Opinion ID: 1241225
Heading Depth: 1
Heading Rank: 6

Heading: Default and Failure to Pay Judgment Liens

Text: The final default alleged by Foothill arises because of two judgment liens. The first judgment lien was a foreign judgment in the amount of $1,881.74. While the record is not clear, it appears that this judgment was filed in Campbell County, Wyoming, in such a way as to constitute a proper lien against the Mikkelson property. In a letter addressed to Tom Mikkelson, dated January 16, 1979, the loan documentation manager of Foothill stated in part: Also, we understand that your attorney, Mr. Biff Hawkey, is trying to clear a judgment on the property in the amount of $1,881.74 by Wes-Kan Oil Company. It is very important that this judgment be cleared as soon as possible. Any further delay will result in our company paying the judgment and charging your account accordingly. While this letter indicated that the bank would pay the judgment, this was apparently not done, and that judgment was still unpaid at the time of trial. On May 9, 1979, a second judgment was entered against Tom Mikkelson in the amount of $3,354.30 in a civil action decided in Campbell County. This judgment lien was also unpaid at the time of trial. The New Jersey court has held that municipal liens may be neutralized if paid before the complaint is filed, Kaminski, supra, 301 A.2d at 771, and we believe that the same would be true as to judgment liens. However, the liens in the case at bar were not paid; therefore that rule cannot be applied here. The failure to satisfy or secure the release of these liens is a failure to pay encumbrances as they become due, a clear omission on the part of the Mikkelsons to perform their obligations under the security agreement. Had the bank followed through with its intention to make an additional advance so as to release the judgment, it might be said that it made an election not to declare a default. It is arguable that the letter had the effect of leading the Mikkelsons to believe that no default would be declared. [5] It is clear, however, that no similar letter was written with respect to the second judgment obtained in May of 1979 and the letter could in no way be construed as indicating that subsequent judgments would be paid by the bank. Moreover, the deed of trust in the case at bar provides that no waiver will be taken as a waiver of subsequent obligations. We believe this provision of the deed of trust to be controlling. If, then, Foothill waived its right to accelerate the mortgage because of the first judgment lien, this action did not preclude it from acceleration for subsequent judgment liens.