Court Opinion

ID: 4095722
Source: CourtListenerOpinion
Date Created: 2016-11-04 19:01:03.48473+00
Date Added: 2024-06-11T14:15:39.711258
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 15-2182

WELLS FARGO EQUIPMENT FINANCE, INCORPORATED,

                Plaintiff - Appellee,

           v.

NABIL J. ASTERBADI,

                Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Paul W. Grimm, District Judge. (8:15-
cv-01371-PWG)

Argued:   September 20, 2016                 Decided:   November 4, 2016

Before NIEMEYER and DIAZ, Circuit Judges, and Irene M. KEELEY,
United States District Judge for the Northern District of West
Virginia, sitting by designation.

Affirmed by published opinion.        Judge Niemeyer         wrote   the
opinion, in which Judge Diaz and Judge Keeley joined.

ARGUED: David B. Lamb, Washington, D.C., for Appellant. Steven
Neal Leitess, LEITESS FRIEDBERG PC, Baltimore, Maryland, for
Appellee.   ON BRIEF: David A. Donohoe, Potomac, Maryland, for
Appellant. Gordon S. Young, Pierce C. Murphy, LEITESS FRIEDBERG
PC, Baltimore, Maryland, for Appellee.
NIEMEYER, Circuit Judge:

        In this appeal, we address the enforceability of a judgment

originally       entered      in    the    Eastern      District        of    Virginia      but

registered for enforcement in the District of Maryland under 28

U.S.C. § 1963.         Particularly, we consider the time period during

which the judgment remains enforceable in Maryland.

       Collecting on a financing debt incurred by Dr. Nabil J.

Asterbadi,       CIT/Equipment           Financing,      Inc.      (“CIT”)      obtained      a

$2.63 million judgment against Asterbadi in 1993, in the Eastern

District      of    Virginia.            Under       Virginia      law,      that    judgment

remained      viable    for    20    years.           Roughly      10   years       after   the

judgment had been entered, on August 27, 2003, CIT registered

the judgment in the District of Maryland pursuant to § 1963.

Under    Maryland      law,    made       relevant      by     Federal       Rule    of   Civil

Procedure 69(a), judgments expire 12 years after entry.

       CIT sold the judgment to Wells Fargo Equipment Finance,

Inc.,     and      Wells   Fargo         thereafter,         in    April       2015,      began

collection efforts in Maryland.                     Asterbadi filed a motion for a

protective order, contending that the judgment was unenforceable

because the efforts began more than 12 years after the judgment

had originally been entered in Virginia.                          Wells Fargo responded

that    the     registration        of    the       Virginia      judgment     in    Maryland

before it had expired under Virginia law became, in effect, a

new judgment that was subject to Maryland law for enforcement.

                                                2
Thus, it argued, Maryland’s 12-year limitations period began on

the date that the judgment was registered in Maryland, not on

the date that the original judgment was entered in Virginia, and

therefore the judgment was still enforceable.

     The district court agreed with Wells Fargo, concluding that

the time limitation for enforcement of the judgment began with

the date of its registration in Maryland, on August 27, 2003,

and that therefore it was still enforceable against Asterbadi.

     For the reasons that follow, we affirm.

                                       I

     The   judgment    was   entered       on   October   4,   1993,   against

Asterbadi in the Eastern District of Virginia and arose from a

defaulted debt that Asterbadi incurred to invest in an airplane.

It was entered in the amount of “$2,286,009.97, plus interest

from May 31, 1993 on the sum of $2,184,950 at the rate of 1.5%

per month, and attorney’s fees of $347,742.50.”                Under Virginia

law, the judgment remained enforceable for 20 years, or until

October 4, 2013.      See Va. Code Ann. § 8.01-251(A).

     While Asterbadi made a number of payments on the judgment

during the period shortly after it was entered, the judgment

has, in substantial part, remained unsatisfied.                In furtherance

of its collection efforts, CIT registered the judgment in the

District of Maryland on August 27, 2003, pursuant to 28 U.S.C.

                                       3
§ 1963.      It     also    recorded    the    judgment     in    state    courts    in

Fairfax   County,         Virginia;    Prince    George’s        County,    Maryland;

Montgomery County, Maryland; and the District of Columbia, under

the law of those jurisdictions.               At the time that CIT registered

its judgment in the District of Maryland, Asterbadi still owed

some $1.75 million, much of which represented interest.

      Several months later, on October 31, 2003, CIT undertook

collection      efforts      in   Maryland      to     execute     on     stock   that

Asterbadi held in Zachair, Ltd.               To this end, it filed a motion

in the district court for an injunction prohibiting Asterbadi

“from transferring the [stock] Certificates and ordering him to

turn over the Certificates to CIT.”                  In response, Asterbadi, who

explained that he was a physician who had made “an ill-fated

investment in an airplane over 15 years ago,” claimed that CIT

had   overstated      the    amount    owed     on    the   judgment.        He   also

asserted that his stock in Zachair was owned with his wife as

tenants   by    the   entireties       and    therefore     was    not     subject   to

execution      on   the    judgment.     Nonetheless,        he    stated     that   he

“ha[d] no intention, and will not transfer, any shares of stock

in which he has any interest” and that he had no objection to

the entry of an order “which would preclude any such transfers.”

He did not, however, agree to an order transferring the stock

certificates to CIT.          No further action was taken on the motion

for more than 10 years.

                                          4
      Effective June 29, 2007, CIT sold and assigned its judgment

against Asterbadi to Wells Fargo as part of an asset purchase

agreement.      Some years later, Wells Fargo renewed collection

efforts.      In preparation for collection in Maryland, Wells Fargo

filed a notice of the assignment, as well as a copy of the

assignment, in the Circuit Court for Montgomery County on April

1,    2015.     And   on    April     7,   2015,        it   filed    a   “Notice    of

Assignment” in the district court, although without including a

copy of the assignment.          After Wells Fargo filed the notice of

the   assignment,     it    noticed    the      deposition       of   Zachair,    whose

stock Asterbadi held.

       Asterbadi filed a motion for protective order on May 8,

2015, contending that the Virginia judgment was not enforceable,

as Wells Fargo was seeking to enforce a judgment “entered more

than 21 years ago in Virginia,” which was beyond both Virginia’s

and Maryland’s statute of limitations for enforcing judgments.

He concluded that if the judgment was unenforceable, “there can

be no post-judgment discovery.”                     He acknowledged that, if the

limitations period began on the date of registration, a judgment

registered      in    the    District          in     Maryland    might    still     be

enforceable under Maryland Rule 2-625, which provides that a

money judgment expires 12 years from the date of entry.                          But he

argued that the registration of the judgment in Maryland was

“nothing more” than “ministerial” and that it “does not have the

                                           5
effect of entering a ‘new judgment’” with a new enforceability

period.         Thus,    he   reasoned    that   any   applicable     limitations

period began at the time of the judgment’s entry in 1993 and

therefore that the judgment was unenforceable.

     In    view     of     Asterbadi’s     arguments,    the    district     court

entered an order requiring Wells Fargo to show cause “why this

matter is not subject to dismissal” for the reasons given by

Asterbadi.       Wells Fargo responded, arguing that “once a [viable]

foreign judgment is recorded in the [District of Maryland], that

judgment remains effective and enforceable for the time period

provided by Maryland law -- 12 years unless earlier renewed for

another 12 year period” -- from the date registered.                    Therefore,

it claimed, the judgment was enforceable to August 27, 2015.

     Asterbadi filed a reply and shortly thereafter a supplement

to   his   reply,        asserting   in    his   supplement     the     additional

argument that Wells Fargo did not have standing to enforce the

judgment because, while it filed a notice of the assignment of

the judgment in the district court, it did not file a copy of

the assignment itself, as required by Maryland Rule 2-624.                       He

attached to his supplement an actual copy of the assignment that

Wells Fargo had filed in Montgomery County, Maryland.

     While the proceedings were pending, Wells Fargo filed a

renewal    of    its    registered   judgment     in   the   district    court   on

                                          6
August 26, 2015, which, it contends, extended the enforceability

of its judgment under Maryland law to 2027.

       By   order     dated    September       16,    2015,   the    district       court

rejected Asterbadi’s argument that Wells Fargo lacked standing

to    enforce    the    judgment,     noting     that      Asterbadi       himself   had

provided the court with a copy of the assignment that had been

filed in the Circuit Court for Montgomery County and therefore

that “Wells Fargo ha[d] standing [to] respond to my show cause

order regarding the enforceability of the 1993 Judgment.”                             The

district      court    also    rejected    Asterbadi’s        argument       that    when

discovery was commenced in 2015, the judgment was unenforceable

because the Maryland limitation of 12 years had run.                        Relying on

Home Port Rentals, Inc. v. International Yachting Group, Inc.,

252    F.3d     399    (5th    Cir.   2001),         the   court    held    that     “the

[Maryland] statute of limitations in this case started to run on

the date that the judgment was registered in this Court, August

27, 2003, and is currently enforceable against the Defendant.”

(Emphasis added).             With respect to the motion for injunction

that had been pending since 2003, the court enjoined Asterbadi

from transferring his stock certificates in Zachair -- relief to

which Asterbadi had earlier consented -- but denied, without

prejudice, Wells Fargo’s request that Asterbadi be required to

turn those certificates over to it.

                                           7
     Asterbadi         noticed    this    appeal    from        the   district     court’s

September 16, 2015 order.                After Asterbadi noticed his appeal

from that order, the district court entered a separate order on

October 14, 2015, denying, without prejudice, Asterbadi’s motion

for a protective order against discovery, pending this appeal.

                                              II

     Both    parties       raise       jurisdictional         issues.        Wells   Fargo

contends that Asterbadi appealed only the September 16, 2015

order,    which        entered   an     injunction       to     which   Asterbadi        had

earlier consented, and not the court’s denial of the motion for

a protective order, entered on October 14, 2015.                         And Asterbadi

contends that Wells Fargo lacks standing to enforce its judgment

against     him    because       Wells     Fargo        filed    only    a    notice      of

assignment in the district court, not a copy of the assignment

itself, and therefore failed to comply with Maryland Rule 2-624,

which     entitles        parties       filing     an      assignment         to     pursue

enforcement       in    their    own    name.      We    address      these    issues     in

order.

                                              A

     In its September 16, 2015 order, the district court granted

in   part   and        denied    in    part     CIT’s    original       motion     for    an

injunction, a result to which Asterbadi had consented in his

original    response       to    the     motion    for     an    injunction.         After

                                              8
Asterbadi filed an appeal from that order, the district court

entered      a     separate          order      dated           October        14,    2015,       denying

Asterbadi’s motion for a protective order to halt Wells Fargo’s

discovery efforts.              Wells Fargo now argues that Asterbadi should

have appealed the second order and that, because he never did

so, his appeal should be dismissed.

       The       filing    of        a     proper          notice        of     appeal       is     indeed

“jurisdictional           in     nature         and       .     .    .   is    a     prerequisite         to

appellate review.”                  Smith v. Barry, 502 U.S. 244, 248 (1992).

Federal Rule of Appellate Procedure 3 requires that the notice

of appeal “designate,” among other information, “the judgment,

order,      or    part     thereof            being       appealed.”               Fed.    R.     App.    P.

3(c)(1)(B).         And even though “[c]ourts will liberally construe

the    requirements            of    Rule       3,”        Barry,        502    U.S.       at     248,    we

generally        confine       our       review       to      the    order      designated         in    the

notice of appeal, cf. Bogart v. Chapell, 396 F.3d 548, 554 (4th

Cir.   2008)       (“[W]e       are       obliged          to       identify       those        particular

matters over which we possess jurisdiction”).

       In    this        case,           however,          Asterbadi           was        justified       in

presenting his issues in connection with his appeal from the

district court’s September 16, 2015 order.                                         While he had not

objected     to     the    form          of    the        injunctive           relief      entered,       he

maintained        that     the       court      lacked          the      ability       to       grant    any

injunctive relief because, as he argued, the judgment against

                                                      9
him was unenforceable.                 In the September 16, 2015 order, the

district court explicitly rejected two of Asterbadi’s arguments

-- that Wells Fargo lacked standing to enforce the judgment and

that limitations for enforcement of the judgment had run.                               Those

rulings    were       necessary        conditions     precedent       if    the    district

court were to grant any injunctive relief, as it did in the

September       16,    2015        order.         Accordingly,      we     conclude     that

Asterbadi’s appeal of that order allows him to challenge the

district       court’s       rulings     on   these    two    conditions         that    were

necessary for granting injunctive relief.

                                              B

       Asterbadi contends that because Wells Fargo did not comply

with Maryland Rule 2-624, it was not entitled to step into the

shoes of CIT, which had obtained the judgment against Asterbadi

in the first place.               That Rule provides that the assignee of a

judgment may enforce the judgment in its own name when it files

“the   assignment        .    .    .   in   the    court    where   the     judgment      was

entered.”        Md. Rule 2-624 (emphasis added).                        Accordingly, he

maintains, Wells Fargo has no standing to enforce CIT’s judgment

in its own name.

       It is important to note that, while Asterbadi’s argument

raises     a    question          of   federal     law,     Federal      Rule     of    Civil

Procedure       69(a)(1)           incorporates       the     state        law     of     the

                                              10
jurisdiction where enforcement is sought for the procedure to be

followed in enforcing money judgments.                               Cf. 28 U.S.C. § 1962

(incorporating          state   law        for    determining             judgment       liens    on

property located in the State).                         Accordingly, because federal

law so requires, it is appropriate that we look to Maryland Rule

2-624.

       Whether a “notice” of assignment is sufficient to satisfy

the filing of “the assignment,” as provided in Rule 2-624, is

not a question that we need to resolve here.                                 As the district

court    observed,        while    Wells         Fargo        filed       only    a     notice    of

assignment in the district court, Asterbadi filed the actual

assignment, which had previously been filed in state court, so

that    the    district     court      had        before       it     both       the    notice    of

assignment and the assignment itself.                           While the procedure by

which the district court received the assignment might have been

awkward,      that      awkwardness         did        not    deprive        Wells       Fargo    of

standing to enforce the judgment that it had purchased.

                                                 III

        On   the   merits,      the    parties          agree        on    several       threshold

issues.       First, the original $2.63 million judgment in this case

was    entered     on    October      4,    1993,       in     the    Eastern          District   of

Virginia, and, under Virginia law, it remained enforceable for

20 years from the date of entry.                             Va. Code. Ann. § 8.01-251.

                                                 11
Second, roughly 10 years later, on August 27, 2003, CIT, the

judgment    holder   at    the     time,   registered        the    judgment       in   the

District    of   Maryland       pursuant    to    28    U.S.C.      § 1963.        Third,

Maryland law provides that a money judgment expires 12 years

from the date of entry or from the date of renewal, if it is

renewed    before    its    expiration.           Md.   Rule       2-625.        Finally,

Maryland’s 12-year limitation governs the enforcement of this

judgment in the District of Maryland.

       Against   these     undisputed       propositions,          Asterbadi       argues

that    even   though     the    Virginia       judgment,     when    registered        in

Maryland, was governed by Maryland’s 12-year limitation, the 12-

year    limitation      period     began    to    run   at    the    time        when   the

original judgment was entered in Virginia, i.e., on October 4,

1993.     Under his argument, the enforceability of the registered

judgment in Maryland expired 12 years after 1993, or on October

4, 2005.

       Wells Fargo contends that when the Virginia judgment was

registered in Maryland, it became, in effect, a new judgment

governed by Maryland’s 12-year limitations period, which began

running on the date of registration, August 27, 2003.

        To resolve the dispute, we begin with § 1963 itself, under

which the Virginia district court judgment was registered in the

Maryland    district      court.      Section      1963      provides       in   relevant

part:

                                           12
        A judgment in an action for the recovery of money
        . . . entered in any . . . district court . . . may be
        registered by filing a certified copy of the judgment
        in any other district . . . .          A judgment so
        registered shall have the same effect as a judgment of
        the district court of the district where registered
        and may be enforced in like manner.

28 U.S.C. § 1963.           The statute was enacted in 1948 as a device

to streamline the more awkward prior practice of bringing suit

on a foreign judgment and thereby obtaining a new judgment on

the    foreign    judgment.        As   then-Circuit       Judge    Harry   Blackmun

observed:

       It seems to be conceded that the purposes of § 1963
       were to simply facilitate the enforcement of federal
       judgments, at least those for money, to eliminate the
       necessity and expense of a second lawsuit, and to
       avoid   the   impediments,  such   as   diversity   of
       citizenship, which new and distinct federal litigation
       might otherwise encounter.

Stanford v. Utley, 341 F.2d 265, 270 (8th Cir. 1965); see also

Home    Port     Rentals,    252    F.3d    at     404   (noting    that    Congress

explicitly enacted § 1963 to spare litigants the inefficiencies

of obtaining a judgment on a judgment); Stiller v. Hardman, 324

F.2d 626, 628 (2d Cir. 1963) (noting that § 1963 provides “a

speedier and more efficient mechanism for the enforcement of

federal judgments” than the practice of obtaining a judgment on

a judgment); S. Rep. No. 83-1917 (1954), as reprinted in 1954

U.S.C.C.A.N. 3142, 3142 (explaining that § 1963 was enacted to

spare    creditors     and    debtors      alike    “the   additional       cost   and

harassment       of   further      litigation      which    would    otherwise      be

                                           13
required by way of an action on the judgment in a district other

than that where the judgment was originally obtained”).

     Thus,   instead    of        requiring    the     holder     of   a    Virginia

judgment to file a complaint in the Maryland district court on

the basis of the Virginia judgment, thereby engaging the federal

process to obtain a new judgment enforceable in the District of

Maryland, § 1963 allows the judgment holder simply to register

the Virginia judgment in Maryland but to retain the benefits of

obtaining a judgment under the former practice of suing on a

judgment to obtain a new judgment.             Indeed, § 1963 explicitly so

provides, stating that a district court judgment registered in

another district court “shall have the same effect as a judgment

of the district court . . . and may be enforced in like manner.”

28 U.S.C. § 1963 (emphasis added).

     We thus construe § 1963 to provide for a new judgment in

the district court where the judgment is registered, as if the

new judgment had been entered in the district after filing an

action for a judgment on a judgment.               Accordingly, just as a new

judgment   obtained    in    an    action     on   a   previous    judgment     from

another district would be enforceable as any judgment entered in

the district court, so too is a registered judgment.                       The other

courts of appeals that have construed § 1963 have reached the

same conclusion.      See, e.g., In re Estate of Ferdinand E. Marcos

Human   Rights   Litig.,      536     F.3d     980,    989   (9th      Cir.    2008)

                                        14
(“[R]egistering       a     judgment     under      §       1963    is    the        functional

equivalent    of   obtaining        a   new    judgment            of    the    registration

court” (emphasis added)); Home Port Rentals, 252 F.3d at 405

(“[R]egistration truly is the equivalent of a new judgment of

the registration court” (emphasis added)); Stanford, 341 F.2d at

268 (“We feel that registration provides, as far as enforcement

is   concerned,       the     equivalent       of       a     new       judgment       of     the

registration court” (emphasis added)).

     With this understanding of § 1963, we apply the principles

applicable to any money judgment entered in a district court.

Under Rule 69(a), the judgment is enforceable in accordance with

state law, and in this case Maryland law provides that “a money

judgment expires 12 years from the date of entry or most recent

renewal.”    Md. Rule 2-625.            Accordingly, the registered judgment

in this case would have expired 12 years from August 27, 2003,

or on August 27, 2015.               And because Wells Fargo renewed the

judgment for another 12 years on August 26, 2015, the registered

judgment remains enforceable in Maryland to August 26, 2027.

     Asterbadi argues that registration is merely a “ministerial

act” that is carried out as a matter of procedure to enforce the

Virginia    district       court    judgment,       and       therefore        the     original

Virginia judgment is actually the judgment Wells Fargo seeks to

enforce, even      if     that     judgment    is       admittedly        subject       to   the

Maryland    12-year       limitation.         Thus,      he    argues,         the    12    years

                                          15
began running when the Virginia judgment was entered, as stated

in Maryland Rule 2-625 (providing that a “judgment expires 12

years from the date of entry” (emphasis added)).             This argument,

however, overlooks the effect of registration under § 1963.                 If

registration    were    merely   a   ministerial    act     to   enforce   the

Virginia judgment in Maryland, there would be no need for the

statute to have added the language that the registered judgment

functions the same as a judgment entered in the registration

court.   With    that    language,   §    1963   elevates    the   registered

Virginia judgment to the status of a new Maryland judgment, and

it is accordingly enforced as a new judgment entered in the

first instance in Maryland.

     The Stanford court likewise expressly rejected Asterbadi’s

“ministerial act” characterization of § 1963:

     We   have  concluded   that  §   1963  is   more  than
     “ministerial” and is more than a mere procedural
     device for the collection of the foreign judgment. We
     feel that registration provides, so far as enforcement
     is concerned, the equivalent of a new judgment of the
     registration court.

341 F.2d at 268.       And the Stanford court gave the same reasons

that we do in reaching this conclusion:

     To   restrict   registration   to  a   procedural  and
     collection device for the foreign judgment itself, and
     to have it expire with the foreign judgment, would
     give the words of the statute a lesser status than
     their plain meaning and to make registration something
     far inferior to a judgment on a judgment.

                                     16
Id.   at   270   (emphasis        added).        Again,    as   all   the    courts    of

appeals have noted, the purpose of § 1963 was to give the same

effect achieved by a judgment on a judgment but without the

excessive process.

      Asterbadi also argues that we should construe § 1963 in the

same manner as courts have construed the Uniform Enforcement of

Foreign Judgments Act, which facilitates the enforcement of one

State’s judgment in the courts of another State.                      See, e.g., Md.

Code Ann., Cts. & Jud. Proc. §§ 11-801 to 11-807.                            He claims

that some courts have construed the Uniform Act or similar state

statutes in a manner that distinguishes between registering a

judgment and suing on a judgment, with the former subject to the

limitations      of   the    state    where       the   judgment      was    originally

entered and the latter subject to the limitations of the state

where the new judgment was obtained.                      While we do not assume

that this construction is an accurate one, see, e.g., Revised

Unif. Enforcement of Foreign Judgments Act prefatory note (Unif.

Law Comm’n 1964), we are nonetheless not construing the Uniform

Act, but rather § 1963.              And we construe § 1963 to elevate a

registered money judgment such that it functions in every way as

a new judgment.           It follows that with the registered judgment

functioning      as   a     new    judgment,      the     limitations       period    for

enforcement runs from the date of registration.                         This is the

conclusion that every court of appeals that has construed § 1963

                                            17
has reached.          See, e.g., Home Port Rentals, 252 F.3d at 407

(holding that “the applicable limitation law for purposes of

enforcement      of    the       registered      judgment      in    the       registration

district is that of the registration state . . . and it starts

to run on the date of registration”); see also In re Estate of

Marcos Human Rights Litig., 536 F.3d at 989; Stanford, 341 F.2d

at 268.

       Finally, Asterbadi proposed during oral argument numerous

horribles    that     he     envisions      will   result       from    the      fact    that

creditors    will      be    able    repeatedly         to    restart      a    statute    of

limitations through the simple act of registration, defeating

any    purpose   for       the    limitation.        The      posited      consequences,

however, are no different than have always existed under the

more   burdensome      process      of     suing   on    an    original        judgment   to

obtain a new judgment in the enforcement jurisdiction.                            When the

new judgment was entered, it carried with it the limitations

period    then   applicable         to   judgments       in    the   State       of   entry.

Moreover, creditors in many States -- including in Maryland --

are also able to renew existing judgments indefinitely and thus

extend    enforcement        with    new    limitations        periods         without    any

adversarial process.             See, e.g., Md. Rule 2-625 (requiring only

that the “judgment holder . . . file a notice of renewal” at any

time before expiration of the judgment or a previous renewal,

                                            18
without   any    limit   on   the    number   of   renewals     that   might   be

filed).

     In   sum,   we   hold    that   the    registration   of    the   Virginia

district court judgment in the District of Maryland at a time

when the judgment was not time-barred by Virginia law functions

as a new judgment in the District of Maryland, and Maryland’s

12-year   limitations     period     for    enforcement    on    the   judgment

begins running from the date of registration.

     Accordingly, the district court’s September 16, 2015 order

is

                                                                       AFFIRMED.

                                       19