Ryan v. Duffield

899 P.2d 378, 19 Brief Times Rptr. 1175, 1995 Colo. App. LEXIS 203, 1995 WL 383218
CourtColorado Court of Appeals
DecidedJune 29, 1995
DocketNo. 94CA1066
StatusPublished
Cited by3 cases

This text of 899 P.2d 378 (Ryan v. Duffield) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ryan v. Duffield, 899 P.2d 378, 19 Brief Times Rptr. 1175, 1995 Colo. App. LEXIS 203, 1995 WL 383218 (Colo. Ct. App. 1995).

Opinion

Opinion by

Judge TAUBMAN.

In this action to enforce a foreign judgment, defendant, O.F. Duffield, appeals the trial court’s order denying his motions to stay a pending garnishment and for the return of funds to him from plaintiff, Richard W. Ryan. He also appeals the trial court’s assessment of attorney fees against him. We affirm.

On March 2, 1987, Ryan obtained a judgment against Duffield in a Wyoming court for $38,100. He filed it as a foreign judgment in the district court on January 2,1992.

On January 16, 1992, Duffield won a $6 million jury verdict against a Colorado bank in the United States District Court for the District of Colorado. In order to enforce his prior judgment, Ryan served a writ of garnishment with notice of exemption and pending levy on the bank on February 3, 1992.

The writ of garnishment was for $38,100, the amount of Ryan’s original judgment. However, since Ryan had not included interest in the first writ, he served a second writ of garnishment on the bank on March 5, 1992, showing an unpaid balance of $57,-307.51. In its answers to the writs of garnishment from Ryan, the bank disclosed that Duffield had obtained a judgment against it, but that the judgment had been stayed pending appeal.

Immediately thereafter, the bank deposited United States Treasury bonds totaling $7,125,000 with a federal reserve institution as an appeal bond for the federal judgment. After the bond was posted, and faced with garnishments from Ryan and several other creditors of Duffield, the garnishee bank petitioned the United States District Court for permission to amend the bond so that it could pay the outstanding garnishments. Duffield argued that the bank had divested itself of ownership of the funds when it turned over possession and control of the treasury bonds to the clerk of the federal district court and that, since the clerk was then owner of the funds, the Supremacy Clause of the United States Constitution made the clerk immune from state court process.

[380]*380The federal district court ruled that, once the bank had posted the bond, it had divested itself of ownership of the funds and, therefore, was not subject to the writs of garnishment. However, since Ryan had served his writs of garnishment on the bank after the jury award but before the bank divested itself of ownership of the funds, the garnishment could be valid. Therefore, the federal court ordered that $65,452.58 be deposited in the Denver District Court Registry so that the state court could determine the validity of the garnishments and Duffield’s defenses to them and order payment in accordance with its findings to either Ryan or Duffield. Consequently, on March 4, 1994, the bank deposited those funds in the Denver District Court Registry.

After the bond was posted, Ryan served an updated writ of garnishment on the bank showing a balance of $65,077.82 with interest accruing at $10.41 per day on January 24, 1994. The bank answered that writ indicating that the case was still pending on appeal.

Prior to the bank’s depositing the funds into the registry of the Denver District Court, Duffield filed motions to quash the enforcement of the garnishment and to stay the garnishment proceedings pending a hearing. Notwithstanding the pendency of those motions, the clerk of the Denver District Court released the funds to Ryan on March 21, 1994. Not knowing that the funds had been disbursed, Duffield filed a motion for disbursement of funds to him on April 29, 1994. Then, upon discovering that the funds had been disbursed to Ryan, Duffield filed a motion on May 4,1994, requesting immediate return of the funds to the court and distribution of them to him.

On May 12, 1994, following a hearing, the trial court denied Duffield’s motions and assessed attorney fees against him for the filing of at least one frivolous motion. This appeal followed.

I. Validity of Wyoming Judgment

A. Garnishment Lien

Duffield contends that, since Ryan had not executed on the Wyoming judgment within five years, the lien against his estate created by the judgment ceased to exist pursuant to Wyo.Stat. § 1-17-307 (1977) and, therefore, the trial court erred in enforcing it. Specifically, he argues that, although the judgment entered against him in Wyoming created a lien in favor of Ryan against his estate, because Ryan had not executed on the judgment within five years the hen ceased to exist. He further asserts that, since a garnishment constitutes a hen against the judgment debtor, by serving a writ of garnishment on the Colorado bank, Ryan was merely attempting to bring a cause of action in Colorado which could not be maintained in Wyoming and that such action is prohibited by § 13-80-110, C.R.S. (1987 Repl.Vol. 6A) (a cause of action that cannot be maintained in the state it arose by reason of lapse of time cannot be maintained in Colorado). We are not persuaded.

As a judgment creditor, a garnishor becomes a hen creditor upon service of the writ of garnishment on the garnishee. Bowlen v. Federal Deposit Insurance Corp., 815 P.2d 1013 (Colo.App.1991). Nevertheless, since a garnishment is used to reach money, credits, debts, property, or other effects of a defendant which may be in the possession of or under the control of a third party, it is always auxiliary to a primary suit against the defendant to estabhsh the requisite judgment. 1A C. Krendl, Colorado Methods of Practice § 801 (1989); see also Steen v. Aetna Casualty & Surely Co., 157 Colo. 99, 401 P.2d 254 (1965) (garnishment proceeding is “ancillary”); Wright v. Nelson, 125 Colo. 217, 242 P.2d 243 (1952) (garnishment is an ancillary proceeding in aid of execution of an existing judgment).

Here, rather than reviving the judgment hen obtained in Wyoming and subsequently recorded in Colorado, Ryan’s garnishments create new and separate hens against Duffield’s estate. Further, the garnishments were not an effort by Ryan to maintain an action in Colorado that he could not maintain in Wyoming, but instead, were ancillary to the judgment previously obtained against Duffield.

Moreover, interpreting a statute upon which the Wyoming dormancy statute was [381]*381based in a similar case, the Ohio Supreme Court held that “while the judgment hen upon the debtor’s estate is lost, the judgment is still a valid judgment, and would sustain an action based upon it.” Horn v. Lamblin, 106 Ohio App. 215, 150 N.E.2d 316, 318 (1957) (emphasis added). Hence, regardless of whether the judgment in Wyoming became dormant, Ryan’s right to levy upon Duffield’s property through garnishment remained valid and enforceable. Accordingly, we reject Duffield’s contentions.

B. Amount of Garnishment

In the alternative, Duffield argues that the trial court could not order payment to Ryan of more than the amount stated in the original garnishment, $38,100. Again, we disagree.

C.R.C.P.

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Bluebook (online)
899 P.2d 378, 19 Brief Times Rptr. 1175, 1995 Colo. App. LEXIS 203, 1995 WL 383218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ryan-v-duffield-coloctapp-1995.