Wells Fargo Equip. Fin., Inc. v. Asterbadi

• Decision Date: 04 November 2016
• Docket Number: No. 15-2182,15-2182
• Citation: 841 F.3d 237
• Parties: Wells Fargo Equipment Finance, Incorporated, Plaintiff–Appellee, v. Nabil J. Asterbadi, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

841 F.3d 237

Wells Fargo Equipment Finance, Incorporated, Plaintiff–Appellee,

v.Nabil J. Asterbadi, Defendant–Appellant.

No. 15-2182

United States Court of Appeals, Fourth Circuit.

Argued: September 20, 2016

Decided: November 4, 2016

ARGUED: David B. Lamb, Washington, D.C., for Appellant. Steven Neal Leitess, Leitess Friedberg PC, Baltimore, Maryland, for Appellee. ON BRIEF: David A. Donohoe, Potomac, Maryland, for Appellant. Gordon S. Young, Pierce C. Murphy, Leitess Friedberg PC, Baltimore, Maryland, for Appellee.

Before NIEMEYER and DIAZ, Circuit Judges, and Irene M. KEELEY, United States District Judge for the Northern District of West Virginia, sitting by designation.

Affirmed by published opinion. Judge Niemeyer

wrote the opinion, in which Judge Diaz and Judge Keeley joined.

NIEMEYER

, Circuit Judge:

In this appeal, we address the enforceability of a judgment originally entered in the Eastern District of Virginia but registered for enforcement in the District of Maryland under 28 U.S.C. § 1963

. Particularly, we consider the time period during which the judgment remains enforceable in Maryland.

Collecting on a financing debt incurred by Dr. Nabil J. Asterbadi, CIT/Equipment Financing, Inc. (“CIT”) obtained a $2.63 million judgment against Asterbadi in 1993, in the Eastern District of Virginia. Under Virginia law, that judgment remained viable for 20 years. Roughly 10 years after the judgment had been entered, on August 27, 2003, CIT registered the judgment in the District of Maryland pursuant to § 1963

. Under Maryland law, made relevant by Federal Rule of Civil Procedure 69(a)

, judgments expire 12 years after entry.

CIT sold the judgment to Wells Fargo Equipment Finance, Inc., and Wells Fargo thereafter, in April 2015, began collection efforts in Maryland. Asterbadi filed a motion for a protective order, contending that the judgment was unenforceable because the efforts began more than 12 years after the judgment had originally been entered in Virginia. Wells Fargo responded that the registration of the Virginia judgment in Maryland before it had expired under Virginia law became, in effect, a new judgment that was subject to Maryland law for enforcement. Thus, it argued, Maryland's 12–year limitations period began on the date that the judgment was registered in Maryland, not on the date that the original judgment was entered in Virginia, and therefore the judgment was still enforceable.

The district court agreed with Wells Fargo, concluding that the time limitation for enforcement of the judgment began with the date of its registration in Maryland, on August 27, 2003, and that therefore it was still enforceable against Asterbadi.

For the reasons that follow, we affirm.

I

The judgment was entered on October 4, 1993, against Asterbadi in the Eastern District of Virginia and arose from a defaulted debt that Asterbadi incurred to invest in an airplane. It was entered in the amount of “$2,286,009.97, plus interest from May 31, 1993 on the sum of $2,184,950 at the rate of 1.5% per month, and attorney's fees of $347,742.50.” Under Virginia law, the judgment remained enforceable for 20 years, or until October 4, 2013. See Va. Code Ann. § 8.01–251(A)

.

While Asterbadi made a number of payments on the judgment during the period shortly after it was entered, the judgment has, in substantial part, remained unsatisfied. In furtherance of its collection efforts, CIT registered the judgment in the District of Maryland on August 27, 2003, pursuant to 28 U.S.C. § 1963

. It also recorded the judgment in state courts in Fairfax County, Virginia; Prince George's County, Maryland; Montgomery County, Maryland; and the District of Columbia, under the law of those jurisdictions. At the time that CIT registered its judgment in the District of Maryland, Asterbadi still owed some $1.75 million, much of which represented interest.

Several months later, on October 31, 2003, CIT undertook collection efforts in Maryland to execute on stock that Asterbadi held in Zachair, Ltd. To this end, it filed a motion in the district court for an injunction prohibiting Asterbadi “from transferring the [stock] Certificates and ordering him to turn over the Certificates to CIT.” In response, Asterbadi, who explained that he was a physician who had made “an ill-fated investment in an airplane over 15 years ago,” claimed that CIT had overstated the amount owed on the judgment. He also asserted that his stock in Zachair was owned with his wife as tenants by the entireties and therefore was not subject to execution on the judgment. Nonetheless, he stated that he “ha[d] no intention, and will not transfer, any shares of stock in which he has any interest” and that he had no objection to the entry of an order “which would preclude any such transfers.” He did not, however, agree to an order transferring the stock certificates to CIT. No further action was taken on the motion for more than 10 years.

Effective June 29, 2007, CIT sold and assigned its judgment against Asterbadi to Wells Fargo as part of an asset purchase agreement. Some years later, Wells Fargo renewed collection efforts. In preparation for collection in Maryland, Wells Fargo filed a notice of the assignment, as well as a copy of the assignment, in the Circuit Court for Montgomery County on April 1, 2015. And on April 7, 2015, it filed a “Notice of Assignment” in the district court, although without including a copy of the assignment. After Wells Fargo filed the notice of the assignment, it noticed the deposition of Zachair, whose stock Asterbadi held.

Asterbadi filed a motion for protective order on May 8, 2015, contending that the Virginia judgment was not enforceable, as Wells Fargo was seeking to enforce a judgment “entered more than 21 years ago in Virginia,” which was beyond both Virginia's and Maryland's statute of limitations for enforcing judgments. He concluded that if the judgment was unenforceable, “there can be no post-judgment discovery.” He acknowledged that, if the limitations period began on the date of registration, a judgment registered in the District in Maryland might still be enforceable under Maryland Rule 2–625

, which provides that a money judgment expires 12 years from the date of entry. But he argued that the registration of the judgment in Maryland was “nothing more” than “ministerial” and that it “does not have the effect of entering a ‘new judgment’ ” with a new enforceability period. Thus, he reasoned that any applicable limitations period began at the time of the judgment's entry in 1993 and therefore that the judgment was unenforceable.

In view of Asterbadi's arguments, the district court entered an order requiring Wells Fargo to show cause “why this matter is not subject to dismissal” for the reasons given by Asterbadi. Wells Fargo responded, arguing that “once a [viable] foreign judgment is recorded in the [District of Maryland], that judgment remains effective and enforceable for the time period provided by Maryland law—12 years unless earlier renewed for another 12 year period”—from the date registered. Therefore, it claimed, the judgment was enforceable to August 27, 2015.

Asterbadi filed a reply and shortly thereafter a supplement to his reply, asserting in his supplement the additional argument that Wells Fargo did not have standing to enforce the judgment because, while it filed a notice of the assignment of the judgment in the district court, it did not file a copy of the assignment itself, as required by Maryland Rule 2–624

. He attached to his supplement an actual copy of the assignment that Wells Fargo had filed in Montgomery County, Maryland.

While the proceedings were pending, Wells Fargo filed a renewal of its registered judgment in the district court on August 26, 2015, which, it contends, extended the enforceability of its judgment under Maryland law to 2027.

By order dated September 16, 2015, the district court rejected Asterbadi's argument that Wells Fargo lacked standing to enforce the judgment, noting that Asterbadi himself had provided the court with a copy of the assignment that had been filed in the Circuit Court for Montgomery County and therefore that “Wells Fargo ha[d] standing [to] respond to my show cause order regarding the enforceability of the 1993 Judgment.” The district court also rejected Asterbadi's argument that when discovery was commenced in 2015, the judgment was unenforceable because the Maryland limitation of 12 years had run. Relying on Home Port Rentals, Inc. v. International Yachting Group, Inc., 252 F.3d 399 (5th Cir. 2001)

, the court held that “the [Maryland] statute of limitations in this case started to run on the date that the judgment was registered in this Court, August 27, 2003, and is currently enforceable against the Defendant.” (Emphasis added). With respect to the motion for injunction that had been pending since 2003, the court enjoined Asterbadi from transferring his stock certificates in Zachair—relief to which Asterbadi had earlier consented—but denied, without prejudice, Wells Fargo's request that Asterbadi be required to turn those certificates over to it.

Asterbadi noticed this appeal from the district court's September 16, 2015 order. After Asterbadi noticed his appeal from that order, the district court entered a separate order on October 14, 2015, denying, without prejudice, Asterbadi's motion for a protective order against discovery, pending this appeal.

II

Both parties raise jurisdictional issues. Wells Fargo contends that Asterbadi appealed only the September 16, 2015 order, which entered an injunction to which Asterbadi had earlier consented, and not the court's denial of the motion for a protective order, entered on October 14, 2015. And Asterbadi contends that Wells Fargo lacks standing to enforce its judgment against him because Wells Fargo filed only a notice of assignment in the district court, not a copy of the assignment itself, and therefore failed to comply with Maryland Rule 2–624

, which entitles part...