Arizona Court of Appeals Division Two Holds That Time For Renewal of Judgment Under Arizona Statute Is Tolled For Period During Which Judgment Is Vacated by an Amended Judgment Before Reinstatement on Appeal.

A judgment creditor (“Creditor”) filed applications for writs of garnishment against a judgment debtor (“Debtor”).  Over the course of previous years, the judgment had been vacated by an amended judgment, stayed by the filing of a bankruptcy petition, and later reinstated on appeal.  The trial court, however, quashed the writ, finding that the judgment had lapsed under A.R.S. § 12-1551(B), because it was not timely renewed or acted upon within five years from the date of its original entry.  Creditor appealed.

The Arizona Court of Appeals reversed and remanded.  The Court agreed that the time for filing a renewal of a judgment under Arizona law is not stayed by the pendency of a bankruptcy case.  In re Smith, 209 Ariz. 343 ¶¶ 13-15 (2004).  The Court also agreed that the Creditor’s initiation of garnishment proceedings did not constitute an “action brought on” the judgment for purposes of renewal under A.R.S. § 12-1551, because the garnishment proceeding is “merely ancillary to the action that gave rise to the underlying judgment.”

The Court reversed the trial court’s finding, however, that the time for renewal dated back to the entry of the original judgment.  Because the original judgment had been vacated, it could not be renewed within the 90-day period prior to its expiration, as required by A.R.S. § 12-1612(B).  The reinstatement of the judgment on appeal did not reinstate the original date for renewal, because the time for renewal was tolled during the period when Creditor was precluded from renewing the judgment or bringing action to enforce the judgment because the judgment had been vacated by the entry of the amended judgment.  Because the time to renew the judgment was tolled for this period, the judgment had not yet lapsed, and the trial court erred by quashing the writs of garnishment.

Judge Vásquez wrote the opinion; Judges Eckerstrom and Brammer concurred.