422 542, 228 306, Nc v. 1988 542 422 542 228 306 Nc Hybrids v. Growers Seed Association

• Decision Date: 21 April 1988
• Docket Number: No. 86-359,86-359
• Parties: Page 542 422 N.W.2d 542 228 Neb. 306 NC + HYBRIDS, a Nebraska Corporation, Appellant, v. GROWERS SEED ASSOCIATION, a Texas Corporation, Appellee. Supreme Court of Nebraska
• Court: Nebraska Supreme Court

Page 542

422 N.W.2d 542

228 Neb. 306

NC + HYBRIDS, a Nebraska Corporation, Appellant v GROWERS SEED ASSOCIATION, a Texas Corporation, Appellee.

No. 86-359.

Supreme Court of Nebraska.

April 21, 1988.

Syllabus by the Court

1. Garnishment. Garnishment is a legal, not equitable, remedy unknown at common law and is a purely statutory remedy.

2. Garnishment. Because garnishment is a creature of statute, garnishment proceedings are necessarily governed by statutory provisions and specifications. Courts may not allow garnishment proceedings to follow any course other than that charted by the Legislature.

3. Garnishment: Pleadings. If a garnisher is dissatisfied with a garnishee's answer but does not controvert or traverse the answer given, as afforded by Neb.Rev.Stat. § 25-1030 (Reissue 1985), then the garnishee's answer is the only filed pleading containing allegations or statements about property, funds, or credits of a judgment debtor, a solitary pleading which is taken as true and conclusive.

4. Garnishment. When a plaintiff institutes a garnishment as a statutory remedy in aid of execution to satisfy a judgment, the plaintiff is bound by the mandatory provisions and consequences prescribed by the garnishment statutes.

5. Res Judicata. The doctrine of res judicata is based on the principle that a final judgment on the merits by a court of competent jurisdiction is conclusive upon the parties in any later litigation involving the same cause of action.

6. Res Judicata. Res judicata is founded on a policy favoring termination of an action by preclusion or prevention of subsequent litigation on the same cause.

7. Garnishment. While garnishment affords the plaintiff a remedy or means to satisfy a judgment, the garnishment statutes also embody a remedy and mechanism for the garnishee to obtain resolution of a question concerning the garnishee's liability and thereby avoid unnecessary and sometimes oppressive litigation.

8. hGarnishment: Pleadings: Judgments. When a garnishee answers and denies an obligation or indebtedness to the judgment debtor, but the plaintiff fails to contest, controvert, or traverse such denial by the garnishee, a subsequent judgment of discharge, as the result of the plaintiff's failure to respond, is a judgment on the merits as an adjudication of the garnishee's liability to the plaintiff for the obligation or indebtedness to the judgment debtor which is the subject of the garnishment proceeding.

Terry R. Wittler of Cline, Williams, Wright, Johnson & Oldfather, Lincoln, for appellant.

J. Scott Paul of Boland, Mullin & Walsh, Omaha, for appellee.

BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

SHANAHAN, Justice.

This appeal arises out of garnishment proceedings instituted by NC + Hybrids after NC + Hybrids v. Growers Seed Assn., 219 Neb. 296, 363 N.W.2d 362 (1985) (NC + 's previous appeal and unsuccessful effort to obtain reversal of an order discharging the garnishee insurance company ("Booker"), which had issued its policy to the judgment debtor (Growers Seed Association), indemnifying against damages sustained by NC +). As noted in our opinion disposing of NC + 's previous appeal, NC + served garnishment interrogatories on Booker in 1982. In answers to the interrogatories, Booker admitted existence of its policy, but claimed that full payment had been made in accordance with the policy and denied any obligation for further payment under its policy. Because NC + failed to apply for a determination of Booker's liability within 20 days after the garnishee's answers to NC + 's interrogatories, the district court discharged Booker from the garnishment proceedings. Neb.Rev.Stat. § 25-1030 (Reissue 1985), which was involved in NC + 's previous appeal, provided in part The answer of the garnishee, if one has been filed, and the application for determination of the liability of the garnishee shall constitute the pleadings upon which trial of the issue of the liability of the garnishee shall be had. If the plaintiff fails to file such application within twenty days, the garnishee shall be released and discharged.

In affirming the garnishee's discharge from the proceedings, we stated in NC + Hybrids v. Growers Seed Assn., supra at 299-302, 363 N.W.2d at 365-66:

Garnishment is a legal, not equitable, remedy unknown at common law and is a purely statutory remedy....

....

In view of the nature of garnishment demanding an expeditious disposition of proceedings, it is reasonable that the Nebraska Legislature sought to protect a garnishee from often unnecessary and sometimes oppressive litigation. [Citation omitted.] To achieve prompt disposition the Legislature has specified a relatively short time for counteraction by a judgment creditor or garnisher in the event of any dissatisfaction with a garnishee's disclosure contained in answers to interrogatories, namely, a written application filed within 20 days in order to determine liability where a garnishee's answers negate a debt, property, or credit due the judgment debtor from the garnishee.

... The answers of the garnishee and the controverted answers or factual allegations in the garnisher's application constitute the pleading for disposition of the liability issue under § 25-1030....

....

If a garnisher is dissatisfied with a garnishee's answer but does not controvert or traverse the answer given, the garnishee's answer is the only filed pleading containing allegations or statements about property, funds, or credits of a judgment debtor, a solitary pleading which is taken as true and conclusive....

... Because garnishment is a creature of statute, garnishment proceedings are necessarily governed by statutory provisions and specifications. Courts may not allow garnishment proceedings to follow any course other than that charted by the Legislature.

In December 1985, approximately 10 months after issuance of our opinion in NC + Hybrids, supra, NC + served the insurance company, Booker, with garnishment interrogatories directed toward the same insurance policy which was the subject of the garnishment proceedings involved in NC + Hybrids v. Growers Seed Assn., supra. Booker filed a "Motion to Quash or in the Alternative, Motion for Summary Judgment," alleging that the previous garnishment proceeding had been terminated by discharge of the garnishee and NC + 's interrogatories served in the subsequent garnishment proceeding are the same as those in the prior garnishment proceeding.

The district court sustained Booker's motion and struck NC + 's garnishment interrogatories served in 1985.

In its assignment of error, NC + contends: "The district court incorrectly held that dismissal of a prior attachment and garnishment which was based on procedural grounds, and not upon the merits of the action, was res judicata and barred any subsequent effort by the judgment creditor to recover from the garnishee." (Emphasis in original.)

Booker claims that the doctrine of res judicata justifies the district court's order striking NC + 's interrogatories.

In Snyder v. Cox, 1 Wash.App. 457, 462 P.2d 573 (1969), the plaintiff served garnishment interrogatories on the insurance company which had issued its policy to the defendant judgment debtors. In answer to the plaintiff's interrogatories, the insurance company denied it was indebted to the defendants. Snyder failed to controvert the insurance company's denial of indebtedness. Construing a garnishment statute with provisions substantially similar to § 25-1030, the Snyder court concluded that a plaintiff's traverse of the garnishee's denial of indebtedness was indispensable for further proceedings to determine the garnishee's liability and remarked:

A review of the [garnishment] statutes indicates that a plaintiff is furnished a valuable remedy provided he complies with certain mandatory procedures. Inasmuch as compliance with the procedures has been declared mandatory, it is logical to conclude the legislature intended that a defendant's remedy for plaintiff's noncompliance have an equally imperative result.

1 Wash.App. at 461, 462 P.2d at 576.

Thus, when a plaintiff institutes a garnishment as a statutory remedy in aid of execution to satisfy a judgment, the plaintiff is bound by the mandatory provisions and consequences prescribed by the garnishment statutes. See, NC + Hybrids v. Growers Seed Assn., 219 Neb. 296, 363 N.W.2d 362 (1985); Snyder v. Cox, supra.

"As a general rule, the word shall is considered mandatory and is inconsistent with the idea of discretion." NC + Hybrids v. Growers Seed Assn., supra at 302, 363 N.W.2d at 366. The words release and discharge have relatively popular and generally accepted meanings. Release means "to relieve from something that confines, burdens, or oppresses." Webster's Third New International Dictionary, Unabridged 1917 (1981). Discharge means "to relieve of a charge, load, or burden ... to free from something that burdens ... release from an obligation." Id. at 644.

We note that garnishment statutes provide for a trial as in any civil action if the plaintiff has filed an application for determination of the garnishee's liability and has properly notified the garnishee and the judgment debtor ("the def...