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Mergenthaler v. Triumph Mortgage Corp.

Superior Court of Delaware

December 20, 2019

LAWRENCE E. MERGENTHALER, a resident of the State of Delaware, Plaintiff,
v.
TRIUMPH MORTGAGE CORP., a Delaware Corporation, Defendant.

          Submitted: November 13, 2019

          John A. Sergovic, Jr., Esquire, SERGOVIC & CARMEAN, P.A., Georgetown, DE; Attorney for Plaintiff.

          Richard L. Abbott, Esquire, ABBOTT LAW FIRM, Wilmington, Delaware; Attorney for Defendant.

          DECISION AFTER REMAND

          LeGROW, J.

          On October 24, 2019, the Delaware Supreme Court issued its decision affirming in part, reversing in part, and remanding this Court's decision denying a motion to quash a writ of attachment fieri facias. The Supreme Court remanded the case so this Court could "decide whether [Delaware Acceptance Corp. v, Schatzman[1]] should apply retroactively to this case."[2] After considering the parties' memoranda of law submitted after remand and the authorities cited by the Supreme Court and the parties, I conclude the Schatzman decision should apply retroactively. My reasoning follows.

         FACTUAL AND PROCEDURAL BACKGROUND

         The complicated and arduous history of this case is summarized fully in earlier decisions issued by this Court and the Delaware Supreme Court. For the sake of efficiency and brevity, I will not repeat those facts here. Rather, the following factual recitation is limited to the facts essential to resolving the retroactivity question remanded to this Court.

         Lawrence Mergenthaler obtained a $207, 599.59 default judgment against Triumph Mortgage Corporation ("Triumph") on January 15, 2010. On November 29, 2016, Mergenthaler filed a writ of attachment fieri facias (the "2016 Writ") in order to seize assets in a brokerage account that was pledged to Triumph. Triumph moved to quash the 2016 Writ because, among other reasons, it was issued more than five years after the judgment's entry and Mergenthaler had not first moved to refresh the judgment.

         The parties' dispute, fairly summarized, involved the interplay of two statutes and a Court rule. Under 10 Del. C. § 5072, a creditor may execute on a judgment within five years, but after such time period the creditor must file a motion to renew the judgment.[3] Delaware Superior Court Rule 69(a), however, extends from five years to ten years the time period during which a judgment creditor may execute on a judgment without moving to renew. And, 10 Del. C. § 561 allows the Superior Court to adopt rules of procedure and provides that such rules supersede conflicting state statutes unless the rules abridge, enlarge, or modify any party's substantive rights. Therefore, the question raised by Triumph's motion to quash was whether the time period for judgment renewal was a procedural rule, in which case Rule 69(a) controlled, or a substantive right, in which case Section 5072 controlled.

         While this Court was considering the motion to quash, a different Superior Court judge issued his decision in Delaware Acceptance Corp. v. Schatzman ("Schatzman").[4] In Schatzman, the Court explained the Superior Court Prothonotary's Office in Sussex County had refused to issue execution writs more than five years after entry of a judgment. The Schatzman Court held that Rule 69 "alters the 'rules of decision' to adjudicate the rights between debtors and creditors," and therefore did not supersede Section 5072.[5] The Schatzman Court therefore held that a judgment must be renewed every five years, notwithstanding the language in Rule 69(a).

         This Court stayed consideration of the motion to quash while the Schatzman decision was appealed. After the Delaware Supreme Court affirmed Schatzman, Mergenthaler filed a motion to renew the judgment against Triumph nunc pro tunc so that it retroactively would be renewed to January 14, 2015. Mergenthaler argued the judgment should be renewed retroactively because he diligently had pursued execution and did not renew the judgment after five years based on the Superior Court's practice of not requiring renewal until ten years after a judgment's entry.

         After considering the parties' arguments, this Court denied the motion to quash the 2016 Writ and granted Mergenthaler's motion to renew the judgment nunc pro tunc. The Court reasoned that before Schatzman was decided, the New Castle County Prothonotary's practice was to issue writs for ten years after a judgment was entered. That is, the Prothonotary's practice was to follow Rule 69 rather than Section 5072. On appeal, the Delaware Supreme Court reversed this aspect of the Court's opinion, explaining that "[a] nunc pro tunc order 'cannot do more than supply a record of something that actually was done at the time to which it is retroactive.'"[6] Giving retroactive effect to a motion to renew which was not filed on the retroactive date was not a proper application of the nunc pro tunc doctrine, and the Delaware Supreme Court therefore reversed that portion of this Court's ruling.

         The Supreme Court, however, also remanded the case to this Court to consider whether Schatzman should apply retroactively, explaining:

The Superior Court found that Mergenthaler relied on the Superior Court's prQ-Schatzman practices when deciding not to renew the judgment before seeking attachment. While the 'presumption is in favor of giving a decision retroactive effect,' this Court has adopted a three-factor test to determine whether to apply a decision retroactively. . . . Because the Superior Court did not address whether Schatzman should apply retroactively to this case, and Mergenthaler sought attachment before we, or the ...

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