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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Smith v. Kofstad (04/24/2009) sp-6368
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| MIKE SMITH d/b/a WASILLA | ) |
| CONCRETE, | ) |
| ) Supreme Court No. S- 12679 | |
| Petitioner, | ) |
| ) Superior Court No. 3PA-06- 1044 CI | |
| v. | ) District Court No. 3PA- 95-244 CI |
| ) | |
| RAYMOND KOFSTAD, individually | ) O P I N I O N |
| and d/b/a BUSCH CONCRETE, and | ) |
| MARGUERITE KOFSTAD, | ) No. 6368 - April 24, 2009 |
| ) | |
| Respondents. | ) |
| ) | |
Petition for Hearing from the Superior Court
of the State of Alaska, Third Judicial
District, Palmer, Eric M. Smith, Judge.
Appearances: Sarah J. Tugman, Anchorage, for
Petitioner. Patricia Hefferan, Wasilla, for
Respondents.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Carpeneti, and Winfree, Justices.
WINFREE, Justice.
I. INTRODUCTION
Alaska Statute 09.35.020 provides that a judgment
creditor must obtain court permission to execute on a judgment if
more than five years have elapsed after entry and no previous
execution has been issued.1 Permission will be granted if there
are just and sufficient reasons for failure to previously execute
on the judgment. In this case judgment was issued in 1995, but
the judgment creditor did not attempt to execute on it for nearly
ten years. He explained the delay by alleging that the judgment
debtor, who died in 2001, lacked assets sufficient to satisfy the
judgment during that time. The district court denied permission
to execute, finding the judgment creditor had made no effort to
verify whether assets did in fact exist. The judgment creditor
appealed and the superior court affirmed the district courts
decision.
We accepted the judgment creditors petition for hearing
and now affirm on an alternative ground: because ownership of
the property upon which the judgment creditor sought execution
passed by operation of law to the judgment debtors spouse upon
the judgment debtors death, the effort to execute is futile.
II. FACTS AND PROCEEDINGS
I. Mike Smith, d/b/a Wasilla Concrete, sued Raymond Kofstad,
d/b/a Busch Concrete, over nonpayment for construction materials
and supplies. Smith obtained a default judgment against Raymond2
for $41,589.41 in September 1995. The judgment was recorded the
next month in the Palmer Recording District,3 where Raymond and
Marguerite owned a home as tenants by the entirety. Raymond died
in January 2001.
Smith first sought a writ of execution in August 2005,
almost ten years after entry of judgment and more than four years
after Raymond died. Smith filed a motion in the district court
requesting leave to execute on the Kofstad home pursuant to
Alaska Rule of Civil Procedure 69(d).4 The motion was
accompanied by an affidavit explaining that Smith had not
previously obtained a writ of execution because he did not
believe that the judgment debtor had assets with net value
capable of satisfying a portion of the judgment.5 He further
stated: I also became aware that the defendant was deceased
during the Fall of 2000 [sic]. I checked property records and
discovered that a number of IRS liens had been recorded, which
would have made execution upon the judgment debtors real property
fruitless. I believe the IRS liens have since expired. Smith
served the motion, affidavit, and a summons on Marguerite.6 She
opposed the motion,7 and the district court denied leave to
execute without explanation.
Smith appealed the denial to the superior court.
Marguerite then argued that there is no showing that there were
no assets to execute against while the debtor was alive and
contended that Smith did not ask a process server to do a bank
sweep, to seize the permanent fund dividend or take any action
whatsoever to collect any amount from any source. Smith did not
expressly deny these assertions, but argued Marguerite had waived
this defense by not raising it in response to his original motion
for leave to execute.8 The superior court remanded the case to
the district court to make factual findings and to explain the
denial of Smiths motion for a writ of execution.
The district court then explained that Smiths reasons
for delaying execution were inadequate: [Smiths] subjective
belief as to the value of decedents assets or decedents position
with the IRS does not justify . . . [Smiths] delay in obtaining a
writ of execution.
The superior court affirmed the district courts denial
of Smiths motion, stating that Smith bore the burden of
demonstrating that [he] made some inquiry regarding available
assets during the five year period and that Smith did nothing to
execute on the debt, or even to ascertain what assets were or
were not available to do so, until after January 2001. The court
concluded that Smith had not demonstrated a fair and sufficient
reason to relax the five-year deadline for execution.
We accepted Smiths petition for hearing, and later
asked the parties to address whether, in light of Raymonds death
and the extinguishment of his interest in the tenancy by the
entirety, Smith could execute on the Kofstad home.
III. STANDARD OF REVIEW
When there has been an appeal to the superior court as
an intermediate court of appeal, we approach the issues
independently. 9 We may affirm a judgment on any grounds that
the record supports, even grounds not relied on by the [lower]
court.10
IV. DISCUSSION
I. A judgment creditor generally can obtain a writ of execution
as a matter of course within five years of the judgment.11 There
is no definitive time limitation on the commencement of
executions of judgment,12 but if the judgment creditor does not
seek a writ of execution within five years, no execution may
issue except by order of the court in which judgment is entered.13
The court shall grant leave to execute only if it determines
there are just and sufficient reasons for the failure to obtain
the writ of execution within five years after the entry of
judgment.14 We have held that a judgment debtors previous lack of
assets that could satisfy the judgment, rendering execution
futile, is a just and sufficient reason to permit leave to
execute under AS 09.35.020 .15
The parties disagree whether, as a matter of law, a
judgment creditor must diligently try to verify the lack of
assets during the five year period to merit permission to later
execute on the judgment. But because execution is now futile
when Raymond died and Marguerite took full ownership of their
home by operation of survivorship, Smiths ability to execute on
Raymonds share of the property was extinguished we need not
reach the question raised by the parties.
When an individual judgment debtor dies, his or her
property generally is transferred through probate proceedings to
heirs or devisees, subject to creditor claims against the
decedent.16 If a judgment creditor has an existing lien on
specific property owned by the judgment debtor, the lien survives
the judgment debtors death and can be foreclosed as if the
judgment debtor were still living.17 Alternatively the judgment
creditor can file a claim in the probate proceedings to have the
debt satisfied from the decedents estate.18
But when property is owned by husband and wife as
tenants by the entirety and one spouse dies, the decedents share
in the property does not pass through probate. Instead, the
decedents share is extinguished at death and the surviving spouse
takes full ownership of the property by operation of law from the
original conveyance: The common law theory . . . is that the
decedents interest vanishes at death, and therefore no probate is
necessary because no interest passes to the survivor at death.19
When the decedents share in unsevered survivorship property
extinguishes, so therefore must the putative interest of any
creditor in that property. Courts in other jurisdictions have
uniformly assumed, if not expressly stated, that with respect to
unsevered survivorship property, the death of a judgment debtor
and the consequent destruction of the judgment debtors share in
the property also destroys any interest of a judgment creditor in
that share.20 This is an issue of first impression for this
court.21
We hold, in accordance with the uniform practice in
other jurisdictions and with the logic of tenancy by the
entirety, that: (1) recording a judgment against a judgment
debtor, thus creating a judgment lien against property owned by
the judgment debtor, does not sever a tenancy by the entirety
between the judgment debtor and spouse, and (2) a judgment
creditors interest, if any, in a judgment debtors interest in an
unsevered tenancy by the entirety is extinguished when the
judgment debtor predeceases the spouse.22 We observe that a
judgment creditor may take action to sever a tenancy by the
entirety:
If an individual and another own property in
this state as tenants in common or tenants by
the entirety, a creditor of the individual
. . . may obtain a levy on and sale of the
interest of the individual in the property.
A creditor who has obtained a levy, or a
purchaser who has purchased the individuals
interest at the sale, may have the property
partitioned or the individuals interest
severed.[23]
Severance terminates a tenancy by the entirety, nullifying
survivorship24 and thus protecting a judgment creditors interest
in the judgment debtors share of the property. We express no
opinion on when in the execution process a tenancy by the
entirety is actually severed. Smith never attempted to levy on
the Kofstads home prior to Raymonds death, and the Kofstads
tenancy by the entirety therefore remained unsevered; Raymonds
death consequently extinguished his interest in the home.
Because Smith is unable to execute on the Kofstad home,
his application under AS 09.35.020 for leave to execute on the
home is futile.
V. CONCLUSION
We AFFIRM the decision of the superior court on the
alternative ground set forth above.
_______________________________
1 AS 09.35.020 provides:
When a period of five years has elapsed after
the entry of judgment and without an
execution being issued on the judgment, no
execution may issue except by order of the
court in which judgment is entered. The
court shall grant the motion if the court
determines that there are just and sufficient
reasons for the failure to obtain the writ of
execution within five years after the entry
of judgment.
2 Because this case concerns both Raymond Kofstad and his
wife, Marguerite Kofstad, we will refer to the Kofstads by their
first names for clarity.
3 AS 09.30.010 provides, in part, that a recorded
judgment becomes a lien upon the real property of the defendant
that is in the recording district, that is not exempt from
execution, and that is owned by the defendant at the time or
acquired by the defendant afterward.
4 Alaska R. Civ. P. 69(d) provides in relevant part:
(d) Execution After Five Years. Whenever a
period of five years shall elapse without an
execution being issued on a judgment, no
execution shall issue except on order of the
court in the following manner:
(1) The judgment creditor shall file a motion
supported by affidavit with the court where
the judgment is entered for leave to issue an
execution. The motion and affidavit shall
state the names of the parties to the
judgment, the date of its entry, the reasons
for failure to obtain a writ for a period of
five years and the amount claimed to be due
thereon or the particular property of which
possession was adjudged to the judgment
creditor remaining undelivered.
5 Smiths motion requested leave to issue an execution in
this action, but did not specify that Smith sought to execute on
the Kofstad home. Smiths supporting affidavit made clear he
intended to execute on the home: I understand and believe that
the judgment debtor owned real property with his wife, Marguerite
Kofstad, and that the property remains subject to execution.
Smiths brief confirms he sought to execute on the home to which
the debtor and his wife took title in 1975.
6 Alaska R. Civ. P. 69(d)(2) provides:
Upon filing such motion and affidavit the
judgment creditor shall cause a summons to be
served on the judgment debtor in accordance
with the provisions of Rule 4. In the event
the judgment debtor is deceased, the summons
may be served upon the judgment debtors
representative. The summons shall state the
amount claimed or the property sought to be
recovered under the judgment.
Although the record suggests that no probate proceedings were
initiated after Raymonds death and Marguerite therefore was not
the formal personal representative of his estate, the parties
apparently assumed without much question that Marguerite was
Raymonds representative for purposes of Rule 69(d)(2). We
express no opinion on this issue.
7 Alaska R. Civ. P. 69(d)(3) provides:
The judgment debtor, or, in the event of his
death, the judgment debtors representative,
may file and serve a verified answer to such
motion within the time allowed to answer a
complaint, alleging any defense to such
motion which may exist. The judgment
creditor may file and serve a verified reply
to such answer. The judgment debtor waives
all defenses and objections which the
judgment debtor does not present by answer as
herein provided.
8 See id.
9 Hallam v. Holland Am. Line, Inc., 27 P.3d 751, 753
(Alaska 2001) (quoting Frontier Saloon, Inc. v. Short, 557 P.2d
779, 781(Alaska 1976)).
10 Van Sickle v. McGraw, 134 P.3d 338, 341 n.10 (Alaska
2006).
11 AS 09.35.010 (A writ of execution may be issued in
favor of . . . [the] party in whose favor a judgment is given
that requires the payment of money.); State, Dept of Rev., Child
Support Enforcement Div. v. Demers, 915 P.2d 1219, 1220 (Alaska
1996) (The plain language of [AS 09.35.010] gives the court no
discretion to decide whether to issue a writ of execution once a
valid judgment for the payment of money has been entered.).
After Demers was decided AS 09.35.010 was amended to allow
issuing the state writs of execution on behalf of crime victims
who received restitution judgments, but the portion of text
interpreted in Demers was not substantively altered. See Ch. 92,
2, SLA 2001.
12 Brotherton v. Brotherton, 142 P.3d 1187, 1189 (Alaska
2006).
13 AS 09.35.020.
14 Id.
15 Magden v. Alaska USA Fed. Credit Union, 36 P.3d 659,
662 (Alaska 2001).
16 AS 13.16.005.
17 AS 09.35.060 (If the judgment debtor dies after
judgment, execution may be issued on the judgment in the manner
and with the effect as if the debtor were still living, except as
provided in AS 13.16.505.); AS 13.16.505 (No execution may issue
upon nor may any levy be made against any property of the estate
under any judgment against a decedent or a personal
representative, but this section shall not be construed to
prevent the enforcement of mortgages, pledges, or liens upon real
or personal property in an appropriate proceeding.).
18 AS 13.16.020; AS 13.16.465.
19 4 James H. Backman et al., Thompson on Real Property
33.02, at 121 (David A. Thomas ed., 2d ed. 2004) (quoting Jesse
Dukeminier & Stanley M. Johanson, Wills, Trusts, and Estates 350
(6th ed. 2000) (internal quotation marks omitted)); accord 7
Richard R. Powell, Powell on Real Property 51.03(3) (Michael
Allan Wolf ed., 2008) (Survivorship is central to a joint
tenancy. The joint tenant who survives the other cotenants takes
the entire estate; the estates of deceased joint tenants have no
interest. Theoretically the survivors interest attaches by means
of the original conveyance, not by transfer from the decedent.).
20 See Francis M. Dougherty, Judgment Lien or Levy of
Execution on One Joint Tenants Share or Interest as Severing
Joint Tenancy, 51 A.L.R. 4th 906 2(a) (1987) (On occasion the
question has arisen whether the mere filing or docketing of a
judgment lien, without levy or execution, severs a joint tenancy.
It appears that all of the courts which have considered this
issue in situations where the debtor-tenant died prior to
execution, sale, or expiration of the period of redemption after
sale have concluded that the lien did not sever the joint
tenancy, reasoning that upon the death of the debtor that partys
interest went to the survivor and therefore there was no property
interest to which the lien could attach.); see also 20 Am. Jur.
2d Cotenancy and Joint Ownership 31 (2008) (stating that mere
docketing of judgment against joint tenant does not sever joint
tenancy, and that if judgment debtor dies prior to severance of
joint tenancy, surviving tenant is sole owner and not subject to
lien).
21 In Zok v. Estate of Collins, 84 P.3d 1005, 1006-08
(Alaska 2004), we considered an appeal by a judgment creditor who
claimed the judgment debtor had fraudulently transferred assets
to a trust. The judgment debtor died before the judgment against
him was issued. His estate argued that even if assets had been
fraudulently transferred, the judgment creditor could not prevail
because those assets had passed to the judgment debtors spouse by
right of survivorship, out of the judgment creditors reach. Id.
at 1009. We decided the appeal on other grounds. Id.
22 We note that a judgment debtor owning property
individually or as a tenant in common with a spouse cannot avoid
an existing lien against the judgment debtors interest by
conveying the property to both spouses as tenants by the
entirety. See AS 09.30.020 (stating that [a] conveyance of real
property or interest in real property is void against a judgment
lien that is recorded before the conveyance is recorded).
23 AS 09.38.100(a); see also AS 09.38.010 (noting
interplay of homestead exemption to execution on spousal interest
in property held as an entirety estate when the property is used
as a principal residence).
24 See Powell, supra note 18, 51.04(1) (A joint tenancy
can be severed by a unilateral act of one of the tenants . . .
that operates to destroy or terminate any one or more of the
essential unities, and such act effects conversion of the joint
tenancy into a tenancy in common and destruction of the right of
survivorship.). The analogy is drawn to joint tenancy because,
at common law, an individual tenant could not sever a tenancy by
the entirety by unilateral act, except by obtaining a divorce.
Thompson, supra note 18, 33.08(b), at 158. AS 09.38.100(a)
differs from the common law by allowing severance of a tenancy by
the entirety through the judgment execution process.
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