Bob Hankins Distributing Co. v. May

Donald L. Corbin, Justice. Appellant, Bob Hankins Distributing Company, brings this appeal to challenge a ruling of the Greene County Chancery Court that upheld the constitutionality of the Arkansas Garnishment Statutes, Ark. Code Ann. §§ 16-110-401 to -415 (1987).1 We reverse and dismiss. Appellee, Willie Frances May, obtained two judgments against her former husband, Billy May, on sums that accrued pursuant to rights given her in a decree of divorce. Billy May was an employee of appellant. Two default judgments were obtained against appellant when it failed to respond to two writs of garnishment after judgment. This is the second time this case has been before us. The first time this case was before us, we reversed on procedural issues and remanded it to the trial court to develop the constitutional issue now at bar. May v. Bob Hankins Distrib. Co., 301 Ark. 494, 785 S.W.2d 23 (1990). Appellant contends the Arkansas Garnishment Statutes violate its rights as a garnishee to the due process of law as guaranteed by the fourteenth amendment to the United States Constitution. Specifically, appellant claims the statutes are unconstitutional because they do not provide for adequate notice to garnishees that they may be liable for the judgment against the garnishee if they fail to properly answer writs of garnishments. We agree. Appellee suggests that while section 16-110-401, the general authority under which writs of garnishment are issued, is silent on the issuance and service of a writ of garnishment, we should read our garnishment statutes in conjunction with Rule 4 of the Arkansas Rules of Civil Procedure, which deals with service of process upon the filing of a complaint. Appellee contends that Ark. R. Civ. P. 4 would cure the notice deficiency of the statute. We cannot agree. Section 16-110-401 is the general authority under which writs of garnishment are issued. The relevant portion follows: (a) In all cases where any plaintiff may begin an action in any court of record, or before any justice of the peace, or may have obtained a judgment before any of the courts, and the plaintiff shall have reason to believe that any other person is indebted to the defendant or has in his hands or possession goods and chattels, moneys, credits, and effects belonging to the defendant, the plaintiff may sue ¡out of a writ of garnishment, setting forth the claim, demand, or judgment, and commanding the officer charged with the execution thereof to summon the person therein named as garnishee, to appear at the return day of the writ and answer what goods, chattels, moneys, credits, and effects he may have in his hands or possession belonging to the defendant to satisfy the judgment, and answer such further interrogatories as may be exhibited against him. Section 16-110-402 provides for the service of the writs: “[t]he writs shall be directed, served, and returned in the same manner as writs of summons.” While this statute is silent on the particular points of the issuance and service of a writ of summons, Rule 4 of the Arkansas Rules of Civil Procedure details the procedure for issuance and service of summons: (a) Issuance: Upon the filing of the complaint, the clerk shall forthwith issue a summons and cause it to be delivered for service to a sheriff or to a person specifically appointed or authorized by law to serve it. Upon request of the plaintiff, separate or additional summons shall issue against any defendant. (b) Form: The summons shall be styled in the name of the court and shall be dated and signed by the clerk; be under the seal of the court; contain the names of the parties; be directed to the defendant; state the name and address of the plaintiffs attorney, if any, otherwise the address of the plaintiff; and the time within which these rules require the defendant to appear, file a pleading, and defend and shall notify him that in case of his failure to do so, judgment by default may be entered against him for the relief demanded in the complaint. Section 16-110-407 provides the penalty for a garnishee’s failure to answer a writ of garnishment, but does not require notice to the garnishee: ' (a) If any garnishee, after having been served with a writ of garnishment ten (10) days before the return day thereof, shall neglect or refuse to answer the interrogatories exhibited against him on or before the return day of such writ, the court or justice before whom the matter is pending shall enter judgment against the garnishee for the full amount specified in the plaintiffs judgment against the original defendant, together with costs. Even considering our original finding in May v. Bob Hankins Distrib. Co., 301 Ark. 494, 785 S.W.2d 23 (1990), that writs of garnishment are to be served pursuant to Ark. R. Civ. P. 4, when the statute and rule are read together they still do not satisfy the constitutional mandate of requiring that adequate notice be given to the garnishee that his property may be subject to satisfaction of the debt. It is true that when the statute and rule are read together, they require that the garnishee receive notice that a failure to respond to the summons or writ of garnishment could result in a default judgment being entered against him for “the relief demanded in the complaint.” Ark. R. Civ. P. 4(b). However, this requirement of notice is not sufficient to satisfy the due process mandate of the fourteenth amendment. The statue and rule are constitutionally deficient in that they do not specifically direct the garnishor to notify the garnishee that failure to answer the writ could result in the garnishee’s personal liability for the original amount owed to the garnishor by the debtor. If a garnishee failed to answer a writ of garnishment, he could be deprived of his property without notice. It is a garnishee’s right to predeprivation due process that must be protected. The case of Pulaski County v. Commercial Nat’l Bank, 210 Ark. 124, 194 S.W.2d 883 (1946) is analogous to the issue now before us. There, we determined that an assessment statute, insofar as it authorized an appeal by one property owner from a decision of the Board of Equalization refusing to raise the assessment of another property owner without requiring any kind of notice to that property owner, contravenes the fourteenth amendment of the Constitution of the United States and is therefore void. We note that other aspects of the garnishment statutes have been held unconstitutional. Davis v. Paschall, 640 F. Supp. 198, (E.D. Ark. 1986), held the statutes unconstitutional insofar as they fail to give adequate notice to the judgment debtor of his right to claim exemptions. In Kennedy v. Kelly, 295 Ark. 678, 751 S.W.2d 6 (1988), we interpreted Davis, supra, and held that a garnishee had no standing to challenge the garnishment laws based on the judgment debtor’s right to notice. Appellee calls our attention to the fact that both writs issued in this case contained the following language: NOTICE TO GARNISHEE: Failure to answer this writ within 20 days or failure or refusal to answer the interrogatories as may be propounded shall result in the court entering a judgment for the full amount specified in this writ of Garnishee, together with costs of the action. We reach the inescapable conclusion that the Arkansas Garnishment Statutes in effect at the time of this action are unconstitutional insofar as they do not require that adequate notice be given to the garnishee that his property may be subject to satisfaction of the original judgment when served with a writ of garnishment. Our conclusion is not influenced by any actual notice that appellant may have received in that “notice must be provided as an essential part of the statutory provision and not awarded as a mere matter of favor or grace.” Central of Georgia Ry. v. Wright, 207 U.S. 127, 138 (1907). In Gravett v. Marks, 304 Ark. 549, 801 S.W.2d 647 (1991), we considered Kennedy, supra, and other cases involving property seizure proceedings and stated: We did not intend, in obiter dicta or otherwise, to suggest that a property seizure proceeding based on a statute which has been declared unconstitutional may succeed. We have held in many cases that “when a statute is declared unconstitutional it must be treated as if it had never been passed.” Green v. Carder, 276 Ark. 591, 637 S.W.2d 594 (1982); Huffman v. Dawkins, 273 Ark. 520, 622 S.W.2d 159 (1981); Morgan v. Cook, 211 Ark. 755, 202 S.W.2d 355 (1947). Actual notice is insufficient where a notice statute is constitutionally insufficient. Wuchter v. Pizzuti, 276 U.S. 13 (1928). We reverse and dismiss. Newbern, J. concurs. Glaze and Brown, JJ., dissent. Footnotes [1] Appellant challenges the garnishment statutes, as they relate to notice to the garnishee, as they existed at the time the writs of garnishment were issued in this case. We note that the Arkansas Garnishment Statutes have been amended since that time.