Chandler-Frates & Reitz v. Kostich

• Citation: 1981 OK 74,630 P.2d 1287
• Decision Date: 30 June 1981
• Docket Number: CHANDLER-FRATES,No. 53019,53019
• Parties: & REITZ, a Co-partnership of Leonard A. Reitz and Paul Reitz, Appellee, v. Walter KOSTICH, d/b/a Rivair Flying Service, Appellant.
• Court: Supreme Court of Oklahoma

Page 1287

630 P.2d 1287

1981 OK 74

CHANDLER-FRATES & REITZ, a Co-partnership of Leonard A.

Reitz and Paul Reitz, Appellee, v. Walter KOSTICH, d/b/a Rivair Flying Service, Appellant.

No. 53019.

Supreme Court of Oklahoma.

June 30, 1981.

Appeal from the District Court of Tulsa County; David Winslow, Trial judge.

Appellant appeals from the refusal of the trial court to sustain his motion to quash and plea to the jurisdiction in a proceeding for a hearing on assets. It is asserted that the underlying judgment was dormant because of the failure of appellee to issue a writ of execution within five years of the date of the last execution as required by 12 O.S.1971 § 735.

REVERSED.

Eagleton, Eagleton & Owens, Inc. by Ben K. McGill, Tulsa, for appellee.

Eric E. Anderson, Tulsa, for appellant.

HODGES, Justice.

The issue on appeal is whether a judgment has become dormant pursuant to 12 O.S.1971 § 735 ¹ for failure to issue execution on it within five years of the last execution. The appellee, Chandler-Frates & Reitz, an insurance agency, paid insurance premiums on behalf of the appellant, Walter Kostich, d/b/a/ Rivair Flying Service, a fixed aircraft base operator. After Kostich failed to reimburse the agency for the premiums, on January 5, 1972, the agency obtained a $4,395.67 judgment against him, together with interest at the rate of ten percent per annum from August 1, 1968, and judgment for $194.15 with interest thereon at the rate of ten percent per annum from February 3, 1969. On January 17, 1972, the agency filed a writ of execution which was returned "no property found." Chandler-Frates attempted to collect its judgment from Kostich by conducting hearings on assets, initiating garnishment proceedings and negotiations with Kostich. The agency was successful in recovering a portion of the judgment. On October 17, 1975, Kostich filed an application to determine the amount due under the judgment. The court entered an order on August 23, 1976, in response to the application. The judgment was modified because the court found prejudgment interest had erroneously been granted at the rate of ten percent per annum ² instead of at six percent as provided by 15 O.S.1971 § 266. ³ The court determined that it had been "without jurisdiction" to enter the judgment. The 1972 judgment was modified and reduced by $815.88.

Chandler-Frates sought to execute on the judgment on February 16, 1977. The writ of execution was returned "no property found." After attempts were made to enforce the judgment, another hearing on assets was scheduled. Kostich filed a motion to quash and plea to the jurisdiction. He asserted that the judgment was dormant and had been extinguished pursuant to 12 O.S.1971 § 735. The court denied his motion.

The determinative question is whether the 1976 order adjusting the interest rate constituted a correction of the initial Journal Entry or was it a rendition of a subsequent judgment. If the court corrected the judgment, the 1977 execution was untimely because the judgment had become dormant by operation of law. If the subsequent modification was a vacation of a void judgment and entry of a new judgment, the judgment is still viable.

I

Although the trial court found it lacked jurisdiction to assess prejudgment interest at the rate of ten percent, what it lacked, in fact, was the authority to do so. A similar situation was presented in the case of Kubatzky v. Pittsburg Plate Glass Co., 119 Okl. 236, 249 P. 412, 415 (1926). In Kubatzky, the trial court had foreclosed a mechanic's and materialman's lien and set the rate of post-judgment interest at ten percent. ⁴ Although the case was reversed on other grounds, the Court said:

"While under the pleadings the court might have rendered judgment for interest from the date the account was due, had the evidence and the law sustained such finding, the court was without authority to set such rate of interest above 6 percent per annum."

The record reveals that the judge imposed the exact amount claimed by the agency. The record also reflects that these payments were past due prior to the commencement of the action. The date from which and to which interest should be computed is clearly ascertainable. Under these circumstances, the liability for interest is fixed by law and is not dependent on any facts submitted to the court. ⁵ Where the court errs and imposes a rate of interest which exceeds the legally allowable interest rate permitted by statute, the judgment is subject to reformation to allow the proper rate of interest to be imposed without vacating the original judgment. ⁶ The proper assessment of interest on a final judgment, at the time judgment was entered, (unless otherwise provided by contract) bore interest at the rate of ten percent from the date of entry and at six percent from the date due, as a matter of law. It is not necessary to set out this in a judgment. ⁷ The entry of the order correcting the balance due under the judgment was merely a clerical act, and the dormancy statute continued to run on the original judgment. ⁸

II.

The appellant urges that the trial court erred in failing to find the judgment had become dormant, and that the interim order tolled the running of the five year period provided by 12 O.S.1971 § 735.

In the absence of a statute to the contrary a partial payment will not prevent the running of a dormancy statute. ⁹ Similarly, ancillary proceedings such as hearings on assets and garnishment proceedings do not prolong the life of a judgment, in the absence of the issuance of a writ of execution to enforce the judgment within the statutory period. ¹⁰

Actions on judgments are frequently limited by specific statutes which proscribe any actions after the lapse of a certain number of years following the rendition of the judgment or the issuance of the last execution upon it. There was no judgment lien at common law. In granting a right which did not exist at common law, the legislature can prescribe certain conditions which must be met by all judgment creditors if dormancy is to be prevented and the lien of a judgment to be continued. There is no limitation other than that of a dormancy statute upon the effective duration of a judgment. A statute prescribing limitations in actions on judgments is a restriction on the common law right of action on a judgment, ¹¹ and general statutes of limitation including exceptions imposed thereby have no application to either actions or judgments or the limitation period prescribed specifically for judgments. ¹²

This Court held in State v. Sterling, 198 Okl. 398, 179 P.2d 125, 126 (1947) that there is a clear distinction between a statute of limitations and a dormancy statute. A statute of limitation is one of repose and the holder of a right of action cannot, by any act on his part, disturb the quiescence produced by the running of the period of limitation; while a dormancy statute constitutes a condition imposed upon the holder of a judgment which adheres to, and is a part of, the judgment. Under 12 O.S.1971 § 735, the judgment becomes dormant if no execution is issued within five years of the entry of the judgment or if five years intervene from the date of the last execution issued on the judgment and the time of suing out another writ of execution on the judgment. ¹³

The provisions of 12 O.S.1971 § 735 must be strictly construed. ¹⁴ Although several attempts were made to satisfy the judgment by garnishment proceedings and asset hearings, these attempts did not comply with the statutory mandate requiring issuance of execution. ¹⁵ Because of the failure of the agency to issue execution on its judgment during the five years which intervened from the date of the last issuance of execution, the judgment became dormant on January 17, 1977.

The appellant requests that the cause be reversed and remanded to the trial court with instructions to order the appellee to return to the appellant any and all sums paid by him on the judgment since January 17, 1977. We find this is a separate cause of action which has not been litigated and is not a proper issue for consideration in this appeal.

REVERSED.

LAVENDER, DOOLIN and HARGRAVE, JJ., and WILSON and BOX, S.JJ., concur.

IRWIN, C. J., BARNES, V. C. J., and OPALA, J., dissent.

WILSON, S. J., sitting in place of WILLIAMS, J., excused.

BOX, S. J., sitting in place of SIMMS, J., disqualified.

OPALA, Justice, dissenting:

The court holds that a January 5, 1972 judgment modified, on debtor's application, by a $815.88 reduction effected on August 23, 1976 became unenforceable by operation of the dormancy statute, 12 O.S.1971 § 735, ¹ five years from January 17, 1972 the date initial execution was issued on the judgment's original version. I cannot join in the court's pronouncement.

I.

This appeal is being prosecuted from the trial court's decision which denies the debtor's motion to quash an order requiring him to appear and answer as to assets and his "plea to the jurisdiction". The post-judgment action sought to be reviewed here is clearly interlocutory. Because it lacks an immediately injurious impact on his property, it is not deemed to affect a debtor's "substantial rights" within the meaning of 12 O.S.1971 § 953. The decision is hence regarded as not appealable "prior to a determination and final order in the proceeding". We so held in Weaver v. Fourth National Bank of Tulsa, Okl., 263 P.2d 194 (1953). Tendered for our review in Weaver was a denial of the debtor's "motion to vacate" an order requiring him to appear and disclose assets. The order before us denies a "motion to quash" like process. It disposes of a procedural variant that, in the context presented, is clearly but the functional equivalent of the Weaver "motion to vacate". The debtor's added "plea to the jurisdiction" has no independent significance here since both the motion and the plea were anchored on the very same ground the passage of five years from the issuance of...