Court Opinion

ID: 9779019
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:33:20.969093+00
Date Added: 2024-06-11T11:23:49.923605
License: Public Domain

John I. Purtle, Justice, dissenting. I am pleased that the majority has adopted the practical view that it is not necessary that an order or judgment “dismiss the parties from court, discharge them from the action, or conclude their rights to the subject matter in controversy” to be appealable. See Tapp v. Fowler, 288 Ark. 70, 702 S.W.2d 17 (1986); Fratesi v. Bond, 282 Ark. 213, 666 S.W.2d 712 (1984); and ARAP Rule 2. The order appealed from in this case was an order by the trial court ordering the appellant to answer certain interrogatories. However, it is obvious that the trial court would have eventually ordered the appellant to pay into the court the attachable part of Ms. Penn’s wages due under the garnishment proceedings. I am not pleased that the majority has overreached the long arm of Arkansas law. Even though the Arkansas court had jurisdiction to issue this writ of garnishment, the court would not have the authority to compel the appellant to pay funds into the court earned by a non-resident judgment debtor in another state. The employee’s wages at issue were not for services performed in Arkansas nor were they a result of her employer doing business in Arkansas. The majority opinion essentially holds that a writ of garnishment, based upon an Arkansas judgment in favor of an Arkansas creditor, will reach the wages of a non-resident earned in another state, if the employer is doing business in both states. The effect of the holding gives the circuit courts of Arkansas jurisdiction over property located in Tennessee. I have no doubt that if the situation were reversed we would have no hesitancy in reaching the opposite result from that stated by the majority. The United States Supreme Court in Shaffer v. Heitner, 433 U.S. 186 (1977), held that in rem and quasi in rem jurisdiction (as well as personal jurisdiction) over an absent defendant must be determined in light of the test found in International Shoe v. Washington, 326 U.S. 310 (1945). Thus, jurisdiction over the property of an absent defendant depends on the defendant’s “contacts” with the forum state, and the exercise of such jurisdiction must not offend “traditional notions of fair play and substantial justice.” I understand Dr. Leflar and Shaffer v. Heitner, 433 U.S. 186 (1977) to require the opposite of the holding accomplished by the majority. Dr. Leflar, in American Conflicts of Law § 24 (3d ed. 1977), speaking about Shaffer states: [Shaffer] imposes far-reaching new due process of law limitations upon the exercise of judicial jurisdiction in rem and quasi in rem. It subjects this area of jurisdiction, or at least part of it that has permitted attachment or garnishment of choses in action at the place where an absent defendant’s debtor is found, to the same constitutional requirement of “fair play and substantial justice” as prescribed in International Shoe Co. v. Washington [footnote omitted] for in personam jurisdiction. Clearly Shaffer made International Shoe applicable to in rem actions as well as in personam. As Dr. Leflar stated, it had far reaching effects. I understand it to overrule the so-called “situs of the debt” theory which Stone v. Drake, 79 Ark. 384, 96 S.W. 197 (1906) and Harris v. Balk, 198 U.S. 215 (1905) followed. Under this theory, the situs of the debt for purposes of garnishment, is not only at the domicile of the judgment debtor, but in any state in which a garnishee may be found. The present case is identical to the situation in Harris v. Balk, supra, which is no longer good law. In Harris v. Balk, Epstein, a resident of Maryland, had a claim against Balk, a resident of North Carolina. Harris, another North Carolina resident, owed money to Balk. When Harris happened to visit Maryland, Epstein garnished his debt to Balk. Harris did not contest the debt to Balk and paid it to Epstein’s North Carolina attorney. When Balk later sued Harris in North Carolina, the Supreme Court held that the Full Faith and Credit Clause, U.S. Const, art. IV, § 1, required that Harris’ payment to Epstein be treated as a discharge of his debt to Balk. The Court reasoned that the location of the debt traveled with the debtor. In Shaffer, however, the Supreme Court overruled Harris v. Balk. The Court held that in rem jurisdiction must be subjected to the test found in International Shoe. In rejecting the “situs of the debt” theory, the Court stated: We are left, then, to consider the significance of the long history of jurisdiction based solely on the presence of property in a State. . . . The fiction that an assertion of jurisdiction over property is anything but an assertion of jurisdiction over the owner of the property supports an ancient form without substantial modern justification. Its continued acceptance would serve only to allow state court jurisdiction that is fundamentally unfair to the defendants. Traditional notions of fair play and substantial justice do not seem to me to have been met by the majority opinion. The appellant has no property or wages in Arkansas which belong to the employee. The employee had no substantial contacts with Arkansas at the time of this garnishment proceeding. Neither she nor her property occupied an Arkansas situs. My chief fear is not what this decision will do to the law; it is the effect it will have on employment. After all, the Arkansas law is only what we say it is on Monday mornings. But the disaster to employees, who become unemployed by plant reductions and closings, is obvious. Large employers are apt to decide to terminate an employee rather than transfer to another location. Another danger of this decision is that employers will be reluctant to hire new employees who have outstanding judgments against them. Therefore, this decision is harmful to both employers and employees. Both sides rely on Stone v. Drake, 79 Ark. 384, 96 S.W.2d 197 (1906), and Williams v. Williams, 621 S.W.2d 657 (Tenn. Ct. App. 1981). The majority states this is a conflict of laws case and then proceeds to decide the case on due process of law. I believe the Tennessee case is the more reasoned resolution of this issue. The appellant complied with the Arkansas law relating to doing business and appointing an agent for process. However, by doing so it did not consent to jurisdiction over obligations arising out of employment in Tennessee. It has no obligation to the appellee arising out of its Arkansas activities. It should be commended and not penalized for its policy of relocation of displaced employees. I would reverse.