Lepak v. McClain

1992 OK 166, 844 P.2d 852, 1992 Okla. LEXIS 227, 1992 WL 379799

• Court: Supreme Court of Oklahoma
• Decided: December 22, 1992
• Docket: 78950
• Status: Published

Opinions

ALMA WILSON, Justice:

The first impression issue presented in this original action is whether an application for citation for indirect civil contempt may be maintained to enforce compliance with an order, entered pursuant to 12 O.S. 1991, § 850, directing a debtor to make installment payments on a money judgment. We hold in the negative.

Jerry Hervey, the plaintiff and judgment creditor below (Hervey), initiated the action below against Greg Lepak, d/b/a Red Sands Fence Company, the petitioner/defendant and judgment debtor below (Le-pak), for breach of contract. Hervey took a default judgment against Lepak in the amount of $10,298.09 for actual damages, $10,000.00 for punitive damages, $1,250.00 for attorney fees and $110.60 for costs. At a post-judgment hearing on assets, the parties agreed that the money judgment should be paid in installments. The trial court entered an order directing Lepak to pay specified amounts on specified dates toward satisfaction of the judgment debt. Apparently Lepak did not make the ordered installment payments and Hervey filed an application for citation for indirect civil contempt, alleging that Lepak willfully and contumaciously violated the installment payment orders and seeking punishment of Lepak by monetary fine and imprisonment. Lepak moved for dismissal of the application for contempt citation on the grounds that the proceeding violates art. 2, § 13 of the Oklahoma Constitution. The trial court denied Lepak’s dismissal motion and docketed Hervey’s application for citation for contempt for trial on the merits. Lepak filed his application in this Court asking that we assume original jurisdiction and issue a writ of prohibition against further indirect civil contempt proceedings before the trial court.

Lepak asserts that the pending contempt proceeding may result in his incarceration for failure to make payments on a judgment debt and thus the contempt proceeding is contrary to the prohibition against imprisonment for debt in art. 2, § 13 of the Oklahoma Constitution. Hervey responds that the underlying purpose of the contempt proceeding is the preservation of the integrity of the district court order directing installment payments on the judgment debt and therefore the contempt proceeding is not violative of art. 2, § 13.

The central question in this controversy is whether art. 2, § 13 of the Oklahoma Constitution prevents the legislature from authorizing the use of the judicial contempt powers to coerce installment payments on a judgment debt. This question is squarely within the original jurisdiction of this court.¹ A petition for writ of prohibition is an appropriate remedy to challenge the constitutionality of a statute vesting power in the district courts.² This court will assume original jurisdiction and consider a petition for writ of prohibition where the trial court’s use of judicial force is challenged even though the cause is otherwise properly cognizable by the inferior tribunal.³ And, where the exercise of judicial power violates fundamental law, this court will issue a writ of prohibition to control the performance of judicial proceedings.⁴

We assume original jurisdiction. We find that the Oklahoma Constitution, art. 2, § 13, prohibits the legislature from authorizing enforcement of a money judgment in an indirect civil contempt procedure as provided in the last sentence of 12 O.S.1991, § 850; and, that the constitutionally impermissible sentence is severable from the remainder of the statute. We hold that the last sentence of 12 O.S.1991, § 850 contravenes the express terms of the Oklahoma Constitution, art. 2, § 13; and, that the last sentence of 12 O.S.1991, § 850 is hereby severed and stricken from the statute.

Section 13 of Article 2 of the Oklahoma Constitution states:

Imprisonment for debt is prohibited, except for the non-payment of fines and penalties imposed for the violation of law.

The words of art. 2, § 13 must be given their plain, natural and ordinary meaning.⁵ That no one may be imprisoned for nonpayment of a debt except a fine or a penalty is the obvious meaning of art. 2, § 13.⁶ This meaning, apparent on the face of art. 2, § 13, must be accepted.⁷ The clear prohibition against imprisonment for debt is mandatory because the words of art. 2, § 13 neither express nor imply an intent that the provision is directory only.⁸

In determining the constitutionality of a legislative enactment, we look to the constitution to determine whether the legislature is prohibited from doing the act.⁹ A mandatory provision in our constitution, art. 2, § 13 is a limitation upon the power of the legislature. The object of art. 2, § 13 is the protection of our resident citizens from body attachment by our governmental officials because of a failure to pay a debt. We will not adopt a strict or technical construction of our constitution so as to defeat the evident object and purpose of the constitutional provision, in order to uphold a legislative enactment.¹⁰ Article 2, § 13 prevents the legislature from enacting any statute that would, directly or indirectly,¹¹ authorize the body attachment of an individual for failure to pay a debt.

The challenged statute, 12 O.S.1991, § 850, states:

The judge after the hearing provided herein may order any property of the judgment debtor, not exempt by law, in his possession or under his control to be applied toward the satisfaction of the judgment, and may enforce the same by proceeding for contempt in case of refusal or disobedience.

The judge may further order the judgment debtor to pay to the judgment creditor or apply on the judgment installments, such portion of his non-exempt income, however or wherever earned or acquired, as the court may deem proper after due regard for any payments required to be made by the judgment debt- or by virtue of law or prior order of a court or under wage assignments outstanding. Where the judgment debtor claims or is proved to be rendering services to or employed by a relative or other person or by a corporation owned or controlled by a relative or other person, without salary or compensation, or at a salary or compensation so inadequate as to satisfy the court that such salary or compensation is merely color-able and designed to defraud or impede the creditors of such debtor, the court may direct such debtor to make payments on account of the judgment, in installments, based upon a reasonable value of the services rendered by such judgment debtor under his said employment or upon said debtor’s then earning ability. The court may from time to time, modify an order made under this section upon application of either party upon notice to the other. A failure or neglect to comply with an order of direction of the court, shall be punished as for contempt. [Emphasis added.]

On its face, it is clear that the two paragraphs of § 850 serve different purposes. The obvious purposes of the provisions contained in the first paragraph of § 850 are to require the delivery of the identified property owned by and in the possession or control of the judgment debtor toward the satisfaction of the judgment debt; and to enforce the order for delivery or turn over of property by incarceration, if the judgment debtor unjustly refuses to apply the identified property towards the satisfaction of a judgment. While the obvious purposes of the provisions contained in the second paragraph of § 850 are to require the judgment debtor to set aside and deliver a portion of his/her future income toward the satisfaction of the judgment debt; and to enforce the order for payment of future income by incarceration. It is the contempt provision in the second paragraph which we conclude is violative of the Oklahoma Constitution, art. 2, § 13.

The early decisions upholding the contempt provision in the first paragraph of § 850 differentiated orders to turn over property identified at a hearing on assets and orders to pay a judgment debt. The creditors’ remedy of hearing on assets and turn over orders in the first paragraph of § 850 were adopted from Kansas in 1910.¹² Prior to enactment of § 850, the Kansas statute had been upheld against an imprisonment for debt challenge. State ex rel. v. Burrows, 33 Kan. 10, 5 P. 449 (1885). The Kansas Supreme Court construed the contempt provisions to be applicable to orders directing the debtor to turn over identified property in his or her possession at the time the turn over order was entered, rather than an order to pay a debt.

As another ground of error, it is insisted by the appellant ... that the order made was one commanding the appellant to pay a debt, and that to commit him for contempt in failing to obey the order would, in effect, be imprisonment for debt. In such proceedings, “the judge may order any .property of the judgment debtor, not exempt by law, in the hands of himself or any person or corporation, or due to the judgment debtor, to be applied towards the satisfaction of the judgment, and may enforce the same by proceedings for contempt, in case of refusal or disobedience.” Section 490, Code. In this case the judge found that the appellant had property, which consisted of money in his possession and under his control, not exempt by law, that should be applied towards the satisfaction of the judgment; and ordered that it be so applied. It was not an order to pay a debt, but was a direction to apply certain property, discovered upon the examination to be in the possession of the appellant, to the satisfaction of the judgment against him.

State ex rel. v. Burrows, 5 P. at page 452.

Six months later, Burrows was again before the Kansas Supreme Court in an original proceeding in habeas corpus. In re Burrows, 33 Kan. 675, 7 P. 148 (1885). Leaving Burrows committed to jail until the judgment and costs were satisfied, the Kansas Supreme Court said:

On March 25, 1884, F.H. Kollock and B. Fanning recovered before a justice of the peace of Marion county, in this state, a judgment against Melvin Burrows, aggregating with costs, $325.30_ The judge found that Burrows had, at his examination, upon his person and under his actual control, money to the amount of $1,000.00, not exempt by law, and he then ordered him to apply sufficient of said moneys so in his possession towards the satisfaction of the judgment against him....

In re Burrows, 7 P. at page 149.

In denying Burrows claim to a right to trial by jury, the Kansas high court explained the purpose of the statute:

... The proceeding in hid of execution, though created by statute, is a proceeding in the action in which the judgment was recovered, after the judgment debt- or has had a hearing and trial, and is a substitute for the creditors’ bill formerly used in chancery. The proceeding is a simple regulation of well-established and well-defined jurisdiction, which courts of equity were accustomed to employ. After the decree in a court of equity for the delivery of property or effects, the debt- or, upon disobeying the decree was adjudged for his contumacy guilty of contempt of the authority of the court. He, therefore, could be imprisoned so long as he remained in contempt. Obedience, however, to the decree, — that is, the delivery of the property, — would terminate the imprisonment at any time. The purpose of the statute is to require the delivery of the property of the judgment debt- or for the payment of his debts; and if it is made, the debtor cannot be imprisoned. It is only when the debtor has property which he unjustly refuses to apply towards the satisfaction of a judgment, after being afforded an opportunity so to do, that he can be imprisoned....

In re Burrows, 7 P. at page 150.

The Kansas court concluded that:

We therefore conclude that the provisions of the Code “in aid of execution,” conferring upon the district judge the power to require a judgment debtor to appear before him to answer concerning his property, which he unjustly refuses to apply towards the satisfaction of a judgment recovered against him, and to order any money or other property in his actual possession and under his control, not exempt by law, to be delivered up and applied towards the satisfaction of the judgment under which the proceedings are had, and to enforce said orders by proceedings for contempt in case of refusal or disobedience, are not violative of sections 5, 10, or 16 of the bill of rights of the constitution of the state, or the fifth amendment of the federal constitution. Sections 483, 490, Code; State v. Burrows, supra.

... In this ease, Burrows is imprisoned simply and wholly because he will not deliver up money in his possession and under his control in payment of the judgment. He can terminate the imprisonment at any time by the mere exercise of his own will; that is, by satisfying the original judgment and costs, and the costs of the supplementary proceedings, — all of which, under the findings of the district judge, he has the ability to do.

In re Burrows, 7 P. at pages 151 and 152.

Hence, the validity of the contempt provisions in § 850 hinges upon the orders to be enforced by contempt. The contempt provision upheld in Burrows serves to preserve the integrity of the turn over orders which are based upon proof that the judgment debtor “had, at his examination, upon his person and under his actual control” the property which he was directed to apply toward satisfaction of the judgment debt. The challenged contempt provision of § 850 serves to enforce orders directing payment of future income toward satisfaction of a judgment debt which are based upon proof that the judgment debtor may or has the capacity to earn income from employment or other rendering of services in the future which he or she is directed to pay toward satisfaction of a judgment debt.

In this context, orders directing delivery of future earnings must be distinguished from orders directing delivery of earnings in the possession of the judgment debtor at the time of issuance of the turn over order. The early versions of § 850 specifically provided that any funds in the possession of the debtor which were earned during the preceding ninety days could not be applied to the judgment debt if the debtor demonstrated the need for such funds for family support. This Court has upheld the application of non-exempt earnings in the hands of the debtor toward satisfaction of a judgment debt. Smith v. Britton, 185 Okl. 76, 89 P.2d 953 (1939).

The contempt provision at issue was enacted in 1965.¹³ The constitutionality of the challenged contempt provision in 12 O.S.Supp.1965, § 850 for failure to obey installment payment orders was addressed in Freeman v. Heiman, 426 F.2d 1050 (10th Cir.1970). The appellant, Heiman, challenged the constitutionality of the provisions authorizing the courts to order installment payments toward satisfaction of a judgment debt and authorizing the courts to punish for contempt the failure to pay as ordered.¹⁴ In holding that the contempt provision in § 850 does not contravene art. 2, § 13, the Tenth Circuit reasoned that the contempt proceeding is designed to punish for failure to make payment from existing funds. Recognizing that this court has not construed § 850 and citing In re Burrows and State v. Burrows, inter alia, the Tenth Circuit stated:

A number of states have enacted statutes providing for the installment payment of judgments similar to § 850.... The purpose of such statutes is not to settle disputes as to ownership of property, but to aid judgment creditors in the discovery of a debtor’s nonexempt assets and their application to unsatisfied judgments. If the court finds from the evidence that a judgment debtor has income over and above the statutory exemptions, sufficient to partially pay the judgment, it may order the payment in installments. The authorized contempt proceeding to enforce the order is designed to punish for failure to make the required payments from existing funds and not for failure to satisfy the judgment debt.

Freeman v. Heiman, 426 F.2d at 1052.

We find the reasoning of the Tenth Circuit in Freeman v. Heiman to be contrary to Burrows and inconsistent with art. 2, § 13. The fallacy in the Tenth Circuit’s reasoning is its characterization of an order directing future installment payments as an order directing payment from existing funds. Clearly, installment payments toward satisfaction of a judgment debt were ordered in Freeman v. Heiman because the evidence established that Heiman had the capacity to earn $40,000.00 in the next succeeding year. Heiman’s expected income during the next year was not an existing fund at the time the order was entered. Further, the Tenth Circuit relied upon decisional law from jurisdictions which had only statutory prohibitions against imprisonment for debts rather than clear state constitutional prohibitions similar to art. 2, § 13.¹⁵

In mandatory language, the challenged contempt provision requires the punishment of a debtor who, whether willfully or negligently, fails to comply with an order directing periodic payments out of non-exempt earnings or other income toward satisfaction of a judgment debt.¹⁶ The legislature has defined contempts as direct and indirect. 21 O.S.1991, § 565.¹⁷ Whether a contempt is direct or indirect, the legislature has authorized punishment to consist of a fine not exceeding $500.00 and/or a sentence not exceeding six months in the county jail, at the discretion of the trial court. 21 O.S.1991, § 566. The legislature has not provided any special proceedings or punishments for contempts of installment payment orders under § 850. The legislature has not excluded punishment by incarceration in the county jail for those con-tempts authorized to aid a creditor in enforcing payment of a judgment debt. Because the contempt proceeding contemplated by the last sentence in § 850 may result in , the incarceration of a debtor for failure to pay a judgment debt, we find the last sentence of § 850 to be contrary to the express terms of art. 2, § 13.

We hold that the art. 2, § 13 prohibits the legislature from authorizing enforcement of a money judgment in an indirect civil contempt proceeding wherein the debt- or may be punished by incarceration in the county jail and that the last sentence in § 850 is constitutionally impermissible and void. We find that the challenged contempt provision in § 850 is severable,¹⁸ and hold that the last sentence of 12 O.S.1991, § 850 is stricken from the statute.

As we noted earlier, this appeal does not challenge the contempt provision in the first paragraph of § 850 authorizing contempt proceedings to enforce district court orders directing the judgment debtor to turn over property in his/her possession or control toward satisfaction of a judgment. We emphasize that this opinion does not affect the contempt provisions in the first paragraph of § 850. The reasoning and holding of this opinion is expressly restricted to the challenged contempt provision in the last sentence of 12 O.S.1991, § 850. We are also cognizant of the presumption of validity¹⁹ of the challenged contempt provision in § 850 since its enactment in 1965. The effect of this opinion shall be prospective and operative as to the contempt proceeding below and all other contempt proceedings initiated pursuant to the last sentence of § 850 and pending before the district courts or the appellate courts. The Honorable R.B. McClain, Associate District Judge for Garvin County, is hereby prohibited from exercising any further judicial power pursuant to 12 O.S.1991, § 850 which may result in the incarceration of petitioner for the failure to make installment payments on the judgment debt.

APPLICATION TO ASSUME ORIGINAL JURISDICTION GRANTED; WRIT OF PROHIBITION ISSUED.

OPALA, C.J., HODGES, V.C.J. and ALMA WILSON, KAUGER, SUMMERS and WATT, JJ., concur. LAVENDER, SIMMS and HARGRAVE, JJ., dissent.

1 . Okla. Const., art. 7, § 4.

2 . The ancient common law writ of prohibition was fashioned to restrain an inferior judicial tribunal from further exercise of jurisdiction with which it is not legally vested. Hirsh v. Twyford, 40 Okl. 220, 139 P. 313, 315 (1913).

3 . Inhofe v. Wiseman, 772 P.2d 389, 391 (Okla.1989).

4 . Atchison, T. & S.F. Ry. Co. v. Love, 29 Okl. 738, 119 P. 207, 208 (1911) and Draper v. State, 621 P.2d 1142, 1147 (Okla.1980).

5 . Wimberly v. Deacon, 195 Okl. 561, 144 P.2d 447 (1944).

6 . Morgan v. National Bank of Commerce of Shawnee, 90 Okl. 280, 217 P. 388, 389 (1923).

7 . Shaw v. Grumbine, 137 Okl. 95, 278 P. 311 (1929).

8 . Constitutional provisions are mandatory, unless it appears from the express terms thereof, or by necessary implication from the language used, that they are intended to be directory only. Jones v. Freeman, 193 Okl. 554, 146 P.2d 564 (1944) appeal dismissed 322 U.S. 717, 64 S.Ct. 1288, 88 L.Ed. 1558.

9 . In ascertaining the constitutionality of a legislative act, we do not look to the constitution to determine whether the legislature is authorized to do an act, but whether the legislature is prohibited from doing an act. Reherman v. Oklahoma Water Resources Bd., 679 P.2d 1296 (Okla.1984).

10 . Williams v. City of Norman, 85 Okl. 230, 205 P. 144 (1922).

11 . This Court is duty-bound to be intolerant of the legislature’s attempt to do indirectly that which the constitution directly prohibits. Reherman v. Oklahoma Water Resources Board, 679 P.2d 1296, 1301-1302 (Okla.1984), wherein we said:

(W)hat may not be done directly should not be allowed to be done indirectly. Further, as the Court stated in Trapp v. Cook Const. Co., 24 Okl. 850, 105 P. 667, 671 (1909):

An act violating the true intent and meaning of the [Constitution], although not within the letter, is as much within the purview and effect of a prohibition as if within the strict letter; and an act in evasion of the terms of the Constitution, as properly interpreted and understood, and frustrating its general and clearly expressed or necessarily implied purpose, is clearly void as if in express terms forbidden....

12 . Revised Laws 1910, § 5198, adopted from Kansas, read as follows:

The judge may order any property of the judgment debtor, not exempt by law, in the hands of either himself or any other persons or corporation, or due to the judgment debtor, to be applied toward the satisfaction of the judgment, and may enforce the same by proceedings for contempt in case of refusal or disobedience; but the earnings of the debtor for his personal services, at any time within three months next preceding the order, cannot be so applied, when it is made to appear, by the debtor’s affidavit or otherwise, that such earnings are necessary for the use of a family supported wholly or partly by his labor.

13 . Okla.Sess.Laws 1965, ch. 300, § 6. As stated previously, Section 850 contains two contempt provisions. The language of the challenged contempt provision in § 850 has not been amended since its enactment in 1965.

14 . Freeman v. Heiman, 426 F.2d at page 1051.

15 . The Tenth Circuit cited the New York case of Reeves v. Crownshield, 274 N.Y. 74, 8 N.E.2d 283, 111 A.L.R. 389 (1937) and adopted the reasoning of those states and Canadian jurisdictions set out in the A.L.R. annotation. At the time of the Tenth Circuit opinion, the constitutions of forty-one states included a prohibition against imprisonment for debt, while the other nine states, including New York and several other jurisdictions cited in the annotation at 111 A.L.R. 389, had a statutory ban against imprisonment for debt. Oklahoma, then and now, provided an absolute prohibition against imprisonment for debt. See, 80 Yale L.R. 1679, 1679, note 1, (1971) for a listing of the states which had constitutional bans against imprisonment for debt.

16 . The authorized installment payments out of the debtor’s present and future non-exempt income from earnings or investments in § 850 is in addition to the prejudgment and post-judgment garnishment remedies, including the six month continuing garnishment, available to creditors in 12 O.S.1991, §§ 1171, et seq.

17 . The Oklahoma Constitution, art. 2, § 25 requires the legislature to define contempts and regulate the proceedings and punishment for contempts. We note that ordinary acts of negligence are not within the statutory definition of direct nor indirect contempts. Willfulness is expressly a required element of indirect contempt. The last sentence of § 850, mandating punishment for contempt for negligent failure to comply with a court ordered direction is inconsistent with 21 O.S.1991, § 565.

18 . Atchison, T. & S.F. Ry. v. Long, 122 Okl. 86, 251 P. 486 (1926).

19 . Reherman v. Oklahoma Water Resources Board, 679 P.2d 1296, 1300 (Okla.1984); Earnest, Inc. v. LeGrand, 621 P.2d 1148, 1153 (Okla.1980).