SUPREME COURT OF ARIZONA
En Banc
FIDELITY NATIONAL FINANCIAL INC., ) Arizona Supreme Court
) No. CV-10-0096-CQ
)
Plaintiff/Appellee, ) United States Court of
) Appeals, 9th Circuit
) No. 08-16967
)
FIDELITY EXPRESS NETWORK INC., ) United States District
) Court
Claimant/Appellee, ) No. 2:03-cv-01222-RCB
)
v. )
)
COLIN H. FRIEDMAN; et al, ) O P I N I O N
)
Defendants/Appellants, )
)
and )
)
ANITA MESHKATAI, individually )
and as a trustee of the Anita )
Kramer Living Trust, dated July )
23, 1987, )
)
Defendant. )
)
__________________________________)
Certified Questions from the
United States Court of Appeals for the Ninth Circuit
The Honorable Sidney R. Thomas, Judge
The Honorable Betty B. Fletcher, Judge
The Honorable N. Randy Smith, Judge
QUESTIONS ANSWERED
________________________________________________________________
HENNELLY & GROSSFELD LLP Marina Del Rey, CA
By Orlando F. Cabanday
Janice M. Kroll
Thomas H. Case
And
SHERMAN & HOWARD L.L.C. Phoenix
By Dewain D. Fox
Attorneys for Fidelity National Financial Inc. and Fidelity
Express Network Inc.
SCHIAN WALKER, P.L.C. Phoenix
By Michael R. Walker
Mark C. Hudson
Attorneys for Colin H. Friedman
________________________________________________________________
H U R W I T Z, Vice Chief Justice
¶1 We accepted jurisdiction to answer two questions
certified to us by the United States Court of Appeals for the
Ninth Circuit:
1) Do collection activities (such as filing for a
writ of garnishment or applying for orders from
the court to inspect a safety deposit box or
require a debtor’s exam) taken within Arizona,
renew a judgment previously registered in Arizona?
2) Does the filing of a related lawsuit in a state
other than Arizona renew a judgment previously
registered in Arizona?
¶2 We have jurisdiction pursuant to Article 6, Section
5(6) of the Arizona Constitution, Arizona Revised Statutes
(“A.R.S.”) §§ 12-1861 to 12-1867 (2003), and Arizona Supreme
Court Rule 27.
2
I.
¶3 The facts and procedural history of this litigation
are set forth in detail in the certification order of the Ninth
Circuit, Fidelity Nat’l Fin. Inc. v. Friedman, 602 F.3d 1121,
1122-23 (9th Cir. 2010), and are summarized here.
¶4 In 2002, Fidelity National Financial Inc. (“Fidelity”)
obtained a monetary judgment against Colin and Hedy Friedman and
Farid and Anita Meshkatai (collectively the “Debtors”) in the
United States District Court for the Central District of
California. Fidelity registered the judgment in the United
States District Court for the District of Arizona in November
2002. During the next five years, Fidelity obtained court
orders in Arizona authorizing writs of garnishment, inspection
of the Debtors’ safety deposit box, and debtors’ examinations
(collectively, the “Arizona collection activities”). In 2006,
Fidelity filed a new action in the Central District of
California (the “California racketeering suit”), alleging that
the Debtors had violated federal racketeering laws and
California state fraud laws by using family trusts and other
devices to avoid paying the 2002 judgment.
¶5 In 2008, the Debtors filed a motion in the Arizona
federal court contending that Fidelity could not enforce the
2002 judgment because more than five years had passed since its
entry. The district court denied the motion, concluding that
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the 2002 judgment had been renewed pursuant to A.R.S. § 12-
1551(B) (Supp. 2009) and § 12-1611 (2003)1 by the Arizona
collection activities and California racketeering suit.
Fidelity appealed, and the Ninth Circuit certified the two
questions to us.2
II.
¶6 The starting point in resolving the questions before
us is the common law background to Arizona’s statutory scheme
for renewal of judgments. At common law, judgments generally
became dormant if not executed upon within a year of entry and
were unenforceable after twenty years. See Browne & Manzanares
Co. v. Chavez, 54 P. 234, 234 (N.M. Terr. 1898). A judgment
creditor could avoid this problem in two ways. The first was by
suing on the judgment in a new action and obtaining a new
judgment, which then could be executed upon. See Cont’l Nat’l
Bank & Trust Co. of Salt Lake City v. John Seely & Sons Co., 77
P.2d 355, 358 (Utah 1938); Simpson v. Cochran & Cherrie, 23 Iowa
81, 81 (1867). The second was through a writ of scire facias,
which revived the original judgment and thus allowed execution
1
Absent material change since the events in question, we
cite the current versions of statutes.
2
The Ninth Circuit was “uncertain” about these issues in
light of a depublished opinion of our court of appeals and a
memorandum decision of that court. Fidelity Nat’l. Fin. Inc.,
602 F.3d at 1123. Under Arizona law, however, neither decision
has precedential value. Ariz. R. Civ. App. P. 28(c), (f); Ariz.
R. Sup. Ct. 111(c).
4
on it. See Cont’l Nat’l Bank & Trust Co. of Salt Lake City, 77
P.2d at 358; Am. Ry. Express Co. v. F.S. Royster Guano Co., 126
S.E. 678, 679 (Va. 1925) (“The proceeding by scire facias is not
a new suit . . . but a continuation of the old suit.”).
¶7 Since well before statehood, Arizona statutes have
provided both a deadline for enforcing judgments and a procedure
for extending that deadline. The 1901 Territorial Code
provided:
No execution shall be issued upon any judgment
after the expiration of five years from the date
of its rendition and entry, unless such judgment
be revived by scire facias, or an action of debt
be brought thereon within five years from the date
of such rendition and entry.
1901 Territorial Code § 2558. Section 2959 of the 1901
Territorial Code codified the common law by allowing revival of
a judgment “by scire facias or an action of debt brought thereon
within five years after the date of such judgment.”3
¶8 The first Civil Code enacted after statehood, the 1913
Civil Code, made a significant change to the statutes governing
judgment revival. That Code eliminated scire facias, replacing
the common law writ with a simplified process under which a
judgment was “revived by affidavit.” 1913 Civ. Code § 1353.
3
The common law action of debt was a form of action to
recover a sum certain. 26 C.J.S. Debt, Action of § 1 (2001).
An action on a judgment sought recovery of a sum certain – the
amount owed on the original judgment and accrued interest. See
Brandt v. Meade, 17 Ariz. 34, 35-36, 148 P.2d 297, 298 (1915).
5
The affidavit process was spelled out in detail in the 1913
Code. 1913 Civ. Code §§ 581 to 583. The affidavit could be
filed “at any time within the ninety days next preceding the
expiration of the five year period within which a judgment may
be a lien under existing law.” 1913 Civil Code § 582. The
affidavit, filed in the court that rendered the original
judgment, “operate[d] to renew and revive said judgment to the
extent of the balance shown due in said affidavit for the period
of five years from the date of the filing of such affidavit.”
Id. Thus, like the writ of scire facias, the affidavit
continued the effectiveness of the original judgment so that the
judgment creditor could continue to execute upon it. See Owens
v. McCloskey, 161 U.S. 642, 645 (1896) (describing writ as
“continu[ing] the effect of . . . the former judgment”).
¶9 Although it abandoned the common law writ of scire
facias, the 1913 Civil Code expressly preserved the common law
alternative of suing on the judgment. Thus, § 1353 provided
that a judgment could also be renewed by an
“action . . . brought thereon.” Section 580 similarly provided
for renewal of a judgment “by action brought thereon in any
court of competent jurisdiction within this state at any time
within five years after the date of such judgment.”
6
¶10 These provisions from the 1913 Civil Code have been
carried forward without material change into present law.
Section 12-1551(B) now provides 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 an action is brought
on it within five years from the date of the entry
of the judgment or of its renewal.
The affidavit renewal process is set forth in § 12-1612 (2003).
Like its predecessors, § 12-1551(B) preserves the option of
renewal through “an action . . . on” the original judgment.
Section 12-1611, in turn, states that “[a] judgment may be
renewed by action thereon at any time within five years after
the date of the judgment.”
III.
¶11 The question before us is whether any of the Arizona
collection efforts or the California racketeering suit renewed
the 2002 judgment. Our inquiry therefore focuses on § 12-
1551(A), which provides that a judgment is renewed by “an action
brought on it,” and § 12-1611, which refers to renewal by
“action thereon.”
¶12 We start from the premise that the slight difference
in the language of these two sections is of no consequence.
Read together, the two statutes — as did their forebears — enact
a limitations period for the enforcement of a judgment and
7
provide for extension of that period by an action “on” the
judgment. See Pima County by City of Tucson v. Maya Constr.
Co., 158 Ariz. 151, 155, 761 P.2d 1055, 1059 (1988) (“[I]f
statutes relate to the same subject and are thus in pari
materia, they should be construed together . . . as though they
constituted one law.”). The “action thereon” described in § 12-
1611 is plainly the same “action brought on” the judgment to
which § 12-1551 refers.
¶13 Our post-statehood case law confirms that every
judgment continues to give rise to an “action to enforce it,
called an action upon a judgment.” Associated Aviation
Underwriters v. Wood, 209 Ariz. 137, 180 ¶ 150, 98 P.3d 572, 615
(App. 2004) (citation and internal quotation marks omitted).
“The main purpose of an action on a judgment is to obtain a new
judgment which will facilitate the ultimate goal of securing the
satisfaction of the original cause of action.” Id. (citations
and internal quotation marks omitted).
¶14 As was true at common law, the defendant in an action
on the judgment under our statutory scheme is generally the
judgment debtor, id., and the amount sought is the outstanding
liability on the original judgment, Brandt v. Meade, 17 Ariz.
34, 35-36, 148 P.2d 297, 298 (1915). The judgment debtor cannot
deny the binding force of the judgment, Miller Rubber Co. of
N.Y. v. Peggs, 60 Ariz. 157, 159, 132 P.2d 439, 440 (1942), but
8
can assert such defenses as satisfaction or partial payment,
Brandt, 17 Ariz. at 41, 148 P. at 301. If indebtedness remains
on the original judgment, the action results in a new judgment
in the amount owed. Associated Aviation Underwriters, 209 Ariz.
at 180 ¶ 150, 98 P.3d at 615.
¶15 “Legislative intent often can be discovered by
examining the development of a particular statute.” Carrow Co.
v. Lusby, 167 Ariz. 18, 20, 804 P.2d 747, 749 (1990). The
history of §§ 12-1551 and 12-1611, dating from before statehood,
is particularly instructive. It demonstrates that our current
statutes, in referring to an action “brought” on a judgment or
an “action thereon,” were meant by the legislature to describe
the common law action on a judgment.
IV.
A.
¶16 In arguing that the Arizona collection efforts and the
California racketeering suit were actions on the judgment,
Fidelity relies primarily on a general definitional statute,
which provides that:
In the statutes and laws of this state, unless the
context otherwise requires:
1. “Action” includes any matter or proceeding in a
court, civil or criminal.
A.R.S. § 1-215 (Supp. 2010). Fidelity contends that any “matter
or proceeding” seeking to facilitate collection on a judgment or
9
indicating the judgment creditor’s continued intent to enforce
the judgment is an action on the judgment.
¶17 The argument is not persuasive. The definition of
“action” currently in § 1-215(1) did not appear in Arizona
statutes until 1928. See 1928 Code § 3040(4). Because §§ 12-
1551 and 12-1611 descended directly from the 1901 Territorial
Code and the 1913 Civil Code, a general definitional statute
enacted after 1913 is of little use in interpreting the current
statute’s use of the word “action.”
¶18 More importantly, § 1-215 makes plain that its general
definition of “action” applies “unless the context otherwise
requires.” Sections 12-1551 and 12-1611 refer not merely to an
“action,” but to an action “brought” on a “judgment” or an
action “thereon.” These statutes, like their predecessors, thus
describe not simply an action in some way related to the earlier
judgment, but rather a specific form of suit — the common law
action on a judgment.
B.
¶19 Our construction of §§ 12-1551 and 12-1611 is
consistent not only with the history of these statutes, but also
with their central purpose. The renewal statutes are designed
to notify interested parties of “the existence and continued
viability of the judgment.” In re Smith, 209 Ariz. 343, 345
¶ 10, 101 P.3d 637, 639 (2004). Among the parties most
10
interested in the status of the judgment are those considering
extending credit to the judgment debtor.
¶20 If, as Fidelity argues, a judgment could be renewed by
“any matter or proceeding in a court, civil or criminal,” § 1-
215(1), a prospective creditor would face an onerous task in
determining the judgment’s continued effect. Under Fidelity’s
view, the potential lender would be required to search the
records of at least every court in the state – and perhaps the
nation — to determine whether a writ of garnishment or other
proceeding relating to the judgment had been instituted. See
Ellsworth Land & Livestock Co. v. Bush, ___ Ariz. ___, ___ ¶ 11,
233 P.3d 655, ___ (App. 2010) (“‘[A] debt may be garnished
wherever personal jurisdiction may be exercised over the
garnishee.’” (quoting Restatement (Second) Conflict of Laws § 68
(1971))). Such a reading of §§ 12-1551 and 12-1611 would hardly
afford interested parties effective notice of the status of the
original judgment.
¶21 Under § 12-1612, a potential creditor need only search
the docket of the court in which the original judgment was
entered for the ninety days preceding the five-year expiration
date to determine whether a judgment has been renewed by
affidavit. It would make little sense for the legislature to
have provided strict temporal and filing limitations on the
affidavit process, while at the same time allowing any action
11
relating to the judgment, filed anywhere, to renew it. If,
however, §§ 12-1551 and 12-1611 authorize renewal by action only
through a common law action on the judgment, no great burden is
placed on potential creditors, because a successful action on a
judgment results in the entry of a new judgment. Those
considering extending credit already must check for extant
judgments in the relevant jurisdiction.
C.
¶22 Finally, Fidelity argues that the Debtors may unjustly
escape liability if the certified questions are answered in the
negative. Our legislature, however, long ago determined that
the judgment debtor will be released from further obligation
unless a judgment creditor timely files a renewal affidavit or
brings an action on the judgment within five years after its
entry. Inherent in any statute of limitations is the risk that
a party who owes money may escape liability if the creditor does
not act in a timely fashion.
¶23 To mitigate any possible unfairness, the legislature
has provided a simple mechanism for renewing the judgment. The
judgment creditor need only file an affidavit, in a form
specified by statute, within a ninety day period before the
judgment expires to obtain renewal and maintain the priority of
12
the original judgment.4 The statute also preserves the more
cumbersome common law action on the judgment. When a judgment
creditor fails to utilize either of these statutory
alternatives, its resultant inability to enforce the original
judgment in Arizona is compelled by law.
V.
¶24 For the reasons above, we conclude that the
“action . . . on” a judgment referred to in § 12-1551 and the
“action thereon” referred to in § 12-1611 are the common law
action on a judgment, which replaced the original judgment with
a new judgment in the amount then owed.5 We turn now to the
certified questions.
¶25 The first certified question asks whether “collection
activities . . . taken within Arizona” serve to renew a
judgment. None of the Arizona collection efforts undertaken by
Fidelity was a common law action on the 2002 judgment. Rather,
4
Fidelity apparently filed an affidavit to renew the Arizona
judgment, but Debtors claim that it was ineffective because it
was filed more than ninety days before the expiration of that
judgment. See A.R.S. § 12-1612(B). This issue has not been
certified to us, and we express no opinion on it.
5
We disapprove any dictum to the contrary in Hall v. World
Savings & Loan Ass’n, 189 Ariz. 495, 502-03, 943 P.2d 855, 862-
63 (App. 1997). And, although we agree with the conclusion in
Associated Aviation Underwriters that §§ 12-1551 and 12-1611
refer to the common law action on a judgment, 209 Ariz. at 180
¶ 150, 98 P.3d at 615, we express no opinion whether, in light
of today's opinion, the court of appeals correctly concluded
that the complaint-in-intervention in that case was such an
action.
13
the writs of garnishment sought to satisfy the judgment by
seizing the Debtors’ property; the other collection efforts
sought to discover assets of the Debtors. The Arizona
collection efforts were attempts to collect upon the 2002
judgment, not to renew it. See In re Smith, 209 Ariz. at 345
¶ 13, 101 P.3d at 639 (recognizing the difference between
enforcing and renewing a judgment). We therefore answer the
first certified question in the negative.
¶26 The second certified question inquires whether the
filing of a “related lawsuit in a State other than Arizona” can
renew an Arizona judgment. Here, the only lawsuit meeting that
description is the California racketeering suit. That suit
clearly was not a common law action on the judgment; it did not
simply recite the amount owed and seek a judgment on that debt.
Instead, the California racketeering suit sought remedies under
federal and California law because of actions allegedly
undertaken by the Debtors to frustrate collection of the 2002
judgment. Indeed, because the California racketeering suit
resulted in a defense verdict in 2010, it did not culminate in a
new judgment against the Debtors. We therefore answer the
second certified question in the negative.6
6
We express no opinion whether the 2002 judgment remains
enforceable in the Central District of California or elsewhere.
14
_____________________________________
Andrew D. Hurwitz, Vice Chief Justice
CONCURRING:
_____________________________________
Rebecca White Berch, Chief Justice
_____________________________________
W. Scott Bales, Justice
_____________________________________
A. John Pelander, Justice
_____________________________________
Michael D. Ryan, Justice (Retired)
15