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Rabbit v. Mills8/22/2005
On September 7, 1990, the Federal Bankruptcy Court for the Middle District of Tennessee dismissed Daniel L. Mills' ("Mills") petition to discharge a $140,000 debt owed to Edward and Janine Rabbitt ("the Rabbitts"), finding that the debt was procured through fraud. The Rabbitts registered the judgment in Davidson County Circuit Court on May 12, 1993. On September 23, 1993, the court granted Mills' motion to pay the judgment by installments, ordering monthly payments of $1,547.54. In addition, the court specifically stayed "the issuance, execution or return of any writ of garnishment or execution against wages or salary due [Mills] or any other funds belonging to [Mills]."
On December 9, 1994, Mills filed a second bankruptcy petition under Chapter 13 of the United States Bankruptcy Code. The Rabbitts responded by filing a Motion to Dismiss Mills' Chapter 13 Bankruptcy Petition. On March 7, 1995, the bankruptcy court granted the Rabbitts' Motion to Dismiss upon finding that Mills had filed the petition in bad faith. The United States District Court affirmed the decision of the bankruptcy court dismissing Mills' Chapter 13 petition on August 22, 1996. On May 1, 1998, the Sixth Circuit Court of Appeals also affirmed the order of the district court.
On January 7, 2004, the Rabbitts sought to collect the registered judgment against Mills by issuing a subpoena for his deposition. Mills filed a Motion to Quash the Subpoena and for a Protective Order, asserting that the ten-year statute of limitations had expired and thus, the Rabbitts were barred from any further enforcement of the judgment. On January 30, 2004, the Rabbitts filed a Petition for a Writ of Scire Facias, in order to revive their judgment. The circuit court granted the petition on April 2, 2004. Petitioner filed a timely notice of appeal.
In granting the Petition for Writ of Scire Facias, the trial court first held that Mills was barred from asserting the defense of the statute of limitations by the doctrine of equitable estoppel. The trial court reasoned that Mills' bad faith as well as his willful and fraudulent conduct in attempting to avoid the payment of a valid and enforceable debt estopped him from taking haven under the statute of limitations. Specifically, the trial court stated,
This judgment resulted from a finding that the defendant embezzled over $100,000 from the Plaintiffs. The Defendant attempted to have this debt discharged through filing a petition for bankruptcy under Chapter 7, but was unsuccessful because the debt was incurred through fraud. Defendant then filed another petition for bankruptcy under Chapter 13 and continued appealing the judgments until it reached the United States Sixth Circuit Court of Appeals. The defendant was in essence attempting to discharge a debt in Bankruptcy that the Bankruptcy Court had ordered him to satisfy. The Bankruptcy Court, District Court, and U.S. Sixth Circuit Court of Appeals all dismissed the Defendant's Chapter 13 petition because it was filed in bad faith...This kind of evasive misconduct is precisely the kind of situation which warrants the application of the doctrine of equitable estoppel.
Mills' overt misconduct in the repayment of the debt owed to the Rabbitts is irrefutable; unfortunately, the law weighs in favor of this wrongdoer. The doctrine of equitable estoppel precludes a party from raising a statute of limitations defense when the party's own conduct causes the delay in bringing the action. Sparks v. Metropolitan Government of Nashville and Davidson Co., 771 S.W.2d 430, 432 (Tenn.Ct.App.1989). In order to apply this equitable remedy, a party must have relied on an action or assertion of the other party which caused
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