Hughes v. Ephrem

371 P.3d 501, 277 Or. App. 193, 2016 Ore. App. LEXIS 374
CourtCourt of Appeals of Oregon
DecidedMarch 30, 2016
Docket110811164; A155125
StatusPublished
Cited by1 cases

This text of 371 P.3d 501 (Hughes v. Ephrem) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hughes v. Ephrem, 371 P.3d 501, 277 Or. App. 193, 2016 Ore. App. LEXIS 374 (Or. Ct. App. 2016).

Opinion

EGAN, J.

Plaintiffs appeal a judgment dismissing a writ of garnishment that they served upon H&B Jewelry & Loan Company (H&B). H&B, a pawnbrokering business, loaned plaintiffs’ debtor money, took a Rolex watch as collateral, and issued the debtor a pawn ticket. Plaintiffs obtained a writ of garnishment and sought to take possession of the watch after tendering the amount of the loan and the interest owed by the debtor. H&B moved to dismiss plaintiffs’ writ of garnishment, arguing that plaintiffs’ efforts were ineffective, first, because the debtor no longer had an ownership interest in the watch and, second, because plaintiffs were not in physical possession of the pawn ticket given to the debtor. The trial court agreed that plaintiffs could not garnish the watch without physically surrendering the pawn ticket. On appeal, plaintiffs argue that the trial court erred as a matter of law. We agree with plaintiffs and, accordingly, reverse and remand.

The facts are undisputed. In February 2012, plaintiffs obtained a judgment against Tina Ephrem following her conviction for elder abuse. Roughly one year later, Ephrem pawned a Rolex watch to H&B for $1,000. Plaintiffs sought to recover a portion of their judgment by garnishing the watch. To that end, plaintiffs served H&B a writ of garnishment on May 24, 2013.

On May 31, 2013, H&B filed a response to the writ of garnishment, stating, “I may owe money to or hold property of the debtor, but I am not sure what or how much it might be.” H&B went on to explain that it had loaned money to Ephrem and had taken the watch as collateral. H&B stated that the loan was overdue, but the watch had not yet been forfeited under the terms of the loan. H&B further explained that it could not determine “whether *** Ephrem retains an interest in [the watch]” because H&B must deliver the watch to whomever “comes into H&B holding the pawn ticket and timely redeems.”

Three days later on June 3, 2013, H&B filed a supplemental response stating, “[Ephrem] has failed to timely redeem the [watch].” Therefore, H&B concluded that the [196]*196watch was forfeited and, consequently, H&B did not possess any property belonging to Ephrem.

Plaintiffs filed a motion pursuant to ORS 18.778(l)1 challenging H&B’s response and requesting a hearing to determine whether H&B should be held liable or should be restrained from disposing of the watch. H&B filed a motion to dismiss.

At the hearing addressing H&B’s motion to dismiss, plaintiffs argued that the writ of garnishment should not be dismissed because the watch, as “property held by the garnishee pursuant to a security interest granted by the debtor to the garnishee,” was garnishable property under ORS 18.615.2

H&B advanced two arguments below. First, citing the definition of garnishable property found in ORS 18.615, H&B noted that a writ of garnishment only garnishes the interest that the debtor has in the property. H&B contended that Ephrem’s interest in the watch, once she had pawned it, was only a “right to redeem.” Based on those premises, H&B asserted that the “right to redeem” is garnishable, but the watch itself is not.

Second, H&B contended that plaintiffs could not garnish the watch because they did not have physical [197]*197possession of the pawn ticket. In support, H&B noted that, under ORS 726.330,3 “a pawnbroker shall not be required to deliver a pledge[4] except upon surrender of the pawn ticket.” Moreover, under ORS 726.310, “ [t]he pawnbroker shall deliver the pledge to the person presenting [the] pawn ticket upon payment of principal and interest due on the pledge loan.” Thus, H&B argued that, if pawned property were subject to garnishment and someone other than the debtor tendered the loan and the interest due on the loan and presented the pawn ticket, “then a pawnbroker would be left in the untenable position of either violating the terms of the writ of garnishment, or violating [statutes governing pawnbrokers] and incurring liability to the lawfully successive holder of a pawn ticket.” Plaintiffs countered that that scenario would not place the pawnbroker in such a dilemma because both ORS 726.310 and ORS 726.330 are subject to an exception: A pawnbroker is not forbidden from delivering pawned property without surrender of the pawn ticket if “the ticket is impounded or its negotiation [is] enjoined by a court of competent jurisdiction.” ORS 726.330. Plaintiffs argued that a writ of garnishment enjoins the negotiation of the pawn ticket and, thus, the exception applies.

The trial court granted H&B’s motion to dismiss, stating, “Because plaintiffs did not present the pawn ticket for [the watch], plaintiffs writ of garnishment was ineffective.”

On appeal, the parties renew their arguments from below. We conclude that the watch itself is gar-nishable property prior to forfeiture and the writ of garnishment enjoined the negotiation of the pawn ticket. Consequently, the trial court erred in dismissing the writ of garnishment.

We begin by rejecting H&B’s contention that Ephrem’s interest in the watch prior to forfeiture constituted only a “right to redeem.” On the contrary, until forfeiture, [198]*198Ephrem had an ownership interest in the watch, albeit one encumbered by H&B’s loan. See Wienstein, Executrix v. Watson, Assessor, 184 Or 508, 515, 200 P2d 383 (1946) (stating that when property is pawned, but not yet forfeited, there is a “temporary interruption of the custody” of the property, but not an interruption in actual ownership); ORS 726.400(7) (stating that, after forfeiture, “the pawnbroker acquires the pledgor’s title”). Consequently, we reject H&B’s argument that Ephrem had less than an ownership interest in the watch.

We turn to address plaintiffs’ contention that the writ of garnishment enjoined the negotiation of the pawn ticket and, consequently, the exception in ORS 726.330 applied, freeing H&B to deliver the watch to plaintiffs even though plaintiffs did not have physical possession of the pawn ticket.

ORS 726.330 provides, in part:

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Related

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Cite This Page — Counsel Stack

Bluebook (online)
371 P.3d 501, 277 Or. App. 193, 2016 Ore. App. LEXIS 374, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hughes-v-ephrem-orctapp-2016.