Thomas N. LEWIS, Appellant-Defendant, v. REX METAL CRAFT, INC., Appellee-Plaintiff.
No. 49A02-0501-CV-11
Court of Appeals of Indiana.
July 28, 2005.
OPINION
CRONE, Judge.
Case Summary
Thomas N. Lewis appeals the denial of his motion to invalidate execution of judgment and rescind garnishment order. We affirm.
Issues
Lewis raises two issues, which we restate as follows:
- Whether the trial court appropriately granted garnishment for a judgment that is over twenty years old; and
- Whether Rex Metal Craft, Inc. (“Rex Metal“) met applicable notice and/or leave requirements for garnishment.
Facts and Procedural History
From what we can discern,1 the facts are as follows. Rex Metal was granted a judgment2 against Lewis on December 14, 1982. On February 11, 1992, the court renewed the judgment for an additionаl ten years, “which ten-year period shall commence to run on December 14, 1992.” Appellant‘s Appendix at 5. On June 8, 2001, the court renewed Rex Metal‘s judgment “for an additional ten-year period commencing December 14, 2002.” Id. at 6.
On January 20, 2004, in a motion for proceedings supplemental, Rex Metal asserted that it “owns a judgment obtained in this court against [Lewis] on December 14, 1982, for the sum of $511,245.55, and costs.” Id. at 7. The motion named Heritage Community Bank and Bank of America as garnishee defendаnts. In a motion to dismiss Rex Metal‘s proceedings supplemental action, Lewis argued that
On May 18, 2004, the court issued a garnishment order requiring
that the following property of [Lewis], in the hands of the garnishee defendant, FCN BANK, N.A.,3 subject to execution to wit: the lesser of (1) $1,333,794.84, the unpaid amount of the judgment due from the garnishee defendant, FCN BANK, N.A., to [Lewis], as specified in the Notice of Garnishment Proceedings, or (2) the balance in the account on the date and at the time the garnishee defendant rеceived the plaintiff‘s Notice of Garnishment Proceedings, Summons and Order to Answer Interrogatories, Notice of Hearing and Interrogatories [“Service Time“], which shall be applied toward the satisfaction of said judgment.
AND IT IS FURTHER, ORDERED, ADJUDGED AND DECREED that said garnishee defendant, FCN BANK, N.A., be and it is hereby ordered and directed to pay to RUBIN & LEVIN, P.C.... forthwith the lesser of (1) the unpaid amount of the judgment or (2) the balance in the account at the Service
Time, to be applied toward the satisfaction of said judgment.
Id. at 13.
On May 27, 2004, Lewis filed his “Supplement of Points of Fact to Defendant‘s Motion to Dismiss and Sworn Statement of Residence,” in which he stressed: “The renewal or extensions of the judgment period is NOT the issue. The ONLY issue in [Lewis‘s] Motion to Dismiss, is the EXECUTION of the judgment.
On June 1, 2004, Lewis filed a “Motion to Invalidate Execution of Judgment and to Rescind Garnishment Order.” Id. at 18. Rex Metal responded. On June 28, 2004, the court denied Lewis‘s motion to dismiss the proceedings supplemental. The court continued the motion for proceedings supplemental indefinitely. See id. at 25.
On July 27, 2004, Lewis filed a notice of appeal of the order denying his motion to dismiss. A panel of this court dismissed Lewis‘s appeal without prejudice, explaining:
(1) A proceeding supplemental involves the right of the appellee to levy on the property of the judgment defendant. See McClure Oil Corp. v. Whiteford Truck Lines, 627 N.E.2d 1323, 1325 (Ind.Ct.App.1994).
(2) This issue has yet to be decided by the trial court.
(3) The trial court‘s denial of Appellant‘s motion to dismiss the proceeding supplemental simply had the effect of allowing Appellee‘s proceeding supplemental to move forward. The denial of the motion to dismiss did not dispose of any issues between the parties to the action.
(4) As nо final, appealable order has been issued in this cause, this Court is without jurisdiction to entertain this appeal.
Id. at 26.
On December 7, 2004, Lewis filed a “Motion for a Court Order and Judgment on Defendant‘s Open and Pending Motion Filed June 1, 2004.” Id. at 27. Two days later, the court issued an order denying Lewis‘s “Motion to Invalidate Execution of Judgment and to Rescind Garnishment Order.” Id. at 29.
Discussion and Decision
At the outset, we note: “Indiana law is well settled that a litigant who chooses to proceed pro se will be held to the same established rules оf procedure as trained legal counsel.” Diaz v. Carpenter, 650 N.E.2d 688, 691 (Ind.Ct.App.1995). Thus, we must hold Lewis to the same standards as an attorney. We further note that Rex Metal has elected not to submit an appellee‘s brief. When an appellee does not submit a brief, an appellant may prevail by making a prima facie case of error, a less stringent standard. Town and Country Ford, Inc. v. Busch, 709 N.E.2d 1030, 1032 (Ind.Ct.App.1999). Prima facie, in this context, is defined as “at first sight, on first appearance, or on the face of it.” Id. “The prima facie error rule protects this court and relieves it from the burden of controverting arguments advanced for reversal, a duty which properly remains with counsel for the appellee.” Id.
I. Twenty-year Time Period
Lewis contends that the trial court erred by “granting Rex Metal‘s order of garnish-
We first observe that there seems to be some confusion regarding execution and the equitable remedy5 of proceedings supplemental. Proceedings supplemental to execution are enforced by verified motion alleging that “the plaintiff owns the described judgment against the defendant” and that the “plaintiff has no cause to believe that levy of execution against the defendant will satisfy the judgment[.]”
Proceedings supplemental are a continuation of the underlying claim on the merits—not an independent action. Koors v. Great Southwest Fire Ins. Co., 538 N.E.2d 259, 260 (Ind.Ct.App.1989). As such, proceedings supplemental are initiated under the same cause number in the same court that entered judgment against the defendant. Kirk v. Monroe County Tire, 585 N.E.2d 1366, 1368 (Ind.Ct.App.1992). The validity of the underlying judgment has alreаdy been determined; thus, proceedings supplemental may progress without a showing that execution has commenced or would be unavailing. Arend, 737 N.E.2d at 1175 (citing Borgman, 681 N.E.2d at 217).
The proceedings are a nullity absent a valid judgment. Washburn v. Tippecanoe Office of Family and Children, 726 N.E.2d 361, 363 (Ind.Ct.App.2000). Thus, a reversal of the underlying judgment nullifies the proceeding supplemental. Evansville Garage Builders v. Shrode, 720 N.E.2d 1273, 1278 (Ind.Ct.App.1999), trans. denied. Even though proceedings supplemental are an extension of the underlying action, the parties cannot during their course collaterally attack the underlying judgment. De Later v. Hudak, 399 N.E.2d 832 (Ind.Ct.App.1980).
At a proceeding supplemental, it is the duty of the judgment debtor to pay the judgment or come forward with property so that execution may proceed. Generally, three types of relief are available to a judgment creditor through a proceeding supplemental: 1) the judgment debtor is required to appear before the trial court and be examined as to available property; 2) the judgment debtor is required to apply particular property to the satisfaction of the judgment; and 3) a third-party garnishee is joined as a рarty and is required to answer as to non-exempt property held by the garnishee for the debtor or an obligation owing from the third party to the debtor. See HARVEY, 4A IND. PRACTICE 18-23 (2003). Property subject to proceedings supplemental includes both real and personal property. Arend, 737 N.E.2d at 1176.
It has been stated that
Long ago, it was explained that
is not in any sense a limitation on the life of a judgment. It is merely a legislative declaration of a rule of evidence. A judgment less than 20 years of age is of itself prima facie proof of a valid and subsisting claim but under this rule a judgment more than 20 years оf age stands discredited, the lapse of that period of time being prima facie proof of payment. But in either case the presumption is rebuttable. Reddington v. Julian, 2 Ind. 224 [(1850)]; Barker v. Adams, 4 Ind. 574 [(1853)]; Bright v. Sexton, 18 Ind. 186 [(1862)].
Odell v. Green, 121 N.E. 304, 307, 72 Ind.App. 65, 75 (1918) (emphases added). Stated even more strongly, “[w]e find nothing in our statutes indicating an intention to utterly destroy judgments after the lapse of 20 years.” Odell v. Green, 122 N.E. 791, 791, 72 Ind.App. 65, 77 (Ind.App. 2 Div.1919) (opinion on rehearing).6
To avail oneself of the presumption of satisfaction of a judgment upon the passage of twenty years, a party “must plead payment.” Odell, 121 N.E. at 307, 72 Ind.App. at 78 (agаin, referring to section 307, now section
II. Leave of Court and Notification
Lewis next argues, “Rex Metal did not request or was not granted leave of Court to obtain an execution of judgment, nor did they give notice to Lewis of this execution of judgment[.]” Appellant‘s Br. at 6. He contends that the garnishment order was filed after he left court on May 18, 2004 and that he did not receive notice of the order until his bank sent him a letter.
Again, we look to the rule entitled, “Proceedings supplemental to execution:
Notwithstanding any other statute to the contrary, proceedings supplemental to execution may be enforced by verified motion or with affidavits in the court where the judgment is rendered alleging generally:
(1) that the plaintiff owns the described judgment against the defendant;
(2) that the plaintiff has no cause to believe that levy of execution against the defendant will satisfy the judgment;
(3) that the defendant be ordered to appear before the court to answer as to his non-exempt property subject to execution or proceedings supplemental to execution or to apply any such specified or unspecified property towards sаtisfaction of the judgment; and,
(4) if any person is named as garnishee, that garnishee has or will have specified or unspecified nonexempt property of, or an obligation owing to the judgment debtor subject to execution or proceedings supplemental to execution, and that the garnishee be ordered to appear and answer concerning the same or answer interrogatories submitted with the motion.
If the court determines that the motion meets the fоregoing requirements it shall, ex parte and without notice, order the judgment debtor, other named parties defendant and the garnishee to appear for a hearing thereon or to answer the interrogatories attached to the motion, or both.
The motion, along with the court‘s order stating the time for the appearance and hearing or the time for the answer to interrogatories submitted with the motion, shall be served upon the judgment debtor as provided in Rule 5, and оther parties and the garnishee shall be entitled to service of process as provided in Rule 4. The date fixed for appearance and hearing or answer to interrogatories shall be not less than twenty [20] days after service. No further pleadings shall be required, and the case shall be heard and determined and property ordered applied towards the judgment in accordance with statutes allowing proceedings supplementary to execution. In aid of the judgment or
execution, the judgment creditor or his successor in interest of record and the judgment debtor may utilize the discovery provisions of these rules in the manner provided in these rules for discovery or as provided under the laws allowing proceedings supplemental.”
From what we can tell, the court determined that Rex Metal‘s motion met the requirements of
HEARING HELD PLAINTIFF BY COUNSEL. DEFENDANT IN PERSON. GARNISHMENT DEFENDANT IN PERSON. GARNISHEE DEFENDANT TO PRODUCE W-2 FOR LAST 2 YEARS FOR DEFENDANT WITHIN 14 DAYS TO APPROVE AND ORDER ON BANK ACCOUNT. DEFENDANT‘S MOTION TO DISMISS PRO. SUPP. DIARIED 2 WEEKS FOR RESPONSE. DEFENDANT TO FILE MOTION FOR REGULAR JUDGE TO HEAR AND RULE ON MOTION.
FINAL ORDER OF GARNISHMENT FILED IN THE AMOUNT OF $1,333,794.84, INTERESTS, COST. PLUS.
Appellant‘s App. at 3. The next entry, dated May 24, 2004, states: GARNISHMENT SERVED BY CERTIFIED MAIL SERVICE ON 05/24/04 AT 11:59 P.M. Id. Hence, it appears that
To the extent that Lewis relies upon
(a) After the lapse of ten (10) years after:
(1) the entry of judgment; or
(2) issuing of an execution;
an execution can be issued only on leave of court, upon motion, after ten (10) days personal notice to the adverse party, unless the adverse party
is absent or a nonresident, or cannot be found. (b) When an execution is issued on leave of court under subsection (a), service of notice may be made by publication, as in an original action, or in a manner as the court directs. Leave shall not be given unless it is established by the oath of the party or other satisfactory proof that the judgment or part of the judgment remains unsatisfied and due.
Because proceedings supplemental are a continuation of the original action, rather than an “action” on a judgment of a court оf record, they are not subject to the ten-year statute of limitations within
Even if viewed as an execution of the judgment, Rex Metal‘s proceedings supplemental would not be barred because Lewis does not challenge thе renewals or extensions of the underlying judgment. See Appellant‘s App. at 14 (Supplement of Points of Fact to Defendant‘s Motion to Dismiss and Sworn Statement of Residence: “The renewals or extensions of the judgment period is NOT the issue. The ONLY issue in the Defendant‘s Motion to Dismiss, is the EXECUTION of the judgment.“). Pursuant to the most recent renewal, the judgment does not expire until December 14, 2012. Accordingly, the proceedings supplemental, as a continuation of the original action, would be permitted at least9 through December 14, 2012.
Affirmed.
DARDEN, J., concurs.
MATHIAS, J., concurs with opinion.
MATHIAS, Judge, concurring.
The majority opinion provides an excellent discussion of the somewhat arcane
First, there are two important statutory time periods affecting judgments that are not renewed pursuant to
When a judgment rеquires the payment of money or delivery of real or personal property, the judgment may be enforced by execution12 as provided by Indiana Code chapter 34-55-1.
An execution must (1) issue in the name of the state, (2) be directed to the sheriff of the county, (3) be sealed with the seal of the court, and (4) be attested by the clerk of the court.
If an execution against the property of the judgment debtor is returned unsatisfied, or upon verified motion, a party may initiate a proceeding supplemental.
Throughout the ten-year period following judgment, a judgment lien attaches to the debtor‘s real estate located in the county where the judgment was entered or is later filed.
Because of the confusing complexity of execution and proceedings supplemental, and the added uncertainty caused by the two attendant decade-long time periods, most sophisticated judgment creditors “renew” their judgmеnts shortly before the expiration of the first (and each successive) decade after judgment.13 See Hinds v. McNair, 153 Ind.App. 473, 477, 287 N.E.2d 767, 769 (1972); see also Willette v. Gifford, 46 Ind.App. 185, 189, 92 N.E. 186, 187 (1910) (the subsequent renewal of that judgment kept it alive). Such renewal actions may take place ad infinitum. Town of New Chicago v. First State Bank of Hobart, 90 Ind.App. 643, 644, 169 N.E. 56, 57 (Ind.Ct.App.1929).
It is important to note that Lewis did not challenge Rex Metal‘s renewals of the underlying judgment. Op. at 821. Rex Metal‘s renewals were accomplished by way of motion practice under the cause number of the underlying action rather than by way of a separate cause of аction. Appellant‘s App. pp. 5-6. I believe that renewal of judgment exists only as a separate action that must be filed as a new and separate cause of action on the original judgment. See Stookey v. Lonay, No. 03-2208, 104 Fed.Appx. 583, 584, 2004 U.S.App. LEXIS 13598 at *2 (7th Cir. June 29, 2004) (citing Town of New Chicago, 90 Ind.App. at 643, 169 N.E. at 57) (Indiana law considers a judgment to be a debt of record on which a “separate” action may be based.). There are many statutory and public policy reasons to “renew” judgments in this manner, but as Rex Metal‘s renewal procеss was not challenged, there is no need to consider them at this time.
Under the facts and circumstances of this case, Rex Metal needed no permission of the court to conduct proceedings supplemental.
Notes
Hinds, 235 Ind. at 40, 129 N.E.2d at 558 (1955).It is true that a lien of a judgment expires in ten years and the lien of execution expires on its return date, but we are not concerned here with the liens of judgments and executions. Proceedings supplemental are brought solely for the purpose of subjecting property allegedly belonging to a judgment debtor to the satisfaction of the judgment debt, not to a lien. An outstanding execution is a condition precedent to the filing of a proceeding supplemental under the statute, but we find no valid reason for holding that the action dies unless it is fully and finally disposed of before the return date of the execution or the expiration of the judgment lien. Yeager v. Wright, 1887, 112 Ind. 230, 13 N.E. 707.
Such a rule would put it in the power of any defendant to defeat the basic purpose of proceedings supplemental by delaying tactics. We hold, therefore, that the expiration of the judgment lien or the lien of the execution pending the proceedings supplemental does not terminate such proceedings and make them ineffectual.