Thursday, June 20, 2013

Arkansas Supreme Court Issues Ruling on Writs of Garnishments (Creditors Rejoice)

This morning, the Arkansas Supreme Court issued a very pro-creditor ruling in Primus Automotive Financial Services v. Sherry Wilburn and Kevin Wilburn, 2013 Ark. 258, which was an appeal from Sebastian County, Arkansas Case No. CV-761. The sole issue on review was whether the issuance of a writ of garnishment tolled the statute of limitations on a judgment for an additional ten year period.

The Wilburns purchased a Kia Sportage back in 1999.  The loan was with Primus.  Primus sued the Wilburns for repayment of the loan after the Wilburns missed payments.   A judgment by default was entered by the circuit court in 2002, the car was sold at auction and a deficiency judgment for the balance was entered against the Wilburns.

Arkansas has a ten year statute of limitations to execute on a judgment, but the limitations period can be extended if the judgment is properly revived.  Sometime before the ten-year statute of limitations period expired, Primus caused a writ of garnishment to be issued by the court, and served upon Ms. Wilburn and her employer, Cooper Clinic, P.A.  Payments from the garnishee were being made for a period of time, until the Wilburns petitioned the circuit court for reimbursement of funds that were paid after the ten-year anniversary from the date of the judgment.  The Wilburns argued that the judgment had not been properly revived because no order of revivor had been entered by the court before the end of the limitations period.  The circuit court agreed with the Wilburns, and awarded the Wilburns the garnished funds.

The Arkansas Supreme Court disagreed, however, and held that the judgment was properly revived by the issuance of a writ of garnishment.  According to the court, "a timely writ of garnishment issued before the judgment is barred tolls the statute of limitations on the judgment and constitutes the commencement of a new period for enforcing the judgment."  In other words, the judgment was successfully tolled for an additional ten years, beginning from the date the writ of garnishment was issued.

Garnishment is just one method that creditors can employ to recover on a judgment and now it is clear that garnishment is also an approved method to revive and extend the life of a judgment.

Link to the full case on the Arkansas Supreme Court's website can be found here.  

C. Michael Daily is an attorney with the long-established law firm of Daily & Woods, P.L.L.C.  Mr. Daily can be contacted by telephone at 479-242-3953, by email at mdaily@dailywoods.com, or by regular post at 58 South 6th Street, Fort Smith, Arkansas 72902.  You can follow Mr. Daily via social network using any of the social network links in the right hand column of the page.  Disclaimer:  This blog is for informational purposes, is certainly not to be considered legal advice and is absolutely not a substitute for any of the benefits that are associated with the attorney-client relationship.