Persinger v. Edwin Associates, Inc.

• Decision Date: 07 December 1976
• Docket Number: No. 13587,13587
• Citation: 230 S.E.2d 460,159 W.Va. 898
• Parties: Albert PERSINGER, dba Albert's Welding Service v. EDWIN ASSOCIATES, INC.
• Court: West Virginia Supreme Court

Page 460

230 S.E.2d 460

159 W.Va. 898

Albert PERSINGER, dba Albert's Welding Service v. EDWIN ASSOCIATES, INC.

No. 13587.

Supreme Court of Appeals of West Virginia.

Dec. 7, 1976.

Syllabus by the Court

1. An affidavit upon which an attachment is based must show the nature of the plaintiff's claim, the amount which the plaintiff believes he is entitled to recover in the action and the existence of one or more of the statutory grounds for issuance of an attachment.

2. Under the provisions of W.Va.Code, 38--7--3, unless the defendant is a foreign corporation or a nonresident of this State, the affidavit for attachment must state the material facts relied upon to show the existance of the grounds upon which the application for attachment is based.

3. 'A statement of material facts in an affidavit for attachment must be certain and definite, in a legal point of view, so as to inform those entitled to defend the attachment what particular facts they must repel.' Point 4, Syllabus, Goodman v. Henry, 42 W.Va. 526, 26 S.E. 528 (1896).

4. The provisions of Article 7 of Chapter 38 of the West Virginia Code, relating to attachment procedures, are not in contravention of the due process clauses of Article III, Section 10 of the Constitution of West Virginia or the Fourteenth Amendment to the United States Constitution.

Robert M. Harvey, Dunbar, for appellant.

Charles E. Hurt, Charleston, for appellee.

FLOWERS, Justice:

The subject matter of this appeal from a judgment of the Circuit Court of Kanawha County involves the constitutionality of the attachment-garnishment procedures embodied in Article 7, Chapter 38 of the West Virginia Code. The sole issue to be determined is whether these statutory procedures comply with federal and state due process guarantees.

The issue arose from a civil action instituted by Albert Persinger, doing business as Albert's Welding Service, against Edwin Associates, Inc., a corporation, to recover $20,776 for equipment and labor furnished the defendant corporation. Following the defendant's general denial, the plaintiff sought and obtained an order of attachment and writ of garnishment from the Circuit Clerk of Kanawha County. Upon a motion to quash the attachment, the circuit court held the provisions of Article 7, Chapter 38 of the West Virginia Code violative of the due process clauses of the state and federal constitutions for lack of preseizure notice and hearing.

In compliance with the provisions of W.Va.Code, 38--7--1, the plaintiff filed an affidavit with the circuit clerk, alleging the nature and amount of his claim against the defendant as well as the grounds upon which he sought the attachment. By the affidavit the plaintiff stated in conclusory language that the defendant was removing or about to remove its property from the state to avoid process or execution on a judgment and was converting or about to convert its property into money and securities with intent to defraud creditors.

The defendant moved to quash the attachment upon the grounds that: (1) the affidavit was insufficient; (2) false assertions were contained in the affidvit; (3) false grounds were alleged in the affidavit; and (4) the attachment-garnishment procedures were unconstitutional. The affidavit was subsequently amended to reflect factual assertions relative to the defendant's status and conduct which included an averment that the defendant was taking funds from the state for use in a different recreational project in South Carolina.

The circuit court, relying upon our decision in State ex rel. Payne v. Walden, W.Va., 190 S.E.2d 770 (1972), and without ruling on the sufficiency of the original or amended affidavit, held the statutory attachment procedures violative of due process guarantees of the state and federal constitutions.

The determination of the issue presented by this appeal rests almost solely upon the effect of Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969), and its progeny. The impact of these decisions on prejudgment remedies, however, is not altogether clear. The confusion, resulting from conflicting opinions and complicated by changes in the composition of the Court, is evident upon careful assessment of these cases and has rendered the constitutional validity of attachment-garnishment statutes uncertain.

In Sniadach v. Family Finance Corp., supra, the Court struck down a state garnishment statute because of insufficient notice and preseizure hearing procedures. Garnishment without preseizure notice and opportunity to be heard was deemed violative of due process. Sniadach was followed by Fuentes v. Shevin, 407 U.S. 67, 92 s.Ct. 1983, 32 L.Ed.2d 556 (1972), a four to three decision rendered while two vacancies existed on the Court.

Fuentes echoed the preseizure hearing requirements of Sniadach. The four-judge majority struck down the Florida replevin statute for its lack of compliance with the Sniadach requirements. The Court suggested, however, that prejudgment remedies could survive the impact of Sniadach-fuentes so long as the creditor established the validity, or at least probable validity, of his underlying claim through a hearing prior to the seizure.

After the decisions in Sniadach and Fuentes, this Court rendered its decision in State ex rel. Payne v. Walden, supra. Payne involved a permanent taking of property under West Virginia distress warrant procedures, ¹ leaving the debtor remediless save an independent action for damages or the posting of a 'double bond'. We held that the distress for rent statute, which denies notice and opportunity for hearing before deprivation of property, deprives the property owner of due process in contravention of Article III, Section 10 of the Constitution of West Virginia and the Fourteenth Amendment to the United States Constitution.

Similarly at this juncture in the development of the federal concept of prejudgment remedies and due process guarantees, the United States District Court for the Southern District of West Virginia rendered its decision in Union Barge Line Corp. v. Marble Cliff Quarries Co., 374 F.Supp. 834 (S.D.W.Va.1974). In the Union Barge decision, the District Court held that the West Virginia attachment-garnishment procedures were constitutionally deficient for lack of a preseizure hearing to evaluate the probable validity of the underlying claim.

Were we to decide this case in the same posture as the Federal District Court, we might be compelled to agree with the decision in Union Barge. The continued validity of its principles, however, as well as those of Sniadach and Fuentes, has been significantly challenged by the later United States Supreme Court decisions in Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974), and North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975).

Unlike the composition of the Court in Fuentes, Mitchell was decided by a nine-judge Court--with Justices Powell and Rehnquist as participators. In Mitchell the Court upheld the Louisiana sequestration statutes, distinguishing, if not overruling, the Sniadach-Fuentes preseizure principle. The Court in Mitchell determined that due process was satisfied when the creditor was required to assert a factual basis for his prejudgment relief in circumstances which permitted some judicial scrutiny prior to seizure and when the debtor could obtain an Early determination of the validity or probable validity of the claim and regain possession by posting bond.

Subsequently, Di-Chem was decided by the same judges who participated in the Mitchell decision. Had the Court intended in Mitchell to overrule Fuentes, it could have made that apparent from the Di-Chem opinion. Such was not the case. In Di-Chem the Court leaned the other way and held the Georgia garnishment procedures violative of due process. The concurring opinions of Justices Steward and Powell note the apparent return to the principles of Fuentes. It appears to us that the critical distinctions between Di-Chem, where the garnishment statute was found deficient, and Mitchell, where the sequestration statute was upheld, are the immediacy of the hearing and judicial participation at the time the writ is issued.

If we were left to deciding the instant case in this posture, our task would be more difficult. Recently, however, in a per curiam decision, the United States Supreme Court abstained from deciding the constitutional validity of the New York attachment statutes and remanded the case to afford the parties an opportunity to obtain a construction of the statutes from the New York courts. Carey v. Sugar, 425 U.S. 73, 96 S.Ct. 1208, 47 L.Ed.2d 587 (1976). Acknowledging that New York courts could conclude that a hearing would encompass the merits of the underlying claim, the Court in Carey provided the state court with the opportunity to avoid unconstitutionality by construing its statutes in a manner which would avoid friction with federal due process standards.

We are in no lesser position than the state of New York. We shall, therefore, examine our statutes in an attempt to avoid fatal friction with due process guarntees. The apparent areas of concern evident upon an analysis of federal decisions include: (A) the circumstances under which an attachment is effected; (B) the availability, scope and timing of a hearing thereupon; and (C) consumer protection procedures to regain possession of the property or damages for injury.

A

W.Va.Code, 38--7--1, ² provides for the issuance of an order of attachment by the clerk of the court in which a contract or damage action is pending upon the filing of an affidavit. The affidavit must state the nature of the plaintiff's claim, the amount of the claim and the grounds for attachment. The grounds for attachment are limited to those instances specified in W.Va.Code,38[159 W.Va. 904] --7--2, ³ and the affidavit cannot issue upon a...