Limitations

The Texas Two-Step: Protecting the Ability to Collect a Judgment

It is not uncommon in the construction industry for a party to find itself involved in litigation. Perhaps a contractor and subcontractor become involved in a payment dispute or perhaps an owner seeks relief for defective work. Regardless of the underlying cause of the dispute, a party who successfully obtains a judgment must protect its ability to collect on the judgment.

To collect on a judgment, the judgment must not become dormant. In Texas, a judgment becomes dormant 10 years after the date the judgment was rendered. To protect a judgment beyond the initial 10 year limitations period, a party should (1) timely issue a writ of execution and (2) timely record an abstract of judgment.

a) The Writ of Execution

The only method of extending the 10 year limitations period of a judgment is through the issuance of a writ of execution. A writ of execution is an order from a court directing a sheriff or constable to collect and sell non-exempt property in order to satisfy a judgment. “If a writ of execution is not issued within 10 years after the rendition of a judgment of a court of record or a justice court, the judgment is dormant and execution may not be issued unless it is revived.” [1] “If a writ of execution is issued within 10 years after rendition of a judgment but a second writ is not issued within 10 years after issuance of the first writ, the judgment becomes dormant.” [2] “A second writ may be issued at any time within 10 years after issuance of the first writ.” [3] There is not a cap on the number of times a party may issue a writ of execution. Essentially, a judgment creditor may extend the life of its judgment indefinitely by the issuance of a writ of execution once every 10 years.

If a judgment does become dormant, meaning a writ of execution was not executed or maintained in a timely manner, the judgment can be revived by “scire facias or by an action of debt brought not later than the second anniversary of the date that the judgment became dormant.” [4] A scire facias procedure requests the court that rendered the judgment to revive it on its own accord whereas an action of debt seeks to obtain a new judgment. A party should timely issue the writ of execution to avoid the process of attempting to revive a judgment.

b) Don’t Forget the Abstract

An abstract of judgment is a document that is filed in the real property records of a county in order to create a lien on a judgment debtor’s non-exempt real property located in that county. If a party allows its judgment to become dormant, any applicable abstracts of judgment cease to exist and can never be extended. [5] If an abstract of judgment ceases to exist, the judgment creditor will be able to more easily sell non-exempt real property. However, so long as the judgment is not dormant, “a judgment lien continues for 10 years following the date of recording and indexing the abstract.” [6]

Therefore a party who obtains a judgment should (1) keep the judgment alive through the timely issuance of a writ of execution and (2) obtain and record new abstracts of judgment every 10 years. Following these steps can help protect and extend the life of a judgment.

 

 

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[1] Tex. Civ. Prac. & Rem. Code § 34.001.
[2] Id.
[3] Id.
[4] Tex. Civ. Prac. & Rem. Code § 34.006.
[5] Tex. Prop. Code § 52.006.
[6] Id.

 

 

 

 

 

 

James Richards is an associate in the litigation practice group of Porter Hedges with a focus on construction law and commercial litigation. To read James’ full bio, click here.