Strong v. Laubach

• Decision Date: 30 March 2004
• Docket Number: No. 99,167.,99,167.
• Citation: 2004 OK 21,89 P.3d 1066
• Parties: William A. STRONG, II, Carolyn E. Strong, Plaintiffs/Appellees, v. Donald D. LAUBACH, Defendant/Appellant, v. Southwestern Bell Telephone Company, Garnishee/Appellant.
• Court: Oklahoma Supreme Court

89 P.3d 1066

2004 OK 21

William A. STRONG, II, Carolyn E. Strong, Plaintiffs/Appellees, v. Donald D. LAUBACH, Defendant/Appellant, v. Southwestern Bell Telephone Company, Garnishee/Appellant.

No. 99,167.

Supreme Court of Oklahoma.

March 30, 2004.

Jon W. Laasch, Jacobson & Laasch, Edmond, OK, for Appellant.

Kelley L. Cornelius, Kelley L. Cornelius, P.C., Oklahoma City, OK, for Appellees.

Richard E. Hornbeek, Hornbeek, Krahl, Vitali & Braun, P.L.L.C. Oklahoma City, OK, for Garnishee/Appellant.

WATT, Chief Justice.

¶ 1 Two cases from the United States Court of Appeals for the Tenth Circuit (Tenth Circuit) have been consolidated for our consideration. In one case, Southwestern Bell Telephone Company (SBTC), as Garnishee, appealed the judgment against it in favor of the Appellees, William A. Strong, II, and Carolyn E. Strong (the Strongs), for the entire sum paid to its employee, Appellant Donald D. Laubach, for a workers' compensation claim. The Strongs are Laubach's judgment creditors. The other case is an appeal by Laubach from the judgment in favor of the Strongs, in which the court found he was not entitled to an unlimited exemption for workers' compensation benefits under 85 O.S.2001 § 48¹ (§ 48), of the Workers' Compensation Act (the Act), but to an exemption limited to $50,000.00, under 31 O.S.2001 § 1(A)(21)² (§ 1(A)(21)), found in Title 31, Homestead and Exemptions of the Oklahoma Statutes. The following reformulated question has been certified to this Court by the United States Court of Appeals for the Tenth Circuit pursuant to the Revised Uniform Certification of Questions of Law Act, 20 O.S.2001 §§ 1601-11:

Are workers' compensation proceeds paid to an injured worker entirely exempt from garnishment, as provided in Okla. Stat. tit. 85, § 48, or is the exemption limited to fifty thousand dollars ($50,000.00), as provided in Okla. Stat. tit. 31, § 1(A)(21)?

We answer the federal question as follows:

Claims for compensation or benefits due are completely exempt under 85 O.S.2001 § 48, the exclusive statutory authority for exemptions under the Workers' Compensation Act, 85 O.S.2001 §§ 1 et seq. The purported exemptions for a "person's interest in a ... workers' compensation claim", under 31 O.S.2001 § 1(A)(21), shall not apply to "claims for compensation or benefits due" under the Oklahoma Workers' Compensation Act.

FACTS

¶ 2 Laubach sustained two injuries during his employment with SBTC. He filed claims in the workers' compensation court and received awards for compensation benefits.³ He settled his claim with SBTC and its insurer, and an annuity was purchased for the remaining $40,000.00 of his award. The Strongs had previously received a judgment against Laubach in federal court in Missouri in an unrelated matter. They filed their judgment in the United States District Court for the Western District of Oklahoma. They have attempted to collect their judgment from Laubach's workers' compensation proceeds through two separate garnishment actions. The first one, in March, 1998, was a continuing garnishment against SBTC to intercept the workers' compensation proceeds then being paid to Laubach.⁴ The other garnishment action was brought in November, 1998, against Laubach's bank account, in which the annuity payments were deposited. This case involves the annuity payments in the November, 1998 garnishment.

¶ 3 Laubach and SBTC objected, claiming workers' compensation proceeds are totally exempt under 85 O.S. § 48. In the November, 1998, bank account garnishment, Laubach claimed he was entitled to an exemption for workers' compensation and social security benefits. The federal magistrate entered a report and recommendation granting his claim for an exemption for the social security benefits. An exemption of $50,000.00 was granted for the workers' compensation benefits. However, the magistrate held that because Laubach had already received $50,000.00 in workers' compensation benefits in the March, 1998, garnishment action, he had received the maximum exemption allowed pursuant to 31 O.S. § 1(A)(21).

¶ 4 Laubach objected to the Magistrate's report and recommendation. He relied on an opinion of the Oklahoma Court of Civil Appeals (COCA), Young v. Rimer, 1998 OK CIV APP 49, 964 P.2d 911 (cert.denied), as authority for his position that he was entitled to a complete exemption for workers' compensation proceeds. The district court rejected his objection, recognizing that Young v. Rimer is not accorded precedential value because it is not an opinion from this Court, or a case which this Court released for publication.⁵ See Rule 1.200(c)(2), Rules of the Supreme Court, 12 O.S.2001, Ch.15, App. The district court relied instead on this Court's opinion in In re Anderson, 1996 OK 135, 932 P.2d 1110. In its certification order, the Tenth Circuit recited the finding of the district court with regard to Anderson, has follows: "The district court concluded that the exemption is limited to $50,000.00 even when asserted by the worker." Laubach and SBTC then appealed to the Tenth Circuit which has certified the question now before us.

DISCUSSION

A. Contentions of the Parties

¶ 5 Laubach contends there should be no limit to the exemption under § 48 and that the federal court erroneously applied § 1(A)(21). He contends the issue in this case is whether the two statutes can be reconciled and that reconciliation is possible, considering how each statute is to be applied. He contends that the Legislature is not presumed, in enacting a new statute, to have intended to repeal an earlier statute by implication. Conflicting legislative acts should be construed in such a way as to reconcile the provisions and render them consistent and harmonious, giving force and effect to each. This is known as the rule of in pari materia. See Beavin v. State ex rel. Dept. of Public Safety, 1983 OK 34, 662 P.2d 299, 302. He contends the exemption in § 48 is unlimited for "claims for compensation" paid to employees, similar to the benefits awarded and paid to him in this case. On the other hand, he contends § 1(A)(21) does not apply to an employee's "claims for compensation", but instead, applies only to a person's "interest in" a claim for ... workers' compensation". [Emphasis added.] Thus, Laubach's contention that the two statutes can be reconciled is based on the premise that § 48 applies to compensation paid to the injured employee, while § 1(A)(21) applies to the "interest" in compensation of someone other than the injured employee. This contention is consistent with COCA's holding in Young v. Rimer, supra. Laubach contends that construing both statutes to apply to the injured employee prohibits a reconciliation of the statutes and notes that COCA recognized only one exception to the unlimited aspect of § 48:

[T]he only express exception to that exemption contained in the opening paragraph is for `the enforcement of any valid lien for child support or valid income assignment for child support.' If the legislature had intended there to be other exceptions to the exemption protection of compensation and benefits paid to employees, we believe that the legislature would have expressly provided them as it did with liens and income assignments for child support. [Emphasis in original].

964 P.2d 911, 913. This exception for child support obligations was added to § 48 in 1994. Also in 1994, the Legislature enacted § 48.1, authorizing a lien to enforce child support judgments.⁶

¶ 6 SBTC takes Laubach's position that Young v. Rimer, supra, should be followed. It contends the full exemption granted in § 48 has never been repealed, and has only been modified to allow a lien or income assignment for child support obligations. Moreover, it contends Young v. Rimer is the only Oklahoma authority which addresses the issue in this case: reconciliation of the conflict between 31 O.S. § 1(A)(21) and 85 O.S. § 48.

¶ 7 The Strongs contend the district court correctly held Laubach's workers' compensation payments (the annuity) are subject to an exemption of only $50,000.00 under § 1(A)(21), and that he had already received it in conjunction with the March, 1998 garnishment. Although they cite Beavin for the rule of in pari materia as being applicable here, they also cite Edmond Independent School District No. 12 v. Oklahoma Tax Comm'n, 1943 OK 62, ¶ 13, 135 P.2d 57, 192 Okla. 241, for the rule that clear legislative intent to restrict the application of a former statute should be respected by the courts. They contend that in 1980, when sub-section A(21) was added to § 1 of title 31, it showed Legislative intent to limit the workers' compensation exemption under § 48 of the Act to $50,000.00. They claim that to ignore the clear language of § 1(A)(21) by carving out legal exceptions would judicially repeal the statute and defeat Legislative intent.

¶ 8 The Strongs contend Laubach's interpretation would, in effect, repeal § 1(A)(21). They argue that no one other than the workers' compensation employee or a creditor of the employee could have been contemplated by the Legislature's use of the terms "such person's interest in a claim for ... workers' compensation ..." under the statute. [Emphasis added.]

LEGISLATIVE INTENT

¶ 9 The fundamental rule of statutory construction is to ascertain and, if possible, give effect to, the Legislature's intention and purpose as expressed in a statute. Hill v. Board of Education, 1997 OK 111, 944 P.2d 930. Under the rule of in pari materia, the Legislature is not presumed, in enacting a new statute, to have intended to repeal an earlier statute by implication. Conflicting legislative acts should be construed in such a way as to reconcile the provisions and render them consistent and harmonious, giving force and effect to each. See Beavin v. State ex rel. Dept. of Public Safety, 1983 OK 34, 662 P.2d 299, 302. However, when an irreconcilable conflict is found to exist between two statutes, the Court will hold one of...