Clendenin Lumber and Supply Co., Inc. v. Carpenter

Decision Date08 July 1983
Docket NumberNo. 15701,15701
Citation172 W.Va. 375,305 S.E.2d 332
CourtWest Virginia Supreme Court
PartiesCLENDENIN LUMBER AND SUPPLY CO., INC., a Corp. v. Robert L. CARPENTER.

Syllabus by the Court

1. The phrase "to another" as used in the definition of an assignment of earnings under W.Va.Code, 46A-2-116(2)(b) [1974], includes an employer when that employer is also the creditor of the employee.

2. " 'A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.' Syl. pt. 1, Karnell v. Nutting, 166 W.Va. 269, 273 S.E.2d 93 (1980) citing syl. pt. 3, Aetna Casualty and Surety Co. v. Federal Insurance Company of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963)." Syl. pt. 1, Perlick & Co. v. Lakeview Creditor's Trustee Committee, 171 W.Va. 195, 298 S.E.2d 228 (1982).

Charles E. Hurt, Charleston, for appellee.

Robert Lamont, West Virginia Legal Services Plan, Charleston, for appellant.

McHUGH, Justice:

This action is before this Court upon the appeal of Robert L. Carpenter, appellant and defendant below, (hereinafter "Carpenter"), from an order entered on March 22, 1982, by the Circuit Court of Roane County wherein Carpenter was ordered to pay Clendenin Lumber and Supply Company, Inc., appellee and plaintiff below, (hereinafter "Clendenin"), the sum of $789.97 pursuant to various credit transactions with Clendenin. This Court has before it the petition for appeal, all matters of record and the briefs and oral argument of counsel.

Clendenin is a West Virginia corporation engaged in the business of retail and wholesale marketing of lumber and hardware products. In regard to its employees, it maintains a policy of extending credit to them when they desire to purchase goods from Clendenin.

Carpenter was an employee of Clendenin and as such, was permitted, along with the other employees, to charge items that he purchased from Clendenin. Carpenter took advantage of this policy and on three separate occasions charged various items to his account. On September 30, 1977, Carpenter charged a net total of $112.04. On December 24, 1977, he charged goods totalling $715.71 and finally, on April 13, 1979, he charged goods worth $119.19. The top right corner of each invoice contained the following language: "Terms: Net 30 Days. After 30 days there will be a Finance Charge of 1 1/2% per month which is an annual percentage rate of 18%." On December 1, 1978, the 30 day period was changed to 90 days.

Between October 6, 1977, and April 13, 1978, Carpenter paid a total of $185.00 on his account. No other payments were made on his account until January of 1979, when the payments that were made resulted from an agreement between Carpenter and Clendenin which read: "I, Robert Carpenter (signature) do give my authorization to the payroll department of Clendenin Lumber and Supply to deduct 30.00 [dollars] per pay from my payroll to be paid on my account." The agreement was dated January 2, 1979, and was written on Clendenin's letterhead stationery. However, the agreement was not signed by a representative of Clendenin, nor was it notarized. Carpenter was paid every two weeks and for eight consecutive pay periods $30.00 was taken from his paycheck and credited to his outstanding credit balance.

On April 16, 1979, Carpenter ceased to be employed by Clendenin. The last pay deduction occurred on April 28, 1979, and as of October 27, 1979, the outstanding balance on his account with Clendenin was $689.88.

Clendenin sought to collect the outstanding amount of Carpenter's account plus interest and costs. Carpenter denied that he owed that amount and asserted counterclaims wherein he averred that the agreement between him and Clendenin was an assignment of earnings as contemplated by W.Va.Code, 46A-2-116 [1974], thereby violating, in form, W.Va.Code, 21-5-3 [1979]. In addition, he asserted that the sales transactions between the parties was part of an "open end credit plan" which violated the disclosure requirements of the Truth in Lending Act, as amended, 15 U.S.C. §§ 1601 et seq. and Regulation Z, 12 C.F.R. §§ 226.1 et seq.

Carpenter moved the trial court for partial summary judgment. The trial court, by order entered on May 11, 1981, denied the motion and ruled as a matter of law and fact that there had been no assignment of earnings and further ruled that the credit extended to Carpenter by Clendenin was not an "open end credit plan." 1

A trial was held on the exclusive issue of the amount Carpenter owed to Clendenin, and in a final order the trial court ordered him to pay Clendenin the outstanding balance on his account including interest and court costs which totaled $789.97.

Carpenter assigns the following errors: (1) the trial court erred when it ruled as a matter of law and fact that the January 2, 1979 agreement between Carpenter and Clendenin was not an assignment of earnings under the West Virginia Consumer Credit and Protection Act, as amended W.Va.Code, 46A-1-101 et seq., and thus, did not violate W.Va.Code, 21-5-3 [1979], and (2) the trial court erred when it ruled as a matter of law and fact that the sales transactions between the parties were not part of an "open end credit plan" thereby excluding them from the disclosure requirements of the Truth in Lending Act, as amended, 15 U.S.C. §§ 1601 et seq. and Regulation Z, 12 C.F.R. §§ 226.1 et seq.

I

The issue relating to the assignment of earnings involves the interpretation of the West Virginia Consumer Credit and Protection Act, Chapter 46A of the West Virginia Code, and the Wage Payment and Collection Act, W.Va.Code, 21-5-1 et seq.

W.Va.Code, 46A-2-116(2)(b) [1974], provides as follows:

"Assignment of earnings" includes all forms of assignments, deductions, transfers, or sales of earnings to another, either as payment or as security, and whether stated to be revocable or nonrevocable, and includes any deductions authorized under the provisions of section three, article five, chapter twenty-one of this Code, except deductions for union or club dues, pension plans, payroll savings plans, charities, stock purchase plans and hospitalization and medical insurance. (emphasis added). 2

In addition, W.Va.Code, 21-5-3 [1979], provides, in pertinent part:

No assignment of or order for future wages shall be valid for a period exceeding one year from the date of such assignment or order. Such assignment or order shall be acknowledged by the party making the same before a notary public or other officer authorized to take acknowledgments, and such order or assignment shall specify thereon the total amount due and collectible by virtue of the same and three fourths of the periodical earnings or wages of the assignor shall at all times be exempt from such assignment or order and no assignment or order shall be valid which does not so state upon its face: Provided further, that no such order or assignment shall be valid unless the written acceptance of the employer of the assignor to the making thereof, is endorsed thereon: Provided further, that nothing herein contained shall be construed as affecting the right of employer and employees to agree between themselves as to deductions to be made from the payroll of employees.... 3

"Deductions" is defined in W.Va.Code, 21-5-1(g) [1981] as "amounts required by to be withheld, and amounts authorized for union or club dues, pension plans, payroll savings plans, credit unions, charities and hospitalization and medical insurance."

Carpenter asserts that the January 2, 1979, agreement between Clendenin and him was an assignment of earnings as defined by W.Va.Code, 46A-2-116(2)(b) [1974], and as such, violated the form requirements of a valid assignment of earnings as set forth in W.Va.Code, 21-5-3 [1979]. Clendenin contends, on the other hand, that the January 2, 1979 agreement between the parties did not meet the definition of W.Va.Code, 46A-2-116(2)(b) [1974], because Clendenin, being Carpenter's employer, did not transfer the earnings "to another" but unto itself. Carpenter further contends that the clause contained in W.Va.Code, 21-5-3 [1979], "that nothing herein contained shall be construed as affecting the right of employer and employees to agree between themselves as to deductions to be made from the payroll of employees" does not exempt the agreement. He argues that the definition of "deductions," as contained in W.Va.Code, 21-5-1(g) [1981], only includes those deductions that are required by law or specifically enumerated in the statutes.

Inasmuch as W.Va.Code, 46A-2-116 [1974], and W.Va.Code, 21-5-3 [1979], relate to assignment of earnings, they are to be construed together to determine whether an employer is included in the words "to another." As this Court stated in Farley v. Zapata Coal Co., 167 W.Va. 630, 281 S.E.2d 238 (1981):

It is well established in West Virginia that when two statutes relate to the same general subject and the two statutes are not in conflict, they are to be read in pari materia. Tug Valley Recovery Center, Inc. v. Mingo County Commission, 164 W.Va. 94, 261 S.E.2d 165 (1979); State ex rel. Miller v. Locke, 162 W.Va. 946, 253 S.E.2d 540 (1979); Snodgrass v. Sisson's Mobile Home Sales, Inc., 161 W.Va. 588, 244 S.E.2d 321 (1978).

167 W.Va. at 636-637, 281 S.E.2d at 243.

In 1974, the West Virginia Legislature passed a comprehensive consumer protection bill known as the West Virginia Consumer Credit and Protection Act, W.Va.Code, 46A-1-101 et seq., which sought to modernize and clarify the law regarding consumer sales and credit transactions. Specifically, article 2 regulates, inter alia, the practice of creditors regarding credit and debt collection practices in consumer credit transactions. Section 116 of article 2 restricts the extent to which the future earnings of a debtor may be assigned in satisfaction of a debt arising out of such...

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