Bulletin: AR2013003

Dear Associates:

On June 20, 2103, the Arkansas Supreme Court handed down its opinion  in the case of Primus Automotive v. Wilburn, 2013 Ar. 258 cause No. CV-12-761. This result will cause some rethinking in search and examination of title in Arkansas.

Basic Facts of the Case:

May 10, 1999: retail installment contract to purchase a car by Wilburn

August 21, 2001: default in the payments

January 9, 2002: default judgment for $4,214 plus costs, attorney fees and interest until paid

January 21, 2011: Primus files writ of garnishment

March 28, 2011: garnishment order issued

October 5, 2011: petition for writ of scire facias filed by Primus to revive the judgment from Jan. 9, 2002. (Note that this petition was well with in the 10-year statute of limitations for collection of judgment liens but was never granted by the court)

May 18, 2012: trial court grants Wilburn's motion to set aside the garnishment order as being past the 10-year statute of limitation

Issue Decided by the Arkansas Supreme Court:

Does the writ of garnishment act to extend (toll) the statute of limitations?

Decided by the Court:

            Our review of the foregoing long-settled principles of law in Arkansas leads us to restate them in our conclusion here that a timely writ of garnishment issued before the judgment is barred tolls the statute of limitations on the judgment and constitutes the commencement of a new period for enforcing the judgment, regardless of whether the garnishment is viewed as a form of execution on the judgment or as the issuance of process on the judgment. (Bold added)

Title Examination and Underwriting Standard:

A judgment may be barred by application of the 10-year statute of limitations (see 16-56-114 Judgments and decrees. Actions on all judgments and decrees shall be commenced within ten (10) years after cause of action shall accrue and not afterward). A judgment may be revived within its 10 year life by a writ of scire facias (see 16-65-501) which extends the judgment from the day the writ is granted for an additional 10 years.

A writ of garnishment or other intermediate executions and payments on judgments form new points for the running of the limitations on the judgment.

What you should do:

If your search and examination of title discovers a judgment and no further court action has been filed during the 10 years immediately following the entry of the judgment, you may consider the lien barred by limitations. If there is a writ of garnishment, then the statute of limitations runs 10 years from its date. If there are any other post judgment papers filed in the case, you may not rely on the 10-year statute of limitations without express approval of a Stewart underwriter.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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