Navy Federal Credit Union v. HMC Finance Corp. (Appeal from Montgomery Circuit Court: CV-23-230).
This text of Navy Federal Credit Union v. HMC Finance Corp. (Appeal from Montgomery Circuit Court: CV-23-230). (Navy Federal Credit Union v. HMC Finance Corp. (Appeal from Montgomery Circuit Court: CV-23-230).) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Rel: December 20, 2024
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other errors, in order that corrections may be made before the opinion is published in Southern Reporter.
ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2024-2025 _________________________
CL-2024-0352 _________________________
Navy Federal Credit Union
v.
HMC Finance Corp.
Appeal from Montgomery Circuit Court (CV-23-230)
LEWIS, Judge.
Navy Federal Credit Union ("Navy Federal") appeals from an order
entered by the Montgomery Circuit Court ("the circuit court"). We
dismiss the appeal as from a void judgment. CL-2024-0352
Procedural History
On April 20, 2002, the Montgomery District Court ("the district
court") entered a default judgment in the amount of $5,589.54 plus court
costs in favor of HMC Finance Corp. ("HMC") and against Quinton
Collick and Dalphne Collick. In October 2019, HMC filed a motion to
revive the judgment, and that motion was granted.
On July 23, 2021, upon the request of HMC, a process of
garnishment was issued to Navy Federal as garnishee. On August 2,
2021, Navy Federal filed an answer to that garnishment. Thereafter, on
November 30, 2021, Dalphne filed a motion for a stay of the garnishment
in the district court because of pending bankruptcy proceedings.
Dalphne's motion was granted. However, a motion to lift the stay as to
Quinton was subsequently filed, and the stay was lifted as to Quinton on
March 4, 2022.
On March 21, 2022, a second process of garnishment was issued to
Navy Federal. On April 15, 2022, Navy Federal filed an answer to the
garnishment. On August 19, 2022, another process of garnishment was
issued to Navy Federal, and Navy Federal again filed an answer,
asserting that it had no garnishable assets.
2 CL-2024-0352
On September 6, 2022, HMC filed in the district court a contest of
Navy Federal's third answer, a motion for an oral examination of a Navy
Federal representative, and a motion for a judgment against Navy
Federal. A hearing was held, and both parties filed briefs in support of
their positions. Navy Federal contended that the account that HMC
sought to garnish was located in the Commonwealth of Virginia and,
therefore, the district court lacked jurisdiction to order a garnishment of
funds from that account. HMC, on the other hand, contended that the
district court had jurisdiction to order a garnishment of funds from the
Navy Federal account.
On June 7, 2023, the district court entered an order, stating, in part:
"This Court has personal jurisdiction over [Navy Federal] as well as in rem jurisdiction over the res, the debt owed.
"Based on the foregoing it is hereby ORDERED
"(1) [Navy Federal] shall within 30 days of the date of this order respond using the Process of Garnishment Form as to the level of indebtedness by [Quinton] Collick. [Navy Federal] may also make a notation on this form that the assets are located outside of the State of Alabama, which would ensure some level of compliance with the [United States of America Consumer Financial Protection Bureau]'s expectations.
"(2) [Navy Federal] is hereby ordered, pursuant to Section 6-6-452 of the Code of Alabama [1975], to pay any 3 CL-2024-0352
monies within its possession regarding [Quinton Collick] into court."
(Capitalization in original.)
Navy Federal filed a notice of appeal from the district court to the
circuit court on June 21, 2023. Both parties thereafter filed in the circuit
court briefs in support of their positions. The circuit court then entered
an order on April 2, 2023, stating:
"Having considered the pleadings, briefs submitted by the parties, argument of counsel, and applicable law, this Court hereby finds that it has personal jurisdiction over Navy Federal …; that Navy Federal … is a depository institution; that any deposit made by a member of the credit union creates an obligation of the credit union to its member to repay the deposit; and that any obligation owed by Navy Federal … to its member is subject to a garnishment action in the State of Alabama regardless of the location of the account stated in the Important Disclosures.
"In consideration thereof, this Court hereby ORDERS Navy Federal … to answer the garnishment stating whether it owed its member any money from the date of service of the garnishment up to the date of the Answer, in accordance with the garnishment statues of the State of Alabama and the instructions on the garnishment form. Further, if [Navy Federal] owed to its member any money from the date of service of the garnishment up to the date of the Answer, that money shall be paid to the clerk of this Court pursuant to § 6- 6-453, Ala. Code 1975, subject to further Orders of this Court."
(Capitalization in original.) Navy Federal filed its notice of appeal on
May 14, 2024.
4 CL-2024-0352
Discussion
Although the parties have not raised the issue whether the circuit
court had jurisdiction to consider Navy Federal's appeal, "this Court is
duty bound to notice ex mero motu the absence of subject-matter
jurisdiction." Stamps v. Jefferson Cnty. Bd. of Educ., 642 So. 2d 941, 945
n.2 (Ala. 1994); see also Kelley v. Finley, 266 So. 3d 756, 758 (Ala. Civ.
App. 2018). Sections 12-12-70(a) and 12-12-71, Ala. Code 1975, provide
that a party may file an appeal to a circuit court from a final judgment
entered by a district court. See Kelley, 266 So. 3d at 758.
In Montgomery Piggly Wiggly, LLC v. Accel Capital, Inc., 358 So.
3d 693, 694 (Ala. 2022), our supreme court explained that "only a
judgment that disposes of a garnishment proceeding in favor of either the
judgment creditor or the garnishee, standing in relation to the defendant,
and that leaves nothing for further adjudication is a final, appealable
judgment." Our supreme court further pointed out that an order denying
a motion to quash a garnishment proceeding "disposed of only a motion
and effectively allowed the garnishment proceeding to continue, which
would require … the garnishee[] to file an answer." Id. The supreme
court stated that "an order merely ruling on a motion to quash a
5 CL-2024-0352
garnishment proceeding, without condemning and distributing
garnished funds," was not a final judgment that would support an appeal.
Id.
In the present case, the district court's June 7, 2023, order stated
that it had "personal jurisdiction over [Navy Federal] as well as in rem
jurisdiction over the res, the debt owed." The order stated that "[Navy
Federal] shall within 30 days of the date of this order respond using the
Process of Garnishment Form as to the level of indebtedness by
Defendant Collick" and "to pay any monies within its possession
regarding this Defendant into court." However, the district court did not
proceed to "condemn[] and distribut[e the] garnished funds."
Montgomery Piggly Wiggly, LLC, 358 So. 3d at 694. Therefore, in
accordance with our supreme court's decision in Montgomery Piggly
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