Case Name: ZIDELL MARINE CORPORATION, a corporation, Plaintiff, v. WEST PAINTING, INCORPORATED, a corporation, Terry K. Gaya, Holly Gaya, Capital Resource Finance Corp., a corporation, John Maring, Rodda Paint Co., a corporation, and Jotun Valspar Marine Coatings, also known as Jotun Valspar, a division of the Valspar Corporation, a corporation, Respondents, and MILLER PAINT CO., INC., a corporation, Appellant
Court: Oregon Court of Appeals
Jurisdiction: Oregon
Decision Date: 1995-04-19
Citations: 133 Or. App. 726
Docket Number: 9307-04357; CA A81893
Parties: ZIDELL MARINE CORPORATION, a corporation, Plaintiff, v. WEST PAINTING, INCORPORATED, a corporation, Terry K. Gaya, Holly Gaya, Capital Resource Finance Corp., a corporation, John Maring, Rodda Paint Co., a corporation, and Jotun Valspar Marine Coatings, also known as Jotun Valspar, a division of the Valspar Corporation, a corporation, Respondents, and MILLER PAINT CO., INC., a corporation, Appellant.
Judges: De MUNIZ, J.
Reporter: Oregon Reports, Court of Appeals
Volume: 133
Pages: 726–753

Head Matter:
Argued and submitted September 9, 1994;
resubmitted In Banc January 3, affirmed April 19,
petition for review allowed June 20, 1995 (321 Or 284)
ZIDELL MARINE CORPORATION, a corporation, Plaintiff, v. WEST PAINTING, INCORPORATED, a corporation, Terry K. Gaya, Holly Gaya, Capital Resource Finance Corp., a corporation, John Maring, Rodda Paint Co., a corporation, and Jotun Valspar Marine Coatings, also known as Jotun Valspar, a division of the Valspar Corporation, a corporation, Respondents, and MILLER PAINT CO., INC., a corporation, Appellant.
(9307-04357; CA A81893)
894 P2d 481
In Banc
Monica M. O’Brien argued the cause for appellant. With her on the opening brief was Gleason, Scarborough, McNeese, O’Brien & Barnes, P.C. With her on the reply brief were Curt B. Anderson and Gleason, Scarborough, McNeese, O’Brien & Barnes, P.C.
Gary Roberts argued the cause for respondents West Painting, Incorporated, Terry K. Gaya, Holly Gaya, Capital Resource Finance Corp., and John Maring. With him on the brief was Schwabe, Williamson & Wyatt.
No appearance for respondent Jotun Valspar Marine Coatings.
No appearance for respondent Rodda Paint Co.
De MUNIZ, J.
Landau, J., concurring.
Leeson, J., dissenting.
Warren, J., not participating.

Opinion:
De MUNIZ, J.
Plaintiff Zidell Marine Corporation (Zidell) brought this interpleader action under ORCP 31 to determine priority among competing claims to money Zidell owes under a contract with defendant West Painting, Inc. (West). On cross-motions for summary judgment, the trial court entered an ORCP 67 B judgment finding that defendant Capital Resource Finance Corp. (Capital) had a perfected security interest in the funds and that that interest was superior to the claims of all the other defendants. Defendant Miller Paint Co., Inc., (Miller) appeals. We affirm.
Defendants Terry and Holly Gaya (Gaya) are the owners of West. West was incorporated in Washington in March 1985, but was administratively dissolved on June 16, 1986. Gaya was not aware that West's corporate status had lapsed, and West continued to operate as a corporation, filing corporate tax returns, and paying creditors, including Miller, from a corporate account.
In December 1984, West applied for credit from Miller, which granted the application and opened an account in the name of West Painting, Inc. There was no individual guaranty of the credit obligation. Pursuant to the line of credit, Miller sold paint to West. In 1991, Gaya, as President of West, signed a "Security Agreement" with Capital in which West assigned and sold its accounts receivable to Capital as a factor in order to finance West. Capital filed a financing statement in Oregon in 1991 under the name West Painting, Inc. On April 6,1992, West and Zidell entered into a contract for West to paint and do other work on a barge owned by Zidell.
In late 1991, Miller sued West for unpaid purchases of paint made between August 1990 and July 1991. On March 18,1992, Miller obtained a judgment against West. In June 1992, Miller discovered that West had been dissolved. Miller then sued the Gayas individually and obtained a judgment against them in July 1992. On June 14, 1993, Miller served two continuing writs of garnishment on Zidell, one for the West judgment and one for the judgment against the Gayas. Zidell responded to the garnishment in the West case, stating that Zidell might owe West as much as $78,860 in the future, subject to offsets, but that it would not release the funds until all offsets were determined and applied. In the Gayas' case, Zidell responded that it did not owe money to or hold personal property of either Terry Gaya or Holly Gaya.
In this interpleader action, Miller filed a cross-claim against all the other defendants, alleging that, by its writs of garnishment, it became a lien creditor whose claim was superior to those of the other defendants. Miller assigns error to the trial court's dismissal of that cross-claim, the denial of its motion for summary judgment, and the grant of summary judgment in favor of defendants West, the Gayas, Capital and John Maring (respondents). In its combined arguments on those errors, Miller argues that its writ of continuing garnishment was proper and that, by virtue of that writ, Miller is a lien creditor with priority over unperfected security interests. ORS 79.3010.
Respondents concede that ¿/"Miller's continuing writ of garnishment was effective to reach sums owed by Zidell, the writ would make Miller a lien creditor and that Miller would then have priority over an unperfected security interest. They argue, however, that Miller's use of a continuing writ of garnishment here was ineffective, because it sought to garnish an entity that was not the debtor's employer and it sought to garnislx property that was not wages. Respondents also argue that Capital was the owner of the account receivable or had a perfected security interest in the funds, and, thus, that the trial court correctly held that Capital was entitled to receive the funds.
Whether Miller is a judgment lien creditor depends on whether the writ of continuing garnishment that Miller served on Zidell is effective. Either the clerk of the court or the attorney for the creditor can issue two types of garnishments. The standard writ garnishes personal property of the debtor or debts owed to the debtor by the garnishee on the date of service of the writ or within 45 days. ORS 29.145 to ORS 29.375. The writ of continuing garnishment was created by statute in 1989. It applies expressly to "employers" of the debtor and garnishes the "wages" or "earnings" owed at the time of service of the writ or accrued within 90 days. ORS 29.401 to ORS 29.415.
Miller's argument that Zidell can be a garnishee under the continuing writ is based on language in the section of the statutory form entitled "EARNINGS EXEMPTION COMPUTATION SCHEDULE." That schedule is used to determine the earnings subject to garnishment. The directions on the form state:
"The Garnishee must complete the following form and fill in the correct amounts only if the Garnishee is an employer of the Debtor under ORS 23.175."
In turn, ORS 23.175(3) provides:
" 'Employer' means an entity or individual who engages a person to perform work or services for which compensation is given in periodic payments or otherwise, even though the relationship of the person so engaged to the employer may be as an independent contractor for other purposes."
Relying on the definition in ORS 23.175(3), Miller contends that the statutory scheme shows that the legislature did not intend a distinction between an employee and independent contractor for use of a continuing garnishment. It argues that the legislature did not intend a garnishee to have to determine whether the debtor is an "employee" or an "independent contractor," but only "whether money is due to the judgment debtor for services performed to the garnishee." Thus, Miller argues, the continuing garnishment was proper here where West or the Gayas were independent contractors.
We conclude, however, that the continuing writ does not garnish all assets owed by a garnishee to a debtor. In so concluding, we part company at the outset with the dissent, which determines that the continuing writ "may be used to garnish more than just earnings owed by an employer to an employee." 133 Or App at 744. The dissent arrives at that determination by relying on the following emphasized language in the first sentence of ORS 29.401, which sets out the parameters of a writ of continuing garnishment:
'In addition to garnishment proceedings otherwise available under ORS 29.125 to 29.375 and 29.401 to 29.415, a person for whom a writ of garnishment may be issued under ORS 29.137 may obtain a writ of continuing garnishment against any garnishee who is an employer of the defendant." (Emphasis supplied.)
ORS 29.401 is the codification of House Bill 2666, section 2 (1989). The reference to "ORS 29.401 to 29.415" was not part of House Bill 2666. As enacted, the first sentence of the bill reads:
"In addition to garnishment proceedings otherwise available under ORS 29.125 to 29.375, a person for whom a writ of garnishment may be issued under ORS 29.137 may obtain a writ of continuing garnishment against any garnishee who is an employer of the defendant." Or Laws 1989, ch 876, § 2.
Despite the fact that the reference to ORS 29.401 and ORS 29.415 was not in House Bill 2666, it was inserted into ORS 29.401 in the printed 1989 edition of the ORS.
In 1991, the legislature amended ORS 29.401 to increase the length of a continuing writ from 60 to 90 days. Or Laws 1991, ch 845, § 9. The increase in time was the only amendment to ORS 29.401 before the legislature, but the amendment was printed on a copy of ORS 29.401 that included the erroneous reference to "ORS 29.401 to 29.415." Prom that, the dissent appears to conclude that the 1991 amendment approved not only the increase in time, but also the error of Legislative Counsel.
We do not agree. As demonstrated by the dissent's interpretation of the assets reached by a continuing writ, the reference to "ORS 29.401 to 29.415" could well effect a substantive change in the continuing writ provisions. Legislative Counsel does not have the authority to make a substantive change, ORS 173.160, and the legislature's 1991 amendment to ORS 29.401 did not do so.
When clerical errors would defeat the purpose of an act, a court will correct them when the true meaning is obvious. See State v. Lermeny, 213 Or 574, 580, 326 P2d 768 (1958). In Bush v. Greyhound Lines, Inc., 295 Or 619, 669 P2d 324 (1983), the Supreme Court addressed a clerical error arising from Legislative Counsel's renumbering of sections of the civil rights laws following the 1979 legislative session. The Supreme Court examined the legislative history of the amendments and concluded that nothing in the history showed that the legislature intended the result that occurred from Legislative Counsel's error.
In Mitchell v. Board of Education, 64 Or App 565, 568, 669 P2d 356, rev den 296 Or 120 (1983), Legislative Counsel had omitted a cross-reference to a particular statute. We held:
"In preparing the statutes for publication, Legislative Counsel has the authority to make changes in section numbers, cross-references and other matters of form and clarity. However, changes must be limited so that they do 'not alter the sense, meaning, effect or substance of any Act.' ORS 173.160. The statutes certified by Legislative Counsel after revision are prima facie evidence of the law, ORS 171.285(2), but they are not conclusive evidence. When, as here, it appears that the law as the legislature adopted it differs in substance from the law as codified, we must follow the legislature's version."
The legislative history of House Bill 2666 shows that the legislature intended that the writ of continuing garnishment was to attach wages paid in the typical employer-employee relationship. The testimony of Kenneth Rider, attorney for the Oregon Collector's Association that sponsored the bill, was unequivocal, that
"[t]he purpose of this bill is to reach non-exempt wages that are due to the debtor as of the date that the garnishee receives the writ of garnishment and these non-exempt wages that are going to become due in the next ensuing 60 days after the writ of garnishment has—during the life of the writ of garnishment which is 60 days from the date of issuance." Tape recording, Senate Judiciary Committee, June 27,1989, Side B at 780.
The dissent finds persuasive testimony regarding the "classic example" of the promissory note. 133 Or App at 750. However, that example was given as an explanation of assets reached by a standard writ. That writ garnishes debts owed at the time of garnishment but not yet payable, the "classic example" being a promissory note. The testimony was that the continuing writ was "fashioned after the current phrasing of the [standard] writ of garnishment" and contains an analogous section that
"what we are doing is we are attaching continuing payments that are going to be made in the form of wages Tape recording, Senate Judiciary Committee, June 27, 1989, Side B at 583.
There is nothing in the legislative history of the 1991 amendment to ORS 29.401 that supports the conclusion that, by lengthening the time of the writ, the legislature intended the garnishment to reach assets other than wages. The amendment was part of House Bill 2992, which dealt with the amount of wages exempt from garnishment. Testimony was presented regarding the relationship of the proposed exemptions to federal law, the basis that would be used to calculate the exemptions and the effect of wage garnishment on low income families. See Minutes, House Labor Committee, April 17, 1991.
The original version of House Bill 2992 did not contain an amendment to ORS 29.401. The amendment was offered at the suggestion of the Collector's Association. Representative Maddox explained the purpose of the amendment:
"Actually, it gives [the creditor] a longer time to use the garnishment which would save the garnishment fee for the person who has to pay it—that's usually the person who's garnished. Makes it more convenient for people running the payroll system." Tape recording, House Labor Committee, May 15,1991, Side A at 190 (emphasis supplied).
The legislative history does not support the conclusion that the legislature ever intended the writ of continuing garnishment to reach the monies at issue here—monies due on a contract between businesses. That conclusion is also supported by the statutes.
A basic tenet of statutory construction is that words of common usage are to be given their natural, plain and obvious meaning. Perez v. State Farm Mutual Ins. Co., 289 Or 295, 299, 613 P2d 32 (1980). Under ORS 29.415, the writ of continuing garnishment "shall be in substantially the [statutory] form" and the garnishee shall be informed that the writ
"garnishes only wages [the garnishee] owe[s] to the Debtor as of the date you received this writ, including the debts that existed but were not yet due when you received this writ and wages that accrue on or before 90 days after the date this writ is issued." (Emphasis supplied.)
The garnishee is also instructed that
' 'YOU MUST ANSWER THIS WRIT BY COMPLETING AND FILING A CERTIFICATE OF GARNISHEE WHETHER OR NOT YOU OWE ANY WAGES TO THE DEBTOR.
"IF YOU FAIL TO ANSWER THIS WRIT, OR IF YOU ANSWER IT UNTRUTHFULLY, OR IF YOU FAIL TO DELIVER THE WAGES WHEN REQUIRED TO DO SO, YOU MAY BE SUBJECT TO COURT PROCEEDINGS UNDER ORS 29.285 AND MAY BE HELD LIABLE TO THE CREDITOR :
"
"NOTE: YOU MAY NOT LAWFULLY DISCHARGE THE DEBTOR FROM EMPLOYMENT AS A RESULT OF THIS GARNISHMENT." (Emphasis supplied.)
The "EARNINGS EXEMPTION COMPUTATION SCHEDULE" in ORS 29.415 uses both "wages" and the broader term "earnings" for calculating "Earnings subject to garnishment." ORS 29.401 also authorizes garnishment of "earnings." However, both "earnings" and "wages" are generally understood to apply to compensation for labor, not contract amounts owed from one business to another for the painting and refurbishing of a barge.
Miller relies only on ORS 23.175(3) to support its argument that Zidell may be a garnishee here. However, the reference is to all of ORS 23.175, and subsection (3) must be considered in context. ORS 23.175 is the definition section for ORS 23.175 and ORS 23.185. Under ORS 23.175(3), the "employer" is the one who "engages a person to perform work or services for which compensation is given ." (Emphasis supplied.) Under ORS 23.175(2), "earnings" are defined as
"compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus or otherwise, and includes periodic payments pursuant to a pension or retirement fund." (Emphasis supplied.)
When ORS 23.175(3) is considered in the context of ORS 23.175, ORS 29.401 and ORS 29.415, it shows the legislative intent that the writ of continuing garnishment was to apply to compensation paid for personal services, even though those personal services might be paid to an independent contractor instead of to an employee.
The contract between Zidell and West does not provide for compensation for personal services. The contract states:
"This purchase order covers all labor & material required to paint-out complete, in a turnkey manner, all specified interior and exterior surfaces of ZMC barge No. 647. All in strict accordance with buyer's request for quotation dated March 8, 1993; applicable material manufacturer's/suppliers application recommendations, seller's proposal dated March 25, 1993 & subsequent pre-contract award meetings."
Under the contract, West was obligated to purchase worker's compensation insurance, any federal insurance required under federal law, and employers' liability, public liability and property damage insurance.
In other words, Zidell owes money on a contract that is not just for labor; it is, in part, for materials, liability insurance and other costs of business. The money owed is not "earnings" or "wages" under ORS 29.401 or ORS 29.415, and Zidell is not the employer of West or Gayas for purposes of the continuing garnishment. Because Miller improperly served Zidell with writs of continuing garnishment, Miller never became a lien creditor for either West or the Gayas. It had no claim to the money owed by Zidell, irrespective of whether Capital had a perfected security interest.
Affirmed.
Defendants Rodda Paint Co. and Jotun Valspar Marine Coatings did not appear in this appeal.
ORS 79.3010(3) defines a lien creditor as
"a creditor who has acquired a lien on the property involved by attachment, levy, or the like and includes an assignee for benefit of creditors from the time of assignment, and a trustee in bankruptcy from the date of the filing of the petition or a receiver in equity from the time of appointment."
Miller points to both ORS 29.411 (a writ issued by a clerk of the court) and to ORS 29.415 (a writ issued by an attorney). The language relied on is identical and, because the writ here was issued under ORS 29.415, we refer to that statute.
ORS 29.401 further provides, as relevant:
"In addition to garnishment proceedings otherwise available *, a person may obtain a writ of continuing garnishment against any garnishee who is an employer of the defendant. To the extent that the earnings are not exempt from garnishment, the garnishment shall be a lien and continuing levy against earnings owed by the garnishee to the defendant at the time of service of the writ of continuing garnishment and on all earnings accruing from the garnishee to the defendant from the date of service until 90 days have expired since the date of issuance of the writ or until the employment relationship is terminated ." (Emphasis supplied.)
ORS 173.160 provides:
"In preparing editions of the statutes for publication and distribution, the Legislative Counsel shall not alter the sense, meaning, effect or substance of any Act, but, within such limitations, may renumber sections and parts of sections of the Acts, change the wording of head-notes, rearrange sections, change reference numbers to agree with renumbered chapters, sections or other parts, substitute the proper subsection, section or chapter or other division numbers, strike out figures or words which are merely repetitious, change capitalization for the purpose of uniformity, and correct manifest clerical or typographical errors." (Emphasis supplied.)
Webster's Third New Int'l Dictionary 714 (unabridged ed 1971) defines earnings as "something (as wages or dividends) earned as compensation for labor or the use of capital;" and, at 2568, the dictionary defines wages as "a pledge or payment of usu. monetary remuneration by an employer esp. for labor or services The dictionary provides the synonyms of wages, at 2569, stating that the term wages "applies chiefly to an amount paid daily or weekly esp. for chiefly physical labor SALARY and STIPEND usu. apply to a fixed compensation commonly paid at longer intervals than wages & usu. for services that require training or special ability Under those definitions, "earnings" is a more inclusive term than "wages," but both apply to compensation for services.
ORS 23.175(3) was enacted in 1985 as part of a large support enforcement bill that was intended to provide an expeditious procedure for wage garnishment. Or Laws 1985, ch 671, § 2; Minutes, Senate Judiciary Committee, May 28,1985.
ORS 23.185 provides the maximum wage that can be garnished. It is the basis for the calculations to be made in the continuing writ form and uses "wages" and "earnings" interchangeably, as does ORS 29.415.