Gunstra v. Bank
| Decision Date | 22 July 2010 |
| Docket Number | No. 49A02-0912-CV-1274,No. 49D10-0812-MF-54677,49A02-0912-CV-1274,49D10-0812-MF-54677 |
| Parties | BRUCE GUNSTRA, Appellant, v. SALIN BANK and TRUST COMPANY, Appellee. |
| Court | Court of Appeals of Indiana |
ATTORNEY FOR APPELLANT: DAVID A. ROSENTHAL Lafayette, Indiana
ATTORNEYS FOR APPELLEE: ALAN K.MILLS, Esq. MARK R. OWENS, Esq. ETHEL H. BADAWI, Esq. Barnes & Thornburg, LLP Indianapolis, Indiana
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable David J. Dreyer, Judge
Bruce Gunstra brings this interlocutory appeal of the trial court's order granting the motion of Salin Bank and Trust Company ("Bank") for pre-judgment garnishment of any distributions to Gunstra by two limited liability companies ("LLCs") of which he is a member.
We affirm.
Whether the order of pre-judgment garnishment must be reversed because Bank failed to make a necessary evidentiary showing of cause.
Bank is the holder of a note, mortgage, and other loan documents evidencing various loans by Bank to Bruce Gunstra Buildings, Inc. ("BGB") and to G and L Development Co., Inc. ("G&L"). Gunstra signed a guaranty for each of the loans, personally and unconditionally guaranteeing their payment.1 On December 3, 2008, Bank filed a complaint for breach of contract and guaranty, replevin, foreclosure and appointment of a receiver against, inter alia, BGB, G&L, and Gunstra, individually; Bank alleged that all amounts due and owing had not been paid.
On March 5, 2009, Bank filed its motion for a pre-judgment garnishment order, with an affidavit in support. Bank sought prejudgment garnishment of any distributions to be paid to Gunstra as a member of River Market Development, LLC ("River Market") and to G&L as a member of River Valley, L.L.C. ("River Valley").2 Bank also petitioned the trial court to set an amount for the bond it would post, as provided by the garnishment statute.
On April 9, 2009, Gunstra filed a response to Bank's motion for a pre-judgment garnishment order. The response asserted "that the conditions to invoke prejudgment attachment [did] not exist," and that the garnishment statute was inapplicable. (App. 597). Gunstra's affidavit admitted that he was a member of River Market and would receive a distribution upon its sale of property.
(App. 66, 593). However, Gunstra denied the complaint's allegations "as to the amount alleged" to be due on the loans. (App. 593).
A hearing on Bank's motion was held on August 24, 2009, and Gunstra was given until September 4, 2009 to respond to Bank's motion for a pre-judgment garnishment order. On September 4th, the response was filed. It stated that Gunstra was "a member of River Market LLC and River Valley LLC, "3 and that the LLCs "own[ed] real estate." (App. 618).
On October 28, 2009, the trial court found Bank's action was "a claim for money founded on contract," citing "T.R. 64(B)(3)," and that the record "sufficiently show[ed]" indebtedness so as "to allow pre-judgment garnishment under I.C. 34-25-3-2(a)(2)." (App. 645). Accordingly, the trial court ordered pre-judgment garnishment against Gunstra and G&L regarding River Valley.4 As subsequently amended on November 25, 2009, the appealed order provides for pre-judgment garnishment of "any current or future distributions and/or amounts paid to" Gunstra and G&L by either River Market or River Valley.5 (App. 33).
Gunstra asserts that there are no issues of fact, "the issue is only at law." Gunstra's Br. at 2. He argues that a "garnishment of assets" requires "a showing of bad faith or intent akin to those facts for attachment pursuant to IC 34-25-2-1 and TR 64(B)(1)." Id. He "concedes" that Bank's "claim is for a money judgment based on a guaranty" but contends that Trial Rule "64(B)(1) requires some cause to provide for garnishment." Reply at 2.
Generally, interlocutory orders are reviewed for an abuse of discretion. Hilliard v. Jacobs, 916 N.E.2d 689 (Ind. Ct. App. 2009) (citing In re Paternity of Duran, 900 N.E.2d 454, 462 (Ind. Ct. App. 2009)), trans. denied. When the issue on appeal is a pure question of law, however, the matter is reviewed de novo. Id.
When interpreting trial rules, we apply the rules of statutory construction. Daugherty v. Robinson Farms, Inc., 858 N.E.2d 192, 197 (Ind. Ct. App. 2006), trans. denied. When we interpret a statute, we attempt to determine and give effect to the legislature's intent when we examine the language it used in the statute. Porter Dev., LLC v. First Nat. Bank of Valparaiso, 866 N.E.2d 775, 778 (Ind. 2007); see also Daugherty, 858 N.E.2d at 197 (). Where the statute is unambiguous, we read its words and phrases in their "plain, ordinary, and usual senses." Id. Further, it is just as important to recognize what a statute does not say as it is to recognize what it does say. Herron v. State, 729 N.E.2d 1008, 1010 (Ind. 2000). We may not read into a statute that which is not the expressed intent of the legislature. Id.
We begin with Indiana Trial Rule 64(B), which provides as follows:
Attachment or attachment and garnishment shall be allowed in the following cases in addition to those where such remedies prior to judgment are now permitted by law:
* * *
(3) Attachment or attachment and garnishment shall be allowed in favor of the plaintiff suing upon a claim for money, whether founded on contract, tort, equity or any other theory and whether it is liquidated, contingent or unliquidated; or upon a claim to determine the rights in the property or obligation attached or garnished.
Gunstra concedes that Bank's action against him is "for money" and "founded on a guaranty" by him. Gunstra's Br. at 2. "A guaranty is a contract to assume liability for the debts of another upon default." Pollas v. Hardware Wholesalers, Inc., 663 N.E.2d 1188, 1189 (Ind. Ct. App. 1996). Thus, Trial Rule 64(B) applies, and it authorizes the remedy granted by the trial court.
In Title 34, Indiana law provides in Article 34 for the "special proceedings" of "attachment and garnishment." Chapter 1 of Article 34 provides general provisions with regard to both attachment and garnishment. Attachment is the subject of Chapter 2, see Ind. Code § 34.25.2.1 etseq.; and garnishment is the subject of Chapter 3. See I.C. § 34-25-3-1 et seq.
The order appealed, however, is an order of garnishment, which is what Bank's motion sought. As already noted, Trial Rule 64(B)(1) states that it "shall be a cause for attachment" if certain evidence is shown; however, Trial Rule 64(B)(3) provides that "garnishment shall be allowed in favor of the plaintiff suing upon a claim for money,...." (emphasis added). When interpreting trial rules, we construe the word "shall" as mandatory. Daugherty, 858 N.E.2d at 197.
Similarly, although the previously quoted attachment statute required that certain evidence be shown in order to obtain an attachment order, the garnishment statute includes no such requirement of an evidentiary showing. Rather, the garnishment statute simply provides as follows:
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