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Ex Parte Renewal of a Consent Judgment by a Bankruptcy Court

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  • 08-04-2014, 10:45 PM
    kiko64
    Ex Parte Renewal of a Consent Judgment by a Bankruptcy Court
    My question involves bankruptcy in the state of: Michigan
    We had a BK-7 filed in 2003 discharged 3/2014 w/ exception of a debtor for supplies from our business.
    We were firmly yet politely informed w/ fiduciary breach charges(Builders Trust Fund Act) if we did not agree to sign a Consent Judgment to repay the debt.
    Our agreement was signed and repayment detailed in the Consent Judgment.
    Consent Judgment signed July 12th 2004.
    Paid 2 yrs of pymts, all payments, communication and collection efforts stopped in March 2006.
    Never heard from from debtor attorney again until now.

    The question that is at hand is:
    July 10th 2014 a motion was filed to reopen BK for the right to file an ex parte motion to extend the judgment for another 10yrs.
    July 25th 2014 BK judge signed Motion to reopen BK file and Ex Parte Motion to renew judgement, granting both on July 25th.

    Statue of Limitations would have run out on July 12th 2014, however either motion was not granted until after the SOL was expired.
    My attorney (25 yrs in BK Law) is not guaranteeing that we would prevail in filing a motion to vacate, and is leaving it up to us to decide to take a shot at winning the time barring of judgment renewal motion. ($2500 for representation)

    My concern is the BK Judge did not in fact review the case for the possibility of a time barred SOL and was signed off by a clerk in the office. Apparently the judge has a reputation for about a 30 min. turn around time for motions, so I cannot see how our case was given any formal review. So in essence we have to retain legal counsel to have the BK judge formally review the case in court to determine if the SOL would prevail from the motion filed to reopen BK 7 and not the date the order was actually signed.
    My attorney claimed finding case law to challenge the motions is going to be very difficult to find, as he has never ran into a situation of this "eleventh hour" filings for a 10 year judgement renewal.
    Any and all thoughts or case law cited would be extremely helpful and greatly appreciated. I have to make a decision soon and was only notified of all of this just 2 days ago.
    I wanted to upload the legal docs edited of course but cannot find the option in the task menu.
    Thank you in advance for your time.
  • 08-05-2014, 12:45 AM
    BKTTT
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    First, I'm assuming that you signed a consent to judgment that was filed in the bankruptcy court.
    Second, I'm assuming that you made payments to the creditor pursuant to that judgment.

    Fed.R.Civ.Pro 69(a) et seq. incorporates the law of the state in enforcing money judgments, including the requirement of a renewal. In other words, since there is no specific statute of federal statute of limitations on how long a consent judgment is effective, you must look to Michigan law.

    According to Michigan law, the SOL is tolled while you were making payments. See MCL 600.6107 and MCL 600.6235. My guess is that the SOL did not expire on July 12, 2014, but will run sometime later (perhaps in 2016?). My inclination is that the SOL defense is the wrong squirrel to hunt.

    Hope this helps
  • 08-05-2014, 04:45 AM
    Mr. Knowitall
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    Based on the timing, installment payments are irrelevant. The initial limitations period on a judgment is ten years. MCL 600.5809(3). The motion to renew the judgment was filed before the judgment was ten years old, and thus the judgment was subject to being renewed for another ten years.
    Quote:

    Quoting MCL 5809(3)
    (3) Except as provided in subsection (4), the period of limitations is 10 years for an action founded upon a judgment or decree rendered in a court of record of this state, or in a court of record of the United States or of another state of the United States, from the time of the rendition of the judgment or decree. The period of limitations is 6 years for an action founded upon a judgment or decree rendered in a court not of record of this state, or of another state, from the time of the rendition of the judgment or decree. A judgment entered in the district court of this state before May 25, 1973, is a judgment of a court not of record. A judgment entered in the district court of this state on or after May 25, 1973, except a judgment entered in the small claims division of the district court, is a judgment of a court of record. Within the applicable period of limitations prescribed by this subsection, an action may be brought upon the judgment or decree for a new judgment or decree. The new judgment or decree is subject to this subsection.

  • 08-05-2014, 12:29 PM
    BKTTT
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    Hmmm. . .

    Well, I could be wrong. Lord knows I’ve been wrong before.

    If it was me, before I shelled out $2,500 to fight an SOL issue, I’d take a hard look at Michigan cases that hold that partial payments made before the expiration of the statute of limitations on the original judgment act to restart the running of that period of limitations, regardless of whether the partial payments were voluntary or involuntary:

    Wayne County Social Services Director v Yates, 261 Mich App. 152, 681 NW. 2d 5 (2004)

    Miner v Lorman, 56 Mich 212, 22 NW 265 (1885)
  • 08-05-2014, 12:33 PM
    Mr. Knowitall
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    Again, it doesn't matter whether or not there was an installment plan (and we've not been told of one) because the petition for renewal was filed before the judgment was ten years old.
  • 08-05-2014, 12:55 PM
    BKTTT
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    Again, it appears that it does matter in Michigan:

    ARKIN DISTRIBUTING COMPANY v. JONES

    The caselaw that I have provided interprets your Michigan statute by Michigan courts. But I'm not from Michigan, I'm from Missouri, so you need to Show Me.
  • 08-05-2014, 01:12 PM
    Mr. Knowitall
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    You don't need an argument that the statute of limitations should be tolled if you take action within the statute of limitations. Here, we have been expressly told that action was taken within the statute of limitations. Judgments are valid for an initial period of ten years, and the plaintiff may file for renewal of the judgment within that ten year period. The amount of time between July 12th 2004 and July 10 2014 is less than ten years.

    Any partial repayment, which from what has actually been posted here in the thread may exist only in your imagination, might be relevant if the creditor had missed its deadline to file for renewal of the judgment, but the creditor did not and thus your argument has absolutely no relevance.
  • 08-05-2014, 01:41 PM
    BKTTT
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    I see what you are doing. You’re losing the argument on the law, so you attempt to change the topic. Well, I’ll bite.

    The poster’s original question concerned his dilemma to pay his attorney to contest a judgment renewal based on a SOL defense.

    Quote:

    Quoting kiko64
    View Post
    So in essence we have to retain legal counsel to have the BK judge formally review the case in court to determine if the SOL would prevail from the motion filed to reopen BK 7 and not the date the order was actually signed.

    Therefore, any tolling that occurred within that period is entirely relevant to the matter of whether to attack the renewal by claiming the SOL had expired. Any tolling by payments in this case (poster says “Paid 2 yrs of pymts,” or maybe I just imagined it) defeats any claim that the statute of limitations expired on July 12, 2014, and makes irrelevant the poster’s question of whether the court’s order dated July 25 has any impact on the case.

    This tolling information helps the poster decide whether to spend hard-earned money contesting the judgment renewal using a SOL defense. That information seems pretty relevant to me.

    - - - Updated - - -

    It has been fun posting with you, but I only posted here to help this individual and anyone else in a similar situation. So write your angry reply, call me names, or change the discussion. I don’t care, I have other stuff I need to do.

    Have a great day
  • 08-05-2014, 02:21 PM
    Mr. Knowitall
    Re: Ex Parte Motion, Consent Judgment 10yr Renewal Statute of Limitations Expired
    You are clearly speaking for yourself. If you knew a whit about the law, you would know that tolling only matters if the underlying limitations period has expired. Here it has not. If you can read, you know that the statute allows the petition for renewal to be filed within the ten year period, but has no requirement that it be granted within the ten year period.

    If your argument is meant to apply to an alternate universe in which the ten year limitations period had expired, then raising the possibility of tolling would make sense. But to become belligerent when somebody points out that the statute of limitations has not run, and to carry on endlessly over a partial payment that you don't even know occurred? What are you trying to accomplish?
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