In Re: Stephen Earl Whitted, App/cross-resp v. Lori Jones Jordan, Resp/cross-app

• Court: Court of Appeals of Washington
• Decided: April 22, 2019
• Docket: 77967-2
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

STEPHAN EARL WHITTED, No. 77967-2-I Appellant/Cross-Respondent, DIVISION ONE V. UNPUBLISHED OPINION LORI JONES JORDAN, FILED: April 22, 2019 Respondent/Cross-Appellant.

MANN, J. — This is the second appeal involving the enforcement of a decree

dissolving the parties’ marriage entered by a Georgia court more than a decade ago. In

the first proceeding, the Washington court entered a judgment against Stephen Whitted

for approximately $165,000 in unpaid child support. In the second proceeding that is

the subject of this appeal, the court entered judgment against Lori Jordan for a principal

sum of $55,000—enforcing a provision of the decree that required her to transfer

retirement account funds to Whitted. The court allowed Jordan to offset the amount she

owed to Whitted against the larger amount Whitted owed to her. Both parties appeal,

challenging the offset, the calculation and rate of interest on the principal judgment

amount, and the allocation of responsibility for any penalties or taxes stemming from the

withdrawal of retirement funds. We affirm. No. 77967-2-1/2

The background facts surrounding the parties’ dissolution and the first lawsuit to

enforce the decree are derived from our unpublished decision affirming the judgment

against Whitted for unpaid child support. See Jordan v. Whitted, noted at 2 Wn. App.

2d 1034 (2018).

Jordan and Whitted dissolved their marriage in 2007 in Georgia. The divorce

decree required Whitted to pay monthly child support for the parties’ three children and

required Jordan to transfer $55,000 from her retirement account to Whitted. Whitted

stopped paying child support in 2010. Jordan never transferred the retirement funds.

At some point, Whitted moved to Maryland and Jordan moved to Washington.

In 2016, Jordan registered the Georgia decree in Washington and filed an action to

enforce the child support provisions. The court entered a judgment against Whitted for

unpaid child support of $167,868.85, plus interest. The court declined to offset the

arrearage by Jordan’s unpaid retirement fund obligation, concluding that the issue of the

retirement fund transfer was not properly before it. Whitted appealed, and this court

affirmed.

Meanwhile, Whitted initiated the instant proceeding by filing a “Declaration re:

Foreign Judgment” and supporting documents. He claimed entitlement to a judgment of

$55,000 under the decree, plus “appx. $85,000” in interest based on an interest rate of

“10.9 % per annum.” Whitted then applied for a writ of garnishment seeking to garnish

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Jordan’s earnings. Jordan moved to stay the writ of garnishment. Following a hearing,

the court granted the motion.1

The parties did not challenge the principal judgment amount, but disputed the

calculation and rate of interest, whether the principal judgment amount should be

reduced to account for penalties and taxes, and whether the judgment should be offset

by the existing judgment for unpaid child support. After a second hearing, the court

ruled that Whitted was entitled to judgment of $55,000, the applicable rate of interest

under Georgia law was 10.9 percent, and interest applied only to the principal. The

court also ruled that Jordan was entitled to offset the amount she owed, $1 14,950, by

the outstanding amount owed by Whitted, which the court calculated as $197,598.40 as

of the date of the hearing. The court declined to reduce the judgment amount based on

estimated penalties and/or taxes. The court then denied Jordan’s motion for

reconsideration. Both parties appeal.

When the court made its ruling granting an offset, the judgment against Whitted

for unpaid child support was pending on appeal. Whitted therefore argues that the

judgment against him was not final and the trial court erred ‘as a matter of law” in

allowing the offset.

An offset or setoff “allows entities that owe each other money to apply their

mutual debts against each other, thereby avoiding ‘the absurdity of making A pay B

when BowesA.” Citizens Bank of Marvlandv. Strumpf, 516 U.S. 16, 18, 1165. Ct.

286, 133 L. Ed 2d 258 (1995) (quoting Studlev v. Boylston Nat. Bank, 229 U.S. 523,

1 The court also granted a continuance, based on Whitted’s request for time to obtain counsel

and to investigate whether the matter should be resolved together with the child support issue because judgment had not yet been entered in that proceeding.

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528, 33 S. Ct. 806, 57 L. Ed. 1313 (1913)). We review a trial court’s decision to offset a

judgment for abuse of discretion. Eagle Point Condo. Owners Ass’n v. Coy, 102 Wn.

App. 697, 701, 9 P.3d 898 (2000). “[Wjhether mutual judgments may be satisfied by

being set off against each other rests largely within the court’s discretion . . . the

application to set off judgments should be made in equity and controlled by equitable

principles.” Rapid Settlements, Ltd.’s App. for Approval of Transfer of Structured

Settlement Payment Rights, 166 Wn. App. 683, 694, 271 P.3d 925 (2012) (quoting

Reichlin v. First Nat’l Bank, 184 Wash. 304, 314-15, 51 P.2d 380 (1934) (citations

omitted)).

Explaining its decision to allow the offset, the trial court noted that while Whitted

appealed the judgment, he had taken no measures to stay enforcement of the judgment

pending appeal. A judgment in a civil case is enforceable unless enforcement is

delayed in the manner provided by in the Rules of Appellate Procedure. RAP 8.1. “A

trial court decision may be enforced pending appeal or review unless stayed pursuant to

the provisions of this rule. Any party to a review proceeding has the right to stay

enforcement of a money judgment, or a decision affecting real, personal or intellectual

property, pending review.” RAP 8.1(b). A party may stay enforcement of a monetary

judgment by filing a supersedeas bond in the trial court. RAP 8.1(b)(1).2

No persuasive authority supports Whitted’s position that a pending appeal

precludes an offset. He primarily relies on Reichlin in which the court held that

equitable principals supported the trial court’s decision to offset a judgment entered

2 As Jordan points out, in addition to being enforceable, a pending appeal does not affect finality for purposes of res judicata or collateral estoppel even though “res judicata can still be defeated by later rulings on appeal.” Lejeune v. Clallam County, 64 Wn. App. 257, 265-66, 823 P.2d 1144 (1992); Winchell’s Donuts v. Quintana, 65 Wn. App. 525, 530, 828 P.2d 1166 (1992).

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against the defendant by the amount of a separate judgment entered against the

plaintiff. The court concluded:

[A] judgment, especially a judgment entered by the same court, when pleaded as a set-off, must, as a matter of law, be credited upon any recovery which the judgment debtor, as plaintiff, may establish against the judgment creditor as defendant. No other course would be equitable. Reichlin, 184 Wash. at 313.

In the context of a general discussion about equitable set offs, the Reichlin court

quoted an excerpt from a treatise suggesting that the pendency of an appeal may, in

some cases, prevent a judgment from being “final and conclusive” for purposes of an

offset, for instance, when “execution of the judgment has been stayed.” Reichlin, 184

Wash, at 314. But, here again, Whitted took no action to stay enforcement of the

judgment. And since Reichlin did not concern judgments that had been appealed, the

quoted language was dicta and unnecessary to the court’s holding.3

The trial court acted within its discretion in granting the offset.

III.

A.

Jordan contends the court erred when it imposed postjudgment interest at the

rate of 10.9 percent. We review an award of postjudgment interest de novo. ]~ Landco, LLC v. Harley C. Douglass, Inc., 186 Wn. App. 249, 256, 346 P.3d 777 (2015).

The rate of interest payable on a foreign judgment registered in Washington is

~ While unpublished decisions of this court filed or after March 1, 2013 may be cited as nonbinding authority, GR 14.1(a) requires the citing party to advise the court that the decision is unpublished. Whitted fails to comply with this provision in citing the unpublished decision of Division Three of this court in Seth Burrill Productions, Inc. v. Rebel Creek Tackle, noted at 198 Wn. App. 1038 (2017). Even overlooking this omission, the decision is unhelpful. The trial court denied a party’s claim for certain set offs in that case where the proposed set offs had not been reduced to judgment. Whitted also cites an Oregon statute, without explanation as to why that law is “controlling” precedent in Washington.

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determined by the law of the state that rendered the judgment. RCW 6.36.140. Under

Georgia law, the default interest rate applicable to judgments is the prime rate of

interest on the date of the judgment, plus 3 percent. GA. CODE ANN. § 7-4-12(a). The parties do not dispute that, at the time of the decree, 10.9 percent was the rate of

interest under this provision.

Jordan contends that a more specific statute, former GA. CODE ANN. § 7-4-12.1, applied to the award under the divorce decree. In 2007, when the Georgia court

entered the decree, that statute provided, in relevant part:

(a) All awards of child support expressed in monetary amounts shall accrue interest at the rate of 7 percent per annum commencing 30 days from the day such award or payment is due. This Code section shall apply to all awards, court orders, decrees, and judgments rendered pursuant to Title 19. Former GA. CODE ANN. § 7-4-12.1(a) (2006). By its express terms, the statute applied a 7 percent rate of interest to “awards of

child support.” Jordan argues that the discounted interest rate was not limited to child

support and applied to “all awards, court orders, decrees, and judgments rendered

pursuant to Title 19.” Title 19 of the Georgia code includes chapters related to

“divorce,” child support, and several other related family law topics. Thus, she contends

that the 7 percent rate applied to any award or judgment in a domestic relations matter.

But Jordan’s interpretation of the provision results in superfluous statutory

language. If the discounted rate of interest applied to all judgments or awards under

Title 19, it would have been unnecessary to specify that it applied to child support

awards. Both Georgia and Washington courts interpret statutes to give effect to all

language, so as to render no portion meaningless or superfluous. Motors Accertance

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Corp. v. Rozier, 278 Ga. 52, 53, 597 S. E. 2d 367 (2004); Rivard v. State, 168 Wn.2d

775, 783, 231 P.3d 186 (2010). The alternative interpretation that gives meaning to all

provisions of the statute is that under the version of the statute in effect at the time of

the decree, the discounted rate of interest applied to child support regardless of whether

that support was encompassed within a decree, court order, award, or other another

vehicle under Title I 9~4 The trial court did not err in ruling that the default rate of

postjudgment interest under Georgia law, here 10.9 percent, applied.

Whitted agrees with the rate of interest but claims the court erred by imposing

simple interest on only the principal judgment amount.5 He relies on a provision of the

Uniform Enforcement of Foreign Judgments Act, RCW 6.36.035(3)(a), to argue that the

decree provided for the accrual of compound interest and Jordan waived her right to

object. We disagree.

Georgia law does not provide for the imposition of interest upon interest, or in

other words, compound interest.6 ~ GA. CODE ANN. § 9-12-10 (“No part of the judgment shall bear interest except the principal which is due on the original, debt.”); see

also Groover v. Commercial Bancorp of Ga., 220 Ga. App. 13, 16, 467 S. E. 2d 355

~ The Georgia legislature amended the statute in 2017. The current provision does not include language limiting the interest rate to “awards of child support” and applies the discounted rate of interest to all “awards, court orders, decrees or judgments rendered pursuant to Title 19 expressed in monetary amounts.” GA. CODE ANN. § 7-4-12.1(a). In this case, the subsequent amendment sheds no light on the meaning of the prior statute. There is no evidence that the language of the prior version generated a dispute that the legislature responded to in amending the statute. Jordan asserts that both versions are consistent, but it is equally reasonable to conclude that the legislature expanded the application of the 7 percent interest rate. ~ We will not entertain Whitted’s suggestion in reply that Washington’s higher rate of interest is applicable to a portion of the interest. ~ ~ Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992) (declining to address an argument raised for the first time in a reply brief). 6 Likewise, in Washington, interest means simple interest unless the express language of a

statute or an agreement provides otherwise. ~ Caruso v. Local Union No. 690, Int’l Bhd. of Teamsters, 5OWn. App. 688, 689, 749 P.2d 1304 (1988).

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(1996) (Georgia’s interest statute ‘forbids post-judgment interest except on the principal

or original debt”). There is nothing in the decree to indicate an intent to impose

compound interest. And even if Whitted’s registration of the Georgia decree apprised

Jordan of his claim for compound interest, RCW 6.36.035(3)(a) imposes no requirement

that a judgment debtor must object within a ten-day period to a claimed rate of interest

on a registered foreign judgment. The statute provides a ten-day waiting period before

a party may commence “execution or other process for enforcement” of a registered

foreign judgment. RCW 6.36.035(3)(a). This limits only a party’s ability to enforce the

foreign judgment. The trial court did not err in imposing interest only on the principal

judgment amount.

B.

Jordan argues that the trial court impermissibly modified the Georgia decree by

requiring her to bear the burden of tax consequences and/or penalties resulting from the

liquidation of retirement funds.

The 2007 Georgia decree required Whitted to provide an account so that Jordan

could transfer the retirement funds. The decree provided that should Jordan “incur any

penalty or tax obligation, or other charges due to the withdrawal [or] transfer of said

funds, all taxes, penalties, or other charges will be deducted from the portion of the

accounts that is transferred to or given to [Whitted].”

In 2011, the Georgia court entered another order on Whitted’s motion to enforce

the decree. According to that order, Whitted provided an account number to Jordan in

December 2007. Meanwhile, Jordan declared bankruptcy in an unsuccessful attempt to

extinguish the debt. The parties then disagreed about whether Jordan owed $55,000,

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or merely half of the balance of the retirement account as it existed at the time of the

transfer. Jordan alleged that the value of the account decreased significantly after 2007

and informed the court that she removed $38,000 from the account, half of the account

value at the time of the withdrawal. The court ruled that Jordan owed Whitted $55,000,

“minus taxes and penalties” and plus interest required by statute. The court ordered

Whitted to provide a bank account, or if necessary, to prepare a qualified domestic

relations order (QDRO) within 20 days, so that Jordan could transfer any and all funds

remaining in the retirement account. If Jordan transferred less than the amount owed,

the court ordered Jordan to pay Whitted $1,000 per month until the entire debt was

satisfied.

Here, the court declined to reduce the principal judgment amount based on

estimated taxes and penalties. The court pointed out that Whitted sought a monetary

judgment based on the provisions of the decree and did not seek a transfer of assets or

to compel the execution of a QDRO. The bourt further observed that the parties did not

avail themselves of tax advantages by transferring the funds as ordered by the court in

2007 and 2011.

Jordan contends that the court inequitably and impermissibly modified the decree

by awarding a monetary judgment because the decree awarded Whitted retirement

assets, not cash, and allocated to him the financial burden of transferring those assets.

The court has broad equitable authority to enforce provisions set forth in a

dissolution decree. Robinsonv. Robinson, 37 Wn.2d 511, 516, 225 P.2d 411 (1950); In

re Marriage of Greenlee, 65 Wn. App. 703, 710, 829 P.2d 1120 (1992). Incident to this

broad authority, the superior court can enforce a decree so long as it does not modify

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the decree.7 In re Marriage of Thompson, 97 Wn. App. 873, 878-79, 988 P.2d 499

(1999). A decree is modified when the rights given to one party are either extended

beyond or reduced from the scope originally intended by the decree. Rivard v. Rivard,

75 Wn.2d 415, 418, 451 P.2d 677 (1969); Thompson, 97 Wn. App. at 878. We review

the trial court’s choice of remedy for an abuse of discretion. In re Marriage of Farmer,

172 Wn.2d 616, 624, 259 P.3d 256 (2011).

The superior court’s order enforcing the Georgia decree neither extended nor

reduced the scope of rights of either party. By ordering a monetary judgment, the court

merely provided a means for Whitted to obtain the assets awarded in the 2007 decree.

The court’s order provides for an offset such that that Jordan is “entitled to full

satisfaction of judgment on the debt she owes” to Whitted. Because the judgment was

fully satisfied by subtracting the judgment amount from the child support debt, there was

no need to adjust the principal judgment amount or allocate responsibility for taxes and

penalties associated with the liquidation of retirement funds.8 Considering the parties’

failure to cooperate in accomplishing such a transfer in more than ten years following

the entry of the decree, the superior court’s decision to impose a monetary judgment for

a principal sum of $55,000 to enforce the terms of the decree was not an abuse of

discretion.

~ Georgia law also follows these principles. See GA. CODE ANN. § 23-4-31 (superior court has ‘full power to enforce its decrees when rendered”); Smith v. Smith, 293 Ga. 563, 564, 748 5. E. 2d 456 (2013). 8 Jordan asserts in her reply brief that although the court’s order does not technically require

withdrawal of retirement funds, she will, in fact, be forced to rely on such funds for the “intended purpose of child support” and to pay for postsecondary education. However, these assertions are neither fully borne out by the factual record nor relevant to the question of whether the court improperly modified the decree.

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lv. Whitted’s application for a writ of garnishment included a claim for $5,000 in

attorney fees. On appeal, Whitted claims he is entitled to those fees because Jordan

failed to specifically object below within a ten-day period. We deny the request. While

an attorney appeared on Whitted’s behalf at the hearing on his motion to enforce the

decree, he represented himself for the most part throughout this proceeding. A pro se

litigant is generally not entitled to attorney fees to recover for work representing himself.

In re Marriage of Brown, 159 Wn. App. 931, 938-39, 247 P.3d 466 (2011). The trial

court did not award fees below and as explained, neither RCW 6.36.035(3)(a) nor any

other authority supports Whitted’s argument as to waiver.

‘I I WE CONCUR:

4~&a~9~