Harris v. Harris

252 S.E.2d 95 (1979)

40 N.C. App. 26

Arlene R. HARRIS, Plaintiff, v. Harold R. HARRIS, Defendant, United States of America, Garnishee.

No. 7812DC295.

Court of Appeals of North Carolina.

February 20, 1979.

*96 William J. Townsend, Fayetteville, for plaintiff-appellant.

U. S. Atty., George M. Anderson, by Bruce H. Johnson, Asst. U. S. Atty., Raleigh, for defendant-appellee.

CARLTON, Judge.

The only question presented on this appeal is the validity of the order of 12 October 1977 dismissing the United States of America as garnishee.

Plaintiff relies on the provisions of 42 U.S.C. § 659 to support her contention that the dismissal was improper. We do not agree.

42 U.S.C. § 659 provides for a waiver of sovereign immunity, in that the United States of America consents to be joined as a garnishee in garnishment proceedings authorized under state law. Overman v. United States, 563 F.2d 1287 (8th Cir. 1977); Williams v. Williams, 427 F. Supp. 557 (D.Md.1976). The statute reads as follows:

Consent by United States to garnishment and similar proceedings for enforcement of child support and alimony obligations. Notwithstanding any other provision of law, effective January 1, 1975, moneys (the entitlement to which is based upon remuneration for employment) due from, or payable by, the United States (including any agency or instrumentality thereof and any wholly owned Federal corporation) to an individual, including members of the armed services, shall be subject, in like manner and to the same extent as if the United States were a private person, to legal process brought for the enforcement, against such individual of his legal obligations to provide child support or make alimony payments. 42 U.S.C. § 659 (1976).

Plaintiff concedes in her brief that the case of Elmwood v. Elmwood, 34 N.C.App. 652, 241 S.E.2d 693 (1977), first decided in this Court, would control the disposition of this appeal. At the time this appeal was filed, Elmwood was on appeal to the Supreme Court, and plaintiff candidly admits that the purpose of her appeal was to allow her to go forward in the event the Supreme Court should reverse this Court's decision. The Supreme Court filed its opinion in Elmwood on 6 June 1978. 295 N.C. 168, 244 S.E.2d 668 (1978).

In Elmwood, the Supreme Court established the following propositions:

(1) 42 U.S.C. § 659 does not create a right in a party, or the children of parties, to garnish military retirement pay. It merely removes the barrier of sovereign immunity *97 so as to place the United States in the same position as a private employer for the purpose of garnishment for child support and alimony, of money due as "remuneration for employment." Whether the monthly payments which the defendant is entitled to receive from the United States are "remuneration for employment" is governed by federal law. If they are, their susceptibility to garnishment is governed by the law of this State.

(2) Payments received by a retired military officer from the United States on account of disability are not "remuneration for employment" and, therefore, the United States is not subject to state garnishment proceedings on account of such payments under 42 U.S.C. § 659.

(3) Payments received by a retired regular officer of the military service for retirement are "remuneration for employment." Payments for retirement received by a retired reserve officer are not "remuneration for employment." Retired reserve officers are not subject to recall to active duty and are not subject to the Uniform Code of Military Justice. Therefore, the payment is considered pension for past services.

(4) Since the retirement pay of a regular retired officer is deemed to be currently earned, the defendant has no vested right therein until it is so earned. It is, therefore, subject to garnishment in proceedings instituted in the courts of this State to the extent, and only to the extent, that compensation for service currently rendered to a private employer is so subject.

(5) Since retirement pay of a regular retired officer is deemed to be compensation for services currently rendered, present entitlement to future payments is obviously contingent upon rendition of services in the future. Thus, entitlement to future retirement payments may be defeated by a number of possible developments; e. g., death, resignation, dismissal pursuant to court-martial, or change in the federal law.

(6) Since generally under North Carolina law, an order of garnishment is unavailable to reach earnings for future pay periods or unaccrued wages, the anticipated retirement pay for a future period, of a regular officer, retired from a branch of the military service, is not subject to garnishment.

(7) Accumulated, unpaid retirement pay for past periods of service is subject to garnishment, except as limited by statutes relating to such proceedings.

(8) Under certain circumstances, military retirement pay may be subject to garnishment for child support.

Under the sixth rule enumerated above, plaintiff, in the case at bar, is unable to join the United States as garnishee.

In Elmwood, the Supreme Court quoted its decision in Ward v. Manufacturing Co., 267 N.C. 131, 148 S.E.2d 27 (1966) as follows: "the principal defendant, who is the plaintiff's debtor, must himself have the right to sue the garnishee, his debtor, in this State for the recovery of the debt."

In the case at bar, the defendant obviously could not maintain suit against the United States for retirement pay which he anticipates he will become entitled to receive in the future. His right to future retirement payments is a mere expectancy, contingent on several factors such as death, resignation, dismissal pursuant to court-martial, etc.

We therefore hold that the United States of America may not be properly joined as a garnishee and the trial court's allowance of the motion to dismiss is

Affirmed.

MORRIS, C. J., and HARRY C. MARTIN, J., concur.