Demystifying Ambiguous Statutes With the Maxims of Statutory Interpretation: a Closer Look at J.d. Tan, Llc v. Summers

• Jurisdiction: Washington,United States
• Citation: Vol. 26 No. 04
• Publication year: 2002

SEATTLE UNIVERSITY LAW REVIEWVolume 26, No. 1SUMMER 2002

NOTES

Demystifying Ambiguous Statutes with the Maxims of Statutory Interpretation: A Closer Look at J.D. Tan,LLC v. Summers

Alexander Kleinberg(fn*)

In July of 2001, Division One of the Washington Court of Appeals decided J.D. Tan, LLC v. Summers,(fn1) a creditors' rights case that turned on the meaning of an ambiguous state statute. In an opinion that is noticeably long on brevity and slight on reasoning, an undivided panel of the court held the statute at issue. (fn2) was not ambiguous and was not in need of judicial interpretation.(fn3) Because the court mistakenly determined that this convoluted law was not ambiguous, it failed to judicially interpret this statute by applying the maxims of statutory interpretation. Not only did this mistake lead to an erroneous outcome, but it also cost J.D. Tan, LLC approximately $1.8 million, not including attorneys' fees.

Given the scope of the quandary evidenced by the court's holding in J.D. Tan, this Note stresses the need for holding the Washington judiciary accountable for carrying out its duty: the judicial interpretation of statutes that are unequivocally ambiguous. This Note puts forth the J.D. Tan case as an example of how Washington's courts can properly resolve future cases in which the meaning of a law is unclear by applying the maxims of statutory interpretation. Should this occur, good things will happen: patently absurd or unfair results will be diminished, as will societal waste in the form of needless litigation and uncollected debts.

Section I begins with a brief discussion of the maxims of statutory interpretation and an explanation of how courts employ them to determine an enigmatic law's meaning. Section II provides a history of the J.D. Tan case, including a chronicle of the underlying dispute between the principal debtor, William Summers, and the assignee of the judgment holder, J.D. Tan, LLC. Section III explains why the statute at issue in J.D. Tan, RCW 6.17.020(3), was ambiguous when this case was decided, and how this statute was in need of judicial interpretation via application of the maxims of statutory interpretation. Section IV analyzes how the J.D. Tan court could have reached a correct result by interpreting the ambiguous statute through the application of four particular maxims of statutory interpretation. Finally, Section V concludes with a summary of this Note, along with a policy analysis explaining why a court that is faced with an ambiguous statute should proceed in a manner different from the manner chosen by the court in J.D. Tan.

I. The Maxims of Statutory Interpretation

A maxim is a concisely expressed principle or rule of conduct.(fn4) Washington law requires courts to interpret ambiguous statutes by applying the long-standing maxims of statutory interpretation.(fn5) The principles governing statutory interpretation have existed for centuries and "capture some of the wisdom of the ages."(fn6) They "are intended to function as a basis for [judicial] decision making, theoretically elevating decisions above mere result-oriented analysis because the rulings appear grounded in a historically tested maxim."(fn7) In essence, these principles of statutory construction are designed to provide courts with guidance in situations where the scope or meaning of a statute is unclear.(fn8)

II. THE HISTORY OF J.D. TAN, LLC V. SUMMERS

On March 30, 1990, Evergreen Park of Richmond Limited Partnership and Creekside of Kirkland Limited Partnership obtained two money judgments against William Summers and his business partners, James Summers and Darrell Fischer, and against each of their wives.(fn9) The judgments were in the respective amounts of $1,079,071.74 and $673,695.52, totaling almost $1.8 million.(fn10)

Within two days after entry of the judgments, William Summers and his partners filed for bankruptcy protection, and the resulting bankruptcy stay provision immediately took effect, barring any collection efforts.(fn11) After pending for over six years, the bankruptcy proceeding was dismissed on August 13, 1996.(fn12) Although his wife was granted a discharge, Summers' discharge was denied for transferring property with the "intent to hinder, delay, or defraud creditors."(fn13) According to the bankruptcy proceeding record, Summers had engaged in consummate game playing with his assets for the purpose of retaining those assets for his own use and denying his creditors access to recovery.(fn14)

Once a judgment has been entered, Washington law gives the holder of the judgment a period of ten years to enforce payment.(fn15) At the time of the J.D. Tan case, subsection (1) of RCW 6.17.020 read as follows:Except as provided in subsections (2), (3), and (4) of this section, the party in whose favor a judgment of a court of record of this state or a district court of this state has been or may be rendered, or the assignee, may have an execution issued for the collection or enforcement of the judgment at any time within ten years from entry of the judgment.(fn16)

On February 11, 2000, less than two months before the expiration of the ten-year execution period, the two judgments entered in favor of Evergreen Park and Creekside were assigned to Judgment Services, a collection agency.(fn17) Judgment Services obtained a court order on February 17, 2000, that extended the judgments for an additional ten years pursuant to RCW 6.17.020(3). It is at this point where the trouble began.

The court provided Judgment Services with the additional ten-year execution period that is available to judgment holders under RCW 6.17.020(3).(fn18) However, at this time the statute did not specifically name assignees as parties that were afforded this right of extension. Instead, subsection (3) read in relevant part as follows:[A] party in whose favor a judgment has been rendered pursuant to subsection (1) or (4) of this section may, within ninety days before the expiration of the original ten-year period, apply to the court that rendered the judgment for an order granting an additional ten years during which an execution may be issued. . .(fn19)

Several months after the judgments were extended, Judgment Services assigned them to J.D. Tan, LLC, a collection agency.(fn20) J.D. Tan quickly commenced proceedings to enforce the judgments by filing a motion for a temporary restraining order that sought to enjoin the defendants from transferring, encumbering, or disposing of certain assets, pending execution upon the judgments.(fn21) The temporary restraining order was granted; at this time J.D. Tan also moved for an order to show cause why the temporary restraining order should not be converted to a preliminary injunction.(fn22) About one month later, following a show cause hearing, J.D. Tan's request for a preliminary injunction was denied when the trial court held that an assignee had no authority to extend a judgment beyond its original ten-year term under RCW 6.17.020(3).(fn23) The court reasoned that the Legislature's omission of the words "or the assignee" in subsection (3) was not "a mere clerical error" that the court had the power to correct.(fn24) As a result, the court concluded the statute was not ambiguous and was, therefore, not in need of judicial interpretation.(fn25)

Summers moved for a declaratory judgment that would vacate the order of February 17, 2000 and declare the judgments void as a matter of law.(fn26) The court granted this motion on June 21, 2000, and J.D. Tan appealed.(fn27) On appeal, a panel of three judges held that RCW 6.17.020(3) did not provide assignees the right of extension.(fn28) The court further held that the statute was not ambiguous because it could not "reasonably be understood to apply to assignees of judgments as well as to original judgment creditors."(fn29) The court did not address the arguments made by J.D. Tan.(fn30)

The conclusion reached by the Court of Appeals in J.D. Tan is especially susceptible to criticism given that questions of statutory construction are reviewed de novo, meaning that the reviewing court was not bound by the trial court's application of the law in the underlying proceedings.(fn31)

III. RCW 6.17.020(3) WAS AMBIGUOUS BECAUSE IT WAS Susceptible to at Least Two Reasonable Meanings

Even though assignees were not specifically named in the statute when this case was decided, J.D. Tan's contention that RCW 6.17.020(3) could be reasonably read to include assignees is persuasive for two reasons.(fn32) First, Washington law has long called for the spirit of the law to prevail over its letter and for the civil portion of the Revised Code of Washington to be "liberally construed."(fn33) A liberal construction of RCW 6.17.020(3) would have afforded assignees rights that were identical to those enjoyed by original judgment holders.

Moreover, a liberal construction of RCW 6.17.020(3) comports with fundamental tenets of property law, which favors the free alienability of property rights.(fn34) One reason why free alienability of property has long been encouraged is because this policy promotes the efficient utilization of resources.(fn35) Construing RCW 6.17.020(3) to include assignees comports with this public policy. The original judgment creditor, who may be unwilling or unable to execute its judgment, could nevertheless obtain redress by selling its...