We are going to start posting a noteworthy legal board question and answer each month. Below is our first one!
QUESTION:
I have a plaintiff asking for a Writ of Execution after 10 years. The plaintiff is claiming that the 10 year period is extended by three years due to a bankruptcy filing after the judgment was entered. Does a bankruptcy filing toll the 10 year judgment period? Judgment was entered 3/19/08, bankruptcy was filed 8/11/09 and dismissed on 8/1/12. The debt is still due and owing as it was not discharged in the bankruptcy.
ANSWER:
The Texas Court of Appeals addressed this issue in the recent case of Cade v. Stone, 2013 WL 3009853 (Tex. App.—Corpus Christi, June 13, 2013, no pet.) and expressly held that the pendency of a bankruptcy proceeding tolls the 10 year life span of a Texas judgment. The court held: “[W]here ‘a person is prevented from exercising his legal remedy by the pendency of legal proceedings, the time during which he is thus prevented should not be counted against him in determining whether limitations have barred his right.’” After considering 11 U.S.C. § 108, the court noted that, “[a]pplicable nonbankruptcy law [i.e., Texas common law] … provides that [the applicable statute of limitations] w[as] suspended during the time that Cade was prohibited from executing on the judgment due to the automatic bankruptcy stay.” The court concluded: “Accordingly, the time during which the automatic bankruptcy stay was in effect is not “counted against [Cade] in determining” when the applicable statute of limitations (i.e., section 34.001 of the civil practice and remedies code) operated to bar execution on the 1993 domesticated judgment, and, in turn, when the time period for reviving that judgment expired.”
See also HSBC Bank USA, N.A. as Trustee for Merrill Lynch v. Crum, 907 F.3d 199 (5th Cir. 2018); Baker Atlas v. Cheruvathur, 8 Wash. App.2d 1070 (Wash. App. May 20, 2019).
Under this case authority, the plaintiff is correct and the period of the bankruptcy should be added to the ten-year period in which the judgment remains valid. That is precisely the holding of Cade v. Stone.
However, in this case, the plaintiff is still within the two year period in which he could file a writ of scire facias or an action of debt to revive the judgment even if it had become dormant. So even if the bankruptcy case had not tolled the ten-year period for enforcing the judgment, he would still be able to do so through those means.