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Expired Judgment Lien Must Be Renewed Before Foreclosure Can Occur

Lesson. Judgment creditor must obtain an order to renew an expired judgment lien before trying to execute on that lien.

Case cite. Chitwood v. Guadagnoli, 230 N.E.3d 932 (Ind. Ct. App. 2024)

Legal issue. Whether summary judgment for Plaintiff in lien foreclosure action was erroneous because the 10-year lien had expired.

Vital facts. Plaintiff obtained a money judgment via default on 9/21/06. On 10/14/08, Plaintiff filed a separate action to foreclose his judgment lien against Defendant’s real estate. Defendant then filed a Chapter 13 bankruptcy case that stayed the foreclosure action. The BK case later was dismissed due to lack of payments. Many years later, in 2019, Plaintiff filed a motion for summary judgment to foreclose the original judgment lien.

Procedural history. The trial court granted Plaintiff’s motion for summary judgment. Defendant appealed.

Key rules. Indiana Code § 34-55-9-2 provides that all final judgments for the recovery of money constitute a lien on the judgment debtor’s real estate in the county until the expiration of ten years.

The Court in Chitwood stated: “While a judgment may be renewed before the expiration of the lien, we are unaware of any requirement to renew. Rather, it has been noted that ‘[b]ecause of the confusing complexity of execution and proceedings supplemental, and the added uncertainty caused by [long delays], most sophisticated judgment creditors 'renew' their judgments shortly before the expiration of the first (and each successive) decade after judgment.’"

Although the lien expires after ten years, the judgment persists for at least another ten years. See, I.C. § 34-11-2-12 (judgment is considered satisfied after twenty years). That said, the judgment is not “utterly destroyed” after 20 years.

My posts noted below talk about these rules and periods of time in more detail.

Holding. The Indiana Court of Appeals reversed the trial court.

Policy/rationale. Defendant’s primary argument was that the time to foreclose the judgment lien had expired. “Focusing on Indiana Code § 34-55-9-2, [Defendant asserted] that, since the default judgment was granted on September 21, 2006, and was not renewed within a ten-year period, the judgment expired on September 21, 2016.” The Court essentially agreed, but concluded that the ten-year period effectively was tolled while Defendant was in bankruptcy (until dismissal 7/24/12). This meant that, although the lien did not expire until June 2020, it had in fact expired in this case.

The Court continued: “while the judgment lien has expired, [Plaintiff's] default judgment against [Defendant] has not. And, as the designated evidence does not reflect that [Plaintiff] renewed the judgment prior to the expiration of the judgment lien, he must obtain leave of the trial court in order to execute on the judgment.” Because renewal had not occurred, the Court reversed the summary judgment and remanded for further proceedings.

Related posts.

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Part of my practice involves representing parties in lien-related disputes. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at [email protected]. Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.

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