Case Title: Franklin Bank and Trust Co. v. Reed

Citation: 508 N.E.2d 1256

Docket Number: 73S01-8706-CV-565

State: indiana

Court: Indiana Supreme Court

Date: 1987-06-10T00:00:00Z

Document:
508 N.E.2d 1256 (1987)
FRANKLIN BANK AND TRUST COMPANY, Appellant-Defendant,
v.
Ruth E. REED, Appellee-Plaintiff.
No. 73S01-8706-CV-565.

Supreme Court of Indiana.
June 10, 1987.
*1257 Stephen L. Huddleston, Clarke House, Franklin, for appellant-defendant.
Marshall, Thomasson & Garber, Michael Thomasson, C. Richard Marshall, Columbus, for appellee-plaintiff.
PIVARNIK, Justice.
This cause comes to us on a petition to transfer from the First District Court of Appeals. Petition is brought by Plaintiff-Appellee Ruth E. Reed (Ruth) concerning the priority of a judgment lien rendered in a dissolution of marriage action. The trial court found Ruth's judgment lien had priority over Defendant-Appellant Franklin Bank and Trust Company (Bank). The Court of Appeals reversed this judgment finding that no judgment lien attached to the property of Ruth's former husband (Owen) and ordered judgment in favor of the Bank. Franklin Bank & Trust Co. v. Reed (1986), Ind. App., 496 N.E.2d 596, 602. We hold the trial court properly interpreted the law regarding judgment liens. We accordingly vacate the opinion of the Court of Appeals with regard to the issue designated as Issue I in their opinion, and affirm the trial court. Transfer is not sought on Issue II concerning a continuing guarantee executed by Ruth for Owen's debts during their marriage, and therefore, the Court of Appeals opinion on that issue is affirmed pursuant to Ind.R.App.P. 11(B)(3).
Resolution of this issue requires interpretation of the general judgment lien statute, Ind. Code § 34-1-45-2 (Burns 1986), and the marriage dissolution statute, Ind. Code § 31-1-11.5-15 (Burns 1980).
The facts summarized by the Court of Appeals are as follows:
*1258 It is the Bank's contention that the marriage dissolution section, Ind. Code § 31-1-11.5-15, governs this matter exclusively and since the trial court failed to establish a lien, none exists. Ruth's contention is that a judgment lien exists by virtue of the general lien statute, Ind. Code § 34-1-45-2 and therefore she is entitled to priority over any interest obtained by the Bank as a result of Owen's subsequent assignment of his equitable interest in the Alexander property. Ruth reasons that prior to the advent of the new dissolution act, the prior act, Ind. Code § 31-1-12-17 (Burns 1973), expressly obviated the applicability of a judgment lien on money judgments paid by installments unless the court specifically created such a lien. However, the new dissolution statutes do not contain this prohibition. She urges that Ind. Code § 31-1-11.5-15 was noticeably shorn of that negative language, thus giving rise to the interpretation that the Legislature intended to allow a judgment to apply automatically unless a lower court, through its inherent power, eliminated the lien. Therefore, Ruth reasons the judgment lien statute and the dissolution statute are complementary and should not be interpreted as mutually exclusive. We agree with this interpretation of the above statutes.
The general judgment lien statute, Ind. Code § 34-1-45-2 provides as follows:
Ind. Code § 31-1-11.5-11(b)(2) of our dissolution statutes allows the trial court to order one spouse to pay the other a sum of alimony "either in gross or in installments." Thereafter, Ind. Code § 31-1-11.5-15 provides:
The previous dissolution statute, Ind. Code § 31-1-12-17, enacted in 1969 and effective until the Dissolution of Marriage Act of 1973, in referring to division of marital property in a dissolution judgment provided:
The difference between the new statute and the old is that the new statute was stripped of its tag line concerning the applicability of judgment liens to future payments. The former statute found it necessary to eliminate the automatic application of a judgment lien to real estate where the money judgment was to be paid in installments. The Court of Appeals takes the position that this is a distinction without a difference; that there is no material or substantial divergence in intent, effect, or import between the old and the new. Franklin Bank at 602. We think such an interpretation of the statutes, that the lien on future payments is of no consequence, would render that language a superfluity. It is apparent the Legislature intended something by placing the language in the former statute, and by the same token intended a policy change by deleting it. We recognize it as a change of direction on the *1259 Legislature's part and conclude that the Legislature intended a judgment lien to exist automatically, except where the exercise of the court's discretion would specifically eliminate it. That appears to be the finding of the Court of Appeals in Bell v. Bingham (1985), Ind. App., 484 N.E.2d 624, wherein the Bell court held that more than one statute regulated the manner in which certain creditors are assured payment of their money judgments. The court there referred to the very statutes here under discussion. The Bell court found that a dissolution court possessed the inherent power to expressly eliminate the otherwise automatic applicability of the judgment lien statute and that the trial court in Bell had, in fact, expressly eliminated such a lien. Bell, 484 N.E.2d  at 627-28.
We find it unnecessary to distinguish Uhrich v. Uhrich (1977), 173 Ind. App. 133, 362 N.E.2d 1163 since it was based on an interpretation of the old statute and does not directly respond to the fact situation of the instant cause. However, to the extent Uhrich might be interpreted to be in conflict with our holding here, it is expressly overruled. It is clear the Legislature intended Ind. Code § 31-1-11.5-15 to give the dissolution court power to enforce its orders providing for division of the parties' property by ordering security bond or other guarantee. The court has many forms of security from which to choose in order to protect one or the other of the parties in their share of the property and yet sever the relationship of the parties to each other. The court also has the power to completely sever the interests of the parties in each other's share including any lien interest arising under Ind. Code § 34-1-45-2. Since § 34-1-45-2 is general in its application, however, giving a judgment lien to one obtaining a judgment in any action, such a lien is not automatically eliminated by the dissolution statute. Rather, the dissolution statute gives the court authority to overcome the judgment lien, or to augment it, or to limit it. But silence of the court does not eliminate the automatic provision in the judgment lien statute. The court may exercise its inherent power and eliminate a judgment lien only by positive action. There was no such action here.
Appellee's Petition to Transfer is hereby granted, the Court of Appeals' decision is vacated, and the trial court is affirmed.
SHEPARD, C.J., and DeBRULER, GIVAN and DICKSON, JJ., concur.