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McDaniel v. Banes - 7/23/2020

Arizona Court of Appeals Division One holds that the application of the four-year statute of limitations to an amended foreign judgment runs from when it is amended, not when it was originally issued.

A judgment creditor and judgment debtor entered a settlement agreement in an action filed in Colorado in 2010, which called for the judgment debtor to pay $20,000 to the judgment creditor pursuant to a payment plan.  The Colorado court erroneously entered the judgment as for $12,000.  After making the first three payments, the judgment debtor stopped paying and disappeared.  When finally discovered in Arizona in 2018, the judgment debtor cited the four-year statute of limitations in A.R.S. § 12-544(3) on registering a foreign judgment and refused to pay.  The judgment creditor than moved to amend his judgment in Colorado; the Colorado court granted the motion and entered an amended judgment in March 2019.  The judgment creditor then registered the judgment in Arizona and obtained a writ of garnishment.  The judgment debtor then moved to vacate the recorded judgment and quash the writ, based on the theory that the statute of limitations ran from 2010.  The superior court denied the motion and granted a continuing lien against the judgment debtor.

The Court of Appeals affirmed the order denying the motion.  The Full Faith and Credit Clause requires that a judgment entered in one state is entitled to the same validity and effect in every other court in the country.  A judgment is due full faith and credit if it is considered final under the law of the state that issued it.  Nothing in Colorado law suggests that an amended judgment issued in response to a clerical error is not considered a final judgment, or that an amended judgment is not enforceable.  Because the amended judgment entered in 2019 is valid and enforceable in Colorado law, the statute of limitations period on registering and enforcing that judgment in Arizona ran from March 2019, not 2010.

Presiding Judge Winthrop delivered the unanimous opinion of the court.  Judge Cruz and Judge Gass joined. 

Posted by: Emma J. Cone-Roddy

Posted On: 7/29/2020