Opinion ID: 2212470
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Heading: Levy on Choses in Action.

Text: In Steffens v. American Standard Insurance Co., 181 N.W.2d 174 (Iowa 1970), we set out the options of a creditor whose debtor had a claim against a liability insurer. Id. at 175-76. These options were to: (1) levy execution on the debtor's chose in action, (2) garnish the insurer under execution, or (3) file a creditor's bill in equity. Id. At common law, choses in action could not be reached by execution. Id. at 176. Iowa, however, has adopted the broad form of statutory execution authorizing levy on choses in action. Id.; Code of Iowa § 626.21 (1989). A chose in action is the same thing as a thing in action. Brenton Bros. v. Dorr, 213 Iowa 725, 733-34, 239 N.W. 808, 811-12 (1931). A chose (or thing) in action is a right not reduced into possession or a right under a contract which, in case of nonperformance, can only be reduced to beneficial possession by an action or suit. Id. We have previously stated that the phrase things in action includes a claim for breach of contract. Id. at 736-37, 239 N.W. at 813. Such a claim is a cause of action. Black's Law Dictionary 224 (5th ed. 1979). A cause of action is in existence prior to judgment and is personal property upon which, under Iowa law, a creditor may levy. Steffens, 181 N.W.2d at 175-76; Iowa Code § 4.1(9). The accepted method of levying on personal property is set out in Note, Applying Hulm in Iowa: Avoiding Involuntary Transfers as Fraudulent Conveyances Under Section 548(a)(2) of the Bankruptcy Code, 71 Iowa L.Rev. 1437, 1463-64 (1986). Published Iowa cases in which causes of action have been levied upon include Steffens and Brenton Bros. But see, Citizens State Bank v. Hansen, 449 N.W.2d 388 (Iowa 1989). Arbie contends that rule 260 need not be strictly complied with for a valid levy. We note that [i]t is a general rule that a statutory lien can exist only when it has been perfected in the manner prescribed by the statute. Ware v. Delahaye, 95 Iowa 667, 678, 64 N.W. 640, 644 (1895). Similarly, rule 260 itself states: [l]evy on personalty may be made under an attachment or general execution by either of the following methods, but no lien is created until compliance with one of them.  (Emphasis added.) There is no lien for any purpose until the procedural steps required under the rule have been taken. Peterson v. Polk County Treasurer, 452 N.W.2d 453, 454 (Iowa 1990). Had Arbie levied upon Elgin's cause of action, that cause of action could have been sold at sheriff's sale. Iowa R.Civ.P. 258; Iowa Code §§ 626.74-.105. Arbie could have purchased the chose in action and had it assigned. It could have then prosecuted the claim against Farm Bureau in Elgin's place. Steffens, 181 N.W.2d at 176. Arbie levied on a nonexistent judgment; it did not levy on Elgin's cause of action. As a result no lien was created. Arbie did not have available to it the option of garnishment. Generally speaking, unliquidated debts may not be garnished. See 38 C.J.S. Garnishment § 89 (1943). Here the debt of Farm Bureau to Elgin was never liquidated; thus, there was never anything for Arbie to garnish.