Opinion ID: 1465638
Heading Depth: 1
Heading Rank: 4

Heading: Right to Future Annuity Proceeds

Text: Thompson also asserts that the trial court erred in finding that Bank of America had a right to ongoing garnishment of future monthly payments under the annuity until the judgment is satisfied or until Thompson's death. This issue involves the question of whether Bank of America may garnish the flow of annuity payments instead of suing on each monthly payment. As Thompson notes, the payments are certainly due if Thompson is alive and certainly not due if Thompson is dead. Thompson argues that because the monthly payments are contingent on his continued life, they are not certain, and may only be garnished each month as Jefferson-Pilot's contractual obligation under the annuity contract ripens and a payment becomes due. In essence, Thompson argues that although there is an ongoing contractual obligation to him under the annuity contract to make the monthly annuity payments, there is no indebtedness to garnish until the day the monthly payment is due arrives and Thompson is alive. Garnishment in Arkansas is a purely statutory remedy in derogation of the common law and must be strictly construed. Beasley v. Haney, 96 Ark. 568, 132 S.W. 646 (1910). Any statute in derogation of the common law will be strictly construed. Although the General Assembly has the power to alter the common law, a legislative act will not be construed as overruling a principle of common law unless it is made plain by the act that such a change in the established law is intended. Hartford Ins. Co. v. Mullinax, 336 Ark. 335, 984 S.W.2d 812 (1999). Books-A-Million, Inc. v. Arkansas Painting and Specialties Co., 340 Ark. 467, 470, 10 S.W.3d 857 (2000). In G.A.C. Trans-World Accept. Corp. v. Jaynes Enterprises, Inc. 255 Ark. 752, 502 S.W.2d 651 (1973), this court stated of garnishment: We have frequently, and without exception, held that garnishment is a statutory procedure and that strict compliance with garnishment statutes is essential to the validity of the proceeding. Hervey v. The Farms, Inc., 252 Ark. 881, 481 S.W.2d 348; Roach v. Henry, 186 Ark. 884, 56 S.W.2d 577 Missouri Pacific R. Co. v. McLendon, 185 Ark. 204, 46 S.W.2d 626; Schiele v. Dillard, 94 Ark. 277, 126 S.W. 835; First National Bank of Huttig v. Rhode Island Insurance Company, 184 Ark. 812, 43 S.W.2d 535. Jaynes, 255 Ark. at 756, 502 S.W.2d 651. Arkansas Code Annotated § 16-110-402 (Supp.2003) provides that where a person has obtained a judgment and wishes to satisfy it, he or she may obtain issuance of a writ of garnishment and require the appearance of a person thought to be indebted to the judgment debtor. In the case before us, Thompson has a right to $750 per month from Jefferson-Pilot as long as he may live. Jefferson-Pilot has a contractual obligation to pay Thompson the sum of $750 each month, but there is no debt presently due or certain to come due until the day of payment arrives and Thompson is alive. Cannady v. First Nat. Bank of Fayetteville, 238 Ark. 474, 382 S.W.2d 589 (1964), is instructive. In Cannady , the writ of garnishment was issued before the money owed was paid into the court. This court in Cannady stated: In the case of Harris v. Harris, 201 Ark. 684, 146 S.W.2d 539, this Court quoted with approval from 28 C.J. 129, 171, the following: Under some statutes it has been held that a debt not presently payable is not subject to Garnishment. But generally debts contracted, although not presently payable or matured, but which will certainly become payable in the future, may be reached. And this, although the terminology of the statute is that claims or debts `due' may be garnished, the term `due' being taken in its larger sense as importing merely an existing obligation, without reference to the time of payment. The Harris case has been cited with approval in Miller v. Maryland Casualty Co., 207 Ark. 312 (p. 318), 180 S.W.2d 581 (1944), 207 Ark. 312, 180 S.W.2d 581 (p. 584); Coward v. Barnes, 232 Ark. 177 (p. 179) 334 S.W.2d 894 (p. 896) (1960); and Gossett v. Merchants of Planters Bank, 235 Ark. 665 (p. 667), 361 S.W.2d 537 (p. 538) (1962). It is not denied that the Bank was first to have a writ of garnishment filed against Cannady The lien thus created took effect at the time the writ was served. See: Bergman v. Sells & Co., 39 Ark. 97 and the Gossett case, supra. Cannady, 238 Ark. at 478, 382 S.W.2d 589. See also Bell v. West, 241 Ark. 89, 406 S.W.2d 316 (1966). Thompson argues that because he might die, the debt is not certain and, therefore, under Cannady , the annuity payments are not certain. Thompson cites United States v. Wakefield, 572 S.W.2d 569 (Tex.Civ.App.1978), where the Texas Court of Appeals held that military retirement pay did not accrue unless Wakefield was alive. Therefore, the debt being garnished was contingently but not absolutely owed. On that basis, garnishment of the military retirement pay not yet due was denied. However, garnishment is a matter of statute. Beasley, supra . Our statute speaks of debt and pursuant to Cannady , a debt not presently due but certain to come due may be subject to garnishment in Arkansas. Garnishment is an attachment of the debt or a form of levy on the debt. Lawrence v. Ford Motor Credit Co., 247 Ark. 1125, 449 S.W.2d 695 (1970). Coward v. Barnes, 232 Ark. 177, 334 S.W.2d 894 (1960) is further illustrative of the law in Arkansas. In Coward , garnishment was not permitted on an undetermined amount due on a debt. At issue was a crop that had only been partially harvested and on which no money had been received. Such a debt was found to be entirely contingent and not subject to garnishment. See Wyatt Lumber & Supply Co. v. Hansen, 201 Ark. 534, 147 S.W.2d 366 (1940). The nature and extent of property the third-party might possess of the judgment debtor in the future was uncertain. Similarly, whether Jefferson-Pilot becomes indebted subject to garnishment is entirely contingent on Thompson's continued life. We note that garnishment of wages as a flow of income is allowed in Arkansas, and might be compared to the flow of payments due under an annuity contract. However, garnishment of wages is expressly allowed under the statutes. Ark.Code Ann. § 16-110-415 (Supp.2003). The contractual obligation to pay Thompson is not triggered until a new month arrives and Thompson is alive. At that point, Jefferson-Pilot becomes indebted to Thompson in the amount of $750. The payment is contingent on Thompson surviving. In Cannady , there was no such contingency. The debt in Cannady was certain to become payable. That is not so in the present case until each payment becomes due. The trial court is affirmed on allowing garnishment of the $27,750 that was due and owing to Thompson when the October 4, 2002, writ of garnishment was issued, and reversed on garnishment of the flow of monthly payments from Jefferson-Pilot.