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Travelers Casualty v. Desert Gold Ventures, LLC

United States District Court, D. Utah

October 22, 2019

TRAVELERS CASUALTY and SURETY COMPANY OF AMERICA, Plaintiff,
v.
DESERT GOLD VENTURES, LLC et al., Defendants.

          MEMORANDUM DECISION AND ORDER

          Clark Waddoups United States District Judge.

         INTRODUCTION

         On December 5, 2013, the Clerk for United States District Court, Central District of California issued a Certification of a Judgment to be Registered in Another District. The foreign judgment was then registered in this district on December 12, 2013 (ECF No. 2). Plaintiff Travelers Casualty and Surety Company of America (“Travelers”) now seeks to renew that judgment pursuant to Utah Code Ann. § 78B-6-1802, and Rules 7 and 58C of the Utah Rules of Civil Procedure. For the reasons stated below, the court denies the motion without prejudice.

         FACTUAL BACKGROUND

         On May 13, 2011, Travelers obtained a default judgment against Defendants Desert Gold Ventures, LLC; Jurassic Ventures, LLC; Michael Mabugat; and Teresa Mabugat (collectively “Defendants”). Default Jdmt., at 2 (ECF No. 2).[1] The judgment consisted of $5, 830, 344.81 in money damages and “$6, 000, 000 in collateral security to be posted to Travelers by Defendants to cover Travelers' exposure for potential losses on claims against the surety bond issued by Travelers on behalf of Defendants.” Id. at 3. This constituted specific performance under “the terms of the General Contract of Indemnity executed by Defendants.” Id. The Default Judgment did not specify the post-judgment interest rate.

         After registering the foreign judgment in this district on December 12, 2013, Travelers filed a Transcript of Judgment on December 30, 2013, in the Fourth Judicial District Court for Wasatch County, State of Utah, Civil No. 136500864. Decl. of David L. Pinkston, ¶ 7 (ECF No. 6). Approximately two years later, Travelers commenced a separate quiet title action in the Fourth District (No. 150500102), “seeking to invalidate other liens on the Mabugats' property in the county.” Id. ¶ 8.

         Since obtaining Default Judgment, “Travelers has received payments, credits, and recoveries (from other indemnitors) on the obligation at various times . . . in the total amount of $9, 200, 000.00” Id. ¶ 15. Travelers also asserts interest has continued to accrue either at the post-judgment rate under California law, or Utah law, or under the federal post-judgment rate. Id.

         Travelers asserts that it seeks to renew the Judgment “primarily to support its Judgment Lien . . . as an in rem action.” Mot. to Renew, at 2 (ECF No. 5). Accordingly, it is not seeking to renew the Judgment “to enforce any personal liability against the Mabugats individually.” Id. According to a footnote, Travelers obtained a “Judgment Lien against the Mabugats' property in Wasatch County, which is the subject of the Quiet Title Action.” Id. at 6 n.2. It is that in rem proceeding it seeks to support through its Motion to Renew Judgment.

         Also in a footnote, Travelers contends that an in rem proceeding survives bankruptcy. No. where else in the Motion is bankruptcy addressed. Thus, the court has little information about the bankruptcy proceedings other than “[b]oth the Mabugats have received a discharge in their respective Chapter 7 bankruptcy cases in California.” Id.

         ANALYSIS

         I. JUDGMENT

         A. Registration of Judgment

         Under federal law, “[a] judgment in an action for the recovery of money or property entered in any . . . district court . . . may be registered by filing a certified copy of the judgment in any other district” after the judgment becomes final. 28 U.S.C. § 1963. “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.” Id.

         Similarly, Utah law allows an authenticated foreign judgment to “be filed with the clerk of any district court in Utah. The clerk of the district court shall treat the foreign judgment in all respects as a judgment of a district court of Utah.” Utah Code Ann. § 78B-5-302(2). Once properly filed, the foreign judgment “has the same effect and is subject to the same procedures, defenses, enforcement, satisfaction, and ...


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