Summary
holding that a motion to compel the production of a supersedeas bond is an "execution" under KRS 413.090
Summary of this case from Irwin v. O'BryanOpinion
NO. 2014-CA-000607-MR
05-27-2016
BERLING CONSTRUCTION COMPANY/BERLING DEVELOPMENT ENTERPRISES APPELLANT v. RAYMOND SCHLAGEL AND KORLISS SCHLAGEL APPELLEES
BRIEFS FOR APPELLANT: Stephen D. Wolnitzek Leonard G. Rowekamp Covington, Kentucky BRIEF FOR APPELLEES: Raymond Schlagel, Pro se Korliss Schlagel, Pro se Florence, Kentucky
NOT TO BE PUBLISHED APPEAL FROM BOONE CIRCUIT COURT
HONORABLE ANTHONY W. FROHLICH, JUDGE
ACTION NO. 90-CI-00425 OPINION
AFFIRMING
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BEFORE: ACREE, CHIEF JUDGE; DIXON AND KRAMER, JUDGES. DIXON, JUDGE: Berling Construction Company/Berling Development Enterprises (collectively, "Berling") appeals an order of the Boone Circuit Court that determined Raymond and Korliss Schlagel's action to enforce a 1996 civil judgment against Berling was not time-barred or barred by collateral estoppel. We affirm.
In May 1990, the Schlagels filed suit against Berling due to construction defects in the Schlagels' home. The Schlagels sought damages for breach of warranty, violations of the Consumer Protection Act, violations of the Kentucky Building Code, misrepresentation, and trespass. In August 1996, following a five-day jury trial, the Schlagels were awarded $1,196,000 in damages. Shortly thereafter, the Schlagels sought a writ of execution against Berling, which was returned by the sheriff as no property found. In July 1997, the Schlagels recorded a judgment lien against Berling in Boone County.
The award included $11,000 for trespass damages, $45,000 in compensatory damages, and $1,140,000 in punitive damages. The Schlagels also received an award of $28,494 in attorney's fees. This Court affirmed the judgment in an unpublished opinion. Berling Construction Co. v. Schlagel, 1996-CA-003222-MR (Dec. 30, 1998).
In April 2005, the Schlagels, pro se, filed a motion in Boone Circuit Court alleging Berling had previously filed a supersedeas bond in the case and asked the court to compel production of the bond. Berling denied that a supersedeas bond was ever filed, and the court held a hearing to address the issue. The court ultimately concluded that a bond had never been filed, noting that the Schlagels had previously executed on the judgment and that an April 1997, pleading filed by the Schlagels' former counsel acknowledged Berling had not filed a supersedeas bond.
Following the circuit court's ruling, this Court denied the Schlagels' petition for a writ of mandamus, and the Kentucky Supreme Court affirmed, Schlagel v. Frohlich, 2006-SC-000430-MR (Nov. 1, 2007). --------
In December 2013, the Schlagels filed a motion in the circuit court to enforce their judgment against Berling. In response, Berling moved to extinguish the judgment due to the expiration of the fifteen-year limitations period and raised an alternative argument of collateral estoppel. The circuit court granted the Schlagels' motion to enforce the judgment and denied Berling's motion to extinguish. This appeal followed.
Berling raises the same arguments on appeal as it did before the trial court. Since the issues presented concern questions of law, our review is de novo. Western Kentucky Coca-Cola Bottling Co. v. Revenue Cabinet, 80 S.W.3d 787, 790 (Ky. App. 2001).
Kentucky Revised Statutes (KRS) 413.090(1) provides that a fifteen-year limitations period applies to an action for the enforcement of a judgment, with "the period to be computed from the date of the last execution thereon[.]" In the matter at bar, the trial court concluded that the Schlagels' 2005 efforts to recover the alleged supersedeas bond constituted an action to enforce the judgment sufficient to toll the fifteen-year limitations period. Berling asserts the Schlagels failed to timely enforce the judgment because the last execution occurred when the Schlagels filed a judgment lien on Berling's property in July 1997; consequently, the Schlagels' December 2013 motion to enforce the judgment was time-barred.
In Slaughter v. Mattingly, 159 S.W. 980, 982 (Ky. 1913), the Court explained:
after an execution on a judgment has been returned, 'No property found,' the judgment creditor has two ways to keep the judgment alive: He may keep it alive indefinitely by causing executions to issue on it from time to time within the period prescribed by the statute, or he may keep it alive indefinitely by commencing an action on the judgment under section 439 of the Civil Code within the time and in the manner prescribed by said section, and keeping the action on the docket. And, so long as it is pending, he may have alias attachments issued and levied on any property of the debtor subject to attachment, regardless of when the last attachment was issued in the action or the last execution was issued on the judgment.
KRS 426.381 is the successor statute of civil code section 439 referenced in Slaughter, supra. KRS 426.381(1) provides, in part:
After an execution of fieri facias . . . is returned by the proper officer . . . no property found to satisfy the same, the plaintiff in the execution may by an amended and supplemental petition filed in the action have the same redocketed and join with the execution defendant or defendants any person believed to be indebted to him or them, or to hold money or other property in which he or they have an interest, or to hold evidences or securities for the same. Upon the filing of such amended petition the case shall be transferred to the equity docket and summons issued thereon. In such supplemental proceeding or in a separate suit in equity against such parties (at his option) the plaintiff may have discovery and disclosure from the judgment creditor and his debtor or bailee, and may have any property discovered, or a sufficiency thereof, subjected to the satisfaction of the judgment.
Recently, in Wade v. Poma Glass & Specialty Windows, Inc., 394 S.W.3d 886, 891 (Ky. 2012), the Kentucky Supreme Court analyzed the meaning of the term "execution" in Kentucky's jurisprudence, and as to KRS 426.381, the Court stated:
Although the statute is much the same as Section 439 of the Civil Code, it no longer requires a judgment creditor to file a separate suit in equity. Rather, the judgment creditor may have the action redocketed post-judgment by filing an amended and supplemental petition. But the substance of the statute remains the same. The judgment creditor can seek discovery and disclosure from the judgment debtor and third parties who owe debts to the judgment debtor. The judgment creditor can join third parties believed to be indebted to the judgment debtor.Id. at 891-92. The Wade Court ultimately concluded:
We hold that in the fifteen-year statute of limitations for actions on judgments, the term execution is defined as an act of enforcing, carrying out, or putting into effect a judgment.Id. at 895.
Today, judgment creditors can enforce judgments through KRS 426.381 petitions, garnishment orders, and judgment liens. These, too, are executions of a judgment in the broad sense of the word; they are acts of enforcing, carrying out, or putting into effect the court's judgment. And we hold that petitions under KRS 426.381, garnishment proceedings, and the filing of judgment liens all toll the fifteen-year statute of limitations.
In the case at bar, the Schlagels initially sought a writ of execution against Berling, which was returned "no property found." In 2005, the Schlagels, acting pro se, filed a motion to compel the production of a supersedeas bond they believed Berling had posted. Although not captioned as "an amended and supplemental petition," we conclude the Schlagels' motion encompassed the intent of a petition pursuant to KRS 426.381: as judgment creditors, their motion redocketed the action in a post-judgment proceeding and sought to compel Berling to disclose the existence of assets (the supersedeas bond) to satisfy the judgment. See id. at 891-92. The Schlagels' efforts in 2005 constituted enforcement of the judgment through KRS 426.381 and tolled the fifteen-year statute of limitations; consequently, their December 2013 motion to enforce the judgment was timely filed. We affirm the circuit court's decision.
Finally, we address Berling's alternative argument that the Schlagels were collaterally estopped from enforcing the judgment because the issue of enforceability was decided by the Kenton Circuit Court in two decisions rendered in November 2012.
Collateral estoppel, also known as issue preclusion, is a subset of res judicata, which "bars the parties from relitigating any issue actually litigated and finally decided in an earlier action." Yeoman v. Commonwealth, 983 S.W.2d 459, 465 (Ky. 1998). To establish collateral estoppel, four elements must exist:
First, the issue in the second case must be the same as the issue in the first case. Second, the issue must have been actually litigated. Third, even if an issue was actually litigated in a prior action, issue preclusion will not bar subsequent litigation unless the issue was actually decided in that action. Fourth, for issue preclusion to operate as a bar, the decision on the issue in the prior action must have been necessary to the court's judgment.Id. (internal citations omitted).
The trial court concluded that collateral estoppel did not bar the Schlagels from enforcing the judgment, and we adopt the court's reasoning as follows:
The Kenton Circuit decisions rendered in 2012 were condemnation actions regarding property owned by the Defendant in this case, not actions to determine whether the enforcement of the Plaintiffs' 1996 judgment was barred by the statute of limitations. The issue litigated in the Kenton County case was not identical to the issue in front of this Court. There is also no showing to this Court that the Plaintiffs had a full and fair opportunity in the condemnation cases to litigate this issue. The Court is also concerned by the language of the Orders. The Kenton Circuit Court noted that 'It appears to this Court, pursuant to KRS 413.090(1) the judgment upon which the Schlagels' lien is based is no longer enforceable - more than fifteen (15) years having expired from the date of last execution thereon.' The use of the words 'it appears' further indicate to this Court that the issue of whether the fifteen-year statute of limitations period had actually run for purposes of enforcing the judgment was not fully and fairly litigated. As a result, the Plaintiffs' claim is not barred by collateral estoppel.
After careful review we find no error in the trial court's decision.
For the reasons stated herein, the judgment of the Boone Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT: Stephen D. Wolnitzek
Leonard G. Rowekamp
Covington, Kentucky BRIEF FOR APPELLEES: Raymond Schlagel, Pro se
Korliss Schlagel, Pro se
Florence, Kentucky