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MITCHELL&ASSOCIATES

A PROFESSIONAL CORPORATION

M E M O R A N D U M

To: Robert D. Mitchell


From: Julie M. Beauregard
Date: April 20, 2010
Re: Dr. Davidson: Analysis of Affidavit of Renewal Timeliness

I. INTRODUCTION AND BACKGROUND.

Dr. Robert Davidson ("Dr. Davidson") and his wife Vanessa Komar (collectively referred
to as the "Davidsons") were involved in extensive litigation against Dr. Jay Grossman ("Dr.
Grossman") and his wife Eudice Grossman (the "Grossmans" or "Judgment Creditors"). Dr.
Davidson blew the whistle on Dr. Grossman for conducting fraudulent clinical trials and
committing insurance fraud. Dr. Grossman filed a civil suit in Pima County, Arizona for
intentional interference with contract, intentional defamation, intentional infliction of emotional
distress, punitive damages, and attorney's fees that resulted in a multi-million dollar judgment
against the Davidsons in 2004 for $7,849,031.27 (the "Judgment"), which is accruing interest at
10% per annum.

The Judgment was filed on November 26, 2004. The Davidsons sought Chapter 7
bankruptcy protection and the Grossmans petitioned the Court to amend the language of the
Judgment to make it stronger, or less dischargeable, in bankruptcy. The Judgment was first
amended on January 4, 2005 (the "First Amended Judgment") to add the second half of a
sentence, which may have been inadvertently omitted. The Judgment was amended again on
March 23, 2005 (the "Second Amended Judgment") to correct a typographical error. The
relevant portion of each judgment is copied below with the amended language highlighted in
bold italics. Notably, the substance of the Judgment, including the amounts awarded, did not
change with each amendment.

The initial Judgment filed on November 26, 2004 reads in relevant part:

The Court finds as fact that as to all Counts of the First Amended
Complaint and as to frivolous pleadings filed by the Plaintiffs in this
action that Defendants acted willfully and

Damages are awarded in favor of Plaintiffs and against Defendants as


follows:

The First Amended Judgment filed on January 4, 2005 reads in relevant part:

The Court finds as fact that as to all Counts of the First Amended
Complaint and as to frivolous pleadings filed by the Plaintiffs in this
action that Defendants acted willfully and maliciously and with the intent
to cause injury to Plaintiffs.

Damages are awarded in favor of Plaintiffs and against Defendants as


follows:

The Second Amended Judgment filed on March 23, 2005 reads in relevant part:

The Court finds as fact that as to all Counts of the First Amended
Complaint and as to frivolous pleadings filed by the Defendants
[previously read Plaintiffs] in this action that Defendants acted willfully
and maliciously and with the intent to cause injury to Plaintiffs.

Damages are awarded in favor of Plaintiffs and against Defendants as


follows:

On March 8, 2010, the Judgment Creditors filed an Affidavit of Renewal to keep the
judgment from expiring and renew it for another five years. Dr. Davidson's concern is whether
the Affidavit of Renewal was timely filed. If the judgment renewal time period is calculated
from the date of the latest, or Second Amended Judgment, then the Affidavit of Renewal was
timely filed and the Second Amended Judgment was effectively renewed upon its filing and
docketing. However, if the judgment renewal time period is calculated from the date of the
initial Judgment, then the Affidavit of Renewal was not timely filed and the Judgment would
have expired.

II. LEGAL ISSUES.

1. Is an Affidavit of Renewal filed before the five year expiration deadline of a later
amended judgment timely, or should the Affidavit of Renewal have been filed
before the five year expiration deadline of the original judgment?

2. Was the Affidavit of Renewal timely and has the Judgment been effectively
renewed?

III. SHORT ANSWERS.

1. Yes, an Affidavit of Renewal filed before the five year expiration deadline of a
later amended judgment is timely and need not be filed before the five year
expiration deadline of the original judgment

2. Yes, assuming the Affidavit of Renewal was procedurally correct under A.R.S. §
12-1612(B), the Affidavit of Renewal was timely and the Second Amended
Judgment has been renewed for an additional five years.

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IV. LEGAL ANALYSIS.

1. The Rule.

Arizona Revised Statute § 12-1612 governs renewal by affidavit and reads in relevant
part as follows:

A. A judgment for the payment of money which has been entered and
docketed in the civil docket or civil order book of the United States district
court or superior court, whether originally rendered by it or entered upon a
transcript of judgment from another court, or recorded with the county
recorder, may be renewed by filing an affidavit for renewal with the clerk
of the proper court.

B. The judgment creditor, his personal representative or assignee may within


ninety days preceding the expiration of five years from the date of entry
of such judgment, make and file an affidavit, known as a renewal
affidavit, entitled as in the action setting forth:

1. The names of the parties, the name of the court in which docketed,
if recorded the name of the county in which recorded, the date and
amount of the judgment, the number and page of the docket in
which entered by the clerk of the court, if recorded, the number
and page of the book in which recorded by the county recorder, the
name of the owner of the judgment, and his source and succession
of title, if not the judgment creditor.

2. That no execution is anywhere outstanding and unreturned upon


the judgment, or if any execution is outstanding, that fact shall be
stated.

3. The date and amount of all payments upon the judgment and that
all payments have been duly credited upon the judgment.

4. That there are no set-offs or counterclaims in favor of the judgment


debtor, and if a counterclaim or set-off does exist in favor of the
judgment debtor, the amount thereof, if certain, or, if the
counterclaim or set-off is unsettled or undetermined, a statement
that when it is settled or determined by action or otherwise, it may
be allowed as a payment or credit upon the judgment.

5. The exact amount due upon the judgment after allowing all set-offs
and counterclaims known to affiant, and other facts or
circumstances necessary to a complete disclosure as to the exact
condition of the judgment.

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C. If the judgment was docketed by the clerk of the court upon a certified
copy from any other court and subsequently an abstract recorded with the
county recorder, the affidavit shall, in addition to the foregoing, set forth a
statement of each county in which such transcript has been docketed and
abstract recorded. The affidavit shall be verified positively by the person
making it, and not upon information and belief.

D. The filing of the affidavit in the office of the clerk of the court where the
judgment is entered and docketed shall renew and revive the judgment to
the extent of the balance shown due in the affidavit.

E. Additional and successive renewal affidavits as provided for in subsection


B may be made and filed within ninety days of expiration of five years
from the date of the filing of a prior renewal affidavit

F. Recorded judgments which have been timely renewed by a renewal


affidavit and successive affidavits, even if such successive affidavits were
not authorized by prior law, may be renewed as provided in this section if
the prior renewal affidavits were filed within ninety days from the
expiration of each successive five year period

A.R.S. § 12-1612 (emphasis added).

2. Analysis and Application of the Rule.

A 2009 Arizona Court of Appeals case encountered an almost identical issue as that
presented in the Davidson case. Jones v. Weston, 212 P.3d 835, 841 (Ariz. Ct. App. 2009).1 In
Jones v. Westin, the judgment creditor argued that pursuant to A.R.S. §§ 12-1551 and 12-1612,
the time for renewing a judgment commenced with "the date of the entry of the amended
judgment." Id. The judgment debtor countered with the argument that the "amendment of a
judgment does not extend the time to renew". Id. The Court did not agree and highlighted that
the judgment debtor cited "no authority to support this assertion. And here, regardless of the fact
the January 16, 2002 judgment amended an existing judgment, it was itself a 'judgment' that was
duly 'entered.'" Id.

The Court further explained its rational and interpretation of the statute by citation to
California authority and providing as follows:

[I]n interpreting a statute that similarly provides the time for renewing a
judgment commences "the date of entry of a . . . judgment," California
courts have concluded, "When an amended judgment is entered[,] the . . .

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The Arizona Supreme Court denied the Petition and Cross Petition for Review of the Jones v. Westin case and
ordered the Court of Appeals Opinion not be published pursuant to Rule 111(g), Arizona Rules of the Supreme
Court. Jones v. Weston, 219 P.3d 1038 (Ariz. 2009). While depublished, the analysis and conclusion provides
valuable interpretation of the relevant statute that is persuasive and highly indicative of how an Arizona court would
rule if faced with a similar legal issue, such as the Davidsons'.

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period within which the judgment must be enforced or renewed
commences upon the date of entry of the amended or modified
judgment." In re Marriage of Wilcox, 124 Cal. App. 4th 492, 21 Cal.
Rptr. 3d 315, 321 (Cal. Ct. App. 2004); see Cal. Civ. Proc. Code §
683.020 (1983). And we assume that if our legislature had intended §
12-1551 to not apply to the entry of judgments that amend existing
judgments, it would have so indicated, as have other jurisdictions. See,
e.g., Haw. Rev. Stat. § 657-5 (time for renewal runs from entry of
"original judgment").

Thus, because the first amended judgment was entered on January 16,
2002, a renewal affidavit had to be filed "within ninety days preceding"
January 16, 2007. See § 12-1612.

Id. (Emphasis added).

Jones v. Westin differs from the Davidson case because the second amended judgment in
Jones "expressly vacated the first amended judgment, and thus 'nothing remained of the [first
amended] judgment' for renewal." Id. (citing Nielson v. Patterson, 204 Ariz. 530, P 12, 65 P.3d
911, 914 (2003) ("vacated judgment lacks force or effect and places parties in the position they
occupied before entry of the judgment"). Unfortunately, the Court that granted the First and
Second Amended Judgments in the Davidsons' case provides no direction in the amended
judgments on their affect on the initial Judgment, referring to each only as an amended judgment
(nunc pro tunc).

While the Jones judgment can be differentiated from the Davidson Judgment, the court
still reasoned that A.R.S. § 12-1612(B) should be given broad interpretation by quoting an
Arizona Supreme Court Opinion that states: "[m]oreover, when a rule of procedure does not
speak to a set of facts or speaks ambiguously, courts should give the rule liberal construction
rather than create a pitfall for the unwary." Id. (citing Nielson, 204 Ariz. at 533).

Like the California statute referenced in the Jones case, A.R.S. § 12-1612 is vague in that
it only refers to "a judgment . . . which has been entered and docketed" and requires that a
renewal affidavit must be filed within ninety days of the expiration of five years from the date of
entry of "such judgment". Since each of the amended judgments against the Davidsons is "a
judgment" that "has been entered and docketed", each would satisfy the renewal statutes'
requirements. Accordingly, the Judgment Creditors' Affidavit of Renewal filed on March 8,
2010 was within ninety days of the expiration of five years from the date of entry of "such
[second amended] judgment" on March 23, 2010.

V. CONCLUSION.

The Judgment Creditors' Affidavit of Renewal filed on March 8, 2010 was timely
because it was filed within ninety days of the expiration of five years from the date of entry of
the Second Amended Judgment filed on March 23, 2005, which was scheduled to expire on
March 23, 2010. Assuming the Affidavit of Renewal was procedurally proper as outlined in
A.R.S. § 12-1612(B), the Grossmans' Judgment against the Davidsons was renewed and revived

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to the extent of the balance shown due in the Affidavit of Renewal and was effective upon the
filing of the Affidavit in the Pima County office of the clerk of the court. Furthermore, the
Judgment Creditors are entitled to file additional and successive renewal affidavits provided they
are filed within ninety days of the expiration of five years from the date of the filing of a prior
renewal affidavit, which was March 8, 2010 in this case.