Opinion ID: 891657
Heading Depth: 2
Heading Rank: 1

Heading: Under the law of garnishment the garnishor/judgment creditor acquires the judgment debtor's right of action against the garnishee.

Text: {27} The district court concluded that garnishment was appropriate in this case because the Policy is an asset of the Plan, imposing an obligation on Guardian to pay benefits awarded to Kirby in the default judgment. Guardian contends that the garnishment statute does not allow the Policy to be garnished in this manner, because it is neither a debt owed to the Plan nor personal property of the Plan held by Guardian. The Court of Appeals agreed with Guardian's interpretation of the garnishment statute, limiting its analysis to whether the Policy was a debt or personal property. Kirby II, 2008-NMCA-154, ¶ 9, 145 N.M. 264, 196 P.3d 965. In our view, this interpretation of our state garnishment statute was unnecessarily restrictive. {28} We turn to New Mexico garnishment law. Under NMSA 1978, Section 35-12-3 (1969), service of a garnishment on the garnishee has the effect of attaching all personal property, money, wages ... rights, credits ... and other choses in action of the defendant in the garnishee's possession or under his control at the time of service. The garnishee may contest the subject of garnishment in his answer, and if the plaintiff/garnishor fails to controvert the answer, the garnishee will prevail by default judgment. NMSA 1978, §§ 35-12-4, -5 (1968, as amended through 1969). If the garnishee does not dispute the garnishment, default judgment is entered in favor of the garnishor. Section 35-12-4. The court issuing the writ of garnishment will decide any remaining dispute between the parties in a garnishment proceeding. Jemko, Inc. v. Liaghat, 106 N.M. 50, 53, 738 P.2d 922, 926 (Ct.App. 1987). {29} The effect of garnishment is that the garnishor (here Kirby) is subrogated to the rights of the judgment debtor (the Plan) as against the garnishee (Guardian), and the garnishor cannot prevail against the garnishee unless the judgment debtor could do so. See id. at 53-54, 738 P.2d at 926-27; Gallegos v. Espinoza, 2002-NMCA-011, ¶ 8, 131 N.M. 487, 39 P.3d 704 (citing Carpenters S. Cal. Admin. Corp. v. Mfrs. Nat'l Bank of Detroit, 910 F.2d 1339, 1341 (6th Cir.1990)). In order to be garnishable, the subject of garnishment must be mature, not subject to any contingency. See Gallegos, 2002-NMCA-011, ¶ 9, 131 N.M. 487, 39 P.3d 704 (citing Garland v. Sperling, 6 N.M. 623, 632, 30 P. 925, 927 (1892), aff'd, 7 N.M. 121, 32 P. 499 (1893)); see also Beaufort Transfer Co. v. Fischer Trucking Co., 357 F.Supp. 662, 667 (D.Mo.1973) (holding that a debt which is conditional or dependent for its existence upon some contingency is not a subject of garnishment). Finally, the garnishee may assert any defenses against the garnishor that he could have asserted in a direct action against the judgment debtor. Gallegos, 2002-NMCA-011, ¶ 9, 131 N.M. 487, 39 P.3d 704. {30} In support of its narrow interpretation of the statute, Guardian relies on references in the garnishment statute, and relevant judicial rules and forms of this Court, to indebtedness or personal property, in the hands of the garnishee. See NMSA 1978, § 35-12-1(D) (1969) (plaintiff's affidavit must state that garnishee is indebted to the defendant... or holds personal property belonging to the defendant); Rule 4-805 NMRA (application for writ of garnishment must state that garnishee holds or controls money or personal property which belongs to the judgment debtor). {31} While Guardian is correct to state that debts owed to, and personal property of, the judgment debtor are proper subjects of garnishment, they are not exclusive. If we were to limit garnishment to these two subjects, we would miss a critical analytical step: a debt or personal property is garnishable only if the judgment debtor has a mature right of action against the garnishee for the same. See Jemko, 106 N.M. at 55, 738 P.2d at 925 (The test as to whether funds in the hands of another are subject to garnishment is whether the defendant in the original action could recover such funds directly against the garnishee.). Indeed, a debt owed or personal property could never automatically be deemed a proper subject of garnishment, because the garnishee is free to contest the assertion that such debt exists or is owing, or that such property in fact belongs to the judgment debtor. See § 35-12-4. {32} In contrast to Guardian's restrictive reading, the garnishment statute explicitly permits, in addition to debts and personal property, attachment of rights, credits, and other choses in action of the Plan in Guardian's possession. See § 35-12-3. A chose in action is a debt owed to a debtor or a right of action of a debtor.  Cent. Sec. & Alarm Co. v. Mehler, 1998-NMCA-096, ¶ 19, 125 N.M. 438, 963 P.2d 515 (internal quotation marks omitted) (emphasis added); see also In re Lucas, 107 B.R. 332, 337 n. 4 (D.N.M.1989) (A chose in action is a thing in action, meaning the right of bringing an action or right to recover a debt or money. It is a personal right ... recoverable by a law suit. Blacks Law Dictionary 219 (5th ed. 1979).). {33} In other words, the object of garnishment is the Plan's right of action against Guardian for performance under the Policy. It is of no consequence that language of rights and choses in action is not repeated throughout the statute, because once a court determines the merits of the judgment debtor's right of action, it is, like any judgment, transformed into a presently owing debt (or personal property that must be surrendered, depending on the nature of the asserted action). See Brunskill v. Stutman, 186 Cal.App.2d 97, 8 Cal.Rptr. 910, 915-16 (1960) (declaring, where liability can be determined as a matter of law, that liability is a debt owing to the judgment debtor). Thus, the primary test for whether garnishment is appropriate is whether the judgment debtor, the Plan, has a valid right of action against the garnishee, Guardian, for the subject sought to be garnished.