Turf Irrigation and Waterworks Supply v. Mountain States Tel. & Tel. Co.

• Decision Date: 16 September 1975
• Docket Number: CA-CIV,No. 1,1
• Parties: TURF IRRIGATION AND WATERWORKS SUPPLY, a division of Florida Company, an Arizona Corporation, Appellant, v. The MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, a Colorado Corporation, Trujon Construction and Development Company, an Arizona Corporation, Leland C. Vought, dba L. C. Vought Company, Johns-Manville Sales Corporation, a Delaware Corporation, Union Rock & Materials Corporation, an Arizona Corporation, and Employment Security Commission of Arizona, Appellees. 2575.
• Court: Arizona Court of Appeals

Page 156

540 P.2d 156

24 Ariz.App. 537

TURF IRRIGATION AND WATERWORKS SUPPLY, a division of Florida Company, an Arizona Corporation, Appellant, v. The MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, a Colorado Corporation, Trujon Construction and Development Company, an Arizona Corporation, Leland C. Vought, dba L. C. Vought Company, Johns-Manville Sales Corporation, a Delaware Corporation, Union Rock & Materials Corporation, an Arizona Corporation, and Employment Security Commission of Arizona, Appellees.

No. 1 CA-CIV 2575.

Court of Appeals of Arizona, Division 1, Department B.

Sept. 16, 1975.

[24 Ariz.App. 538] Mesch, Marquez & Rothschild, P.C., by Douglas H. Clark, Jr., Tucson, for appellant.

Streich, Lang, Weeks, Cardon & French, by Earl E. Weeks, Phoenix, for appellee Johns-Manville.

Davis & Eppstein, by Robert W. Eppstein, Tucson, for appellee L. C. Vought Co.

Fennemore, Craig, von Ammon & Udall, by Michael Preston Green, Phoenix, for appellee Mountain States Tel. and Tel. Co.

Rawlins, Ellis, Burrus & Kiewit, by Chester J. Peterson, Phoenix, for appellee Union Rock & Materials Corp.

OPINION

HAIRE, Chief Judge, Division 1.

The question presented on this appeal concerns the validity, as against appellant, of two prejudgment writs of garnishment, not involving wages, issued and served in 1971.

In March of 1971 appellees Vought and Johns-Manville (sometimes referred to as appellees) filed separate and independent actions against Trujon Construction and Development Company. In connection with these actions, writs of garnishment were issued and served upon Mountain States Telephone and Telegraph Company, which responded that it was indebted to Trujon in an amount which was eventually determined to be in excess of $11,000. The Vought writ of garnishment was served on March 5, 1971, and the Johns-Manville writ was served on March 17, 1971. As previously indicated, both of these writs were issued and served prior to judgment in accordance with then applicable Arizona statutory provisions. See A.R.S. § 12--1571 et seq. Trujon, the debtor and principal defendant in the Vought and Johns-Manville actions, was duly served, but did not, and has not to this date, contested the validity of the above-mentioned writs of garnishment.

After the service of the Vought and Johns-Manville writs of garnishments on Mountain States, various other creditors of Trujon also asserted claims against the Trujon funds being held by Mountain States. Inasmuch as the total amount of these claims exceeded the amount which Mountain States owed to Trujon, Mountain States, on October 5, 1971, filed a declaratory judgment and interpleader action seeking court determination of the rights and priorities of the various claimants. This appeal grows out of the judgment entered in that action. The appellant, Turf Irrigation and Waterworks Supply Company, was made a party to the action because of its previously filed mechanic's and materialmen's lien. ¹ Against this background we now consider subsequent events which gave rise to the questions on this appeal.

As previously stated, Mountain States 1971. On October 26, appellant asserted a new claim against the Trujon funds being held by Mountain States, having on that date served upon Mountain States a post-judgment writ of garnishment. After the filing of motions for summary judgment by the various claimants, the trial court entered its judgment in the interpleader action, in effect finding that the claims of Vought and Johns-Manville based upon their prejudgment writs of garnishment were prior and superior to the claim of appellant based upon its subsequently filed postjudgment writ.

The sole contention urged on appeal by appellant is that the Vought and Johns-Manville writs of garnishment were 'void, invalid and of no force and effect' because of the alleged unconstitutionality of the Arizona statutes insofar as they authorized prejudgment garnishment without allowing the debtor a pregarnishment hearing as to the genuiness of plaintiff's claim. In this connection we note that prior to the filing of the prejudgment writs here involved, the United States Supreme Court had issued its opinion in Sniadach v. Family Finance Corporation of Bay View, 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969), on June 9, 1969, which brought into question the constitutionality of state statutes allowing prejudgment garnishment of wages without notice and a prior hearing. After the Sniadach decision, but prior to the issuance of the writs of garnishment here involved, the Arizona Supreme Court issued its opinion in Termplan, Inc. v. Superior Court of Maricopa County, 105 Ariz. 270, 463 P.2d 68 (1969), upholding the constitutionality of the Arizona garnishment statutes insofar as concerns prejudgment writs of garnishment Not involving wages. See also to the same effect, Andrew Brown Company v. Painters Warehouse, Inc., 11 Ariz.App. 571, 466 P.2d 790 (1970); and First National Bank and Trust Co. v. Pamona Machinery Co., 107 Ariz. 286, 486 P.2d 184 (1971) filed June 25, 1971, some three months after the service of the Vought and Johns-Manville writs of garnishment.

The motions for summary judgment which eventually resulted in the entry of the judgment here appealed were not filed until September 1972. By that time the United States Supreme Court had filed its decision in Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (June 12 1972), and in addition, the United States District Court for the District of Arizona had filed its opinion in Western Coach Corporation v. Shreve, 344 F.Supp. 1136 (June 15, 1972), affd., 475 F.2d 754 (9th Cir. 1973). These decisions appeared to require that Arizona's garnishment statute be considered unconstitutional as to all prejudgment garnishments, the unconstitutionality not being limited merely to prejudgment wage garnishments as had been previously held by the above-cited Arizona appellate decisions. Nevertheless, on November 15, 1972, the Arizona Supreme Court filed its opinion in Roofing Wholesale Co., Inc. v. Palmer, 108 Ariz. 508, 502 P.2d 1327 (1972), again upholding the validity of Arizona's prejudgment garnishment statutes not involving wages.

The above discussion of 1972 and prior Arizona appellate decisions has not been set forth in order to show that Arizona's prejudgment garnishment statutes must, in 1975, be considered constitutional. Clearly at this point in time their unconstitutionality must now be accepted in view of the principles set forth in recent decisions issued by the United States and Arizona Supreme Courts. See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975); Thornton v. Carson, 111 Ariz. 490, 533 P.2d 657 (1975). Rather, the above discussion of Arizona appellate decisions is set forth to demonstrate that in 1971, at the time of the service of appellees' writs of garnishment, the Arizona appellate courts had expressly considered the question of the constitutionality of prejudgment writs of garnishment not involving wages and had held them to be constitutional.

In urging their motions for summary judgment in the trial court appellees advanced three arguments: first, that the Arizona statutes allowing prejudgment writs of judgment not involving wages were constitutional; second, that even if declared unconstitutional, a retroactive effect should not be given so as to invalidate appellees' writs of garnishment where Trujon, the debtor and principal defendant in the garnishment action did not contest the writ; and third (to some extent related to and inseparable from appellees' second argument), that in any event the appellant had no standing to contest the validity of the writs of garnishment, that due process right being personal to the debtor, Trujon.

On September 24, 1973, the trial court entered its final judgment in favor of appellees and against appellant. The record does not indicate which of appellees' arguments the trial court adopted. Notwithstanding appellant's prior knowledge of the three arguments advanced in the trial court by appellees, appellant's opening brief filed in this Court addressed itself only to the question of the constitutionality of prejudgment writs of garnishment under Arizona's statutory scheme....