Title: UNION PACIFIC RAILROAD v. TRONA VALLEY FEDERAL CREDIT UNION

State: wyoming

Issuer: Wyoming Supreme Court

Document:

UNION PACIFIC RAILROAD v. TRONA VALLEY FEDERAL CREDIT UNION2002 WY 16557 P.3d 1203Case Number: 01-263Decided: 11/04/2002
OCTOBER TERM, A.D. 2002

                                                                                                
   

UNION 
PACIFIC RAILROAD,

Appellant(Garnishee) ,

 
 

v.

 

TRONA 
VALLEY FEDERAL

CREDIT 
UNION,

Appellee(Judgment Creditor) .

 
 
 

Appeal 
from the District Court of Sweetwater County

The Honorable Jere Ryckman, Judge

 
 
   

Representing 
Appellant:

Stan Decker Cannon of Greenhalgh, Beckwith, Lemich & 
Stith, Rock Springs, Wyoming.

 
 
          

Representing 
Appellee:

Stephen K. Palmer of Palmer & LaBuda, P.C., Rock 
Springs, Wyoming.

 
 
         

Before 
HILL, C.J., and GOLDEN, LEHMAN*, KITE, and VOIGT, JJ.

*Chief Justice at time of oral argument.

 
 
     

            
HILL, Chief Justice.

 
  

[¶1]      Union Pacific 
Railroad (Union Pacific) appeals a district court judgment that it improperly 
calculated the amount to be withheld from an employee's paycheck to satisfy a 
judgment debt by failing to deduct a child support garnishment when determining 
disposable earnings.  Union Pacific 
contends that deducting the child support garnishment would result in a 
violation of the Consumer Protection Act, 15 U.S.C.A. §§ 1671 through 1677, and 
Wyoming law.  We 
agree and reverse.

 
   

ISSUES

 

[¶2]      Union Pacific 
sets forth the following statement of the issues:

1.                  
Whether 
a person who is garnished for both child support and a consumer judgment debt 
may have more than twenty-five (25%) percent of his or her disposable income 
garnished from his or her wages.

2.                  
Whether 
the district court erred by making its ruling based upon what it believed was an 
official form, "Garnishee's Answer to Writ of Continuing Garnishment" sanctioned 
and approved by the Supreme Court, when it was not.

The 
judgment creditor, Trona Valley Federal Credit Union (Trona Valley FCU), sets 
forth the matter under review as a single issue:

Whether 
court ordered child support payments properly qualify as an item "that is 
required by law to be withheld" in calculating disposable earnings pursuant to 
W.S. § 1-15-501.

After 
filing its brief in this appeal, Trona Valley FCU raised the question of Union 
Pacific's standing in a motion to dismiss.  
We will consider 
this issue in our discussion below.
        

FACTS

 

[¶3]      The dispute in 
this case centers on the proper treatment of child support garnishment payments 
when calculating the amount to be withheld from an employee to satisfy a 
judgment debt.  When presented with 
a request for a garnishment, an employer fills out a form entitled, "Garnishee's 
Answer to Writ of Continuing Garnishment."  
The form is a standardized document that resides in a database managed by 
this Court.  A committee of county 
judges (now circuit judges) developed the form, and this Court facilitated its 
placement in the database, which is available to the circuit courts for use in 
an electronic format.  The form 
contains a section that allows the garnishee to calculate the disposable 
earnings of an employee from which the amount of garnishment to be withheld can 
be determined.  To calculate 
disposable earnings, an employee's gross earnings are reduced by certain 
exemptions.  On the form the 
following exemptions are listed:  
(1) federal income tax withheld; (2) FICA taxes withheld (or in this case 
railroad taxes because Union Pacific is the employer); (3) mandatory retirement 
exempted by federal law; (4) disability contributions exempted by federal law; 
(5) other amounts exempted by federal law; (6) court ordered child support 
payments withheld; and (7) other amounts withheld.  The total of these exemptions are 
deducted from the employee's gross earnings to arrive at his disposable 
earnings.  The form sets forth a 
chart for determining how much of the employee's disposable income should be 
withheld each pay period to satisfy the garnishment.  The chart indicates the maximum amount 
that may be withheld from an employee.  
When the employee's disposable earnings exceed 
a certain minimum level, then a maximum of 25% of his disposable earnings may be 
withheld.

 
          
           

[¶4]      In this case, 
Trona Valley FCU obtained a judgment against a Union Pacific employee for 
$8,919.06.  In May 2000, Trona 
Valley FCU filed a Request for Writ of Continuing Garnishment.  Union Pacific responded by filing the 
Garnishee's Answer to Writ of Continuing Garnishment form.  The employee already had a child support 
garnishment against him.  In filling 
out the form, however, Union Pacific specifically omitted the child support 
garnishment when calculating exemptions.  
Union Pacific's rationale was that including the child support 
garnishment with the exemptions would result in the total amount being withheld 
from the employee's paycheck, exceeding the 25% maximum set forth in the form 
which was based on federal and Wyoming law.  Instead, Union Pacific calculated what 25% of 
the employee's disposable earnings would be and then subtracted the child 
support garnishment leaving the remainder as the amount garnished to go towards 
satisfying Trona Valley FCU's judgment.

 
     
             
            
    

[¶5]      Trona Valley FCU 
objected to Union Pacific's methodology.  
The district court held a hearing and agreed with Trona Valley.  Specifically, the court concluded that 
any child support garnishments should be deducted from gross earnings because a 
deduction from disposable earnings could result in a judgment creditor being 
unable to recover if the child support garnishment exceeded 25% of the debtor's 
disposable earnings.1  Union Pacific now brings this 
appeal.
     

STANDARD 
OF REVIEW

 

[¶6]      When a matter has 
been the subject of a bench trial before the district court, we review the 
factual determinations under a clearly erroneous standard and the legal 
conclusions de novo.  
Kenyon v. Abel, 2001 WY 135, ¶ 6, 36 P.3d 1161, ¶ 6 (Wyo. 2001) 
(quoting Rennard v. Vollmar, 977 P.2d 1277, 1279 (Wyo. 
1999)).

 
   

[¶7]      The issues raised 
in this appeal require application of rules relating to statutory 
interpretation, which is a question of law that is reviewed by this Court de 
novo.

As 
we have noted: "In interpreting statutes, we primarily determine the 
legislature's intent. If the language is sufficiently clear, we do not resort to 
rules of construction.  We apply our 
general rule that we look to the ordinary and obvious meaning of a statute when 
the language is unambiguous." Kirbens v. Wyoming State Board of Medicine, 
992 P.2d 1056, 1060 (Wyo. 1999) (citations omitted). We construe together all 
parts of the statutes in pari materia, and, in ascertaining the meaning of a 
given law, we consider and construe in harmony all statutes relating to the same 
subject or having the same general purpose. Thunderbasin Land, Livestock 
& Investment Co. v. County of Laramie County, 5 P.3d 774, 779 (Wyo. 
2000).

When 
the language is not clear or is ambiguous, the court must look to the mischief 
the statute was intended to cure, the historical setting surrounding its 
enactment, the public policy of the state, the conclusions of law, and other 
prior and contemporaneous facts and circumstances, making use of the accepted 
rules of construction to ascertain a legislative intent that is reasonable and 
consistent.

State 
ex rel. Motor Vehicle Division v. Holtz, 
674 P.2d 732, 736 (Wyo. 1983). When the legislature adopts a statute, we presume 
it does so with full knowledge of the existing state of the law with reference 
to the statute's subject matter. Thunderbasin Land, Livestock & 
Investment Co., 5 P.3d  at 780.

All 
statutes are presumed to be enacted by the legislature with full knowledge of 
the existing state of law with reference thereto and statutes are therefore to 
be construed in harmony with the existing law, and as a part of an overall and 
uniform system of jurisprudence, and their meaning and effect is to be 
determined in connection, not only with the common law and the constitution, but 
also with reference to the decisions of the courts.

Voss 
v. Ralston, 
550 P.2d 481, 486 (Wyo. 1976); see also Fosler v. Collins, 13 P.3d 686, 
689 (Wyo. 2000).

Alberston's, 
Inc. v. City of Sheridan, 
2001 WY 98, ¶ 7, 33 P.3d 161, ¶ 7 (Wyo. 
2001).

    

DISCUSSION

 

[¶8]      We begin our 
review with the question of standing.  
Trona Valley filed a Motion to Dismiss in this case raising Union 
Pacific's standing to maintain this action for the first time in these 
proceedings.  Standing "is a 
jurisprudential rule of jurisdictional magnitude." Robinson v. Hamblin, 
914 P.2d 152, 154 (Wyo. 1996) (quoting Schulthess v. Carollo, 832 P.2d 552, 556-57 (Wyo. 1992)).

At 
its most elementary level, the standing doctrine holds that a decision-making 
body should refrain from considering issues in which the litigants have little 
or no interest in vigorously advocating. * * * A litigant is said to have 
standing when he has a "personal stake in the outcome of the controversy." This 
personal stake requirement has been described in Wyoming as a "tangible 
interest" at stake.

Id.  Trona Valley FCU contends that Union 
Pacific has no interest or stake in its employee's loss of income and has no 
injury that could be remedied by this Court.  Initially, Union Pacific complains about 
the timeliness of Trona Valley's motion to dismiss:  The question of standing was not an 
issue before the trial court, nor was it raised in the parties' appellate 
briefs.  On the merits of the issue, Union Pacific 
insists that it has standing because, as garnishee, it is accountable to the 
court issuing the garnishment order and, under certain circumstances, may be 
held liable for its reply to the writ of garnishment.

 
      
            
           
            

[¶9]      Historically, we 
have addressed the question of when standing may be raised in only a handful of 
cases.  Generally, we have stated 
that since standing "goes to the existence of a claim for relief and is 
jurisdictional in nature, it can be raised at any point in the procedure." 
Matter of Various Water Rights in Lake DeSmet Reservoir, 623 P.2d 764, 
767 (Wyo. 1981) (citing Parker v. Bowron, 40 Cal. 2d 344, 254 P.2d 6 
(1953)); see also Mekss v. Wyoming Girls' School, 813 P.2d 185, 205 (Wyo. 
1991), cert. denied, 502 U.S. 1032, 112 S. Ct. 872, 116 L. Ed. 2d 777 
(1992).  On at least one occasion, 
however, we have refused to address the issue of standing because of the 
plaintiff's failure to raise it in the district court.  Robinson v. Hamblin, 914 P.2d 152, 154 (Wyo. 1996).  In this 
case, it is readily apparent that Union Pacific possesses standing, so we will 
not address the timeliness (or lack thereof) of Trona Valley's 
motion.

 
   
             
         

[¶10]   As noted, standing exists when a 
party has "a personal stake or tangible interest in the outcome of the 
controversy."  The Wyoming statutory 
scheme specifically contemplates the participation of the garnishee in the legal 
process.  See Wyo. Stat. Ann. 
§§ 1-15-401 through -425 (garnishment) and 1-15-501 through -511 
(continuing garnishment) (LexisNexis 2001).  The garnishee is legally bound to hold 
for the benefit of the creditor all property and money due to the debtor.  §§ 1-15-425  and -507.  Under certain circumstances, the 
garnishee may become legally liable to the creditor.  §§ 1-15-412 and -413.  The 
imposition of legal duties upon the garnishee and the potential liability 
attached thereto is sufficient to confer standing on Union Pacific.

 
       
           
   

[¶11]   The federal government has imposed 
restrictions on garnishments:

(a)   Maximum 
allowable garnishment

Except 
as provided in subsection (b) of this section and in section 1675 of this title, 
the maximum part of the aggregate disposable earnings of an individual for any 
workweek which is subjected to garnishment may not exceed

(1)   25 
per centum of his disposable earnings for that week, or

(2)   the 
amount by which his disposable earnings for that week exceed thirty times the 
Federal minimum hourly wage prescribed by section 206(a)(1) of Title 29 in 
effect at the time the earnings are payable,

whichever 
is less. In the case of earnings for any pay period other than a week, the 
Secretary of Labor shall by regulation prescribe a multiple of the Federal 
minimum hourly wage equivalent in effect to that set forth in paragraph 
(2).

(b)   Exceptions

(1)   The 
restrictions of subsection (a) of this section do not apply to the case 
of

(A)   any 
order for the support of any person issued by a court of competent jurisdiction 
or in accordance with an administrative procedure, which is established by State 
law, which affords substantial due process, and which is subject to judicial 
review.

(B)   any 
order of any court of the United States having jurisdiction over cases under 
chapter 13 of Title 11.

(C)   any 
debt due for any State or Federal tax.

(2)   The 
maximum part of the aggregate disposable earnings of an individual for any 
workweek which is subject to garnishment to enforce any order for the support of 
any person shall not exceed  

(A)   where 
such individual is supporting his spouse or dependent child (other than a spouse 
or child with respect to whose support such order is used), 50 per centum of 
such individual's disposable earnings for that week; and

(B)   where 
such individual is not supporting such a spouse or dependent child described in 
clause (A), 60 per centum of such individual's disposable earnings for that 
week;

except 
that, with respect to the disposable earnings of any individual for any 
workweek, the 50 per centum specified in clause (A) shall be deemed to be 55 per 
centum and the 60 per centum specified in clause (B) shall be deemed to be 65 
per centum, if and to the extent that such earnings are subject to garnishment 
to enforce a support order with respect to a period which is prior to the 
twelve-week period which ends with the beginning of such 
workweek.

(c)  Execution or enforcement of 
garnishment order or process prohibited

No court of the United States or any State, and no State (or 
officer or agency thereof), may make, execute, or enforce any order or process 
in violation of this section.
 
               
             
 

15 
U.S.C.A. § 1673 (1998).  For our 
purposes here, the relevant portions of § 1673 are those that generally limit 
garnishments to 25% of the debtor's disposable earnings and the exception to 
that limit for child support payments, which may exceed the general limit up to 
50% or 65% of disposable earnings depending on the circumstances.  The term "disposable earnings" is 
defined as "that part of the earnings of any individual remaining after the 
deduction from those earnings of any amounts required by law to be 
withheld."  15 U.S.C.A. § 
1672(b) (1998).

 
    
 

[¶12]   The Wyoming statutes covering 
garnishments parallel the federal ones.  
"Disposable earnings" are defined as "that part of an individual's 
earnings remaining after the deduction of all amounts required by law to be 
withheld."  Wyo. Stat. Ann. §§ 
1-15-102(v) and -501(iii) (LexisNexis 2001).  Similarly, the limitations on the amount 
of a debtor's disposable earnings subject to garnishment are codified in Wyoming 
law.  Wyo. Stat. Ann. §§ 
1-15-408(b); 1-15-511(a).

(a)               
The 
maximum portion of the aggregate disposable earnings of a judgment debtor which 
are subject to continuing garnishment under this article is the lesser 
of:

(i)                 
Twenty-five 
percent (25%) of the judgment debtor's disposable earnings for that week; 
or

(ii)               
The amount by which the judgment debtor's aggregate 
disposable earnings computed for that week exceeds thirty (30) times the federal 
minimum hourly wage prescribed by the Fair Labor Standards Act of 1938, 29 
U.S.C. 206(a)(1), in effect at the time the earnings are payable, or, in case of 
earnings for any pay period other than a week, any equivalent multiple thereof 
prescribed by the administrator of the Wyoming Uniform Consumer Credit Code in 
the manner provided by W.S. 40-14-505(b)(iii).

 
 
           
            
               
               
            
            

Wyo. 
Stat. Ann. § 1-15-511(a).  The 
maximum amount of earnings that may be withheld to satisfy a child support 
judgment is established in Wyoming law by reference to the limits 
established.  15 U.S.C.A. § 1673; 
Wyo. Stat. Ann. § 20-6-210(b)(iii)(B) (LexisNexis 2001).  It is important to note that under 
Wyoming law an order withholding income for child support has priority over any 
other garnishment.  See Wyo. Stat. Ann. 
§§ 1-15-408; 1-15-504; and 20-6-210(b)(v).

 
 
      

[¶13]   The basic question presented here 
relates to the relationship between competing garnishments, one of which is for 
child support and the other is not.  
The form promulgated by this Court treated child support garnishments as 
an exemption that was to be deducted from an individual's gross earnings in the 
process of calculating disposable earnings.  Trona Valley FCU argues on appeal that 
the form is correct because child support garnishments are an amount "required 
by law to be withheld" since district courts must impose a garnishment when an 
arrearage has been established.  We 
disagree.

 
 

[¶14]   There is no question that 
withholding child support payments from an individual's wages constitutes a 
garnishment.  15 U.S.C.A. § 1672(c) 
(1998) ("The term garnishment' means any legal or equitable procedure through 
which the earnings of any individual are required to be withheld for payment of 
any debt."); Koethe v. Johnson, 328 N.W.2d 293, 297 (Iowa 1982) (quoting 
Marshall v. District Court for Forty-First-b Judicial District of 
Michigan, 444 F. Supp. 1110, 1116 (E.D. Mich. 1978)); Donovan v. Hamilton 
County Municipal Court, 580 F. Supp. 554, 556 (S.D. Ohio 1984).  The statutes limit a garnishment to 25% 
of an individual's disposable earnings with an exception for garnishments for 
the support of another person which may take up to 50% to 65% of the disposable 
earnings.  If child support withheld 
pursuant to a court order was treated as an amount "required by law to be 
withheld," the result would be contrary to the clear, unambiguous language of 
the federal and Wyoming statutes  up to 65% of the individual's earnings could 
be withheld for support, and since this amount would be subtracted to determine 
"disposable earnings," an additional 25% of those disposable earnings could be 
garnished by creditors.  
Koethe, 328 N.W.2d  at 298; Long Island Trust Company v. United 
States Postal Service, 647 F.2d 336, 339-40 (2nd Cir. 1981).  In effect, Trona Valley FCU is asking us to 
consider support garnishments independently of creditor garnishments and 
construe the statutes as reserving 25% of an individual's earnings for 
attachment and leaving the remaining 75% for personal and family expenses, 
including support orders.

 
        
         
           
           
  

Given 
the overall purpose of the Act [15 U.S.C. § 1671 et seq.] and the 
priority accorded in New York to garnishments for support, we find no merit in 
Long Island Trust's argument, that 25 percent of an employee's disposable 
earnings are reserved for creditors and that up to 65 percent more may be 
garnished to enforce a support order. Certainly, the structure of the section  
with subsection (a) entitled "Maximum allowable garnishment" and subsection (b) 
setting forth "Exceptions" for support garnishments  does not suggest such an 
interpretation.  Had Long Island 
Trust's interpretation been the intended thrust of the Act, subsection (b) would 
more appropriately have been entitled "Additions" rather than "Exceptions."  And in view of Congress's overall 
purpose of restricting garnishments in order to decrease the number of personal 
bankruptcies, it would be unjustifiable to infer that the general ceiling and 
its exceptions were intended to be cumulated to allow garnishments of disposable 
income to the total extent of 90 percent.  
Thus, we hold that where, as here, support 
garnishments have priority and result in the withholding of 25 percent or more 
of an employee's disposable earnings, creditor garnishment is impermissible 
under the Act.

 
            
             
       

Long 
Island Trust Company, 
647 F.2d  at 341.  Wyoming, like New 
York, gives priority to support garnishments.  Accordingly, creditor's garnishments may be imposed only to the extent 
support garnishments do not exceed the general 25% limit for 
garnishments.

 
    
              
  

[¶15]   We are sympathetic to the concerns 
expressed by Trona Valley FCU that the statute, as construed, can limit or even 
prevent a judgment creditor from recovering their money by allowing debtors to 
evade payment when their support orders exceed the general statutory maximum of 
25%.  The purpose behind these 
statutes was to deter predatory credit practices while preserving debtors' 
employment and insuring a continuing means of support for themselves and their 
dependents.  15 U.S.C.A. § 1671 
(1998); Kahn v. Trustees of Columbia University, 492 N.Y.S.2d 33, 37 
(N.Y.A.D. 1 Dept. 1985).  The 
Wyoming legislature has made a policy choice to give priority to support 
orders.  That is the legislature's 
prerogative, and it is hard to argue against a policy whose purpose is to ensure 
the financial well being of an employee's family.  In any event, these statutes merely 
prohibit the garnishment of a debtor's wages and do not inhibit a judgment 
creditor from pursuing other means to collect on a judgment.  See, e.g., Wyo. 
Stat. Ann. § 1-15-201 through -212 (LexisNexis 2001) (attachment).
    
     

CONCLUSION

 

[¶16]   Garnishments are generally limited 
to 25% of an individual's disposable income with an exception up to 65% for 
support order garnishments.  Support 
garnishments have priority under Wyoming law, and creditor judgment garnishments 
may be imposed only to the extent support garnishments do not exceed the general 
25% limit.  Accordingly, support garnishments are not to 
be treated as an exemption to be deducted from gross earnings in calculating 
disposable earnings.

 
  
              
    

[¶17]   This matter is reversed and 
remanded with instructions for the district court to enter a garnishment order 
in conformity with this opinion.

 

FOOTNOTES

  1As we shall see, 
child support garnishments are exempted from the general 25% 
limit.