeal in this court pending the outcome of the bankruptcy proceedings. The Bankruptcy Appellate Panel of the Ninth Circuit ultimately concluded that the reduced amount of the second amended judgment against Nichols exceeded the debt limits for a Chapter 13 bankruptcy and dismissed his bankruptcy case. Thereafter, the state court appeal was resumed and in a memorandum decision, this court found the trial court had erred in granting relief under Rule 60(c) because the partners had acted in concert to breach their fiduciary duties. Jones v. Whipple, No. 2 CA-CV 2004-0187, ¶ 23 (memorandum decision filed June 27, 2007). Thus, we concluded the record supported the imposition of joint and several liability, notwithstanding the dismissal of the fraud claim and we vacated the second amended judgment and "reinstate[d]" the first amended judgment. Id. ¶ 24.

¶ 5 In May 2008, Whipple again filed applications for writs of garnishment to collect the first amended judgment from earnings owed to Nichols. After a hearing, the trial court found "the original judgment's monetary award was not affected ... by the[] amended judgments" and "the appropriate judgment date to consider ... is the original July 18, 2001 judgment." The court concluded the judgment had "lapsed and was not timely renewed," and thus quashed "any Writ of Garnishment that may have been signed regarding this judgment." This appeal followed. This court granted David Weston's motion to substitute himself as Whipple's assignee pursuant to Rule 17(a), Ariz. R. Civ. P.² We have jurisdiction under A.R.S. § 12-2101(F)(3), which permits an appeal from an order "[d]issolving or refusing to dissolve an attachment or garnishment." See Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Greene, 195 Ariz. 105, ¶ 6, 985 P.2d 590, 592 (App.1999).

Discussion

Standard of review

¶ 6 Because the issue on appeal is one of statutory interpretation, our standard of review is de novo. City of Tucson v. Clear Channel Outdoor, Inc., 209 Ariz. 544, ¶ 8, 105 P.3d 1163, 1166 (2005). In construing a statute our primary goal is to give effect to the intent of the legislature, and the statute's language is the most reliable indicator of legislative intent. McMurray v. Dream Catcher USA, Inc., 220 Ariz. 71, ¶ 8, 202 P.3d 536, 540 (App.2009); see also Cornman Tweedy 560, LLC v. City of Casa Grande, 213 Ariz. 1, ¶ 8, 137 P.3d 309, 311 (App.2006); Walker v. City of Scottsdale, 163 Ariz. 206, 209, 786 P.2d 1057, 1060 (App.1989). But when that language is ambiguous, we may also consider "the context and subject matter, the effects and consequences of the statute, and other acts that are in pari materia." Ban v. Quigley, 168 Ariz. 196, 198, 812 P.2d 1014, 1016 (App.1990).

¶ 7 In order to determine whether the trial court erred in finding the judgment underlying the garnishment had expired, we must interpret three statutes. Section 12-1551(B), A.R.S., provides, in relevant part, as follows:

An execution or other process shall not be issued upon a judgment after the expiration of five years from the date of its entry unless the judgment is renewed by affidavit or process pursuant to section 12-1612 or an action is brought on it within five years from the date of the entry of the judgment or of its renewal.

And A.R.S. §§ 12-1611 and 12-1612 respectively provide that a judgment may be renewed "by action thereon at any time within five years after the date of the judgment" or by filing an affidavit for renewal "within ninety days preceding the expiration of five years from the date of entry of such judgment."

Did bankruptcy proceedings extend the deadline for filing a renewal affidavit?

¶ 8 Relying on In re Smith, 209 Ariz. 343, 101 P.3d 637 (2004), Weston first argues the time period for renewing a judgment pursuant to §§ 12-1551 and 12-1612 is tolled during bankruptcy. He thus contends in this case "the time to file the renewal affidavit has been extended for an additional 1333 days." However, his reliance on Smith is misplaced. In Smith, our supreme court answered two certified questions from the United States Bankruptcy Court regarding timeliness of renewal affidavits: (1) "whether under Arizona law the time for filing a renewal affidavit is extended if the debtor has a bankruptcy proceeding pending," and (2) whether affidavits filed after the original renewal date were timely because "the time for filing the renewal affidavit was ... extended" by the bankruptcy, pursuant to federal law. Id. ¶¶ 9, 17; see 11 U.S.C. § 108(c)(1). In answering the first question, the court distinguished between the filing of an affidavit and the enforcement of a judgment. Smith, 209 Ariz. 343, ¶ 9, 101 P.3d at 639. Reasoning that the filing of a renewal affidavit is a "ministerial action," which, unlike enforcement of a judgment, is not precluded during bankruptcy, the court concluded that "[u]nder Arizona law, the time to file an affidavit of renewal of judgment is not changed or extended by the pendency of a bankruptcy case." Id. ¶¶ 13-15.

¶ 9 Weston's argument apparently relies on the court's positive answer to the second question. However, that answer was based on the "premise that the B[ankruptcy]A[ppellate]P[anel] has ruled as a matter of federal law that [11 U.S.C.] § 108(c)(1) extended the time for filing the renewal affidavit in this case." Id. ¶ 16. The Bankruptcy Appellate Panel described this as a "flawed assumption" and found that, "[a]bsent state law suspending the time for filing the renewal affidavit, ... [n]o additional time [i]s afforded under § 108(c)(1)." In re Smith, 352 B.R. 702, 706-07 (B.A.P. 9th Cir.2006). There is thus no basis under either federal or Arizona law "for a suspension of the time for filing a[n affidavit renewing a] judgment during the pendency of a bankruptcy case." See id. at 707.

Did garnishment proceedings renew the judgment?

¶ 10 Weston...