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Media Alerts - Wells Fargo Equip. Fin., Inc. v. Asterbadi -- Fourth Circuit
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December 7, 2016
  Wells Fargo Equip. Fin., Inc. v. Asterbadi -- Fourth Circuit
Clock Is Reset: Limitation Period for Enforcement Begins to Run on Date of Registration of Foreign Judgment

Areas of Law:
Civil Procedure

Issue Presented: Whether Maryland's 12-year limitation period for enforcement on a foreign monetary judgment begins to run on the date of its registration in Maryland.

Brief Summary: The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision that a monetary judgment the plaintiff obtained against the defendant in Virginia, which the plaintiff registered in Maryland pursuant to 28 U.S.C. § 1963, was enforceable against the defendant in Maryland. The Fourth Circuit construed § 1963 to provide for a new judgment in the district court where the judgment was registered. The Fourth Circuit held that with the registered judgment functioning as a new judgment, Maryland's 12-year limitation period for enforcement ran from the date of registration.

Extended Summary: The enforceability of a registered foreign monetary judgment is governed by 28 U.S.C. § 1963. The statute provides that "a judgment in an action for the recovery of money . . . entered in any . . . district court . . . may be registered . . . in any other district . . . . A judgment so registered shall have the same effect as a judgment of the district court of the district where registered and may be enforced in like manner."

On October 4, 1993, CIT/Equipment Financing, Inc. ("CIT") obtained a $2.63 million judgment against Nabil J. Asterbadi ("Asterbadi") in the United States District Court for the Eastern District of Virginia ("the Virginia Judgment"). The judgment arose from a defaulted debt that Asterbadi incurred to invest in an airplane. Under Virginia law, the judgment remained enforceable for 20 years, i.e., until October 4, 2013. On August 27, 2003, in furtherance of its collection efforts, CIT registered the judgment in the United States District Court for the District of Maryland ("the District Court") pursuant to 28 U.S.C. § 1963. Under Maryland Rule 2-624, "a money judgment expires 12 years from the date of entry or most recent renewal."

In 2007, CIT sold and assigned its judgment against Asterbadi to Wells Fargo Equipment Finance, Inc. ("Wells Fargo"). On April 7, 2015, Wells Fargo began collection efforts and filed a notice of the assignment in the District Court.

Asterbadi argued that Maryland's 12-year limitation period for enforcement on the registered judgment began to run on the date that the Virginia judgment was entered, i.e., on October 4, 1993. Thus, Asterbadi argued that the registered judgment was unenforceable, as its enforceability expired on October 4, 2005, 12 years after 1993. Wells Fargo argued that when the Virginia judgment was registered in Maryland, it became, "in effect, a new judgment" governed by Maryland's 12-year limitation, which began to run on the date of registration, i.e., August 27, 2003. Thus, Wells Fargo argued, the registered judgment would expire on August 27, 2015. On August 26, 2015, Wells Fargo filed a renewal of the registered judgment in the District Court, which it contended, extended the judgment's enforceability under Maryland law to 2027.

The District Court agreed with Wells Fargo, holding that Maryland's time limitation for enforcement of the registered judgment began to run on the date of its registration in Maryland, August 27, 2003, and that the judgment was still enforceable against Asterbadi.

The Fourth Circuit affirmed the District Court's decision. The Fourth Circuit began its analysis by examining the legislative intent of 28 U.S.C. § 1963. The Fourth Circuit discussed three other circuits' cases Stanford v. Utley, 341 F.2d 265 (8th Cir. 1965), Home Port Rentals, Inc. v. International Yachting Group, Inc., 252 F.3d 399 (5th Cir. 2001), and Stiller v. Hardman, 324 F.2d 626 (2d Cir. 1963). Based on these cases, the Fourth Circuit found that the statute was enacted "as a device to streamline the more awkward prior practice of bringing suit on a foreign judgment and thereby obtaining a new judgment on the foreign judgment." Thus, the Fourth Circuit held that § 1963 allows the holder of a Virginia judgment "simply to register the Virginia judgment in Maryland but to retain the benefits of obtaining a judgment under the former practice." Moreover, the Fourth Circuit found the explicit statutory language of § 1963, which states that a district court judgment registered in another district court "shall have the same effect as a judgment of the district court . . . and may be enforced in like manner," supported this conclusion.

Therefore, the Fourth Circuit construed § 1963 to provide for a new judgment in the district court where the judgment was registered. The Fourth Circuit further explained that with the registered judgment functioning as a new judgment, the limitation period for enforcement runs from the date of registration. The Fourth Circuit found that other circuits, such as the Fifth, Eighth, and Ninth Circuits, had reached the same conclusion. See, e.g., Home Port Rentals, 252 F.3d at 405; Stanford, 341 F.2d at 268; In re Estate of Ferdinand E. Marcos Human Rights Litig., 536 F.3d 980, 989 (9th Cir. 2008).

Thus, the Fourth Circuit held the registered judgment would have expired on August 27, 2015 - 12 years from the date of registration August 27, 2003. As Wells Fargo renewed the judgment for another 12 years on August 26, 2015, the registered judgment is enforceable in Maryland until August 26, 2027.

To read the full opinion, click here.

Panel: Circuit Judges Niemeyer and Diaz, and District Judge Keeley

Argument Date: 09/20/2016

Date of Issued Opinion:
11/04/2016

Docket Number: No. 15-2182

Decided: Affirmed by published opinion.

Case Alert Author: Maria Nazarova, Univ. of Maryland Carey School of Law

Counsel: 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.

Author of Opinion: Circuit Judge Niemeyer

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 12/07/2016 09:27 AM     4th Circuit  

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