Colclazier & Assocs. v. Stephens

• Decision Date: 01 June 2012
• Docket Number: No. 108,591.,Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.,108,591.
• Citation: 2012 OK CIV APP 45,277 P.3d 1285
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma
• Parties: COLCLAZIER & ASSOCIATES, Plaintiff/Appellee, v. Craig STEPHENS and Chantal Stephens, Defendants, and Biscuit Hill Foodmart, 1606 S. Rock Creek Road, Shawnee, Oklahoma 74801, Garnishee/Appellant.

277 P.3d 1285

2012 OK CIV APP 45

COLCLAZIER & ASSOCIATES, Plaintiff/Appellee,

v. Craig STEPHENS and Chantal Stephens, Defendants,andBiscuit Hill Foodmart, 1606 S. Rock Creek Road, Shawnee, Oklahoma 74801, Garnishee/Appellant.

No. 108,591.Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.

Court of Civil Appeals of Oklahoma, Division No. 2.

April 5, 2012.

As Corrected June 1, 2012.

Appeal from the District Court of Seminole County, Oklahoma; Honorable Tim Olsen, Trial Judge.

REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.

Jerry L. Colclazier, Colclazier & Associates, Seminole, Oklahoma, for Plaintiff/Appellee.

Benjamin McCullar, Shawnee, Oklahoma, for Garnishee/Appellant.

JOHN F. FISCHER, Chief Judge.

¶ 1 Biscuit Hill Shell Foodmart, a sole proprietorship owned by Rod Goodman, appealsthe denial of its motion to vacate a default judgment entered in a garnishment proceeding instituted by Colclazier & Associates (Law Firm). The summons by which the district court may have acquired jurisdiction in the garnishment proceeding was served more than 180 days after it was issued. However, there has been no determination that good cause existed for the delay. Therefore, we reverse and remand for further proceedings.

BACKGROUND

¶ 2 On December 27, 2004, the Law Firm obtained a default judgment against its former clients Craig and Chantal Stephens in the amount of $11,046.78 for unpaid attorney fees in Case No. S–CS–2004–60. Although it appears that the Law Firm tried on numerous occasions to collect the judgment from the Stephenses, it was unsuccessful. On March 15, 2005, the Law Firm filed a garnishment affidavit. In that affidavit, the Law Firm asserted its belief that Biscuit Hill Shell Foodmart had property belonging to Craig Stephens. It appears that Craig Stephens was employed by Biscuit Hill from February through December 2005. The court clerk issued a garnishee summons to Biscuit Hill Shell Foodmart the same day the affidavit was filed. Attached to the summons was Garnishee's Answer/Affidavit, Claim for Exemption and Request for Hearing. The district court's docket indicates that the summons was given to the attorney for the Law Firm for service.

¶ 3 On March 21, 2006, attorney Jerry L. Colclazier filed an affidavit of service in which he stated that, on January 5, 2006, he had served an Application and Order to Garnishee to Answer Summons by certified mail on Rod and Tonya Goodman. A return receipt dated January 11, 2006, was attached to the affidavit and appears to have been signed by Rod Goodman. Colclazier filed an amended affidavit of service on April 14, 2006, in which he stated that the Garnishee Summons, Garnishment Affidavit, Garnishee's Answer/Affidavit and Claim for Exemption and Request for Hearing were the items served on January 5, 2006. It is undisputed that Craig Stephens no longer worked for Biscuit Hill at that time. Further, the only evidence in this record shows that when the Garnishee's Summons was served, the Goodmans confused it with a garnishment summons they had previously received from the Department of Human Services for child support owed by Craig Stephens. They had withheld from Stephens's pay check and remitted to DHS the appropriate funds for November and December 2005.

¶ 4 According to the district court's docket, the case was “stricken” on May 18, 2007, for failure to serve the garnishee. The court minute reflecting this action is not included in the record on appeal. On June 1, 2007, a proof of service was filed indicating that a private process server received an Application and Order to Garnishee to Answer Summons on September 6, 2006, and served the same on Rod and Tonya Goodman on September 11, 2006. No documents are attached to the proof of service. The only Application and Order to Garnishee to Answer Summons in the district court record was filed March 23, 2006. The Application, filed by the Law Firm, represents that garnishee Biscuit Hill Shell Foodmart was served with a Continuing Postjudgment Earnings Garnishment on January 11, 2006, but had failed to file an answer. The attached order states that the Application was heard and granted on March 21, 2006. The district court gave the garnishee seven days from the date of service to answer the garnishment summons. The district court also ordered the Law Firm to give the garnishee notice of the court's order by certified mail. The only evidence of service of the Application and Order is the proof of service filed on June 1, 2007. The proof of service shows that service was made on Rod Goodman's wife, Tonya Goodman, on September 11, 2006.

¶ 5 On June 12, 2007, the district court entered judgment by default against Rod and Tonya Goodman d/b/a Biscuit Hill Shell Foodmart. The district court found they were in default for failing to file an answer to the garnishment summons served on January 11, 2006, and failing to file an answer as directed in the court's March 23 order which had been served September 11, 2006. The amount of the judgment was $17,270.02.

¶ 6 On January 12, 2010, the Law Firm filed an Application for Hearing on Assets in the Stephens case (S–CS–2004–60). However, the style of the case listed Rod and Tonya Goodman as the defendants and omitted the Stephenses. The district court ordered the Goodmans to appear for a hearing on assets on February 4, 2010. That order appears to have been entered on January 19, 2010. However, the only entry on the court's docket relevant to service of the order shows that a summons was issued to the attorney for the Law Firm on February 24, 2010. On that same date, the Goodmans filed a petition to vacate the default judgment. On July 26, 2010, following a hearing at which the Goodmans testified, the district court denied the petition to vacate. The Goodmans now appeal the order denying their petition to vacate.¹

STANDARD OF REVIEW

¶ 7 The district court's disposition of a motion to vacate is reviewed for an abuse of discretion. Patel v. OMH Med. Ctr., Inc., 1999 OK 33, ¶ 20, 987 P.2d 1185, 1194. “An abused judicial discretion is manifested when discretion is exercised to an end or purpose not justified by, and clearly against, reason and evidence.” Id. An abuse of discretion standard requires appellate review of both issues of fact and the legal principles used to determine the correctness of the trial court's decision. Christian v. Gray, 2003 OK 10, ¶ ¶ 43, 45, 65 P.3d 591, 608–09. In garnishment proceedings “[t]he court shall render such judgment in all cases as shall be just to all of the parties and shall properly protect their respective interests....” 12 O.S.2011 § 1182.

ANALYSIS

¶ 8 Our review of the district court's order denying the garnishee's petition to vacate is determined ultimately by the validity of the 2007 default judgment entered against the garnishee. If that judgment is void, then the Law Firm cannot prevail. “A default judgment is void if the court did not have jurisdiction over the parties.” Ferguson Enters., Inc. v. H. Webb Enters., Inc., 2000 OK 78, ¶ 5, 13 P.3d 480, 482. “If the record does not reflect that personal service has been made on the defendant, the court lacks in personam jurisdiction over the defendant and any default judgment rendered thereon is void and subject to vacation.” Id., ¶ 11, 13 P.3d at 483.

While it is true that diligence of litigants in attending to their matters pending in the courts is of importance, and while it is a significant function of the courts that the litigation before them be determined and disposed of as rapidly as possible, it is also important that all litigants be given a reasonable opportunity to have their day in court, and to have their rights and liberties tried upon the merits. The latter is and should be the primary right of the parties and duty of the courts.

Beck v. Jarrett, 1961 OK 162, ¶ 10, 363 P.2d 215, 218.

¶ 9 The dispositive issue here is whether the March 2005 summons, on which the district court's jurisdiction depends, was timely and properly served. Absent effective service of the initial garnishment summons, even the district court's March 23, 2006 order directing the garnishee to answer was defective. Although that order was properly served, it was authorized only by section 1179 and obtained as a result of the affidavit Jerry Colclazier filed on April 14, 2006, wherein he stated he had mailed the required garnishment documents to the Goodmans and that the requested order was authorized by section 1179. Section 1179 provides, in part:

If any garnishee, having been duly summoned, shall fail to file and deliver or mail the answer as required by Sections 1172.2, 1178, 1178.1 or 1178.2 of this title ... the court shall enter an order to the garnishee to file and deliver or mail the answer.In order for a garnishee to be “duly summoned,” the garnishment summons:

[S]hall be served upon each of the garnishees, together with a copy of the judgment creditor's affidavit, a garnishee's answer form, notice of garnishment and request for hearing, and claim for exemptions, in the manner provided for in Section 2004 of [Title 12] and shall be returned with proof of service within ten (10) days of its date.

12 O.S.2011 § 1173.4(D).

¶ 10 First, it is undisputed that the Law Firm's March 2006 return of its purported January 2005 service was made more than ten days after the time required by section 1173.4(D). “Statutes circumscribing intervals during which pleadings may be filed have generally been construed to fix a limit beyond which the pleading may not be filed without permission.” Spears v. Preble, 1983 OK 8, ¶¶ 13–14, 661 P.2d 1337, 1341 (interpreting section 1175 of the garnishment statutes). “Where a pleading is filed out of time, without permission of the court, or agreement of opposing counsel, it may be treated as a nullity, otherwise acts regulating the time of pleading would be nugatory.” State Nat'l Bank v. Lowenstein, 1915 OK 892, ¶ 0, 52 Okla. 259,...