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Fidelity National Financial v. Friedman et al. (8/19/10)

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This is an opinion on certified questions from the Ninth Circuit concerning judgment renewal.

Fidelity took judgment against the defendants, in federal court in California, in 2002. It registered the judgment here and unsuccessfully tried to collect it. In 2008 the defendants moved in Arizona federal court to bar further collection efforts because Fidelity hadn’t renewed the judgment. The court denied the motion, concluding that the judgment had been renewed by Fidelity’s attempts to collect it, which included the Arizona collection efforts and a lawsuit it filed against the same defendants, again in California, in 2006, alleging that their attempts to avoid paying the judgment violated RICO. Defendants appealed. The Ninth Circuit certified the questions of whether either collection efforts or filing a related case in another state renews a judgment.

Under 12-1551(B) a judgment must be renewed within five years by affidavit or by “an action . . . brought on” it. Fidelity argued that “’action’ includes any matter or proceeding in a court,” quoting 1-215. But the Supreme Court, after reviewing 1551’s common-law and statutory predecessors – which long predate 215 – determined that it refers to a common-law action on a judgment, not “any matter.”  In that kind of “action” the creditor alleges the old judgment and prays for a new one on the same debt. It wouldn’t make sense to have a well-defined affidavit process if “any matter” would do just as well. And prospective creditors of the judgment debtor would have a hard time knowing if the judgment was still in force if “any matter” could keep it alive rather than something clearly on the docket.

So, Fidelity’s acts did not renew its judgment.

It has been so long since anyone filed a real action on a judgment that Fidelity may actually have believed its arguments. The result shouldn’t surprise those who have worked with the statute or know anything of the history recited by the court, though. It is probably time to remove the “action on a judgment” language, just as an earlier version of 1551 removed scire facias from the law.

But perhaps what confused Fidelity and the District Court was AAU v. Wood, 209 Ariz. 137 (App 2004), which held that intervention counts as “an action . . . on” a judgment. In a footnote this court says “we express no opinion whether, in light of today’s opinion, the court of appeals” was correct. In light of today’s opinion it obviously wasn’t, and was so wrong that the opinion really should mention it, but that’s a problem since Justice Pelander, who joins this unanimous opinion, wrote AAU. That was not his finest hour. AAU might also explain why he did not write this opinion (Justice Hurwitz did) even though he addressed the same basic issue last year in Jones, which was not consistent with AAU either and which the Supreme Court later ordered de-published anyway.

Speaking of Justice Hurwitz, this isn’t quite as clean an opinion as we’ve come to expect from him. “The starting point in resolving the questions before us is the common law background,” he tells us at the beginning. That’s true. But it would have been useful to say why it’s true – because the background illuminates the legislative intent of the present statute – at the beginning, too, rather than waiting until the end of the legal-history analysis to explain why it’s there. But we’re not complaining too much since we’re suckers for legal history; he gets extra points, in our book, for using scire facias in a sentence (although we think it should be set in italics, and that Court of Appeals should be capitalized, two things this opinion doesn’t do).

 

(link to opinion)

Estate of Winn v. Plaza Healthcare (CA1 8/10/10)

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This was an attempt to create a new category of damages.

Mary Winn died in a nursing home. Her estate sued it under the Adult Protective Services Act. The Estate filed a motion for “summary judgment,” admitting that it had no financial loss (Mary had retired) but arguing that it should be awarded the “inherent value” of her life. The trial court denied it. After some procedural clumsiness and a compulsory-arbitration award for the defendant (which the court assumes was for lack of any damages; the Estate admitted it couldn’t prove pre-death pain and suffering, which a Supreme Court case – Denton – had allowed), this appeal resulted.

The APSA says that the court may award “actual and compensatory damages.” The Estate argued that “actual damages” includes the inherent value of life. The Court of Appeals disagreed. There is no evidence that the legislature intended this and if it had then it could have said so. If somebody wanted more damages then Mr. Winn should have filed a wrongful-death claim.

The Estate’s argument isn’t quite as silly as it sounds; it’s an attempt to follow-up Denton, which used verbal slight-of-hand with the “actual damage” language to produce a result the legislature surely never thought of.

The bigger problem here is bigger because it’s one seen all the time: a “motion for summary judgment” that isn’t. A motion for summary judgment seeks a judgment. A motion seeking a ruling on, for example, what the damages include doesn’t.  Most motions for summary judgment “on the issue of” something-or-other can’t properly result in a judgment. They’re motions in limine.

So why do the movants take on the burden of the summary-judgment standard? Two reasons. The first, and by far the most common, is that they haven’t thought about what they’re doing. They call their motion a “summary judgment” because they once saw someone else do that with a similar motion. (That’s how most lawyers learn most things and why so much of what they learn is wrong.) And too many lawyers aren’t comfortable with the fact that a motion “in limine” can be filed months or years before trial.

The other reason is equally wrong but not thoughtless. If the whole point of your case is to make new law then if you can manage to get the ruling called a judgment then maybe you can appeal it without further ado. That’s what these folks tried. But the Court of Appeals caught on – the flaw in this plan is that the court routinely will catch on – and kicked it back for arbitration.

And what of the estate of poor Mary Winn, now reduced by costs if not fees? A touchingly naive question. You surely can’t think that anyone in this saga, except Mr. Winn, was actually concerned about such a thing as that.

 

(link to opinion)

Preston v. Kindred Hospitals West (CA1 8/5/10)

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NOTE: THE SUPREME COURT ACCEPTED REVIEW AND AFFIRMED THIS OPINION

The court tells us that this is an original issue about the substitution of real parties in interest under Rule 17(a).

Preston, while in bankruptcy, died in Kindred Hospital. His sisters sued it for malpractice. The hospital moved to dismiss, arguing that the bankruptcy trustee owned the claim. The sisters admitted this and moved under Rule 17(a) to join or substitute the trustee as plaintiff.

That rule says that “no action shall be dismissed on the ground that it is not prosecuted in the name of the real party interest until a reasonable time has been allowed after objection for . . . joinder or substitution of the real party in interest.” But the trial court granted the dismissal, reasoning that the rule must refer to situations is which the real party in interest is, basically, unknown or uncertain. That is the gloss that the federal rule has acquired and it is what a State Bar Committee note, parroting the corresponding federal note, suggests.

The Court of Appeals reverses. It says that this is an issue of first impression. What it apparently means is that 17(a) has never been brought up on these exact facts, for it then goes on to cite, among others, its own earlier case holding – in a case where the real-party-in-interest wasn’t unknown or uncertain – that the trial court can’t immediately dismiss without allowing time for joinder or substitution. The case suggested that prejudice might be a factor but that wasn’t argued here so the court “declines to consider” whether it is or not.

We’ve waited for a case like this. We knew one had to come. The practice of making, printing, and paying any attention to State Bar Committee notes is a lousy idea. The notion that the committee members are experts on a particular rule or subject matter – or, for that matter, on any – is a flattering myth; as here, they’re as often as not cribbing from another source, one that might or might not itself have been more knowledgeable than they and one that they might or might not have given much consideration to. And to the extent that they make a substantive, original contribution, they shouldn’t. The language required to understand what the rule means belongs in the rule. The rest belongs in the rulings; judges should tell us what rules mean, not anonymous nobodies trying to steer the law in one direction or another. (Yes, we’re anonymous, and you can assume that we’re nobodies, but we’re not trying to make law or decide your case.) As for strictly factual/historical matters, lawyers and judges can read; whether a 1970 rule was intended to change, or not, the result of a 1966 opinion they can figure out by seeing that the later rule differs, or not, from the earlier case.

Why are the notes made? Because they’re printed. And why are they printed? Mostly to stroke the egos of the committee members. Have you ever met a member of a Bar committee (other than yourself, of course) whose ego needed to be stroked? Most need to be tied up in a box and kept in a cool, dark place.

(link to opinion)