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GALLEGOS V. ESPINOZA
State: New Mexico
Court: Court of Appeals
Docket No: 21298
Case Date: 11/21/2001
Plaintiff: GALLEGOS
Defendant: ESPINOZA
Preview:GALLEGOS V. ESPINOZA, 2002-NMCA-011, 131 N.M. 487, 39 P.3d 704
MICHAEL GALLEGOS, Plaintiff-Garnishor-Appellee
vs.
ROBERT ESPINOZA, SR., EAGLE EYE CONSTRUCTION, INC., a New
Mexico Corporation, ROBERT ESPINOZA, JR., and BENITO
ESPINOZA, Defendants, ARMSTRONG CONSTRUCTION
CO., Garnishee-Appellant.

Docket No. 21,298
COURT OF APPEALS OF NEW MEXICO
2002-NMCA-011, 131 N.M. 487, 39 P.3d 704
November 21, 2001, Filed
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY. Art Encinias, District Judge.  
Released for Publication February 5, 2002. Certiorari Denied, No. 27,296, January 29, 2002.
COUNSEL
Peter V. Culbert, Santa Fe, NM for Appellee.
David C. Henderson, Santa Fe, NM for Appellant.
Sean Calvert Calvert & Menicucci, Albuquerque, NM Amicus Curiae American Subcontractor Association.
Linda Zemke Gardner & Zemke Co., Albuquerque, NM Amicus Curiae Associated Builders and Contractors, Rio Grande Chapter.
David Gorman Sheehan, Sheehan & Stelzner, Albuquerque, NM Amicus Curiae Association of General Contractors of New Mexico.

JUDGES
RICHARD C. BOSSON, Chief Judge. WE CONCUR: CYNTHIA A. FRY, Judge CELIA FOY CASTILLO, Judge. AUTHOR: RICHARD C. BOSSON
OPINION
{*487}

BOSSON, Chief Judge.
{1} A general contractor on a public works project owes payments to its subcontractor who, in turn, owes money to various suppliers. The subcontractor also owes an unrelated debt on a judgment. The judgment creditor obtains a writ of garnishment against the general contractor demanding that, instead of paying the subcontractor, it pay the judgment creditor. We discuss the circumstances under which the garnishee-general contractor may raise defenses against the garnishor-judgment creditor that the garnishee had under its contract with the subcontractor, whose unpaid judgment debt has caused the garnishment. The district court  {*488} granted summary judgment in favor of the garnishor. We reverse and hold that the general contractor's contractual defenses prevail against the writ of garnishment.  

BACKGROUND
{2} On April 29, 1999, Armstrong Construction Co. (Armstrong) contracted with the New Mexico State Highway and Transportation Department to make improvements on State Highway 18, near Eunice, New Mexico (the Project). On June 17, 1999, Armstrong subcontracted with Eagle Eye Construction, Inc. (Eagle Eye) to install a fence as part of the Project (the Subcontract). The Subcontract provided that Armstrong would make progress payments to Eagle Eye within ten days after receipt of funds from the State and final payment including retainage within twenty days. Eagle Eye, in turn, contracted with other businesses for supplies to use on the Project.
{3} Meanwhile, unknown to Armstrong, Michael Gallegos filed an unrelated lawsuit against Eagle Eye for collection of a private debt and for fraud. On August 24, 1999, Gallegos obtained a default judgment in the First Judicial District Court, which awarded Gallegos $ 212,422 in compensatory and punitive damages against Eagle Eye. A transcript of the judgment was issued on August 24, 1999, and recorded in Santa Fe County on August 31, 1999. Attempting to collect on his judgment, on October 22, 1999, Gallegos served a writ of garnishment on Armstrong in regard to any payments Armstrong owed Eagle Eye as part of the Subcontract.  
{4} Armstrong answered the writ asserting that it owed $ 28,464.26 to both Eagle Eye and Eagle Eye's suppliers. The district court ordered the $ 28,464.26 paid into the court registry. Some of Eagle Eye's suppliers intervened below, but most did not.  
{5} The district court granted summary judgment to Gallegos on the writ of garnishment. After crediting Armstrong $ 3000 in costs and attorney's fees, the district court awarded the remaining $ 25,464.26 to Gallegos. Armstrong now appeals from that judgment. Intervenors did not appeal.

DISCUSSION
{6} We review a trial court's grant of summary judgment de novo, as a matter of law. Self v. United Parcel Serv., Inc., 1998-NMSC-46, P6, 126 N.M. 396, 970 P.2d 582. "Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law." Id.

Gallegos' Writ of Garnishment is Subject to Contractual Defenses Armstrong had Against Eagle Eye
{7} "Garnishment proceedings provide a remedy, in the form of attachment, which is controlled by statute." Amaya v. Santistevan, 114 N.M. 140, 142, 835 P.2d 856, 858 . Gallegos, as garnishor of Eagle Eye's rights to payment from Armstrong, has only those same rights that Eagle Eye could assert against Armstrong. See Jemko, Inc. v. Liaghat, 106 N.M. 50, 54, 738 P.2d 922, 926 (Ct. App. 1987) (explaining that garnishor is subrogated to judgment debtor's rights against garnishee).
{8} The garnishee, Armstrong, has the same liability, legal and equitable, to the garnishor as it has to the judgment debtor, Eagle Eye. See Field v. Sammis, 12 N.M. 36, 47-48, 73 P. 617, 620 (1903) (holding that garnishor takes no more than rights of debtor); Cent. Sec. & Alarm Co. v. Mehler, 1998-NMCA-96, P13, 125 N.M. 438, 963 P.2d 515 ("[A] garnishor can acquire no greater rights by a writ of garnishment than those that the judgment debtor would have been able to assert against the garnishee."); Jemko, Inc., 106 N.M. at 52, 738 P.2d at 924 ("A judgment creditor acting under a writ of garnishment, after due notice to interested parties, can only seize the property that belongs to the judgment debtor."); Carpenters S. Cal. Admin. Corp. v. Mfrs. Nat'l Bank, 910 F.2d 1339, 1341 (6th Cir. 1990) (predicting that Michigan Supreme Court would hold that "the judgment-creditor garnishor stands in the same position as the judgment-debtor with respect to the garnishee and may not prevail against the garnishee unless the debtor could do so"); Valley Nat'l Bank v. Hasper, 6 Ariz. App. 376, 432 P.2d 924, 926 (Ariz. Ct. App. 1967) ("[A] garnishor cannot obtain {*489} rights against a garnishee superior to the rights held by the judgment debtor against the garnishee at the time of garnishment."); Messall v. Suburban Trust Co., 244 Md. 502, 224 A.2d 419, 421 (Md. 1966) ("The rights of the creditor vis a vis the garnishee cannot rise above those of the debtor.").
{9} Thus, the garnishor stands in the shoes of the judgment debtor. Armstrong can assert against Gallegos any contractual defenses that it could have asserted under the Subcontract against Eagle Eye. Hasse Contracting Co. v. KBK Fin., Inc., 1999-NMSC-23, PP19-22, 127
N.M. 316, 980 P.2d 641 (Hasse II) (allowing account debtor to assert contractual defenses against assignee); see also Garland v. Sperling Bros., 6 N.M. 623, 632, 30 P. 925, 927 (1892) (holding that the debt must be "absolutely, and unconditionally owing and payable at the present or some future time" when the writ is served), aff'd, 7 N.M. 121, 32 P. 499 (1893); Beaufort Transfer Co. v. Fischer Trucking Co., 357 F. Supp. 662, 667 (E.D. Mo. 1973) ("The Missouri authorities make it abundantly clear, however, that a debt which is conditional or dependent for its existence upon some contingency is not a subject of garnishment.").  

The Subcontract
{10} We now turn to the Subcontract between Eagle Eye and Armstrong to assess Eagle Eye's rights against Armstrong, and therefore Gallegos' rights against Armstrong in light of Armstrong's defenses. We "apply the plain meaning of the contract language as written." Christmas v. Cimarron Realty Co., 98 N.M. 330, 332, 648 P.2d 788, 790 (1982). Although the parties disagree as to the meaning of the Subcontract, neither claims it is ambiguous, and we do not find it so. See  Kirkpatrick v. Introspect Healthcare Corp., 114 N.M. 706, 711, 845 P.2d 800, 805 (1992) (holding that court decides as a matter of law whether contract is ambiguous; noting that parties' disagreement as to proper interpretation does not establish ambiguity).  
{11} We also consider custom and usage in the construction industry to illuminate the meaning of the terms in the Subcontract. See Points v. Wills, 44 N.M. 31, 36-37, 97 P.2d 374, 377 (1939) (noting that evidence of industry custom is admissible to amplify but not to contradict express terms of contract); see also Restatement (Second) of Contracts
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