Domesticating Foreign Judgments
In Part 1 of this series, we covered some of the tools available to judgment-creditors in Texas seeking to enforce and collect a money judgment. What if you obtain a judgment in another state? Once the foreign judgment has been domesticated, the judgment creditor can use any method of collection or enforcement applicable to a Texas judgment.
The domestication of a foreign judgment is the process by which a judgment from one state (or another country) is converted into an enforceable judgment in another state (or country). This article will consider only valid, subsisting foreign judgments rendered in another state. The right to enforce a foreign judgment is rooted in the full faith and credit clause of the U.S. Constitution and Chapter 35 of the Texas Civil Practice and Remedies Code, or the Uniform Enforcement of Foreign Judgments Act (“UEFJA”). A judgment can be domesticated in Texas in two ways: (1) via the procedure set forth in the UEFJA, or (2) a common law action to enforce the judgment.
The UEFJA provides a simplified process for domesticating a foreign judgment which once complete renders the judgment enforceable in Texas, usually without a court order. The UEFJA is subject to a 10-year limitations period, which runs from the date the judgment was rendered or the date in which the debtor began residing in Texas, and it does not apply where the action would be barred in the state where the judgment was rendered. Recent caselaw suggests that the Texas venue statute applies to domestication actions. The UEFJA sets forth the following process for the domestication of a foreign state judgment – the filing attorney must:
- file an authenticated copy of the foreign judgment with the clerk of a court of competent jurisdiction (and pay all associated fees);
- file an affidavit based on personal knowledge which states the last known address of the judgment-creditor and judgment-debtor; and
- mail notice of the filing of the foreign judgment to the judgment-debtor at the address listed in the affidavit and file proof of mailing with the court.
Once accomplished, this results in the automatic creation of an enforceable Texas judgment – without further action from the court. The filing is treated as both petition and final judgment. The domesticated judgment is presumed valid and the judgment-debtor may challenge the domestication and overcome the presumption only by challenging the validity of the underlying judgment with clear and convincing evidence to the contrary. Absent a successful challenge by the judgment-debtor, a judgment domesticated in this manner is enforceable in Texas, and the judgment-creditor is free to take advantage of the post-judgment remedies available to him at law.
The UEFJA also gives a judgment-debtor the option to bring an action to enforce a foreign judgment instead of proceeding as outlined above. The judgment-creditor files a petition to enforce the foreign judgment, admits the foreign judgment into evidence, followed by a common law proceeding in which the judgment-debtor can appear and assert defenses, and (hopefully) results in an appealable judgment which renders the foreign judgment enforceable. Generally, a motion for summary judgment should dispose of the issues. The same 10-year statute of limitations applies.
In the next and final installment in this series, we will consider a collection remedy unique to oil and gas: the mineral lien.
Kuiper Law Firm, PLLC offers comprehensive collection solutions for businesses. If you have any questions about the information in this article and how it applies to your business, do not hesitate to contact us.