Aacen v. San Juan County Sheriff's Dept., 90-2036

• Decision Date: 05 September 1991
• Docket Number: No. 90-2036,90-2036
• Citation: 944 F.2d 691
• Parties: JoAnn AACEN, for herself and on behalf of others similarly situated, Plaintiff-Appellant, v. SAN JUAN COUNTY SHERIFF'S DEPARTMENT; Doug Brown, in his individual capacity; Jack A. Richards, in his individual and official capacities; Billy Hillgartner, in his official capacity and on behalf of a class of others similarly situated; Gregory T. Ireland, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 691

944 F.2d 691

60 USLW 2202

JoAnn AACEN, for herself and on behalf of others similarly

situated, Plaintiff-Appellant, v. SAN JUAN COUNTY SHERIFF'S DEPARTMENT; Doug Brown, in his

individual capacity; Jack A. Richards, in his individual

and official capacities; Billy Hillgartner, in his official

capacity and on behalf of a class of others similarly

situated; Gregory T. Ireland, Defendants-Appellees.

No. 90-2036.

United States Court of Appeals, Tenth Circuit.

Sept. 5, 1991.

Stephen T. LeCuyer of Mettler & LeCuyer, P.C., Albuquerque, N.M., for plaintiff-appellant.

Robin D. Strother of Tansey, Rosebrough, Gerding & Strother, P.C., Farmington, N.M., for defendants-appellees.

Before MOORE, ANDERSON and BRORBY, Circuit Judges.

STEPHEN H. ANDERSON, Circuit Judge.

JoAnn Aacen brought a civil rights action against the San Juan County Sheriff's Department and various law enforcement personnel claiming that she did not receive due process when her truck, which qualified for an exemption from execution, was seized by the sheriff and sold in satisfaction of a judgment against her. The court dismissed her action, holding that she received meaningful notice under the Fourteenth Amendment regarding her personal property exemptions. On appeal, Aacen asserts that the notice she received was insufficient for due process purposes and that certain New Mexico post-judgment execution statutes are unconstitutional because: (1) they fail to require adequate notice to a judgment debtor with respect to seizures of exempt property; (2) they fail to provide sufficient notice of state property exemptions; (3) they also fail to require notice of the means for asserting exemption rights; and, (4) that the relevant statutes fail to require a prompt hearing to resolve exemption claims. We affirm in part and reverse in part.

I. BACKGROUND

In November 1984, JoAnn Aacen purchased a truck from Ziems Motor Co. for $10,700, for which she made monthly payments. After several months, she returned the truck to Ziems. She was current on her payments at that time. On November 8, 1985, Ziems sued Aacen for the deficiency balance remaining after resale of the truck. Although served with the summons and complaint, Aacen took no action and the district court entered a default judgment against her in the amount of $3,946.91. In the meantime, Aacen had purchased another truck for $1,500. On January 3, 1986, the court clerk issued a Writ of Execution to the San Juan County Sheriff, directing the Sheriff to seize Aacen's property to satisfy the judgment. Sheriff Jack A. Richards served the Writ of Execution on Aacen on January 10 and advised her that she had until the following Friday to pay the creditor to avoid seizure of her pickup. ¹ Aacen, having no money and being recently unemployed, knew that she could not pay the creditor and consequently removed her personal possessions from the vehicle on Friday morning. Later that day, without further notice, the truck was taken by Richards.

Under New Mexico law, a number of exemptions are available to judgment debtors. New Mexico Stat.Ann. § 42-10-2 exempts limited amounts of cash, jewelry and tools of the trade, as well as one motor vehicle up to $4000 in value, from execution. ² Also, if the debtor does not own a home, she may claim an exemption in lieu of homestead, N.M.Stat.Ann. § 42-10-10, to protect an additional $2000 worth of personal property.

Aacen's truck could have been exempted from execution either under the in-lieu-of-homestead exemption or the motor vehicle exemption. However, Aacen never asserted her exemption rights in the truck and never contacted the Sheriff's Department or the court in an attempt to get her truck back. She did call a friend, an employee of Ziems, to see "if there was anything [she] could do." Tr. at 28. He said no. The pickup was consequently sold by Richards on February 25, 1986 to Ziems in a public sale in partial satisfaction of the judgment against Aacen. Later that year, Aacen learned that there was some possibility that she could get her pickup back and went to a legal aid office for assistance. She then brought this case.

Aacen claimed at trial that she did not receive notice of any exempt property at or before the time of seizure. However, the trial court found that she did receive a "Notice of Exemption in Lieu of Homestead" ["Notice"], as required by New Mexico law for that exemption, and that she failed to claim that exemption although she qualified for it. The Notice required a signature acknowledging receipt of the "written notice to claim an exemption in lieu of homestead, in addition to any other exemptions, in the amount of $2000" and allowed the debtor to designate the property she sought to be protected by the exemption. The Notice also advised the debtor to "notify the Court of Origin" if she wished to claim any exemptions. New Mexico law does not require additional notice of the availability of other exemptions and Aacen received none.

The court held that the "[w]rit of execution and accompanying notice served on [Aacen] constituted meaningful notice under the due process clause of the Fourteenth Amendment," Tr. at 91, and denied Aacen declaratory, injunctive and monetary relief. On appeal, Aacen does not challenge the court's finding that she received the Notice of Exemption in Lieu of Homestead. She reurges only her contention that she did not receive sufficient notice about her motor vehicle exemption and that New Mexico's post-judgment execution statutes are unconstitutional because they do not require notice of seizure, the availability of other exemptions (specifically, the exemption of vehicles and other specified property) or hearings, nor do they require prompt procedures for claiming such exemptions. ³

II. DUE PROCESS

This case presents an issue of procedural due process and thus raises two questions. First, we must determine whether Aacen possesses a property right protected by due process. Other circuits have uniformly treated garnishment exemptions as property interests entitled to due process protections. Reigh v. Schleigh, 784 F.2d 1191, 1194-96 (4th Cir.1986); McCahey v. L.P. Investors, 774 F.2d 543, 548-50 (2d Cir.1985); Dionne v. Bouley, 757 F.2d 1344, 1350 (1st Cir.1985); Finberg v. Sullivan, 634 F.2d 50, 56 (3d Cir.1980) (en banc); Brown v. Liberty Loan Corp. of Duval, 539 F.2d 1355, 1365 n. 9 (5th Cir.1976), cert. denied, 430 U.S. 949, 97 S.Ct. 1588, 51 L.Ed.2d 797 (1977). No circuit has held to the contrary. We agree with our sister circuits and hold that by creating exemptions from execution, New Mexico granted judgment debtors a property interest in retaining their exempt property. ⁴ While the state need not grant such exemptions, once given, the property rights they create are entitled to due process protection. See Arnett v. Kennedy, 416 U.S. 134, 94 S.Ct. 1633, 40 L.Ed.2d 15 (1974) (six justices holding that deprivations of state entitlements must satisfy due process requirements); Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Goldberg v. Kelly, 397 U.S. 254, 262 & n. 8, 90 S.Ct. 1011, 1018 & n. 8, 25 L.Ed.2d 287 (1970) (procedural due process is applicable to deprivation of benefits to which plaintiff is statutorily entitled).

Second,

to determine whether a constitutional violation has occurred, it is necessary to ask what process the State provided, and whether it was constitutionally adequate. This inquiry would examine the procedural safeguards built into the statutory or administrative procedure of effecting the deprivation, and any remedies for erroneous deprivations provided by statute or tort law.

Zinermon v. Burch, 494 U.S. 113, ----, 110 S.Ct. 975, 983, 108 L.Ed.2d 100 (1990) (emphasis omitted). We turn now to that question.

A. The Analysis:

The defendants argue that Endicott-Johnson Corp. v. Encyclopedia Press, Inc., 266 U.S. 285, 45 S.Ct. 61, 69 L.Ed. 288 (1924), controls here. In that case, the Supreme Court held that a judgment debtor is not constitutionally entitled to notice and a hearing prior to the issuance and execution of a writ of garnishment. Rather, the court found that "after the rendition of the [underlying] judgment [the debtor] must take 'notice of what will follow.' " Id. at 288, 45 S.Ct. at 62. However, we agree with the subsequent cases which find that Endicott did not consider the existence of exempt property that might nevertheless be erroneously seized if some post-judgment notice and hearing are not accorded to the debtor. McCahey v. L.P. Investors, 774 F.2d at 547-48; Dionne v. Bouley, 757 F.2d at 1351-52; Finberg v. Sullivan, 634 F.2d at 56-57. ⁵ "Endicott's rationale assumed that the judgment resolved all outstanding issues between the debtor and the creditor, collection being a ministerial act. However, the judgment does not resolve whether certain property is exempt." McCahey v. L.P. Investors, 774 F.2d at 548. That is, while the judgment resolves the issue whether a debt exists, it does not address whether the creditor can seek satisfaction of the debt from this particular asset. Dionne v. Bouley, 757 F.2d at 1352. In addition, Endicott addressed pre-execution notice of seizure and hearing, which are not at issue here. Rather, Aacen seeks only to be notified of her exemptions and to be heard after execution of the writ. Thus, Endicott is not dispositive of this case.

The circuit courts reviewing the constitutional sufficiency of notification and hearing procedures in post-judgment garnishment proceedings have universally employed the balancing test summarized in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). ⁶ McCahey v. L.P. Investors, 774 F.2d at 548-49; Dionne v. Bouley, 757 F.2d at 1350; Finberg v. Sullivan, 634 F.2d at 58; Brown v. Liberty Loan Corp. of Duval, 539 F.2d at 1365 (although Mathews had not yet been decided, the court used a similar balancing analysis). [I]dentification of the specific...