Court Opinion

ID: 4147850
Source: CourtListenerOpinion
Date Created: 2017-02-23 16:03:31.175768+00
Date Added: 2024-06-11T07:46:10.430133
License: Public Domain

Cite as 2017 Ark. 54

                 SUPREME COURT OF ARKANSAS
                                        No.   CV-16-183

                                                   Opinion Delivered: February   23, 2017

CARDINAL HEALTH
                                 APPELLANT APPEAL FROM THE PULASKI
                                           COUNTY CIRCUIT COURT
V.                                         [NO. CV-14-3231]

BETH’S BAIL BONDS, INC.                     HONORABLE TIMOTHY DAVIS
                                   APPELLEE FOX, JUDGE

                                                   MOTION TO DISMISS DENIED;
                                                   REVERSED.

                            SHAWN A. WOMACK, Associate Justice

        Appellant Cardinal Health appeals from the Pulaski County Circuit Court’s denial

 of its motion for relief from an order to pay in a garnishment proceeding. Appellee Beth’s

 Bail Bonds filed a motion to dismiss this appeal, which we opted to dispose of alongside the

 merits of the appeal. For the reasons discussed below, we deny the motion to dismiss and

 reverse the circuit court’s denial of Cardinal Health’s motion for relief.

                                              I.    Facts

        Beth’s Bail Bonds filed a breach-of-contract claim against Cassondrea Livingston and

 Calvin Stovall. The circuit court entered a default judgment for $26,235 as to Livingston.

 The clerk issued a writ of garnishment based on the allegation that Cardinal Health possessed

 assets belonging to Livingston for the satisfaction of the default judgment. Cardinal Health

 was served with the writ through certified mail in March 2015 and was directed to answer.
                                    Cite as 2017 Ark. 54

Cardinal Health answered the interrogatories included in the writ, stating that Livingston

earned $14.64 hourly in Cardinal Health’s employ.

       The circuit court set a hearing for June 1, 2015. The court sent notice of this hearing

electronically on May 27, 2015, but sent it only to the counsel for Beth’s Bail Bonds,

Thomas Burns. The notice of the hearing stated that it was “the responsibility of the

parties/attorneys to notify [the court] of any parties/attorneys who have been inadvertently

omitted from this notice.”

       Beth’s Bail Bonds did not serve a copy of the hearing notice on Cardinal Health.

The only communications between the parties between the date of service of the writ of

garnishment and the date of the hearing were (1) Burns’s notice and entry of appearance

and (2) a proposed draft of the order to pay, both sent on May 1, 2015. Neither document

indicated the date or existence of the June 1, 2015 hearing, which had been scheduled only

five days prior to the hearing.

       When Cardinal Health did not appear at the June 1, 2015 hearing, the circuit court

stated that Cardinal Health had made “several errors” and had been “given an opportunity

when this hearing was set to realize that some huge misprision had been made.” The circuit

court issued an order to pay for $26,874, which is the original amount of the judgment

against Livingston plus postjudgment interest. The order was entered on the day of the

hearing, but it was not served on Cardinal Health until October, long after the deadline for

appeal had passed.

       Cardinal Health filed a motion for relief or in the alternative for an extension of the

time to appeal. The circuit court denied the motion. Cardinal Health filed a notice of appeal.

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The circuit court also denied a motion to stay execution of the order to pay pending the

appeal. We granted a motion to stay execution. Beth’s Bail Bonds filed a motion to dismiss

this appeal for lack of appellate jurisdiction, and we dispose of that motion with the case.

                                    II.     Motion to Dismiss

       This appeal comes to us under Rule 2(a)(5) of the Arkansas Rules of Appellate

Procedure–Civ., which authorizes us to hear an appeal from “an order which vacates or

sustains an attachment or garnishment.” Beth’s Bail Bonds argues that this is not such an

action, because it is an appeal from the denial of a postjudgment motion for relief from

December 2015 rather than from the initial writ of garnishment or the order to pay from

June 2015. Beth’s Bail Bonds additionally argues that Cardinal Health waived its alternative

argument requesting an extension of the time to appeal from the June order based on the

way Cardinal Health abbreviated the title of the motion in the amended notice of appeal.

       The argument that this is not an “order which vacates or sustains an attachment or

garnishment” is unsupported by the plain language of the rule. When the circuit court

denied the motion for relief, the direct effect of that denial was to sustain Cardinal Health’s

responsibility to pay the garnished amount. If the circuit court had granted the motion for

relief instead, the garnishment would have been vacated.

       The cases in which we have interpreted the rule’s language offer no support for the

position of Beth’s Bail Bonds either. In Medical & Dental Credit Bureau, Inc. v. Lake Hamilton

Bible Camp & Conference Grounds, 291 Ark. 353, 727 S.W.2d 382 (1987), we held that the

denial of summary judgment in a case involving an issue of garnishment was not an

appealable matter within the meaning of Rule 2(a)(5). Unlike a postjudgment motion for

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relief, appeals from summary-judgment denials are expressly limited in Rule 2(a)(10) to

include only situations involving the defense of sovereign immunity. In Denney v. Denney,

2015 Ark. 257, 464 S.W.3d 920, we held that Rule 2(a)(5) did not permit an interlocutory

appeal from an order temporarily sustaining a mechanics’ lien, because a lien was not an

attachment or garnishment. Here, it is clear that Cardinal Health’s funds are subject to

garnishment within the meaning of the rule.

       Beth’s Bail Bonds also argues that Cardinal Health waived its ability to argue for an

extension of time to appeal. Because we conclude in Section III of this opinion that the

circuit court’s denial of the motion for relief should be reversed, we do not need to reach

the alternative argument about the extension of time to appeal. We deny the motion to

dismiss for lack of jurisdiction and move on to the merits of Cardinal Health’s appeal.

                                           III.       Notice

       Cardinal Health argues that its due-process rights were violated when the circuit

court entered an order to pay against it during a hearing for which Cardinal Health received

no notice. We review de novo the circuit court’s denial of Cardinal Health’s motion for

relief because it turns entirely on an issue of law. See, e.g., Preston v. Stoops, 373 Ark. 591,

593, 285 S.W.3d 606, 609 (2008).

       The uncontested facts of this case justify reversal of the circuit court’s decision not

to grant relief from the order to pay. The statutory scheme for garnishment proceedings sets

some procedural rules, but the general rules of civil procedure fill in the gaps. The statute

even makes this hybrid nature clear. Arkansas Code Annotated section 16-110-402(b)(1)(A)

(Repl. 2016) states that a writ of garnishment “shall be directed, served, and returned in the

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same manner as a writ of summons.” The relevant consideration, then, is Rule 5 of the

Arkansas Rules of Civil Procedure, which sets out the requirements for “every pleading and

every other paper, including all written communications with the court, filed subsequent to

the complaint.” Rule 5(b)(2) permits service by electronic communication with an attorney

for the party, but it is “not effective if it does not reach the person to be served.”

       Cardinal Health did not receive notice of the June 1, 2015 hearing. The only

communications between the parties were the initial writ of garnishment, Cardinal Health’s

reply, Burns’s notice of appearance, and the proposed order to pay. None of these

documents contained the date, or acknowledged the existence, of the hearing; indeed, they

were all sent before the hearing was even scheduled. We typically insist on strict compliance

with statutory service and notice requirements. See, e.g., Carruth v. Design Interiors, Inc., 324
Ark. 373, 374–75, 921 S.W.2d 944, 945 (1996). The limited exceptions we have recognized

certainly do not include the circumstances here, where there was neither an attempt to alert

Cardinal Health of the hearing nor an actual awareness of it on Cardinal Health’s part.

Proceedings that suffer from these fatal flaws are void from the beginning. Id. at 375, 921

S.W.2d at 945.

                                         IV.    Conclusion

       Requiring notice when one party attempts to use the courts to affect another party’s

liberty or property is at the very core of our legal system’s obligation to protect the

constitutional right to due process. That requirement was not met here.

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       We reverse the circuit court’s denial of Cardinal Health’s motion for relief from the

order to pay, and we vacate all proceedings in the garnishment action that have occurred

since the defective notice.

       Motion to dismiss denied; reversed.

       Jackson Lewis P.C., by: James R. Mulroy II; and Barber Law Firm, PLLC, by: J. Carter

Fairley and S. Brent Wakefield, for appellant.

       Charles D. Hancock, for appellee.

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