DALLAS SHACKELFORD v. HENRIETTA AUSMUS, F/K/A HENRIETTA A. PARTIN; AND TILMON PARTIN
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RENDERED:
SEPTEMBER 14, 2001; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-001007-MR
DALLAS SHACKELFORD
APPELLANT
APPEAL FROM BELL CIRCUIT COURT
HONORABLE JAMES L. BOWLING, JUDGE
ACTION NO. 91-CI-00494
v.
HENRIETTA AUSMUS, F/K/A
HENRIETTA A. PARTIN; AND
TILMON PARTIN
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, JOHNSON AND TACKETT, JUDGES.
JOHNSON, JUDGE:
Dallas Shackelford has appealed from an order
entered by the Bell Circuit Court on March 2, 2000, which set
aside an order of garnishment dated January 20, 1998, in favor of
Shackelford and released funds to appellee Henrietta Ausmus.
Having concluded that the trial court’s findings are not clearly
erroneous and that its order is correct as a matter of law, we
affirm.
This is the third time this case has been before this
Court.
Not surprisingly, it has a long and convoluted history.
On February 16, 1993, a judgment for $35,522.55, with interest at
the rate of 12% per annum from April 25, 1990, until paid, was
rendered in the Bell Circuit Court reflecting a jury award in
favor of plaintiffs, Henrietta Ausmus (formerly Partin) and
Tilmon Partin, and against defendants, Dallas Shackelford and
Dallas Shackelford II.
In the same proceeding, Shackelford,
individually, filed a counter-claim against Tilmon Partin,
individually.
Neither Ausmus nor Shackelford II were parties to
this counterclaim.
A judgment for $122,700.00, with interest at
the rate of 12% per annum until paid, was entered in the Bell
Circuit Court on February 23, 1993, in favor of Shackelford and
against Partin.
The Shackelfords appealed the two February 1993
judgments to this Court.1
In an Opinion Affirming, this Court
stated as follows:
The Florida judgment being enforced in
Kentucky is by two plaintiffs who have a
joint judgment, against two defendants who
have joint and severable liability. The
judgment on the counterclaim is by one
defendant to the original action against one
original plaintiff. Since we do not have
identical parties to the judgments, how would
we determine how much of the original Florida
judgment belongs to Henrietta and how much of
the liability of the Florida judgment belongs
to Dallas Carl Shackelford, II? If we allow
the set-off, then how much does Dallas Carl
Shackelford, II, owe his father, Dallas
1
1993-CA-001026-MR, not-to-be-published opinion rendered on
June 17, 1994.
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Shackelford? Obviously, the Florida court
did not answer these questions. It wasn’t
asked to. It is just as obvious that
Kentucky cannot retry the Florida issues to
answer these questions. Although the cases
of Bryant Bros. v. Wilson, 253 Ky. 578, 69
S.W.2d 1020 (1934) and Marcum v. Wilhoit, 290
Ky. 532, 162 S.W.2d 10 (1942) would support
appellants’ request for a set-off if the
appellants could show how much of the Florida
judgment would go to Tilmon Partin, we don’t
have those figures. Without these answers,
we have a situation much like the Court in
Daniel v. Wilhoit, 289 Ky. 79, 158 S.W.2d 153
(1942) wherein the Court considered a set-off
demand by one defendant. The Court ruled:
A demand, to be the subject matter
of set-off, must be mutual between
all the parties to the action; that
is, the claim must be due to and
from the same parties and in the
same capacity.
Id. at 155.
A few lines down, the Court explained:
A joint debt cannot be set-off
against a separate demand, nor a
separate demand against a joint
one.
Id.2
Ausmus made numerous attempts at executing on property
owned by Shackelford; and Shackelford made numerous attempts at
executing on property owned by Partin.
On December 18, 1997, the
Bell Circuit Court entered a judgment and order of sale on
Ausmus’ garnishment of 6,666 shares of common stock of Cumberland
Mountain Bankshares, Inc., held in escrow by the garnishee,
2
This Court also held, on an issue that is irrelevant to
this appeal, that the Florida judgment had not been released and
satisfied.
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Middlesboro Federal Bank, FSB, “that was specifically pledged on
behalf of the defendant, Dallas Shackelford, as collateral
security in satisfaction of the plaintiffs’ judgment.”
The
circuit court further ordered that the Master Commissioner be
“directed to sell, according to the law, the 6,666 shares of
common stock of Cumberland Mountain Bankshares, Inc. and to
thereafter pay the sale proceeds to the Clerk of the Bell Circuit
Court for distribution pursuant to further orders of this Court.”
On December 23, 1997, the Master Commissioner filed a
notice of sale, which gave notice that the common stock would be
offered for sale at public auction on January 23, 1998.
On
January 20, 1998, Shackelford filed three separate orders of
garnishment on his judgment against Tilmon Partin for
$195,093.00, naming as garnishees the Master Commissioner, the
Bell Circuit Court Clerk, and Ausmus’ attorney.
The Bell Circuit Court did not take any further action
until it entered an order on January 27, 1998, “setting proof
schedules and directing deposit of funds.”
Specifically, the
circuit court noted that Shackelford had “paid into Court the sum
of $68,526.80 and by reason thereof, the Court . . . cancelled
the January 23, 1998 scheduled sale of the bank stock in
question.”
The Court further noted that “following a hearing
held on January 26, 1998,”3 it ordered (1) Shackelford to pay the
Master Commissioner’s sale costs; (2) “[b]y agreement of all the
3
The record on appeal does not include any motion for a
hearing or any record of the hearing.
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parties, the Clerk shall forthwith deposit the $68,526.80 at
Middlesboro Federal Bank, FSB in a six month certificate to be
held in the name of the Clerk and pending further Orders of the
Court”; and (3) set a briefing schedule on “the propriety of a
credit or setoff in favor of . . . Shackelford, as against any
interest of the plaintiff, Tillman [sic] Partin, in the judgment
and proceeds paid into Court.”
The circuit court entered an
amended order on January 29, 1998, which also ordered that the
parties could file briefs concerning Shackelford’s garnishment
against the funds held by the Bell Circuit Court Clerk.
On May 6, 1998, the circuit court entered a final
judgment and held that this Court’s Opinion rendered in 1994
which addressed the issue of set-off had become the law of the
case and Shackelford was not entitled to a set-off.
The circuit
court’s judgment, however, failed to specifically discuss the
enforceability of Shackelford’s garnishment against the funds
held by the Clerk.
In its judgment, the circuit court stated:
The issue before this Court now, Is he
entitle [sic] to a set-off based on his
Judgment against the Plaintiff Partin on a
Counter-Claim?
. . .
The issues attempted to be raised
regarding a set-off have been clearly
discussed, considered and ruled on by the
Court of Appeals in an appeal from Bell
Circuit Court. This ruling became final.
The ruling in that appeal becomes the
“LAW OF THE CASE” and disposes of the issue
before this Court [emphasis original].
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Shackelford filed a motion to alter, amend or vacate
the judgment.
He argued that the issue presented to the circuit
court was not whether set-off was allowable, but “the issue of
the legality, validity and enforceability of [the] Garnishments
against Tilmon Partin’s funds which were in the possession of the
Clerk of this Court.”
He maintained that garnishment and set-off
were separate and distinct legal theories and that the circuit
court erred in failing to address garnishment.
Shackelford
argued:
[That he stood] in the same position with the
same rights as any other person or party who
may hold a judgment against Tilmon Partin.
It does not matter in whose hands the Tilmon
Partin funds were held. Mr. Shackelford has
the right under the Kentucky Revised Statutes
and Civil Rules to enforce his Judgment and
proceed by Garnishment or Execution against
funds or property belonging to Tilmon Partin.
The circuit court denied the motion and Shackelford appealed that
decision to this Court.
On December 30, 1999, this Court rendered an Opinion
which remanded the case to the Bell Circuit Court “for
consideration of Shackelford’s assertion that he is entitled to
garnishment.”
This Court stated in part:
The corpus of Shackelford’s argument is that
garnishment and set-off [are] separate and
distinct legal theories. We must agree.
Garnishment is a creation of the legislature,
and its application is expressly governed
[by] the civil rules . . . .
Conversely, the term “set-off” does not
have a statutory origin, and is equitable in
nature and subject to the discretion of the
trial court . . . [citations omitted].
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Though the case law in this jurisdiction
comparing garnishment and set-off is sparse
if not non-existent, it is clear that
garnishment is a statutory mechanism
facilitating the collection of judgments,
while a set-off is a court-created term of
art allowing for the equitable resolution of
opposing judgments. In the matter at bar,
while set-off is inappropriate (for the
reasons addressed in our prior opinion), the
applicability of garnishment, if at all, was
raised by Shackelford but not addressed by
the circuit court. We do not believe that
our opinion4 addressing set-off may be relied
upon as a basis for summarily disposing of
Shackelford’s motion for garnishment.
Shackelford is entitled to have the
garnishment issue adjudicated, and
accordingly we must remand the judgment at
issue.
On March 2, 2000, the Bell Circuit Court entered an
order “releasing funds toward satisfaction of judgment,” and
stating in part:
On January 29, 1998, the Defendant,
Dallas Shackelford, deposited into Court the
sum of $68,526.80 representing the original
trial judgment plus accrued interest. It is
important to note that this money was paid
into Court in order to avert a Court ordered
sale of certain stock held by Defendant
Dallas Shackelford.
The Court finds that the Defendant
Dallas Shackelford expressly dedicated these
funds toward the satisfaction of judgment and
to avert the sale of Defendant Dallas
Shackelford’s stock. Since the funds
deposited by Shackelford were dedicated
toward the satisfaction of the judgment the
Court finds that to allow Shackelford to now
garnish these funds in satisfaction of
Shackelford’s separate and distinct judgment
against Plaintiff Tilmon Partin would be
equivalent to allowing Shackelford to garnish
his own stock.
4
The 1994 Court of Appeals’ Opinion.
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Additionally, the Court finds that the
original judgment against Shackelford was
granted to the Plaintiffs Ausmus and Partin,
jointly and severally, meaning that either
Ausmus or Partin or both together may enforce
the trial judgment. Only Ausmus is seeking
an enforcement of this judgment.
The circuit court directed the Clerk to pay the funds to Ausmus.
Shackelford’s motion to alter, amend or vacate the order was
denied on May 29, 2000.
This appeal followed.
Kentucky’s garnishment statute at KRS5 425.501 states
in relevant part:
(1) Any person in whose favor a final
judgment in personam has been entered in any
court of record of this state may, upon the
filing of an affidavit by him or his agent or
attorney in the office of the clerk of the
court in which the judgment was entered, and
in the same cause in which said judgment was
obtained showing the date of the judgment and
the amount due thereon, and that one or more
name persons hold property belonging to, or
are indebted to, the judgment debtor, obtain
an order of garnishment to be served in
accordance with the Rules of Civil Procedure.
. . .
(5) If the court finds that the
garnishee was, at the time of service of the
order upon him, possessed of any property of
the judgment debtor, or was indebted to him,
and the property or debt is not exempt from
execution, the court shall order the property
or the proceeds of the debt applied upon the
judgment [emphasis added].
The interpretation of a statute is, of course, a
question of law; and this Court reviews the trial court’s legal
5
Kentucky Revised Statutes.
-8-
conclusions de novo.6
When interpreting a statute, we look to
the statute’s express language and overall purpose.7
begins with the language of the statute itself.
The task
When a statute’s
language is plain, “the sole function of the courts is to enforce
it according to its terms.”8
When the statute’s language admits
of more than one reasonable interpretation, however, courts
attempt to understand the legislative intent by considering the
legislative history, the statutory context, and, where the
statute is plainly based on or intended to coordinate with
legislation from another jurisdiction, the construction of
similar statutes by other courts.9
We believe Shackelford fails to recognize a fundamental
requirement of KRS 425.501(5).
We agree with Shackelford’s basic
contention that if he follows the necessary requirements of the
statute that application of the proceeds under KRS 425.501(5) is
mandatory; but the judgment creditor can only acquire an interest
in the garnished property to the extent the judgment debtor has
6
Louisville & Nashville Railroad Co. v. Commonwealth, ex
rel. Kentucky Railroad Commission, Ky., 314 S.W.2d 940, 943
(1958).
7
Democratic Party of Kentucky v. Graham, Ky., 976 S.W.2d 423
(1998); Kentucky Region Eight v. Commonwealth, Ky., 507 S.W.2d
489 (1974).
8
Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct.
192, 194, 61 L.Ed. 442 (1917); Bailey v. Reeves, Ky., 662 S.W.2d
832 (1984).
9
Schmitt Furniture Co., Inc. v. Commonwealth of Kentucky
Revenue Cabinet, Ky., 722 S.W.2d 889 (1987); Burke v. Stephenson,
Ky., 305 S.W.2d 926 (1957); City of Owensboro v. Noffsinger, Ky.,
280 S.W.2d 517 (1955); City of Covington v. State Tax Commission,
257 Ky. 84, 77 S.W.2d 386 (1934).
-9-
an interest in that property.
Proof of the debtor’s non-interest
will defeat the garnishment.10
Thus, the issue to be decided is
to what extent the garnishee is “possessed of any property of the
judgment debtor . . . .”
Ausmus and Partin have a joint and severable judgment
against Shackelford for $68,526.80, while Shackelford only has a
judgment against Partin individually.
This Court in its 1994
Opinion has already held that it is impossible to determine what
portion of the original judgment belongs to Ausmus and what
portion belongs to Partin.
On remand following this Court’s 1999
Opinion, the circuit court made a finding that only Ausmus had
acted to garnish the common stock held at the bank and that
Partin had no interest in the funds on deposit with the Clerk.
To accept Shackelford’s argument would require a finding that
Partin possessed an interest in Ausmus’ garnishment of the common
stock.
While Partin holds a judgment against Shackelford, he has
no claim to Ausmus’ garnishment.
Accordingly, the order of the Bell Circuit Court is
affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
Daniel Jackson Tribell
Middlesboro, KY
Robert B. Bowling
Middlesboro, KY
10
Bank One, Pikeville, Kentucky v. Commonwealth of Kentucky,
Natural Resources and Environmental Protection Cabinet, Ky.App.,
901 S.W.2d 52 (1995).
-10-
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