Garner v. Kempf
| Decision Date | 30 January 2017 |
| Docket Number | Court of Appeals Case No. 82A01-1512-PL-2362 |
| Citation | 70 N.E.3d 408 |
| Parties | Dennis GARNER, Appellant-Defendant, v. Gregory Stewart KEMPF and Vanderburgh County Clerk, Appellee-Plaintiff. |
| Court | Indiana Appellate Court |
Attorney for Appellant : Curt J. Angermeier, Evansville, Indiana
Attorney for Appellees : Joseph H. Harrison, Jr., Evansville, Indiana
[1] Dennis Garner appeals from the trial court's order denying his motion for proceedings supplemental.
[2] We reverse and remand with instructions.1
[3] In 2013, the Vanderburgh Superior Court awarded Garner a civil judgment against Gregory Kempf in the amount of $20,600. Garner has been unable to collect on the judgment.
[4] On July 30, 2015, criminal charges were filed against Kempf in an unrelated matter in Vanderburgh Superior Court, and a $5,000 bond was posted on Kempf's behalf. The next day, Garner filed a motion for proceedings supplemental in the civil case seeking to garnish the bond proceeds and naming the Vanderburgh County Clerk (the Clerk) as a garnishee defendant. On the same date, Garner served a copy of the motion on the Clerk along with a letter advising the Clerk that Garner held a lien against the bond proceeds and that the Clerk could be held liable if it released the funds to anyone else. Garner did not, however, file anything in the criminal matter or otherwise give the criminal court notice of the lien. The Clerk did not make a note of the lien on the Chronological Case Summary (CCS) in the criminal case, and there is no indication that the criminal court had any knowledge of its existence. The parties do not dispute that Garner notified Kempf of the lien. On July 31, 2015, the civil court issued an order requiring Kempf and the Clerk to appear at a hearing on the motion for proceedings supplemental on August 26, 2015.
[5] On August 13, 2015,2 Kempf asked the criminal court to release the bond proceeds to his criminal defense attorney, and Kempf's attorney filed a written motion to that effect the next day. The criminal court, apparently still unaware of Garner's pending motion for proceedings supplemental, granted the request and ordered the proceeds of the bond released to Kempf's defense attorney on August 14, 2015.
[6] The hearing on Garner's motion for proceedings supplemental was subsequently reset for September 22, 2015. At the hearing, the Clerk indicated that the bond proceeds had been paid to Kempf's criminal defense attorney pursuant to the criminal court's order. On September 29, 2015, the civil court entered a written order denying Garner's motion for proceedings supplemental and declining to enter judgment against the Clerk. Garner filed a motion to correct error, which the trial court denied after a hearing. This appeal ensued.
[7] This court has set forth the standard of review applicable to appeals from judgments regarding proceedings supplemental as follows:
Our system vests trial courts with broad discretion in conducting proceedings supplemental. [I]n proceedings supplemental, we are constrained to treat a trial court's judgment as being general only. We will not disturb a trial court's judgment regarding a proceedings supplemental unless the record does not provide sufficient support for any theory on which the judgment may be sustained. We will affirm the trial court's judgment on any legal theory supported by the evidence most favorable to the judgment, together with all reasonable inferences to be drawn therefrom.
Prime Mortg. USA, Inc. v. Nichols , 885 N.E.2d 628, 669 (Ind. Ct. App. 2008) (internal quotation marks and citations omitted).
[8] On appeal, Garner argues that the Clerk wrongfully released the bond proceeds to Kempf's attorney after the attachment of an equitable lien and, as a result, is liable to him in the amount of $5,000. The trial court rejected this claim, reasoning that it was incumbent upon Garner to see to it that an entry was made on the CCS in the criminal case so as to notify that court of the lien. In support of this conclusion, the trial court relied on a purported "rule" issued by the Vanderburgh Circuit and Superior Courts. Appellant's Appendix at 12.
[9] The "rule" relied upon by the trial court, a copy of which is attached to its written order, is not a rule at all. Instead, it appears to be an internal memo, dated February 5, 2003, from the "Vanderburgh Circuit and Superior Courts" to a former Vanderburgh County Clerk. Id. at 13. This memo is not a part of the Vanderburgh County Local Rules, and there is no indication that it was ever even published or otherwise made available to the public. The memo reads as follows:
Id. (emphasis in original). It is apparent from the language of the memo that it was intended to provide guidance to the Clerk and court personnel, not the public. Indeed, the Clerk appears to implicitly concede as much by declining to cite or rely upon the memo in its brief. We therefore conclude that the trial court erred by relying on the memo in reaching its decision to deny Garner's motion for proceedings supplemental. It does not necessarily follow, however, that the trial court's ultimate judgment was in error. As we noted above, we must treat a trial court's ruling on a motion for proceedings supplemental as a general judgment and affirm on any legal theory supported by the evidence.
[10] On appeal, Garner relies on Fifth Third Bank v. Peoples Nat'l Bank for the proposition that "[i]t is well settled under Indiana law that a judgment creditor acquires an equitable lien on funds owed by a third party to the judgment debtor from the time the third party receives service of process in proceedings supplemental." 929 N.E.2d 210, 214 (Ind. Ct. App. 2010). Further, "the third party in proceedings supplemental is liable for paying out funds in a manner inconsistent with the judgment creditor's lien." Id. (quoting Radiotelephone Co. of Ind., Inc. v. Ford , 531 N.E.2d 238, 241 (Ind. Ct. App. 1988) ).
[11] The Clerk does not appear to dispute that Garner's argument in this regard is an accurate reflection of the law in general. Instead, the Clerk seems to argue that an exception exists when a creditor seeks to garnish the proceeds of a bond posted in a criminal matter and held by the clerk of that court. Specifically, the Clerk claims that "[t]he Indiana Supreme Court has specifically held that proceeds of a cash bail bond posted in a criminal case are not subject to garnishment for a judgment obtained in a civil case." Appellee's Brief at 3. In support of this assertion, the Clerk cites O'Laughlin v. Barton , 549 N.E.2d 1040 (Ind. 1990).
[12] The Clerk's reliance on O'Laughlin is misplaced. It is well settled in Indiana that the proceeds of bail bonds are subject to garnishment. See, e.g., Germann v. Tom's 24 – Hour Towing, Inc ., 776 N.E.2d 932, 934 (Ind. Ct. App. 2002) ; Turner v. Clary , 606 N.E.2d 878, 880–81 (Ind. Ct. App. 1993). The law of bailment provides guidance in cases involving the disposition of bail bond proceeds. Turner , 606 N.E.2d at 880. "A bailment is an express or implied agreement between a bailor and a bailee in which the bailee is entrusted to accomplish a specific purpose with the bailor's personal property and when the purpose is accomplished, the property is returned to the bailor." Id. at 880. Because a bailment generally involves no transfer of ownership, the depositor's interest in a cash bail bond is not extinguished unless and until the bond is forfeited.3 Id. O'Laughlin stands for the uncontroversial proposition that once a bail bond is forfeited, the depositor's interest therein is extinguished and the funds must be transferred to the Treasurer of the State for deposit into the Common School Fund. O'Laughlin , 549 N.E.2d at 1042.4 See alsoInd. Const. art. 8, sec. 2. In this case, however, Kempf's bond was never forfeited. Because his interest in the bond proceeds was not extinguished, O'Laughlin is inapposite and the funds remained subject to garnishment.5
[13] Citing Ind. Code § 35-33-8-7(b), the dissent asserts that our General Assembly has limited the circumstances under which a third-party creditor may garnish bail proceeds to cases in which the criminal charges arise out of the "same transaction or occurrence" as that giving rise to the civil judgment. We cannot agree with this interpretation of the statute. I.C. § 35-33-8-7(b) provides as follows:
In a criminal case, if the court having jurisdiction over the criminal case receives written notice of a pending civil action or unsatisfied judgment against the criminal defendant arising out of the same transaction or occurrence forming the basis of the criminal case, funds deposited with the clerk of the court under section 3.2(a)(2) of this chapter may not be declared forfeited by the court, and the court shall order the deposited funds to be held by the clerk. If there is an entry of final judgment in favor of the plaintiff in the civil action, and if the deposit and the bond are subject to forfeiture, the criminal court shall order payment of all or any part of the deposit to the plaintiff in the...
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Garner v. Kempf
...garnishment lien pending against Kempf in the Civil Court.Garner appealed, and a divided Court of Appeals reversed. Garner v. Kempf , 70 N.E.3d 408 (Ind. Ct. App. 2017). The Clerk then sought transfer, which we granted, thereby vacating the Court of Appeals' opinion.Discussion and Decision ......