McIntyre v. Wright

634 P.2d 493, 54 Or. App. 248, 1981 Ore. App. LEXIS 3364

• Court: Court of Appeals of Oregon
• Decided: October 12, 1981
• Docket: No. 376-325, CA 19231
• Status: Published

Opinions

GILLETTE, P. J.

Respondent seeks to garnish Workers’ Compensation benefits due defendant. The trial court granted a continuing garnishment against defendant’s benefits for the lesser of 25 percent of the benefit or $255 per month. Defendant appeals. We reverse in part.

Defendant first contends that a creditor may not garnish Workers’ Compensation benefits. Defendant is incorrect. See Satterfield v. Satterfield, 54 Or App 184, 634 P2d 787 (1981).¹

Defendant next contends that, assuming garnishment was permissible, a continuing garnishment was not. We agree. In Weyerhaeuser Co. v. Lynch, 268 Or 142, 502 P2d 351 (1971), the Oregon Supreme Court stated:

"The law is well settled in Oregon that a garnishment creditor takes only such rights or interests as his debtor had at the time the notice of garnishment was served. Scheuerman v. Mathison, 74 Or 40, 144 P 1177 (1914). A garnishing creditor canstand in no better position than the debtor and garnishees are held only for clearly ascertainable debts owing at the time of service of the notice.” 268 Or at 146.

Although Weyerhaeuser is distinguishable on its facts, the statement cited is a clear, general prohibition of continuing garnishment.

Respondent admits that Weyerhaeuser accurately states Oregon garnishment law, but argues that Calvin v. Calvin, 6 Or App 572, 487 P2d 1164, 489 P2d 403 (1971), which holds that Workers’ Compensation benefits are not exempt from support obligations, implies that those who are entitled to support payments from the debtor are not creditors and therefore not subject to the general garnishment rules.

ORS 23.777² does provide an exception to the general rules of garnishment for those entitled to delinquent support payments. Although the garnishment statutes generally do not provide for continuing garnishment, ORS 23.777 allows the court to order "any employer or trustee, including but not limited to a conservator, of the obligor” to withhold "money due or to become due such obligor” for payment of delinquent child support. (Emphasis supplied.) Subsection (4) states that such an order "shall be a continuing order and shall remain in effect and be binding * * * until further order of the court.” Since this provision specifically authorizes continuing garnishment upon only employers, trustees, or conservators of the obligor, continuing garnishment is implicitly improper as to all others.

SAIF is not an employer for purposes of the statute. Sandstrum v. SAIF, 46 Or App 773, 613 P2d 96, rev den (1980). The state makes no claim that SAIF is either a trustee or conservator; we hold that it is neither. Defendant is simply the third party beneficiary of an insurance contract between SAIF and defendant’s employer.

Because SAIF is not a permissible garnishee under ORS 23.777, the support obligor must proceed under the general garnishment statutes and is not, therefore, entitled to continuing garnishment. The trial court’s order granting continuing garnishment was in error. The court could garnish only sums owed defendant by SAIF at the time the proceeding was brought. We remand the case to the trial court to determine that amount.

Reversed in part and remanded.

1 But for Satterfield, the author of this opinion and Young, J., would reverse this case for the reasons set forth in the dissenting opinion in Satterfield.

2 ORS 23.777 provides:

"(1) In addition to any other remedy provided in law for the enforcement of support, the court, upon notice that support payments or any fees provided for in chapter 458, Oregon Laws 1975, are delinquent and application by the obligee or by the district attorney or Support Enforcement Division of the Department of Justice, shall issue an order directing any employer or trustee, including but not limited to a conservator, of the obligor to withhold and pay over to the Department of Human Resources or the clerk of the court out of which the order is issued, whichever is appropriate, money due or to become due such obligor in an amount not to exceed:

"(a) One-fourth of the disposable earnings as defined in ORS 23.175 due or becoming due the obligor at each pay period, until all delinquent amounts due together with interest are paid in full, plus all further amounts coming due before the delinquent amounts are paid in full.

"(b) Thereafter at each pay period, the amount ordered to be paid for support, but not more than one-fourth of the disposable earnings as defined in ORS 23.175 due or becoming due the obligor at each pay period.

"(2) (a) An order entered pursuant to this section shall recite the amount of all delinquent support amounts due, together with interest, and the amount required to be paid as continuing support.

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"(4) An order issued under subsection (1) or (3) of this section shall be a continuing order and shall remain in effect and be binding upon any employer or trustee upon whom it is served until further order of the court.

"(5) An order to withhold issued and served pursuant to this section shall have priority over any notice of garnishment subsequently served upon any employer or trustee of an obligor.

"(6) No employer or trustee who complies according to its terms with an order under this section or the notice provided for in paragraph (b) of subsection (2) of this section shall be liable, to the obligor or to any other person claiming rights derived from the obligor for wrongful withholding.

,"(7) An employer or trustee described in subsection (1) of this section who wilfully fails or refuses to withhold or pay the amounts as ordered shall be deemed to be in contempt of the authority of the court and may be held personally liable.

"(8) No employer shall discharge or refuse to hire an employe because of the entry or service of an order of withholding under this section. Any person who violates this subsection shall be deemed to be in contempt of the authority of the court.”