Boykin v. Law
Boykin v. Law
Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 840
The opinion of February 10, 2006, is withdrawn, and the following is substituted therefor.
Ruby Boykin, the designated primary beneficiary of an annuity owned by the now deceased annuitant, Eric Woodrow Boykin, appeals from the trial court's order commuting the annuity after Eric's death to satisfy a restitution order in favor of his judgment creditor, Louise Law. We reverse and remand.
In 1999, Law learned that Eric was the owner and annuitant of a $400,000 annuity controlled by Manufacturers Life Insurance *Page 841 Company. Eric's mother, Ruby Boykin, had purchased the annuity in 1992 using the proceeds Eric had received from the settlement of a personal-injury lawsuit.1 The annuity contract named Ruby Boykin as the primary beneficiary of the annuity in the event of Eric's death and named Eric's sisters, Shanetha Boykin and Seresa Boykin, as secondary beneficiaries. On October 22, 1999, Law filed a writ of garnishment against Manufacturers Life seeking to seize the payments due Eric under the annuity to recover her restitution judgment. Although Eric received notice of the writ of garnishment, Ruby, Shanetha, and Seresa were not made parties to the garnishment proceeding.
Manufacturers Life answered Law's writ of garnishment by admitting that it had in its control "[a]n annuity owned by Mr. Boykin with an income stream. . . ." Manufacturers Life's admission prompted Law to move the trial court to enter an order condemning the funds from the annuity. In her motion, Law asked the trial court to order Manufacturers Life to commute the annuity by converting the future monthly payments due under the annuity contract into a lump-sum payment due immediately and to pay her the commuted value of the annuity as restitution. Law also asked the trial court, in the alternative, to order Eric to assign to her all of his rights, title, and interest in the annuity and to designate Law and her heirs as the primary and secondary beneficiaries of the annuity contract.
Eric opposed Law's motion to condemn the funds, arguing that his annuity payments were wages, salary, or other compensation under §
Law responded to Eric's brief in opposition to her motion to condemn funds by arguing that, notwithstanding "any provision of any law of this state to the contrary," the Alabama Restitution Withholding Act, §
"any decree, judgment or order requiring the payment of restitution may include . . . an order requiring that any asset or other income or any portion thereof to which a defendant is or may be entitled be withheld or attached, and such order may also require any person *Page 842 in real or constructive possession, custody, or control thereof to pay over, deliver, convey, transfer or assign the same to the clerk of the court for disbursement, transfer or assignment to the victim in accordance with the defendant's restitution obligation."
§
On February 7, 2001, the trial court issued an order awarding Law 65% of any monthly annuity payment due Eric under the Manufacturers Life annuity contract. The trial court's order also stated:
"This Income Withholding Order attaches to the monthly annuity payments as per the annuity contract/policy and is binding upon the annuitant and/or his beneficiaries."
The trial court denied Law's request to commute the annuity but stated in its order that "if said annuity is ever commuted then the balance of said restitution plus interest shall attac[h] to the commuted balance of the annuity and shall be paid to the Circuit Court for payment to the said Louise Law and her heirs or beneficiaries." None of the parties to the garnishment proceeding appealed the trial court's order.
Eric died on April 24, 2004. On May 3, 2004, Law moved the trial court to commute the balance of the annuity and requested that the trial court allow her to receive the commuted value as payment of her judgment.4 In support of her motion, Law quoted the language from the trial court's February 7, 2001, order awarding her the commuted value of the annuity and argued that, under the terms of the contract, the annuity could now be commuted because Eric was no longer alive. Ruby Boykin, Shanetha Boykin, and Seresa Boykin moved the trial court to allow them to intervene to contest Law's motion to commute the annuity. The trial court granted the Boykins' motion.
Ruby moved the trial court to dismiss Law's action and to order that the annuity be turned over to her. Ruby's motion was based on the argument that, as the primary beneficiary under the annuity contract, she became the rightful owner of the annuity upon Eric's death. Ruby argued that she owed Law no restitution and, therefore, that the value remaining in the annuity at the time of Eric's death could not be subjected to Law's restitution claim. *Page 843
Law responded to Ruby's motion to dismiss by pointing to the language in the trial court's 2001 income-withholding order making her attachment of the monthly annuity payments "binding upon the annuitant and/or his beneficiaries" and argued that the language entitled her to payments from the annuity after Eric's death. Law argued that, under the terms of the annuity contract, any person entitled to payments from the annuity after the annuitant's death could commute the annuity. Law also argued that, even though Ruby was not a party to the garnishment proceeding, she knew of the proceeding and had attended a hearing in the proceeding. Law asserted that the time for challenging the February 7, 2001, order had expired without Ruby's intervening and, therefore, that Ruby could not now contest the February 7, 2001, order.
On February 14, 2005, the trial court denied Ruby's motion to dismiss Law's action to commute the annuity. In explaining its decision, the trial court stated that the February 7, 2001, order
"not only established a garnishment of the monthly payments due to the defendant Mr. Boykin in accordance with the restitution [statutes] and Title
27-14-32 , Code of Alabama, 1975, it also pursuant to the restitution statutes provided for the attachment of the commutation value of the annuity if that occurred."
The trial court granted Law's motion to commute the annuity and ordered Manufacturers Life to pay the commuted value of the annuity to the circuit court clerk so that the funds could be disbursed to Law. Ruby appeals.
The facts relevant to this appeal are undisputed; both Law and Ruby raise questions of law. Accordingly, our review is de novo.See George v. Sims,
"An appeal lies to the supreme court or the court of civil appeals, as the case may be, at the instance of the plaintiff, the defendant, the garnishee, or the contestant, or claimant."
On February 7, 2001, the trial court entered its order garnishing the monthly annuity payments and attaching the future commuted balance of the annuity for Law's benefit. Because §
In Spina v. Causey,
"in all cases in which an appeal is permitted by law as of right to the supreme court or to a court of appeals, the notice of appeal . . . shall be filed with the clerk of the trial court within 42 days (6 weeks) of the date of the entry of the judgment or order appealed from."
Law is correct when she argues that under §
Ruby's motion to dismiss Law's action was based on the argument that she, as the primary beneficiary under the annuity contract, was the lawful owner of any value remaining in the annuity after Eric's death. By asserting that she personally owed no restitution to Law, Ruby challenged the validity of those provisions in the trial court's February 7, 2001, order that purported to make Law's garnishment binding upon Ruby as a beneficiary of the annuity. By definition, "[a] garnishment on a judgment is a proceeding in the nature of attachment to subject the property of the judgment debtor to the plaintiffs claim."Pepperell Mfg. Co. v. Alabama Nat'l Bank of Montgomery,
Porter Blair Hardware Co. v. Perdue,"Garnishment is a remedy or process of purely statutory creation and existence. There is no authority for a resort to it — courts are without jurisdiction to grant and effectuate it — except in cases and against parties which and who are within the terms of the statute."
On July 22, 2004, Ruby moved to dismiss Law's action to commute the annuity. "[I]t has always been the law in Alabama that a void judgment could be vacated at any time. . . . "Ex parteFull Circle Distribution, L.L.C.,
"'Garnishment is a proceeding of purely statutory creation, unknown to the common law. . . .'" Tennessee Coal, Iron R.R. v. Warner,
Section
"A `garnishment,' as employed in this article, is a process to reach and subject money or effects of a defendant in attachment, in a judgment or in a pending action commenced in the ordinary form in the possession or under the control of a third person. . . ."
Under §
Law has a restitution order against Eric, which has the force and effect of a final judgment. See §
Under the definition section of the Manufacturers Life annuity contract, "[t]o `commute' a series of future payments means to replace them by a single payment, called their `commuted value.'" The annuity contract also provides that "[n]o annuity payments can be commuted before the Annuitant's death." The annuity contract also states that "[a] `beneficiary' is a person who is to receive any payments due after the death of the Annuitant." Law does not dispute that Eric's annuity contract with Manufacturers Life designates Ruby as the primary beneficiary of the annuity. Because the Manufacturers Life annuity contract states that a "`beneficiary' is a person who is to receive any payments due after the death of the annuitant" and because Ruby is the designated primary beneficiary under the annuity contract, the commuted balance of the annuity is rightfully Ruby's property.
"[A]n attaching creditor necessarily claims through his debtor, and in the absence of fraud, can claim no greater right than was vested in the latter at the time the writ was served on the garnishee." LaBarre v. Doney,
"'It is a general rule in garnishment that the plaintiff can obtain no greater beneficial relief against the garnishee than the judgment debtor would be entitled to, and that if the debtor's recovery would be limited to a mere legal title, without beneficial interest or right of enjoyment in himself, the proceeding must fail. A judgment creditor cannot have his debt satisfied out of property held in trust for another, no matter how completely his debtor may have exercised apparent ownership over it, unless it was upon the faith of such ownership that the credit was given.'"
In Louisville N.R. v. Webb Furniture Co.,
"'Garnishment is a species of proceeding in rem, in the nature of a sequestration of the debtor's efforts. Unless the property is within the jurisdiction of the court issuing the garnishment, so that it may be seized, jurisdiction neither of the res, nor the person can be acquired.'"
"Any provision of any law of this state to the contrary notwithstanding and in addition to any other remedy which is or may be hereafter provided by law for the enforcement or collection of a restitution order, any decree, judgment or order requiring the payment of restitution may include, upon motion of the victim, . . . an order requiring that any asset or other income or any portion thereof to which a defendant is or may be entitled be withheld or attached, and such order may also require any person in real or constructive possession, custody or control thereof to pay over, deliver, convey, transfer or assign the same to the clerk of the court for disbursement, transfer or assignment to the victim in accordance with the defendant's restitution obligation."
Section
"While the annuitant is living, you as owner, without any beneficiary's consent, can:"(a) exercise all rights and privileges granted by the policy; and
"(b) assign the policy."
Thus, if the trial court possessed the statutory authority to order Eric to exercise any of his rights under the annuity contract and exercised that authority over Eric in 2001, the trial court's 2005 order awarding Law the commuted value of the annuity would not be invalid to the extent that the later order could be read as carrying out the terms of the 2001 order.
It appears that the trial court may have had the authority to have ordered Eric to change the beneficiary or to exercise one of his other rights or privileges under the annuity agreement. In general, §
"The benefits, rights, privileges and options which under any annuity contract, heretofore or hereafter issued, are due or prospectively due the annuitant shall not be subject to execution, nor shall the annuitant be compelled to exercise any such rights, powers or options, nor shall creditors be allowed to interfere with or terminate the contract, except: [there follows a list of exceptions, none of which is applicable here]."
Generally, §
"Any provision of any law of this state to the contrary notwithstanding. . ., any . . . order requiring the payment of restitution may include . . . an order requiring that any asset or other income . . . to which a defendant is or may be entitled be withheld or attached. . . ."
(Emphasis added.) This statute appears to provide an exception to the general prohibition set forth in §
However, even if we were to agree with Law that the trial court had the authority to order Eric to change the beneficiary of his annuity when he was before the trial court in 2001, the trial court did not do so, even though Law requested it to.
The trial court's February 7, 2001, order states in part that "if said annuity is ever commuted[,] then the balance of said restitution plus interest shall attac[h] to the commuted balance of the annuity and shall be paid to the Circuit Court for payment to the said Louise Law." The trial court's order does not state that Eric must designate Law as the primary beneficiary of the annuity contract or that he must designate a beneficiary who would commute it for Law's benefit.
We construe the trial court's judgment like other written instruments: the rules of construction for contracts are applicable for construing judgments. Hanson v. Hearn,
It may be argued that the trial court in 2001 could have facilitated the relief that it sought to grant in 2005 by having ordered Eric in 2001 to change the beneficiary of his annuity contract; however, whatever that merits of that argument might be, the trial court declined to take that action.
"[W]here it appears on the face of the record that the judgment or decree is void, it is the duty of the court upon application thereto by the party having rights or interests immediately involved, to vacate such judgment or decree at any time subsequent to its rendition. . . ." Robinson Co. v.Beck,
"A void judgment is one which, from its inception, is and forever continues to be absolutely null, without legal efficacy, ineffectual to bind the parties or to support a right, of no legal force and effect whatever, and incapable of enforcement in any manner or to any degree." Loyd v. Director, Dep't ofPub. Safety,
APPLICATION OVERRULED; OPINION OF FEBRUARY 10, 2006, WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED.
NABERS, C.J., and HARWOOD, STUART, and BOLIN, JJ., concur.
"The wages, salaries, or other compensation of . . . residents of this state . . . shall be exempt from levy under writs of garnishment or other process for the collection of debts contracted or judgments entered in tort in an amount equal to 75 percent of such wages, salaries, or other compensation due or to become due. . . ."
"The benefits, rights, privileges and options which, under any annuity contract, heretofore or hereafter issued, are due or prospectively due the annuitant shall not be subject to execution, nor shall the annuitant be compelled to exercise any such rights, powers or options, nor shall creditors be allowed to interfere with or terminate the contract. . . . "
Reference
- Full Case Name
- Ruby Boykin v. Louise Law and Manufacturers Life Insurance Company.
- Cited By
- 18 cases
- Status
- Published