Martin v. Lincoln Bar, Inc.

• Decision Date: 25 March 1993
• Docket Number: No. 92-14-M,92-14-M
• Citation: 622 A.2d 464
• Parties: John T. MARTIN et al. v. LINCOLN BAR, INC. and Michael Farnsworth. P.
• Court: Rhode Island Supreme Court

Page 464

622 A.2d 464

John T. MARTIN et al. v. LINCOLN BAR, INC. and Michael Farnsworth.

No. 92-14-M.P.

Supreme Court of Rhode Island.

March 25, 1993.

Joseph G. Miller, Warwick, for plaintiffs.

Gerald Petros, Hinckley, Allen, Snyder & Comen, Hugh Moore, Jr., Hodosh, Spinella & Angelone, Providence, for defendants.

OPINION

MURRAY, Justice.

This case comes before this court pursuant to a writ of certiorari filed by the plaintiff, John T. Martin, alleging that a Superior Court justice erred in denying his motion for a prejudgment writ of attachment on a piece of real estate owned by the defendant, Lincoln Bar, Inc. (Lincoln Bar). In addition, the plaintiff alleges that the Superior Court justice erred in denying his request for a temporary restraining order preventing Lincoln Bar from transferring this real estate. For the reasons set forth in this opinion, we deny the plaintiff's petition for certiorari.

The facts in this case are as follows. On December 22, 1986, Michael Farnsworth (Farnsworth), also a defendant in this case, operated a pickup truck owned by defendant Lincoln Bar and struck a vehicle owned by plaintiff's employer. This accident caused plaintiff serious and permanent injuries. The plaintiff thereafter sought recovery from Rumford Insurance Company (Rumford), the company that insured Lincoln Bar. Rumford provided Lincoln Bar with insurance coverage with a policy limit of $300,000. During the course of this litigation, Rumford became insolvent and the Rhode Island Insurers Insolvency Fund stepped in to assume Rumford's financial obligations. General Laws 1956 (1989 Reenactment) § 27-34-12 required plaintiff to proceed against his own insurance carrier prior to seeking compensation from the Rhode Island Insurers Insolvency Fund. Through compliance with this requirement, plaintiff received $350,000 from his own insurance carrier.

Notwithstanding this partial recovery, plaintiff continued to pursue a negligence action against Farnsworth and Lincoln Bar, alleging that plaintiff has incurred damages in excess of $750,000. The plaintiff's wife, Jean Martin, and plaintiff's two children joined in this action, seeking recovery for loss of consortium and loss of society.

Prior to trial plaintiff moved to attach real estate owned by Lincoln Bar. The plaintiff asserted that he has a strong likelihood of success on the merits and that if the court denies his motion for a prejudgment writ of attachment, plaintiff runs the risk of being unable to enforce his judgment against defendants. In addition, plaintiff sought a temporary restraining order under the Uniform Fraudulent Transfer Act, G.L.1956 (1992 Reenactment) chapter 16 of title 6, that would prevent Lincoln Bar from transferring the real estate. The trial justice denied both of these prejudgment motions. We address the propriety of these rulings on this petition for certiorari.

I

The first issue we consider is whether the trial justice erred in denying plaintiff's motion to attach the real estate owned by Lincoln Bar. Rhode Island law regarding the availability of the attachment remedy, and the procedure a party must follow in seeking to obtain a writ of attachment, has developed dramatically over the last twenty-five years, and it is helpful to begin with a review of this development.

Prior to 1972, Rhode Island had both case law and statutory law regarding writs of attachment. Three pre-1972 statutory provisions are pertinent to our review. General Laws 1956 (1969 Reenactment) § 10-5-2 governed the procedure a party must follow in seeking a writ of attachment. This provision simply required the moving party to file an affidavit, demonstrating "that the plaintiff has a just claim against the defendant, that is due, upon which the plaintiff expects to recover in such action a sum sufficient to give jurisdiction to the court to which such writ is returnable." This 1969 version of § 10-5-2 did not require notice to a defendant and a hearing before a court attached the property of a defendant.

A second pre-1972 statutory provision, G.L.1956 (1969 Reenactment) § 10-5-5, governs attachments in suits based in equity.

A third pre-1972 provision, G.L.1956 (1969 Reenactment) § 10-5-6, governed suits based in tort filed against nonresidents of Rhode Island. This provision, still in effect today, authorizes a court to issue a writ of attachment against a nonresident tort defendant whenever "the plaintiff has a just cause of action against the defendant, upon which the plaintiff expects to recover a sum sufficient to give jurisdiction to the court."

Pre-1972 Rhode Island case law significantly supplemented this statutory law. Most importantly, this court refused to allow the issuance of writs of attachment in cases arising in tort because the extent of damages in tort cases cannot be reduced to a sum that is certain prior to the return of a jury verdict. Marsh v. Moore, 52 R.I. 458, 459, 161 A. 227, 228 (1932); Mainz v. Lederer, 24 R.I. 23, 25-26, 51 A. 1044, 1045 (1902). In United States v. J. Tirocchi & Sons, Inc., 180 F.Supp. 645 (D.R.I.1960), the Federal District Court in Rhode Island, interpreting Rhode Island law, reaffirmed this principle by holding that in order to qualify for a writ of attachment, a moving party must demonstrate (1) that the cause of action sounds in contract and (2) that the damages "are susceptible of estimation and determination under the ordinary and well-understood commercial and business rules which apply to contracts proper." Id. at 650.

The court in J. Tirocchi & Sons also concluded that Rhode Island statutory law compelled courts to deny prejudgment writs of attachment in tort cases filed against in-state defendants. The court stated:

"It is to be noted that the language of § 10-5-2 makes no express provision for attachment in actions ex delicto [in tort]; and the complete statutory scheme, especially the provisions of § 10-5-6 (which authorized the issuance of an original writ of attachment in tort actions against nonresidents), manifestly indicates a legislative intent that the remedy of attachment shall not be generally available under the provisions of § 10-5-2 when the cause of action is one sounding in tort." 180 F. Supp. at 650.

The court in J. Tirocchi & Sons reasoned that if the General Assembly saw fit to create an attachment remedy in tort cases filed against nonresidents, by negative implication the General Assembly intended to prohibit the attachment remedy in actions against in-state tort defendants. Id.

In 1972 the United States Supreme Court decided Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct.1983, 32 L.Ed.2d 556 (1972). In Fuentes the Court held that the due process clause of the Fifth and Fourteenth Amendments to the United States Constitution required notice and a hearing prior to the issuance of a writ of replevin, absent extraordinary circumstances. Id. at 96-97, 92 S.Ct. at 2002-03, 32 L.Ed.2d at 579. In light of Fuentes the Federal District Court in Rhode Island found Rhode Island's attachment procedures unconstitutional because the 1969 version of § 10-5-2 permitted a plaintiff to obtain a prejudgment writ of attachment without providing a defendant with notice and a proper hearing. McClellan v. Commercial Credit Corp., 350 F.Supp. 1013, 1014 (D.R.I.1972), aff'd sub nom., Georges v. McClellan, 409 U.S. 1120, 93 S.Ct. 935, 35 L.Ed.2d 253 (1973).

Rhode Island authorities responded to this development in two ways. In 1973 the General Assembly amended § 10-5-2 and provided a procedure that would meet the requirements of due process. Public Laws 1973, ch. 109, § 1. The 1973 version of § 10-5-2 read in pertinent part:

"At the time of the commencement of the action, or at any time thereafter, a plaintiff must file a motion in said court for authority to attach said defendant's assets, including his personal or real estate, and the said motion must state the day, time and place of hearing and a copy must be served by the process server on the defendant or by leaving it at his last and usual place of abode with some person there at least five (5) days before the fixed date hearing." ¹

Notably, this 1973 amendment to § 10-5-2 did not alter the range of cases in which attachment was available. The distinction between tort and contract cases still remained. The 1973 version of § 10-5-2 only added a procedure to ensure that defendants received advance notice and a hearing before a court allowed a plaintiff to attach a defendant's property.

In addition to this action by the General Assembly, the Rhode Island Superior Court, with the approval of the Rhode Island Supreme Court, adopted a 1972 amendment to Rule 4(j) of the Superior Court Rules of Civil Procedure. This 1972 amendment, as amended by the court December 6, 1972, effective December 20, 1972, states in pertinent part:

"Attachment and Trustee Process.

(1) Availability of Remedies. In connection with the commencement of any action under these rules, attachment, including trustee process, shall be available to the extent and in the manner provided by law.

* * * * * *

(3) Same: Issuance. The writ of attachment may be procured in blank from the clerk, shall be filled out by the plaintiff's attorney as provided in paragraph (2) of this subdivision, and shall be submitted to the court with a motion for its issuance. The motion shall be granted only upon a showing that there is a probability of a judgment being rendered in favor of the plaintiff and that there is a need for furnishing the plaintiff security in the amount sought for satisfaction of such judgment, together with interests and costs. A motion hereunder shall not be granted ex parte. Security may be required in connection with issuance of any writ of attachment. A surety upon a bond or undertaking hereunder shall be subject to the provisions of Rule 65(c)."

It is absolutely clear that Rule 4(j) placed a greater burden on a party seeking to attach property. The moving party must...