Opinion
No. 29423-1-II.
Filed: February 17, 2004. UNPUBLISHED OPINION
Appeal from Superior Court of Pierce County. Docket No: 87-2-08876-1. Judgment or order under review. Date filed: 10/04/2002. Hon. Kitty-Ann Vandoorninck.
Counsel for Appellant(s), Charles F. Jr Schmit, Attorney at Law, 820 a St. Ste 600, Tacoma, WA 98402-5293.
Counsel for Respondent(s), Brian Lee Dolman, Attorney at Law, 1102 Broadway Ste 403, Tacoma, WA 98402-3526.
Robert Louis Michaels, Smith Alling Lane, 1102 Broadway Ste 403, Tacoma, WA 98402-3526.
Richard Mulligan's assignee, Charles Woodke, III, appeals a trial court order vacating his previously obtained garnishment order against Ty Smith. We hold that the trial court did not abuse its discretion by vacating the order on the grounds that Smith's alleged fraudulent conduct did not prevent Mulligan from extending the lifetime of the judgment an additional 10 years under RCW 6.17.020. We affirm and award attorney fees and costs for wrongful levy of the writ of garnishment.
As the holder of a past-due note, Mulligan obtained a default judgment against Smith on April 7, 1988. Mulligan initiated collection efforts in 1992 when he obtained an order requiring Smith to appear in court and submit to an examination as to his finances and property interests. Smith failed to appear, and a warrant issued for his arrest. The record does not show what came of this warrant.
In 1995, Smith was again ordered to appear and submit to an examination as to his finances and property interests. The parties rescheduled the examination date several times, and Smith again failed to appear for one of the scheduled dates. Mulligan, therefore, received an award of attorney fees. Mulligan finally secured Smith's attendance on July 7, 1995.
At this examination it is alleged that Smith misrepresented the state of his financial affairs, maintaining that he was unemployed and had no assets, no property interests, and no business interests. The trial court made no findings as to the veracity of the allegations against Smith.
Based on Smith's responses, Mulligan believed that Smith was judgment-proof. He therefore neglected to take further action in discovering Smith's assets or seeking satisfaction of the 1988 judgment. But unbeknownst to Mulligan, Smith did have assets, property, or business interests, including a leasehold interest in a warehouse owned by Oscar Hokold and a construction business called Smith Construction, which he operated from the leased space. The nature of Smith's interest in Smith Construction is unclear.
The revelations regarding Smith's business and leasehold did not come from Smith. Instead, they emerged during an unlawful detainer suit that Hokold brought against Smith in early 1995. This suit settled in 2001, and as part of the settlement, Smith was to receive approximately $250,000 from Hokold. Commonwealth Title Company held a portion of this sum in escrow.
Mulligan eventually assigned his rights under the 1988 default judgment to an individual named Charles Woodke. Woodke promised to cover any collection costs and to pay Mulligan an agreed amount of any money recovered from Smith. As part of his collection efforts, Woodke sought to garnish the funds that Smith received in the Hokold settlement, which were then held by Commonwealth. Commonwealth answered the writ of garnishment, indicating that it held $148,963.58 that was due and owing to Smith. The record before us does not reveal whether Smith controverted Commonwealth's answer.
On May 7, 2002, Woodke obtained a garnishment judgment against Smith, which ordered Commonwealth to pay an amount partially covering Mulligan's 1988 default judgment. But the judgment was short-lived, as Smith moved to vacate it several weeks later. He argued that the judgment lien against him had expired in April 1998 under RCW 4.56.210, which establishes a 10-year period for such liens. Commissioner David H. Johnson agreed and held the garnishment judgment and order void under CR 60(b)(5) for a failure of jurisdiction. In its order denying Woodke's motion to revise this ruling, the superior court reasoned,
RCW 4.56.210(1) provides, in part, 'after the expiration of ten years from the date of the entry of any judgment heretofore or hereafter rendered in this state, it shall cease to be a lien or charge against the estate or person of the judgment debtor. No suit, action or other proceeding shall ever be had on any judgment rendered in this state by which the lien shall be extended or continued in force for any greater or longer period than ten years.'
[h]ere, the judgment was entered on April 7, 1988. Smith's allegedly fraudulent conduct occurred three years prior to the expiration of the judgment lien, on July 7, 1995 (at the time of the Supplemental Proceeding). This did not prevent Plaintiff from enforcing the judgment within the statutory lifetime nor from extending the lifetime of the judgment an additional ten years pursuant to RCW 6.17.020.
Under RCW 6.17.020(3), a judgment lienholder may 'apply to the court that rendered the judgment . . . for an order granting an additional ten years during which an execution, garnishment, or other legal process may be issued.'
Clerk's Papers at 185.
Woodke does not dispute the finding that his lien had expired under RCW 4.56.210, nor does he dispute the finding that he failed to extend the lien under RCW 6.17.020. His primary challenge is, instead, that the superior court erred by (1) concluding that it lacked jurisdiction to garnish Smith's funds and order him to pay and (2) refusing to equitably toll the lien period due to Smith's deception at the 1995 examination. We first address the jurisdiction issue, which we review de novo. Dougherty v. Dep't of Labor Indus., 150 Wn.2d 310, 314, 76 P.3d 1183 (2003). The brand of jurisdiction presently at issue is subject matter jurisdiction, which exists where a court 'has authority to adjudicate the type of controversy involved in the action.' Marley v. Dep't of Labor Indus., 125 Wn.2d 533, 539, 886 P.2d 189 (1994) (citing Section 11 of the Restatement (Second) of Judgments). ''Type' means the general category without regard to the facts of the particular case . . . It refers to the nature of a case and the kind of relief sought.' Dougherty, 150 Wn.2d at 317.
Washington's superior courts, as courts of general jurisdiction, 'have long had the 'power to hear and determine all matters, legal and equitable, . . . except in so far as these powers have been expressly denied.'' In re Marriage of Major, 71 Wn. App. 531, 533, 859 P.2d 1262 (1993) (quoting State ex rel. Martin v. Superior Court, 101 Wn. 81, 94, 172 P. 257 (1918)). Rather than deny the power, our Legislature has expressly given the superior courts the authority to conduct garnishment proceedings. See RCW 6.27.020; see also Bour v. Johnson, 80 Wn. App. 643, 648, 910 P.2d 548 (1996).
The statute provides, '[t]he clerks of the superior courts and district courts of this state may issue writs of garnishment returnable to their respective courts for the benefit a judgment creditor who has a judgment wholly or partially unsatisfied in the court from which the garnishment is sought.' RCW 6.27.020(1).
Here, the superior court determined that it lacked jurisdiction to hear a writ of garnishment, which is certainly within the general category of proceedings contemplated by the above-referenced power to conduct garnishment proceedings. That the lien was non-existent at the time of the court's order is inconsequential for jurisdictional purposes as the important issue is merely whether the trial court had jurisdiction over the type of controversy involved. The facts of the particular dispute before the court may, and clearly did here, provide fertile grounds for affirmative defenses or a motion to dismiss for failure to state a claim, but those facts are unimportant in determining whether subject matter jurisdiction is proper. Therefore, the commissioner's decision that the order was void under CR 60(b)(5) was erroneous.
Because jurisdiction was proper, we must next decide whether the superior court properly declined to equitably toll RCW 4.56.210. In search of a favorable standard of review, Woodke proposes that we should forsake our usual abuse of discretion standard for CR 60 decisions in favor of a summary judgment standard, which would lend him the benefit of all inferences and create a favorable factual record. His logic is that chapter 6.27 RCW prescribes a procedure that, had it been invoked here, would have resulted in a hearing to determine whether an issue of fact existed for trial. As such a hearing resembles one for summary judgment, he argues that summary judgment rules should apply here.
In re Marriage of Flannagan, 42 Wn. App. 214, 222, 709 P.2d 1247 (1985), review denied, 105 Wn.2d 1005 (1986).
The procedure described does not operate as Woodke suggests. RCW 6.27.210 and .220 address disputed, or 'controvert[ed],' answers between a garnishee (here Commonwealth Title Company) and the plaintiff (Woodke) or defendant (Smith); they do not control procedures in a conflict, such as this one, between the plaintiff and the defendant. Thus, although Woodke may be correct that a hearing could have resulted had he or Smith controverted Commonwealth's answer, that hearing would not have been one to resolve the issues now before us. Therefore, we decline Woodke's invitation and, instead, apply the abuse of discretion standard. As it operates here, this standard merely seeks tenable reasons for the trial court's refusal to equitably toll RCW 4.56.210. See Lindgren v. Lindgren, 58 Wn. App. 588, 595, 794 P.2d 526 (1990), review denied, 116 Wn.2d 1009 (1991).
Equitable tolling in the present context is seldom used. The test for it thus remains to be stated in succinct terms. Hensen's lengthy description is, perhaps, the best statement:
[equitable tolling] declares that one shall not, by waging unfounded litigation, be rewarded at the expense of his unwilling opponent. It is based upon the equitable principle that a party will not be permitted to avail himself of an unconscientious advantage obtained by his own wrongful act and without fault on the part of his adversary. It is sustained by the wholesome consideration that a party should not be permitted to profit by the abuse or misuse of legal process or by imposing upon judicial tribunals litigation without merit. It is also fortified by that sound public policy which sets its face against putting a premium upon unrighteous and vexatious litigation commenced and prosecuted by a party for the ulterior purpose of obtaining by indirection an advantage which in equity and good conscience he is not entitled to enjoy.
Hensen v. Peter, 95 Wn. 628, 637, 164 P. 512 (1917).
Assuming that Smith committed fraud at the 1995 examination, which is a contested and unresolved point, Mulligan had roughly three years remaining on the original judgment lien and was thus afforded ample opportunity for lien extension under RCW 6.17.020(3). Therefore, Smith's allegedly fraudulent conduct was no impediment to Mulligan's ability to extend the lien. The superior court was of the same mind, stating that 'Smith's allegedly fraudulent conduct . . . did not prevent Plaintiff from enforcing the judgment within the statutory lifetime nor from extending the lifetime of the judgment an additional ten years pursuant to RCW 6.17.020.' CP at 185.
Our only task is to determine whether this was a tenable reason for declining to equitably toll the original lien's 10-year period. We believe that it was. The extension statute provided an effective and simple method of avoiding lien expiration and has since 1989. The statute leaves nothing to judicial discretion, so Mulligan would only have had to make his application, and an order extending the lien would have issued. We thus believe that Mulligan's extension failure gave the superior court tenable reason to decline the equitable tolling doctrine.
Also, under the statute, extension does not disturb the lien's perfection or priority. RCW 6.17.020(6).
Finally, we award attorney fees and costs to Smith. We agree with the statement and reasoning that '[i]f attorney's fees may be collected as a part of the damages for the wrongful issuance of an injunction or attachment, there is no reason that we can see why they should not also be recoverable in the wrongful levy of a writ of garnishment.' James v. Cannell, 135 Wn. 80, 84, 237 P. 8 (1925); see also Rorvig v. Douglas, 123 Wn.2d 854, 862, 873 P.2d 492 (1994).
Affirmed.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
ARMSTRONG, J., concur.
I concur with the majority but write separately to express my dismay that we cannot provide an equitable remedy here. Following Millay v. Cam, 135 Wn.2d 193, 206, 955 P.2d 791 (1998), it is apparent that even in instances of a defendant's dishonest conduct, equitable tolling does not apply absent a showing that the plaintiff could not have overcome the misconduct within the statutory period. I sympathize with the appellant's choice not to have expended more financial resources to pursue what must have appeared to be a lost cause. But I agree with the majority that the trial court did not abuse its broad discretion here. The aggrieved in this case may justifiably feel quite wronged, but equitable tolling cannot remedy the wrong. Unfortunately, this is one of instances where there is no remedy for a wrong.