Opinion ID: 1160937
Heading Depth: 1
Heading Rank: 3

Heading: The Garnishment Proceedings

Text: ¶ 4 Upon learning, some three years later, that the defendants were receiving income from gas production ( on other land than that included in the foreclosure) from property consisting of two separate tracts located in the county, Halliburton brought garnishment proceedings against Kerr-McGee Corporation [Kerr-McGee or garnishee]. [3] Garnishee's amended answer states that it has on hand for defendant Taylor $1,057.54. Halliburton concedes the garnishment, insofar as it affects Grothaus' indebtedness, may be subject to a prior claim by the IRS. [4] The deficiency-order debtors pressed separate claims for exemption from garnishment, maintaining that the production was from restricted Indian property. The answer by the Secretary of the Interior [Secretary] to the garnishment proceeding states that: (a) the two tracts of land in controversy are owned by Grothaus and Taylor; (b) on 5 September 1986 the BIA determined that the property was not restricted and executed a relinquishment of the land's supervision; (c) the BIA later determined in August 1994 that the land was in fact restricted, basing its decision on a finding that the deficiency-order debtors had sufficient quantum of Indian blood and (d) the determination of their actual Indian blood relates back to their acquisition of the land. According to the Secretary, although restricted Indian land is generally not subject to creditors' claims and notwithstanding the land's current restricted status,  the royalty income from the property is subject to the preexisting judgment lien at the point that the restricted property was recognized by the BIA as restricted.  [5] (Emphasis supplied.) The Secretary stated that he would have no objection to a determination that the royalties were subject to the preexisting judgment lien. ¶ 5 Grothaus and Taylor objected to the garnishment, arguing that: (a) Halliburton was attempting to encumber restricted assets to satisfy a judgment entered against property that is not the subject of the garnishment proceedings; (b) the Secretary had approved the mortgage to secure an indebtedness of the property that had been foreclosed upon; (c) but because there is no proof that the Secretary had approved an encumbrance upon the property in contest in the garnishment proceedings, it is invalid; (d) the federal jurisprudence relied upon by the Secretary is factually distinguishable from this case and (e) the trial court is without jurisdiction to encumber restricted Indian land without prior approval by the Secretary. ¶ 6 The trial court (a) found that the proceeds from gas production which Kerr-McGee holds in obedience to the garnishment process are available for the satisfaction of the debt, (b) denied Grothaus' and Taylor's claim of exemption based on the land's restricted status and (c) ordered the funds paid over to the judgment creditor. The defendants unsuccessfully pressed the trial court to reconsider [6] its denial of their separate claims for exemption from execution, arguing that (a) the property in contest has always been restricted because none of the requirements for removal of the restrictions has occurred and (b) the Secretary's answer in the garnishment incorrectly states that both tracts of land (whose production proceeds are sought) were determined to be unrestricted on 5 September 1986. [7] ¶ 7 The Court of Civil Appeals reversed, holding that (a) whatever lien rights may have attached during the land's unrestricted status were contingent upon the resolution of the controversy over the quantum of defendants' Indian blood and (b) the lien's enforcement by garnishment or other process was barred upon restoration of the land to restricted status. Because the garnishment summons were issued to Kerr-McGee after the land's restricted-status restoration, the defendants were deemed entitled to a full exemption of the royalty proceeds from garnishment.