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Walker v. Lipin - 10/6/2021

Arizona Court of Appeals Division Two holds that the deadline for renewal of judgments previously tolled are not shortened by recent amendments lengthening the statute of limitations for such actions.

A couple filed a lawsuit and prevailed against an individual.  After that, the individual filed for bankruptcy.  The couple argued to the bankruptcy court that their judgment they obtained against the individual was non-dischargeable, i.e. that they could still recover from the individual after bankruptcy.  The individual responded by arguing that the time to recover the judgment had expired under the statute.  The bankruptcy court rejected that argument, decided that the time for the couple to renew their judgment was tolled during bankruptcy, and exempted their judgment from the final discharge. 

Unhappy with the bankruptcy court’s decision, the individual filed a new lawsuit seeking a declaratory judgment in the superior court that the couple’s renewal time had expired.  The family argued that the individual’s claim was barred by the doctrines of laches and claim preclusion.  The trial court agreed, and granted the family’s motion for judgment on the pleadings.  The court of appeals affirmed. 

In this case, the couple’s estate (the couple died before this lawsuit was filed) filed an affirmative lawsuit against the individual seeking to recover on the earlier judgment.  The individual argued again that the family’s action was untimely.  This time, the individual relied upon a recent change to limitations period in the renewal statute, which extended the limitations period from five to ten years, but stated that “an action may not be brought to renew a judgment entered on or before August 2, 2013 that was not renewed on or before August 2, 2018.”  2019 Ariz. Sess. Laws, ch. 20, § 2.  In this case, the judgment was entered before 2013, but because of the tolling period, did not expire until 2020.   

The trial court rejected the individual’s argument that the recent change to the statute extinguished the claim.  The Court explained that although the plain language of the statute could be read to bar their claim, it would be absurd if the amended statute—which was intended to extend the statute of limitations for seeking a renewal of judgment from five years to ten years—would have incidentally extinguished the couple’s claim.  It therefore affirmed the trial court. 

Judge Espinosa authored the opinion for the Court; Judges Staring and Eckerstrom concurred.

Posted by: John Bullock

Posted On: 10/15/2021