Paglia v. Breskovich

522 P.2d 511, 11 Wash. App. 142, 1974 Wash. App. LEXIS 1217
CourtCourt of Appeals of Washington
DecidedMay 1, 1974
Docket726-2; 766-2
StatusPublished
Cited by7 cases

This text of 522 P.2d 511 (Paglia v. Breskovich) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Paglia v. Breskovich, 522 P.2d 511, 11 Wash. App. 142, 1974 Wash. App. LEXIS 1217 (Wash. Ct. App. 1974).

Opinions

Petrie, J.

John Breskovich, plaintiff, filed a complaint against defendant, Martinolich Shipbuilding Corporation, in Pierce County Superior Court, cause No. 196536, alleging damages in excess of $100,000 resulting from an alleged breach of contract to build a vessel. Martinolich counterclaimed to recover for an alleged unpaid balance of $15,000 due on the contract. John Paglia is counsel for Martinolich [143]*143and also is assignee for collection of a judgment creditor of Breskovich in Pierce County Superior Court, cause No. 185187. The unpaid balance on the judgment against Breskovich is approximately $1,600.

Under a general writ of execution issued in cause No. 185187 at Paglia’s request, the sheriff of Pierce County levied upon Breskovich’s unliquidated claim No. 196536 against Paglia’s client, Martinolich. Paglia purchased this unliquidated claim for $750 at a sheriff’s sale on October 28, 1971. A week later Paglia wrote a letter to Breskovich’s counsel advising him that his services were no longer needed in cause No. 196536.

Shortly thereafter, Paglia moved to be substituted as party plaintiff in lieu of Breskovich in cause of action No. 196536. Breskovich objected to the substitution and moved to set aside the sheriff’s sale which had been conducted in cause No. 185187. After argument on the motions, the trial court announced on November 22, 1971, that the sheriff sale would be set aside on condition that Breskovich pay to Paglia the full amount of the unpaid judgment together with interest, costs and attorneys’ fees within 15 days, otherwise the sale would not be set aside.

On December 6, 1971, Breskovich filed a motion seeking additional relief supported by his counsel’s affidavit, which asserted, in part, that Breskovich had borrowed funds sufficient to comply with the court’s announced ruling of November 22, 1971, but three other judgments against him, totaling approximately $20,000 remain unsatisfied. Paglia as assignee of one of these other judgment creditors had already obtained another writ of general execution,1 the sheriff had once again levied upon Breskovich’s unliquidated claim, and sale thereon had been set for December 20, 1971. The affidavit also recited that Breskovich’s only asset was the claim he had against Martinolich. Additional relief [144]*144which Breskovich sought included an order quashing all writs of execution issued, staying issuance of any further writs, and enjoining all sales thereunder until such time as judgments of record against him could be satisfied out of whatever judgment may be obtained at the conclusion of his cause of action against Martinolich.

At the hearing on this latter motion Paglia was quite candid with the court. His position was openly and emphatically declared: “We are intending to take away their ability to prosecute the action. I mean make no mistake about it.”

The trial court, apparently under the impression that its authority to stay proceedings was limited solely to provisions of RCW 6.08 and CR 62, was obviously distressed at its inability to grant any type of equitable relief which Breskovich sought. Consequently, after hearing the matter, the court entered two orders on December 20, 1971: (1) substituting Paglia in lieu of Breskovich as plaintiff in cause No. 196536, but continuing Breskovich as a party to the action “in effect as a defendant incident to” Martinolich’s counterclaim; (2) in cause No. 185187, denying Breskovich’s motions to set aside the sheriff’s sale and for additional relief. Breskovich has appealed both orders to this court;

The underlying issue to be decided in this appeal is whether or not a judgment debtor may invoke any equitable power of the superior court in his quest for an order to set aside a sheriff’s bill of sale of personal property which purports, after sale on notice and following levy under a writ of execution, to sell and convey the debtor’s unliquidated and undetermined independent cause of action against another party when the sale completely destroys the judgment debtor’s ability to prosecute that independent cause of action to judgment. We hold that the court does possess inherent supervisory power over its own process, exercisable when the demands of justice to all parties can be reasonably satisfied, to set aside a sheriff’s bill of sale [145]*145which effectively deprives the judgment debtor an opportunity to establish his claim.

We start with the statutory pronouncement that:

All property, real and personal, of the judgment debt- or, not exempted by law, shall be hable to execution.

RCW 6.04.060.

Fifty years ago that statute was the foundation stone upon which a levy on an unliquidated and undetermined claim of indebtedness was supported even though the alleged indebtedness was due from the assignor of the party at whose request the levy was made. Johnson v. Dahlquist, 130 Wash. 29, 225 P. 817 (1924). The Johnson court reasoned rather succinctly:

But it is contended that the respondents should not be permitted to levy upon that which they themselves owe to the judgment debtor. But why not? It is property. It is capable of being transferred. It is capable of being converted into a judgment which is subject to execution. It is an asset of the judgment debtor, and why should not his assets, whatever their nature, be taken to satisfy a judgment? We cannot see any logical reason why such property should not be levied on.

Johnson v. Dahlquist, supra at 33.

In part, at least, the Johnson court based its conclusion upon the premise that the claim of indebtedness had a capability of being converted into a judgment, which, itself was subject to execution. In a more recent opinion, a unanimous en banc court exhibited a somewhat tortured reluctance to extend the area of the Johnson rule’s application. United Pac. Ins. Co. v. Lundstrom, 77 Wn.2d 162, 459 P.2d 930 (1969).

In Lundstrom, the United Pacific Insurance Company was awarded a judgment against one Lundstrom, which arose from an agreement in which Lundstrom and a Milmanco Corporation had promised to hold United Pacific harmless from any loss on a performance bond. United Pacific had previously dismissed with prejudice its claim against Milmanco. The court also entered an order award[146]*146ing Lundstrom a judgment over and against Milmanco Corporation, based upon a separate agreement between Lundstrom and Milmanco. The judgment over was in such amounts as Lundstrom should pay from time to time upon the judgment in favor of United Pacific. On appeal both the judgment and the order awarding judgment over were affirmed. Prior to judgment, United Pacific had obtained a writ of attachment and had levied upon Lundstrom’s cause of action against Milmanco Corporation. After judgment, the sheriff’s attempt to proceed to sale was subjected to a motion to quash. The Lundstrom court quashed the sale and vacated the writ of attachment. The Lundstrom court’s announced reason appears at pages 172-73:

But whereas in Johnson

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Paglia v. Breskovich
522 P.2d 511 (Court of Appeals of Washington, 1974)

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Bluebook (online)
522 P.2d 511, 11 Wash. App. 142, 1974 Wash. App. LEXIS 1217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paglia-v-breskovich-washctapp-1974.