*1 8 that this order was not final be- this case. Fairness dictates
damages, the application concerning it did not establish amount court’s of the rules cause En- damages); Support finality applied equally Child should be to all Office of Oliver, 447, litigants conveniently ignored. v. 824 Ark. 921 and not forcement (1996) (holding that an order S.W.2d 602 arrearage final was not where
child
was found but the amount
determined);
not
arrearage
Bank,
Hastings v. Planters & Stockmen
joined majority I must dissent
Lax, Fortson, Rowe, Vaughan, Jones P.A., Fortson, by: Grant E. Grant E. Rowe, Roger Fortson and D. for appellant. PLC, by: Williams & Anderson Andrew Rock, Gaines, King, Little and Alec appellee Metropolitan National Bank. Watkins, Noblin, PLLC, Boyer, Gray & Rogers, by: Gray, Jennifer E. for appellee Finance, Capital Webster Inc. Firm, PLLC, Story by: Law Travis W. Renauro, Story, Fayetteville, Ryan and appellees. trust DANIELSON, PAUL E. Justice. 12AppeIlant Hunt, LLC, appeals County from orders of the Benton Circuit Thorntons, dismissing its second amended com- one or both of the were all Court plaint case, for failure to state facts which parties in the consolidated and each sustaining sub- relief could be filed a motion to dismiss J.B. Hunt’s first sequent ap- writs of complaint.1 Metropolitan, amended Web- Bank, pellees Metropolitan National Web- ster, argued all that the facts BALC Finance, Inc., Computer Capital ster alleged by J.B. Hunt would not entitle it to *3 Services, review, Repair LLC. After we relief under pro- section 16-66^418 as that affirm. cedure not the appropriate remedy. pertinent The facts these. J.B. court, The circuit in a opinion letter a creditor of Robert and 27, 2013,2 February explained on that in (the Thorntons) Frieda Thornton virtue years preceding, the two there had been a $12,700,000 judgment of a entered on “race to serve” on the trusts various writs 16, 2011, in prior March case out of garnishment by judgment of creditors and County. Benton The Thorntons are the respective garnishments their had life trustees and beneficiaries of five chari been determined “winning the race.” pro table-remainder trusts. Each trust It attempting noted that J.B. Hunt was annuity quarterly vides that distributions priority pursuant assert Ann. be made to the Thorntons until their However, § 16-66-418. the circuit court 5, 2012, deaths. On September J.B. Hunt found that section 16-66-418 towas be pursuant commenced an action to Ark. used when other remedies are un- Code Ann. 16-66-418 to attach the available or where remedies are im- Thorntons’ interest in future distributions practical, such as fraudulent conveyances apply from the trusts and them to the Therefore, property. of the circuit court (here satisfaction of J.B. Hunt’s concluded that option J.B. Hunt had the action”). inafter, “the attachment addi garnishment, it allege had failed to Thorntons, tion to the individually and fraud, |4absence remedies, an or other their capacities as trustees of the five trigger circumstances that would an action trusts, complaint Merrill named 16-66-418, under section and that its com- Pierce, Smith, Inc., Lynch, Fenner & plaint could not withstand the motions to custodian of the investment accounts hold dismiss. J.B. given Hunt was ing the assets of the trusts. days plead ten further. |sOn 26, 2012, November the circuit 7, 2013, On March J.B. Hunt filed its court, on the motion of Banc of America complaint. Metropolitan, second amended (BALC), Leasing Capital, LLC consoli- Webster, BALC, and the Thorntons all dated Hunt’s attachment action with a filed motions to dismiss to Rule already pending case in its court involving 12(b)(6) of the Arkansas Rules of Civil parties some of the same and common Procedure. The circuit court entered an questions of law and fact as there was 20, granting order May motions on competition among various cred- 2013, itors. for the reasons set forth in Appellees Metropolitan National a letter Bank, Finance, Inc., 11, opinion previously Capital April Webster filed on BALC, were also creditors opinion, In that letter explained the court 17, 2013, 1. J.B. Hunt April had filed a first amended com- 2. Another order was filed on 22, 2012, granting plaint shortly the motions "for the on October reasons set out before its February opin- the Court’s 2013 letter case was consolidated. ion.” complaint Hunt’s revised failed to Ann. Appellees that J.B. 16-66-418. all argue offer a claim under section facts that while attachments future distribu- court 16-66-418. circuit found that tions be authorized section 28-73- although argued garnish- J.B. Hunt situations, 501 in some not permissible ment was unavailable be- given the facts in the instant case. After insolvent, cause the debtors were such an considering arguments, all the agree we argument supported by was not case law appellees. with the and that a creditor not claim a quar- The circuit court’s order here terly distribution until the date it became motions to dismiss for failure to state a due. Because its order dismissed J.B. 12(b)(6) and, claim under Ark. R. P. Civ. Hunt’s action but not the entire consolidat- therefore, our standard of review is wheth court, May ed the circuit er the court abused its discretion in dis 54(b) certifícate, issued Rule *4 missing complaint. the See Born v. Hosto requisite findings pursu- it made the Buchan, PLLC, 292, 2010 Ark. 54(b). ant to Ark. R. P. Civ. making S.W.3d 324. In this determina appealing addition to from the order tion, we treat the alleged facts the com dismissing its J.B. Hunt is appeal- plaint as true light and view them in the ing finding four orders of the circuit court most favorable to plaintiff. the See id. Webster, that Metropolitan, Computer Also, all reasonable inferences must be (CRS) Repair Services were entitled to resolved in favor of the complaint, and the certain distributions from the trusts.3 J.B. Illiberally pleadings are to be construed. objected |fito Hunt had the relevant writs See id. garnishment, contending, of it did its The relevant section of the Arkansas complaint and as it does on appeal, that it Trust Code for creditor’s claims is section superior had created a lien 28-73-501, which reads: motion, section 16-66-418. On J.B. Hunt’s stayed the circuit court orders its beneficiary’s To the extent a interest is deposited directed that the distributions be not protected by spendthrift provision, pending appeal. with the circuit clerk this may a court authorize a creditor argument appeal. We now turn to the on assignee beneficiary the reach beneficiary’s interest attachment asserts, below, J.B. Hunt as it did present or Code, distributions to or specifically the Arkansas Trust future for 28-73-501, beneficiary or other Ann. provides Code that a benefit of may means. The court limit the award may creditor reach future distributions to such relief as appropriate appropriate from a trust and that an mech- under the doing anism for so is found in Ark. circumstances. Code 20, 2013, May payable 3. In an order dated the circuit should Robert be awarded one-half court directed that Frieda Thornton's Decem- Metropolitan each to and Webster. J.B. Hunt 31, paid ber 2012 distributions be to Metro- timely appeal amended its notice of on June politan. The ordered court also on that same 19, Finally, 2013 to include that order. in an date that Robert Thornton's distributions 5, 2013, July order dated the circuit court paid from December 2012 be to Webster. objections overruled of BALC and J.B. Hunt garnishment Those two orders were listed in being September to CRS entitled to certain original appeal. notice of an order distributions, stayed but distribution 11, 2013, dated June the circuit court directed pending appeal. ap- timely this J.B. Hunt payable that the March 2013 distributions pealed from that order with a second amend- paid to Frieda Thornton should be to Metro- July appeal ed notice of politan and that the March 2013 distributions (Repl.2012) garnishment Ann. debtor. A writ of is a suit 28-73-501 added). (emphasis party directed to a third determine party proper- whether third possesses derived from the Section 28-73-501 was ty Thompson of the See debtor. correspond- Trust Uniform Code Am., v. Bank 157 S.W.3d commentary ing reads: (2004). A garnishment writ of reaches necessarily This does not mean that the all in the debtor all creditor can collect distributions garnishee. hands of the See third-party beneficiary. made to the The interest id. The effect of the service of a writ of contingent be too indefinite all impound is to the creditor to reach or interest third-party garnishee the hands of the exemption for an under qualify belongs to the debtor at the time general exemption state’s creditor stat- service, thereafter come utes. possession up into his or her until the filing of a true and correct answer. See id. prescribe pro- This section does not (“other means”) reaching cedures case, In the instant there is no beneficiary’s priority interest or of dispute that J.B. Hunt was a claimants, among leaving those issues creditor of the Thorntons. enacting State’s laws on creditor sought for the circuit court to find below *5 rights. clarify, This section does howev- that was entitled to the Thorntons’ fu er, that an against order obtained the ture distributions. This court has held trustee, procedures may whatever state that a payment contingent on an individu used, have may been extend to future al’s survival is not certain and does not directly distributions whether made payment become so until each becomes beneficiary the or to for the others bene- due. payment See id. When is contin ficiary’s By allowing benefit. an order gent, garnishment payments of future payments, to extend to future the need permitted. Unfortunately See id. for periodically for the creditor to return to Hunt, the Thorntons’ future distribu court will be reduced. they tions are not certain because are con (Amended § Unif. Trust 501 cmt. Code tingent upon survival of the beneficiaries. 2010) added). (emphasis Presumably, it is because of this limita- commentary to section 501 tion that J.B. attempted bring its makes it clear that a creditor not be against claim the Thorntons contingent allowed to reach a interest of a Ark.Code Ann. 16-66-418 and establish prescribe debtor and the state must equitable against an lien their interests. the procedures reaching beneficiary’s for 16-66-418, “Discovery Section entitled in interest when there priority issue of Equitable proceedings— aid of execution— Arkansas, among claimants. we have Attachment,” reads, part: in relevant garnishment proceedings provided for in b(a)(l) our statutes. Arkansas Code After an execution of fieri faci- 17Annotated (Repl.2006) provides 16-110-402 in county as directed to the which the person where a county has obtained a was rendered or to the it, satisfy and wishes to he or she of the defendant’s residence is returned officer, obtain issuance of a writ proper the either as to the thereof, substance, require appearance the of a whole or in no person part execution, thought to be indebted to the judgment property satisfy found to the plaintiff the execution insti- Southern District of against Texas Mrs. Locher, an action in the court from which resident, tute Anne Wood a Texas issued, $13,000, the execution or in the court of and a nulla bona return was county in re- any which defendant on the execution issued on that 19made summoned, discovery sides or is for the Thereafter, judgment. See id. Maryland any money, equitable chose Casualty filed a claim in the nature of a interest, legal property or and all other suit, equitable creditor’s or execution. See entitled, to which the defendant is Although id. Locher had notice of the subjecting money, chose in ac- suit, she did not enter an appearance, and tion, interest, and all the court never obtained personal jurisdic- property to which the defendant is tion over her in Arkansas. See id. Addi- to the satisfaction of the judg- entitled tionally, Locher property had no in Texas ment. elsewhere to execution or at-
(2) actions, persons In such indebted tachment except her interest to the defendant in the execution or the trust administered in Arkansas. See money or holding Accordingly, id. the chancery court en- interest, he has an holding evi- joined the paying trustees from Locher same, may dences or securities for the any of the future net income of her share be also made defendants. of the trust and decreed that the trustees pay
should the future income of Locher’s trust, (d) during share of the the lifetime of A lien shall be created Locher, Maryland Casualty Mrs. defendant, until levy attachment, was fulfilled. See id. This or service of the sum- that, court ultimately held under the cir- object mons with the of the action en- cumstances, thereon, proper, relief was person dorsed on the holding or and affirmed the controlling chancery his court’s decree. property. specifically See id. discussing whether (d) 16-66-418(a), §Ann. (Repl. *6 seizure, subject Locher’s interest was to 2005). “[a]ny the court noted that beneficial inter- A review of our ease law reveals that est of a personal property debtor in real or this is typical procedure by not the used which cannot by regular pro- be reached judgment creditor for satisfaction of the law not expressly exempted cess and is judgment, appellees also urge is by by statute be reached a creditors’ not remedy legislature intended subjected payment bill and or satis- under the circumstances in the instant Miller, faction of the debt.” 207 Ark. at case. J.B. Hunt to Mary- cites Miller v. added) 326, 180 (emphasis S.W.2d at 588 Co., Casualty land (quoting 21 C.J.S. Creditors’ Suits at (1944), argu- S.W.2d 581 of its 1068). ment on appeal. Miller, pre- Appellees quick this court affirmed a to out point 80, chancery Amendment court’s decision differences in Miller between facts Miller, provide equitable relief a suit for a the facts in the instant case. Arkansas, creditor’s bill and to allow a defendant the debtor was a nonresident with legal remedy no other to attach a lien the creditor could obtain debtor, Maryland personal jurisdiction to certain trust interests. over the Casu- alty Company recovered a had the court found that the distributions could in the States District for the by any legal process. United Court not be reached other reason, |nFor dismissing one it.4 we af-
It is also notable Here, to be involved. firm. appeared creditor circumstances not one of those point appeal, For its second
110applicable. argues J.B. Hunt that be- argues that because the circuit court does not allow it to garnishment cause erred when it dismissed J.B. Hunt’s at- future trust distribu- reach the Thorntons’ tachment it also erred when it sus- tions, then it also had no means or subsequently garnish- tained the served reach those legal process to distributions. discussed, previously ments. However, we note that while the future we do not conclude that the circuit court by garnish- distributions are not reachable in dismissing erred J.B. Hunt’s action. present, they ment in the do become Therefore, argument. we do not reach this they reachable when become due. There- Affirmed. fore, equivalent it is not the of a certain property or interest of a debtor that will HART, JJ., BAKER and dissent. by any legal pro-
never be reachable
cess.
HART,
JOSEPHINE LINKER
Cummings
J.B. Hunt also cites to
v. dissenting.
Fingers, 296
Because J.B. Hunt’s Thorntons, and that the writ erly sought the had been Thorntons’ uncertain fu- trusts, indicating ture distributions from the the cir- returned that' there was no cuit court did not in properly satisfy abuse its discretion the execution. The and, thus, incorrectly 4. The dissent concludes that J.B. so will J.B. Hunt. Garnishment will legal remedy ignores provide appropriate Hunt has no that then Hunt with the terms of the trust are such that the Thorn- at law. While it understandable is contingent. tons' interest is Once the Thorn- that J.B. Hunt does not want to wait in line as creditor, quarterly payment they tons' due and that how the law this area of is alive, they then have will have a valid interest structured.
15
| ^complaint
alleged
further
the Hunt’s
of a creditor’s bill in these
hsuse
“present equitable
Thorntons’
interests
circumstances.
In
Maryland
Miller v.
Ca
312, 180
sualty Company,
future distributions” from
trusts “are
S.W.2d
(1944),
legal
interests and cannot be reached
581
court
ques
this
answered the
through
legal processes
garnish-
tion
posed
this appeal, specifically,
execution,”
therefore,
ment
there whether a creditor
attach a debtor’s
“no
remedies”
through
equitable
were
interest in a
through
trust
use of
“may subject
equita-
Miller,
Hunt
the Thorntons’
a creditor’s bill. In
Maryland
(MCC)
satisfy
ble interests” in the trusts to
the Casualty Company
obtained a
judgment.
complaint alleged
judgment
The
that a
in federal court in
against
Texas
“only
Locher,
“creditor’s bill” is the
means that Anne Wood
and a nulla bona re
exists for Hunt
to attach or otherwise
turn was made
execution issued on
judgment.
reach the Thorntons’
interests in that
Id. at
at
S.W.2d
future distributions” from the trusts.
582.
brought
MCC
suit in Arkansas based
relief,
his claim for
Hunt cited section 16- on the unsatisfied
federal judgment
Texas
66-418, asserting
313-14,
that the statute allowed and the return.
Id. at
180 S.W.2d
pur-
Hunt to institute the action for the
at 582. The complaint alleged that Locher
pose
subjecting
the Thorntons’
beneficiary
was the
of a trust
for and
interests in the trusts to the satisfaction of
her
during
natural
life.
Id. at
judgment.
complaint
The
asked that S.W.2d at 582. The complaint prayed that
finding
payments
the court enter an order
that Hunt
the annual
made to Locher
paid
had attached the Thorntons’
in-
should be
during
MCC
the life of
terests in future distributions from the
Locher until the Texas
should be
Id.,
trusts.
satisfied.
In so In 21 1065 in C.J.S. supporting may by hends case law from this court be reached creditors’ suit it in an are sufficient.” that a vested interest means of execution not 1ustated Newbern, Watkins, seized; in 21 David John J. & D.P. can C.J.S. estate be Marshall, Jr., 2 Ark. Practice Series: Ark. “Any inter- 1068 it is stated: beneficial (5th 33:9, § Prac. & Proc. at 725 personal prop- in Civ. est of a debtor real ed.2010). It been noted that erty by regular be reached has creditors’ which cannot equity in expressly not ex- suits or creditors’ bills bills process law and is by by creditors to reach and empted by may statute be reached a payment equi- of their debts so-called subjected payment creditors’ bill and debt; table or assets that cannot be ...” In 32 satisfaction of levy a at by an exhaustive reached and sale execution Ann. Cas. there is § law. 21 and Debtor subject “property note on the reachable C.J.S. Creditor (2006). bill”; by many creditors’ and cases from
jurisdictions are cited to sustain the Any beneficial interest of a debtor in may gen- statement to-wit: “It be stated or personal property real that cannot be erally that a under the interest of debtor by regular process reached of law and is may by a trust be reached a creditors’ expressly exempted by may not statute be placed beyond bill unless it has been | by subjected reached a bill and ^creditors’ by reach of provi- his creditors a valid payment or satisfaction of the debt. creating sion in the instrument general Id. 104. view of the rule that trust.” a creditor cannot come into equity to ob-
In 26 R.C.L.
the rule is stated:
tain satisfaction of his or her claim out of
trust,
“If property
conveyed
in
so that
by
not reachable
legal process
the trustee shall take the
prof-
rents and
until the creditor has exhausted his or her
apply
support
its and
them to the
remedies at law and shown them to be
designated
maintenance of
persons dur-
unavailing,
a creditor who seeks
(as
ing
distinguished
their lives
from a
must,
accomplish
purpose
relief to
fund),
right
support
mere
out of a
rule,
comply
order to
with that
not
right
beneficiaries have the
to the whole
obtain a
as a condition of the
of the fund thus created and not a mere
relief,
right to such
but also must be able
it;
right
out of
the trust
to show that an execution has been issued
trust,
spendthrift
created is
but
required by
in the form and manner
law
interest
the beneficiaries is as-
and has been returned unsatisfied in whole
signable
subjected
be
to the
part.
Am.Jur.2d
Bills
Creditors’
payment
by
of their
proceedings
debts
(1998).
general
rule is that when
in equity.”
the execution has been returned unsatis-
fied,
proof
this is sufficient
of the exhaus-
Miller,
326-27,
no remedy, is un-
available to reach future distributions