TEACHING CONCEPTS, INC. v. ROBERT ALLEN HELLER

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4928-03T54928-03T5

TEACHING CONCEPTS, INC.,

Plaintiff-Respondent,

v.

ROBERT ALLEN HELLER,

Defendant-Appellant.

______________________________________

 

Argued: January 24, 2005 - Decided:

Before Judges A. A. Rodr guez and Hoens.

On appeal from the Superior Court of New Jersey, Law Division, Morris County, DJ-15757-04.

Peter Rosen argued the cause for appellant (Rosen & Avigliano, attorneys; Peter Rosen, of counsel; Robert D. Rosen, on the brief).

Myer L. Rosenthal argued the cause for respondent.

PER CURIAM

On March 8, 1988, the Civil Court of New York County entered a judgment against Robert Allen Heller and in favor of Teaching Concepts, Inc. (TCI) in the amount of $19,116.92. Heller answered and participated in the litigation. A year after the judgment was entered in New York, Heller filed a bankruptcy petition. Seven years later, Heller again filed a bankruptcy petition. Heller has provided no other information regarding these bankruptcy proceedings other than his allegation that both proceedings were "Chapter 7 - no asset bankruptcies." There is no proof that TCI was identified as a judgment creditor in either of the Bankruptcy proceedings filed by Heller or that this specific judgment was discharged.

Almost sixteen years later, TCI docketed the judgment in New Jersey, pursuant to the Uniform Enforcement of Foreign Judgments Act (UEFJ), N.J.S.A. 2A:49A-27. Heller moved in the Law Division to vacate the judgment arguing that: (1) a judgment entered in New York is only valid for a period of ten years; and (2) the New York court lacked personal jurisdiction over Heller. In a subsequent letter brief, Heller argued that the bankruptcy judgments discharged the debt upon which the New York court had entered the judgment.

The judge denied the motion, finding:

The New Jersey statutory scheme of liens envisions looking behind the lien provisions of each of the states participating in the [UEFJ] and conforms its own lien laws to that interpretation. . . . The focus of the action is now in New Jersey, there is a New Jersey statutory scheme for enforcing . . . valid judgments . . . of other states, and that is the one that should prevail.

The judge made no determination on the record regarding Heller's argument that his bankruptcy discharged the debt.

Heller appeals contending that New York law should apply to the judgment, and therefore the docketed judgment is not a lien on his real property. Specifically, Heller argues that the judge incorrectly held that N.Y. C.P.L.R. 5014, 5203, and 211(b) permit a twenty-year lien on his real property.

Heller initially argues that New York has in place a shorter statute of limitations than does New Jersey for enforcement actions on docketed judgments, and because the New York statute should apply, TCI was already barred from bringing an enforcement action. We disagree.

It must be noted that where the law in New Jersey and a sister state are congruent, no choice of law problem exists. Keil v. National Westminster Bank, Inc., 311 N.J. Super. 473, 480 (App. Div. 1998). Such is the case here. Heller argues that New York provides a ten-year statute of limitations within which a judgment creditor may pursue an action upon a judgment. N.Y. C.P.L.R. 5014. Heller contrasts this New York rule with N.J.S.A. 2A:14-5, which provides a twenty-year statute of limitations to judgment creditors who wish to bring an action on a valid judgment. Heller misconstrues the purpose of the New York statute and further mischaracterizes the ten-year time period as a statute of limitations.

N.J.S.A. 2A:49A-27, a part of the UEFJ, permits judgment creditors to file a "copy of any foreign judgment authenticated in accordance with an act of Congress or the statutes of this State" with the Clerk of the Superior Court of this State. New Jersey will treat such judgment in the same manner as a judgment of the New Jersey Superior Court. Such judgment would then have "the same effect and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a Superior Court of this State and may be enforced in the same manner." N.J.S.A. 2A:49A-27.

Accordingly, a litigant may commence an action in New Jersey on a judgment obtained in any other state so long as the commencement is prior to the expiration of the twenty-year period following the date of such judgment. However, if the period for like actions in the judgment state is shorter, the shorter limitations period applies. N.J.S.A. 2A:14-5.

Although New York courts treat liens differently, a New York judgment remains active and subject to enforcement for a total of twenty years pursuant to N.Y. C.P.L.R. 211(b). This is contrary to Heller's assertion. Thus, no conflict exists regarding the statute of limitations for the enforcement of judgments. N.Y. C.P.L.R. 211(b) provides that, "[a] money judgment is presumed to be paid and satisfied after the expiration of twenty years from the time when the party recovering it was first entitled to enforce it." While a lien attaches with the entry of judgment in New York, N.Y. C.P.L.R. 5203(a) provides:

[n]o transfer of interest of the judgment debtor in real property against which property a money judgment may be enforced, is effective against the judgment creditor . . . from the time of the docketing of the judgment with the clerk of the county in which the property is located until ten years after filing of the judgment-roll. . . .

[N.Y. C.P.L.R. 5203(a).]

Thus, in New York, a judgment creditor holds a lien on the judgment debtor's real property for ten years immediately commencing from the docketing of such judgment. However, the judgment remains in effect for twenty years. The section 5203(a) restriction does not bar the judgment creditor from bringing an action on such judgment within the twenty-year period.

Heller's argument that N.Y. C.P.L.R. 5014 provides a ten-year statute of limitations for actions on money judgments rests on an incorrect interpretation of the statute. The statute provides judgment creditors with the option to renew the original ten-year lien for an additional ten-year period. However, even without such an extension, the judgment, as distinguished from the lien, remains in effect. Moreover, TCI is seeking to execute on property in New Jersey, not New York. Therefore, section 5014, which governs the effectiveness of a lien on a New York judgment is irrelevant to the lien on New Jersey property after the docketing of a judgment in such state. The docketing of the New York judgment in New Jersey within twenty years from its entry is valid. Such docketing with the Clerk of the Superior Court, and the subsequent attachment of the lien, is a procedural device for the enforcement of judgments on the debtor's property in this state. See Columbia Lumber & Millwork Co. v. De Stefano, 12 N.J. 117, 123 (1953).

Heller also contends that he filed two bankruptcy petitions after the judgment was rendered in New York, thereby discharging the prior judgment. However, Heller fails to provide proof that this specific judgment constituted a discharged debt.

N.J.S.A. 2A:16-49.1 permits a judgment debtor to apply, upon proof of his discharge, for the cancellation and discharge of record of any judgment one year after such debtor was discharged in bankruptcy. "If it appears upon the hearing that he has been discharged from the payment of that judgment . . . an order shall be made directing said judgment to be cancelled and discharged of record." N.J.S.A. 2A:16-49.1. However, "it is vital to note that it is within the exclusive purview of the bankruptcy court to determine whether debt is dischargeable." In re Krautheimer, 210 B.R. 37, 46 (Bankr. S.D.N.Y. 1997); see also, Brown v. Felsen, 442 U.S. 127, 135-136, 99 S. Ct. 2205, 2211-12, 60 L. Ed. 2d 767, 774-75 (1979).

Heller argues that the Third Circuit Court's decision in Judd v. Wolfe, 78 F.3d 110 (3rd Cir. 1996), is controlling. In Judd, a bankruptcy petitioner appealed a Bankruptcy Court ruling denying her motion to reopen her no asset bankruptcy in order to add a creditor and discharge her obligation to such creditor. Id. at 111. The court in Judd explained:

Section 727(b) of the Bankruptcy Code defines the scope of a Chapter 7 debtor's discharge: "Except as provided in section 523 of the title, a discharge under subsection (a) of this section discharged the debtor from all debts that arose before the date of the order for relief under this chapter. . . ." 11 U.S.C. 727(b). (emphasis added.) As other courts have observed, "The operative word in this section is `all.'" In re Beezley, 994 F.2d 1433, 1435 (9th Cir. 1993) (citing In re Mendiola, 99 B.R. 864, 865 (Bankr. N.D. Ill. 1989). . . . Because section 727(b), on its face, does not create an exception for unlisted or unscheduled debts, every prepetition debt is discharged under section 727(b) subject to the provisions of section 523(a)(3).

[Id. at 113-14.]

Ultimately, the court in Judd held that "[i]n a case where there are no assets to distribute . . . the right to file a proof of claim [in the bankruptcy proceedings] is a hollow one." Thus, "[a]n omitted creditor who would not have received anything even if he had been originally scheduled, has not been harmed by omission from the bankrupt's schedules and the lack of notice to file a proof of claim." Id. at 115. Therefore, the court determined that the Bankruptcy Court did not need to reopen the case to add an omitted creditor in such a case. However, the court suggested that it would be practical for the Bankruptcy Court to amend the petitioner's schedules to list all of her discharged creditors. Id. at 117.

Here, Heller has provided little information regarding his alleged no-asset bankruptcy. Other than providing a United States Bankruptcy Court abstract showing two entries, no other evidence appears on record indicating the circumstances surrounding either bankruptcy proceeding. The entries are as follows:

Bankruptcy # BK-025009-995 Voluntary

Petition filed: 08/04/95 Chapter: 07

Order for Relief: 08/04/95

In the Matter of

Robert Allen Heller SSN XXX-XX-XXXX

1360 Hamburg Turnpike

Wayne, N.J. 07470

Atty. : Paul R. Gaver

Trustee : Charles Forman

Final Decree: Discharge of Bankruptcy 01/19/96

Robert Allen Heller

____________________________________________

Bankruptcy# BK - 004743-1988 Voluntary

petition filed: 07/19/ 88 Chapter 07

In the Matter of

Robert A. Heller SSN XXX-XX-XXXX

344 Prospect Ave.

Hackensack, N.J. 07601

Attorney: Michael R. Seneck

Trustee : Michael McLaughlin

Assets : $1,550.00

Final Decree: 09/21/89

Robert A. Heller

Liabilities: $10,448.01

Discharge of Bankrupt: 03/03/89

 
This information is insufficient for this court to conclude that the judgment entered on March 8, 1988 has been discharged in bankruptcy.

Affirmed.

(continued)

(continued)

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A-4928-03T5

September 21, 2005