McDaniel v. Signal Capital Corp.
| Decision Date | 24 January 1996 |
| Docket Number | Civil Action No. H-95-3348. |
| Parties | Charles L. McDANIEL, Plaintiff, v. SIGNAL CAPITAL CORPORATION, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Robert Allen Kouts, Houston, TX, for plaintiff.
Cecil M. Arnold, Dallas, TX, for defendant.
Pending before the Court is Plaintiff's Motion for Summary Judgment (Doc. # 7) and Defendant's Motion for Leave to Withdraw Defendant's Motion for Leave to Amend Answer (Doc. # 22). For the reasons stated below, Plaintiff's Summary Judgment Motion is GRANTED.
Trailmobile, Inc. ("Trailmobile") is Defendant, Signal Capital Corporation's ("Signal"), predecessor in interest. Trailmobile extended $253,414.00 in credit to Plaintiff, Charles L. McDaniel ("McDaniel"), for the purchase of nine truck trailers in 1981. The loan was made in reliance upon a financial statement presented by McDaniel reporting his net worth as $2,600,000.00. Less than a year later, McDaniel filed for bankruptcy under Chapter 7 of the Bankruptcy Code, claiming no non-exempt assets. See Defendant's Response to Plaintiff's Motion for Summary Judgment ("Defendant's Response"), Exh. B, at 5. Trailmobile objected to McDaniel's discharge and filed an action in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, seeking a judgment against McDaniel for $99,661.58 for the deficiency on McDaniel's debt, accrued interest, attorney's fees, and court costs. First Amended Complaint to Determine Dischargeability, at 5 (Defendant's Response, Exh. B).
The case was tried on May 6, 1985, although the issue of attorney's fees was not heard until May 13, 1988.1 The Bankruptcy Court announced its decision at the close of argument in 1985, finding that the financial statement that McDaniel had given to Trailmobile was materially misleading, and that Trailmobile had relied upon it in extending McDaniel $250,000.00 in credit. According to the docket sheet, the Court also held that McDaniel's debt to Trailmobile was non-dischargeable. Defendant's Response, Exh. C. These findings were reduced to writing in a judgment, signed by the Bankruptcy Court on June 5, 1985, in which the Bankruptcy Court held that McDaniel's outstanding debt was not discharged and Trailmobile was awarded a judgment for $99,651.58 ("Written Judgment"). Defendant's Response, Exh. A, at 2. Signal did not try to execute on the judgment until June 6, 1995, ten years plus one day after the Written Judgment was signed by the Bankruptcy Court. Defendant's Amended Original Answer ("Defendant's Answer"), at 2.
Plaintiff requests a declaration pursuant to 28 U.S.C. § 2201 that federal judgment liens on Plaintiff's property have ceased to exist,2 and that enforcement of the federal judgment is time barred by state law, as made applicable under Fed.R.Civ.P. 69.3 Plaintiff also seeks an Order pursuant to Fed.R.Civ.P. 62(f) permanently staying execution and further enforcement of the judgment, in addition to attorney's fees incurred in this proceeding.
Under Texas law, if a writ of execution is not issued within ten years after the rendition of a judgment of a court of record or a justice court, the judgment is dormant and execution may not be issued on the judgment unless it is revived. Civ.Prac. & Rem.Code § 34.001(a) (West 1986). Further, if execution has not issued within 12 months after the date of the rendition of a judgment in a court of record, the judgment may be revived by scire facias or by an action of debt brought not later than 10 years after the date of the rendition of the judgment. Civ.Prac. & Rem.Code § 31.006 (West 1986).4
McDaniel argues that the 1985 judgment which Trailmobile won against him fell dormant ten years after it was rendered and, never having been revived, the ten-year limitations period on the judgment ran on May 6, 1995, one month before Signal sought a writ of execution. Signal argues that "final" judgment was not rendered until May 17, 1988, when the Bankruptcy Court denied Trailmobile's motion for attorney's fees and, therefore, the ten year limitations period on the judgment had not run by the time a writ of execution was sought on June 6, 1995.
Defendant argues that, because the Bankruptcy Court "reserved the right to make further orders that may be necessary," its Written Judgment was not final until all issues raised in Trailmobile's complaint, particularly attorney's fees, were ultimately disposed of by the Court.5 The Court need not reach this issue, however, because whether a judgment is interlocutory or final does not determine whether or when it was "rendered." "Final" and "rendered" are distinct terms under Texas law and Plaintiff's arguments attempt erroneously to merge the two.
Texas Law. — "A rendition of judgment is the pronouncement by the trial court of its conclusions and decision upon the matters submitted to it for adjudication; such conclusions and decisions may be oral or written, and judgment is rendered when the decision is officially announced either orally in open court or by a memorandum filed with the clerk." Arriaga v. Cavazos, 880 S.W.2d 830, 833 (Tex.App. — San Antonio 1994, no writ), citing Comet Aluminum Co. v. Dibrell, 450 S.W.2d 56, 58 (Tex.1970). "A judgment is in fact rendered whenever the trial judge officially announces his decision in open court." Arriaga v. Cavazos, 880 S.W.2d at 833. "Rendition is distinguishable from the entry of judgment which is a purely ministerial act by which judgment is made of record and preserved." Id. "Signing" occurs when the judge actually signs the written draft of the judgment, and this is usually deemed to be the date of rendition for purposes of calculating appellate time limits. Burrell v. Cornelius, 570 S.W.2d 382, 383 (Tex.1978); Tex. R.Civ.P. 306a. "Entry" refers to the clerk's act of placing a copy of the judgment in the official record of the court. Id. at 384.
Central to this dispute is the date that judgment was rendered in favor of Trailmobile. Plaintiff contends that the Bankruptcy Court's judgment was rendered on May 6, 1985, the day that Trailmobile v. McDaniel was tried. Plaintiff's summary judgment evidence supports this argument, although a transcript of the Bankruptcy Court proceeding has not been submitted to this Court. In particular, the May 6, 1985 entry on the docket sheet ("Trial; debt held not dischargeable") suggests that the Bankruptcy Court officially announced its decision in open court and thereby rendered a judgment in favor of Trailmobile. Defendant concedes as much, admitting that, on May 6, 1985, ". . . the Court orally held that the debt of Charles McDaniel was non dischargeable." Defendant's Answer, at 1. However, Defendant contends (i) that the judgment was not "rendered" until June 5, 1985, when the Court reduced its oral findings to a signed, written judgment and (ii) that, in any event, both decisions were interlocutory. Id.6
Based on the docket entry and Defendant's own characterization of the trial, the Bankruptcy Court orally rendered a decision on the matter submitted to it for adjudication (i.e., the dischargeability of McDaniel's debt to Trailmobile) on May 6, 1985. The Written Judgment signed on June 5, 1985, simply memorialized the Court's earlier findings.7
A judgment under Texas law may be rendered as to one issue in a case despite the fact that other issues have not yet been decided by the court. See Comet Aluminum Co., Inc. v. Dibrell, 450 S.W.2d 56, 58 (Tex. 1970). Therefore, regardless of whether judgment on the debt was rendered on May 6, 1985, or June 5, 1985, the Court finds that the ten-year limitations period had expired by the time that Defendant sought a writ of execution on June 6, 1995.8 The Bankruptcy Court's three-year delay in rendering judgment on attorney's fees does not change this result.
Defendant's Authorities. — Notwithstanding the foregoing, Defendant cites two Seventh Circuit cases for the proposition that a "rendered" judgment means a "final" judgment, and that a jury verdict must resolve all issues in order for a judgment to be "final." Neither decision is particularly instructive, however, because the Seventh Circuit did not hold or even address the precise argument that Defendant advances here, i.e., that the appellate status of a judgment (whether interlocutory or final) determines its date of rendition.9
In further support of its argument that "a rendered judgment means a judgment that has attained appealable perfection," Defendant cites In re Hurley Mercantile Co., 56 F.2d 1023 (5th Cir.1932), cert. denied, 286 U.S. 555, 52 S.Ct. 580, 76 L.Ed. 1290 (1932), for the proposition that a "rendered judgment" means a final judgment entered on the court record by the clerk. The Court finds this argument unpersuasive. In In re Hurley, the Fifth Circuit found that, by interchangeably using the terms "entry" and "rendition," Congress had been technically inaccurate in calculating appellate timetables. Therefore, the Court looked beyond the language of individual statutes and determined that congressional intent was to begin all appellate timetables at "the perfecting of the judgment or order as final by its filing with the clerk." Id. at 1025.
Defendant argues, on the basis of In re Hurley, that the Court should read a similar requirement into Sections 34.001(a) and 31.006 of the Civil Practice and Remedies Code, and hold that Trailmobile's judgment against McDaniel was not "rendered" on May 6, 1985 (the date of the trial), but on May 13, 1988, when attorney's fees were denied and (according to Defendant) the judgment became appealable. However, Defendant offers neither policy reasons nor authority in support of his interpretation of "rendition." Nor is it supported by the language of the Texas Civil Practice and Remedies Code. Nowhere does that Code or other Texas law cited to the Court suggest that a...
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