Olympic Forest Products, Inc. v. Chaussee Corp.

• Citation: 511 P.2d 1002,82 Wn.2d 418
• Decision Date: 05 July 1973
• Docket Number: No. 42378,42378
• Court: United States State Supreme Court of Washington
• Parties: OLYMPIC FOREST PRODUCTS, INC., Appellant, v. CHAUSSEE CORPORATION, Respondent, and St. Paul Fire & Marine Insurance Company, Respondent.

Page 418

82 Wn.2d 418

511 P.2d 1002

OLYMPIC FOREST PRODUCTS, INC., Appellant, v. CHAUSSEE CORPORATION, Respondent, and St. Paul Fire & Marine Insurance Company, Respondent.

No. 42378.

Supreme Court of Washington, En Banc.

July 5, 1973.

Short, Cressman & Cable, Phillip Offenbacker, Seattle, for appellant.

Powell, Livengood, Dunlap & Silvernale, Robert P. Tjossem, Kirkland, for respondent.

BRACHTENBACH, Associate Justice.

It is common legal knowledge that the filing of an affidavit and bond results in the perfunctory issuance of a writ of garnishment, before judgment, in a suit for a debt. Since 1893, the affidavit only need be couched in the statutory language that '. . . such debt is just, due and unpaid, and that the garnishment applied for is not sued out to injure either the defendant or the garnishee.' Laws of 1893, ch. 56, § 1; RCW 7.33.010(1)(b).

This case challenges that procedure. The major question is whether the prejudgment garnishment of a corporation's bank account without prior notice and opportunity for hearing constitutes a deprivation of property without that procedural due process required by the fourteenth amendment to the United States Constitution and article 1, section 3 of the Washington State Constitution.

Plaintiff, Olympic Forest Products, Inc., sued defendant, Chaussee Corporation, to recover $30,603.63 allegedly due for building materials sold to defendant. At the same time that the lawsuit was started, the plaintiff obtained a writ of garnishment and garnished the defendant's bank account. Plaintiff had filed a form affidavit in compliance with RCW 7.33.010(1)(b) and filed a bond as required by RCW 7.33.030.

The next day, the defendant was served with the summons and complaint and a copy of the writ. The garnished bank answered, revealing that defendant's bank account at the time of service of the writ contained $30,621.63.

Defendant made an ex parte application for an order discharging the writ of garnishment upon the filing of a discharge bond. By uncontroverted affidavit, the defendant alleges that the garnished bank account represented 30 percent of the defendant's working capital and that this deprivation of the use of that working capital made it extremely difficult, if not impossible, for the defendant to continue its operations. On November 8, 1971, the court commissioner entered a conditional order, discharging the writ of garnishment and vacating all proceedings thereunder. This order was conditioned upon the filing of a bond in the sum of $30,603.63 undertaking that defendant would 'perform the judgment of the court' in said action as provided in RCW 7.33.170. The defendant then filed such a discharge bond issued by the Travelers Indemnity Company.

To obtain this discharge bond it was necessary for the defendant to pledge $30,000 in time certificates to its bank which in turn had to issue an irrevocable letter of credit indemnifying Travelers Indemnity Compnay with respect to any loss it might incur under the bond. The bank refused to issue the letter of credit until defendant pledged the time certificates to the bank as security for the letter. Defendant did pledge the required amount in time certificates; the bank then issued its irrevocable letter of credit and Travelers issued the discharge bond to satisfy the court commissioner's order.

On November 19, 1971, defendant answered plaintiff's complaint by denying the indebtedness and claiming damages. Defendant alleged that plaintiff breached their agreement concerning the materials being purchased. In addition, defendant alleged that Olympic Forest Products, Inc., wrongfully sued out the writ of garnishment. In short, plaintiff's claim was disputed.

Chaussee Corporation then filed a motion to quash and dissolve the writ of garnishment, contending that the statutes authorizing this garnishment violate the due process requirements of the fourteenth amendment to the United States Constitution and article 1, section 3 of the Washington State Constitution. The superior court granted defendant's motion on March 17, 1972. This order (1) unconditionally discharged the writ of garnishment herein and vacated all proceedings thereunder; (2) unconditionally released the garnishee bank from the writ; and (3) terminated all obligations of the Travelers Indemnity Company pursuant to their bond on file, thereby completely exonerating Travelers. Plaintiff appeals from this order.

The writ in question was issued pursuant to RCW 7.33.010(1)(b), which provides that

(1) . . . the clerks of the superior courts in the various counties in the state may issue writs of garnishment returnable to their respective courts in the following cases:

(b) Where the plaintiff sues for a debt and the plaintiff or someone in his behalf makes affidavit that such debt is just, due and unpaid, and that the garnishment applied for is not sued out to injure either the defendant or the garnishee.

The fourteenth amendment to the United States Constitution provides in part that no 'State (shall) deprive any person of life, liberty, or property, without due process of law . . .' Article 1, section 3 of the Washington State Constitution likewise states that, 'No person shall be deprived of life, liberty, or property, without due process of law.' Noting the near identity in the language of these clauses, we stated in Petstel, Inc. v. County of King, 77 Wash.2d 144, 153, 459 P.2d 937, 942 (1969), that 'the federal cases while not necessarily controlling should be given 'great weight' in construing our own due process provision.' We are further cognizant, of course, that insofar as the due process clause of the Fourteenth Amendment provides greater protection than does article 1, section 3, the federal constitution must prevail. U.S.Const. art. 6.

While the boundaries of the concept of due process are not capable of precise formulation, there are certain fundamental considerations involved.

For over a century it has been recognized that 'Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must first be notified.' Baldwin v. Hale, 68 U.S. (1 Wall.) 223, 233, 17 L.Ed. 531 (1864). The fundamental requisites of due process are 'the opportunity to be heard,' Grannis v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 58 L.Ed. 1363 (1914), and 'notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections,' Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950). Thus, 'at a minimum' the due process clause of the Fourteenth Amendment demands that a deprivation of life, liberty or property be preceded by 'notice and opportunity for hearing appropriate to the nature of the case.' Mullane, at 313, 70 S.Ct. at 657. Moreover, this opportunity 'must be granted at a meaningful time and in a meaningful manner.' Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965).

Synthesizing decisions 'representing over a hundred years of effort,' the United States Supreme Court recently refined these fundamental requirements of procedural due process into the following standard:

(D)ue process requires, at a minimum, that absent a countervailing state interest of overriding significance, persons forced to settle their claims of right and duty through the judicial process must be given a meaningful opportunity to be heard.

Boddie v. Connecticut, 401 U.S. 371, 377, 91 S.Ct. 780, 785, 28 L.Ed.2d 113 (1971).

However, while the minimal requisites of due process are definite, their form may vary according to the exigencies of the particular situation.

'(D)ue process,' unlike some legal rules, is not a technical conception with a fixed content unrelated to time, place and circumstances. Expressing as it does in its ultimate analysis respect enforced by law for that feeling of just treatment which has been evolved through centuries of Anglo-American constitutional history and civilization, 'due process' cannot be imprisoned within the treacherous limits of any formula. Representing a profound attitude of fairness between man and man, and more particularly between the individual and government, 'due process' is compounded of history, reason, the past course of decisions, and stout confidence in the strength of the democratic faith which we profess. Due process is not a mechanical instrument. It is not a yardstick. It is a process. It is a delicate process of adjustment inescapably involving the exercise of judgment by those whom the Constitution entrusted with the unfolding of the process.

Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 162--163, 71 S.Ct. 624, 643--644, 95 L.Ed. 817 (1951). (Frankfurter, J., concurring.)

This flexibility means that 'A procedural rule that may satisfy due process in one context may not necessarily satisfy procedural due process in every case.' Bell v. Burson, 402 U.S. 535, 540, 91 S.Ct. 1586, 1590, 29 L.Ed.2d 90 (1971). The procedural safeguards afforded in each situation should be tailored to the specific function to be served by them. See Goldberg v. Kelly, 397 U.S. 254, 267, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). Also, in determining the specific procedures required by due process under any given set of circumstances we must consider:

The precise nature of the interest that has been adversely affected, the manner in which this was done, the reasons for doing it, the available alternatives to the procedure that was followed, the protection implicit in the office of the functionary whose conduct is challenged, (and) the balance of hurt complained of and good accomplished . . .

Joint Anti-Fascist Refugee Committee v. McGrath, Supra at 163, 71 S.Ct. at 644. (Frankfurter, J., concurring.)

This elasticity in the Form of the hearing demanded by due process in different contexts should not,...