You can
search the entire site.
or go to the recent opinions, or the chronological or subject indices.
Reynolds v. The Sisco Group, Inc. (5/9/2003) sp-5688
Reynolds v. The Sisco Group, Inc. (5/9/2003) sp-5688
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
DONNALD R. REYNOLDS and )
PARRIS A. REYNOLDS, ) Supreme Court No. S-10266
)
Appellants, ) Superior Court No.
) 3AN-99-8596 CI
v. )
)
THE SISCO GROUP, INC., ESTATE ) O P I N I O N
OF ELDRIDGE C. SISSON, and )
VIRGINIA ERICKSON, ) [No. 5688 - May 9, 2003]
)
Appellees. )
)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Brian C. Shortell and Stephanie E.
Joannides, Judges.
Appearances: Barton M. Tiernan, Esq., Law
Offices of Barton M. Tiernan, Anchorage, for
Appellants. Allan E. Curlee, Allan Curlee,
P.C., Fairbanks, for Appellee Estate of
Eldridge C. Sisson.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
BRYNER, Justice.
I. INTRODUCTION
Reynolds tried to execute on a money judgment against
Sisson by seizing one of three vans Sisson had fraudulently
transferred to a friend, Erickson, and by attaching funds owed by
a third person, Frye, to whom Erickson had sold the other two
vans after receiving them from Sisson. As Reynolds prepared to
sell the seized van and either shortly before or after he
attached the funds from the other vans' sale, Sisson died.
Alaska's probate code bans judgment creditors from attempting new
executions or levies against any property of a deceased judgment
debtor's estate. Relying on this prohibition, the superior court
ordered the seized van and attached funds to be restored to
Sisson's estate. We reverse as to the seized van, finding the
probate code's ban inapplicable, since Reynolds perfected his
security interest in the van by seizing it before Sisson died.
As to the estate's right to the sale funds, we hold that the
issue turns on whether Reynolds perfected his security interest
by serving the writ of attachment on Frye before Sisson died.
Because the record does not disclose the writ's date of service,
we vacate the summary judgment as to the funds and remand for
further proceedings.
II. FACTS AND PROCEEDINGS
In April 1999 the superior court entered a default
judgment against Eldridge Sisson and his company, Sisco Group,
Inc. (Sisson), awarding Donnald and Parris Reynolds (Reynolds)
over $400,000 in tort damages. Reynolds recorded the judgment a
week later and began collecting the judgment by obtaining writs
of execution and attempting to seize various items of Sisson's
property, including three Ford vans. In July Reynolds managed to
seize one of the vans.
Meanwhile, however, attempting to avoid execution,
Sisson had transferred title to all three vans to a friend named
Virginia Erickson; in early June Sisson had also arranged for
Erickson to sell two of the vans to a third party, Cameron Frye,
for $47,500. The sale contract between Erickson and Frye, an
arm's-length transaction, required Frye to pay Erickson a down
payment of $5,000, forty-eight monthly installments of $1,027.50,
and four $5,000 balloon payments.
Upon learning of this sale, Reynolds asked the court to
issue an order enjoining any further transfer of Sisson's
property and directing any persons owing money to Sisson to pay
directly to the court. The superior court granted the request
and issued the writ of attachment so ordering on July 7, 1999.
On July 23 Reynolds filed a supplemental action against Sisson
and Erickson, seeking an order nullifying Sisson's fraudulent
transfers to Erickson and requiring Frye to pay his monthly
installments directly to the court. After consolidating the
supplemental action with the original case, the superior court
issued a prejudgment writ of attachment on July 29, 1999,
ordering Frye to make all further payments to the court. The
record does not disclose the exact date that Frye received this
order, but he evidently started sending his monthly payments to
the court in August or September.
On August 8, 1999, Sisson died in an accident.
Several months later, Reynolds moved for summary
judgment on his fraudulent conveyance complaint, asking the court
for title to the van he had seized in July so that he could sell
it in partial satisfaction of his judgment; he also asked the
court to award him the right to collect Frye's installments on
the other two vans. The personal representative for Sisson's
estate intervened and responded. While acknowledging that
Sisson's conveyances had been fraudulent, the estate opposed
Reynolds's request for the property, arguing that the sale
proceeds from Frye and the title to the unsold van should instead
be restored to the personal representative for distribution as
part of Sisson's estate.
Superior Court Judge Brian C. Shortell agreed with the
estate and issued a summary judgment ordering that the van and
the funds be held in the court registry for distribution as part
of Sisson's estate. After the parties stipulated that Judge
Shortell's order disposed of all triable issues, Superior Court
Judge Stephanie E. Joannides, who had replaced Judge Shortell on
the case, entered a final judgment incorporating the substance of
the summary judgment order.
Reynolds appeals, arguing that the superior court erred
in awarding the disputed property to the estate.
III. DISCUSSION
The controversy in this appeal centers on AS 13.16.505,
which prohibits judgment creditors from executing or levying on
property of a deceased debtor's estate but nonetheless permits
the continued enforcement of liens:
No execution may issue upon nor may any
levy be made against any property of the
estate under any judgment against a decedent
or a personal representative, but this
section shall not be construed to prevent the
enforcement of mortgages, pledges, or liens
upon real or personal property in an
appropriate proceeding.
Alaska drew this statute from 3-812 of the Uniform Probate
Code, a law we described in Lundgren v. Gaudiane as establishing
that the "death of the judgment debtor terminates the possibility
of issuing a valid writ of execution upon a money judgment."1
In Sheehan v. Estate of Gamberg, we declared that "the purpose of
AS 13.16.505 is to freeze the status of all claims at the death
of the debtor in order to provide for the orderly administration
of the estate."2 We observed that this purpose harmonizes with
the purpose of Alaska's devolution statute,3 which passes a
decedent's property "to his heirs or devisees immediately upon []
death, subject to the rights of creditors."4 Given this
immediate transfer of property rights, we explained, "a judgment
creditor of a decedent cannot create a new property interest,
such as a judgment lien, in the decedent's estate since title is
in the heirs or devisees."5
In the present case, Reynolds insists that AS
13.16.505's prohibition against new executions and levies does
not prevent him from using Sisson's vans as a source for
satisfying his judgment. Before Sisson died, Reynolds points
out, one of the vans had already been seized under a writ of
execution; and a prejudgment writ of attachment had already
issued directing Frye to pay to the court all future installments
falling due on the other two vans. Because seizing the first van
completed its execution and the prejudgment writ of attachment
acted as a lien on the remaining funds owed by Frye, Reynolds
maintains, his interest in using this property to secure his
judgment was already perfected by the time Sisson died. And
because AS 13.16.505 only prohibits new executions or levies and
expressly allows continued enforcement of existing liens after a
judgment debtor dies, Reynolds reasons, nothing in the statute or
in our cases interpreting it precludes him from satisfying his
judgment by enforcing his established interests in the van and
Frye's installments.
In response, the estate cites Sheehan and Lundgren and
insists that, as interpreted by these cases, AS 13.16.505
effectively froze the status of all claims pending against Sisson
at the time of his death, thereby requiring his interest in the
vans to be treated as the estate's property:
What is in dispute is the appropriate
disposition of the van still titled to
Erickson and the proceeds of the sale [of the
other two vans]. Based on AS 13.16.505 and
[Lundgren], the Personal Representative
asserts that the property and proceeds of
sale should be returned to her to allow her
to properly carry out her duties[.]
But the estate's argument is unpersuasive.6 In
providing that "no execution may issue upon nor may any levy be
made against any property of the estate," AS 13.16.505's plain
language makes two conditions necessary to trigger its
prohibitions after a judgment debtor dies: (1) some form of
execution or levy must be issued or made; and (2) the execution
or levy must be directed against property of the estate. Our
cases interpreting this statute reinforce its plain meaning. In
Sheehan, for example, we noted the statute's purpose of ensuring
that "a judgment creditor of a decedent cannot create a new
property interest" after title passes to heirs or devisees; yet
at the same time we recognized that the heirs and devisees take
the decedent's property "subject to the rights of creditors"
existing at the time of death.7 Similarly, in Lundgren, we
described AS 13.16.505 as a provision that "terminates the
possibility of issuing a valid writ of execution upon a money
judgment."8
Here, then, the estate's claim that it should receive
the disputed property so that the personal representative can
ensure an orderly administration of the estate's assets begs the
two critical questions posed by the statutes' requirements: would
allowing Reynolds to recover his judgment by selling the seized
van and collecting Frye's installments entail the creation of a
new property interest (that is, an interest that did not exist at
the time of Sisson's death)? And if so, does the new interest
that Reynolds seeks to assert involve property that belongs to
the estate (that is, property devolving to Sisson's heirs and
devisees upon Sisson's death)?
As to the seized van, at least, the answer to the first
question is decidedly, "No." Under Alaska law, a writ of
execution directs a judgment creditor to levy on - or seize - the
property that is subject to the writ.9 Until the levy occurs,
"the property is not affected by the execution."10 But once the
property is levied upon, it serves as a specific source for
satisfaction of the judgment,11 and the judgment creditor thus
enjoys a lien-like interest in collecting against the particular
property seized.12 By seizing the van under a writ of execution,
then, Reynolds secured a cognizable interest in satisfying his
judgment against that particular item of property.13 And because
the van's levy undisputedly occurred before Sisson died, this
interest cannot properly be regarded as the kind of newly created
interest forbidden under AS 13.16.505. To the contrary, whatever
residual right Sisson retained in the seized van when he died
devolved to his heirs and devisees subject to Reynolds's
established interest in collecting against that property.
Whether Reynolds has the right to collect Frye's
installment payments presents a cloudier picture. Because the
record fails to disclose exactly when Reynolds served the
prejudgment writ of attachment on Frye, we cannot determine
whether the installment payments were attached before Sisson
died. Reynolds argues that this is irrelevant. He maintains
that the prejudgment writ of attachment itself amounted to a lien
upon issuance, regardless of whether or when it was served. In
support of this argument, Reynolds cites Civil Rule 89's opening
language, which authorizes claimants to apply for prejudgment
writs of attachment "as security for satisfaction of a judgment
that may be recovered."14 But the rule's broad statement
describing a writ of attachment's purpose begs the narrower
question of precisely when a writ of attachment achieves its
purpose of providing "security for satisfaction of a judgment."
Nothing in the statement of purpose suggests that a writ of
attachment creates a security interest before being perfected by
service. And as we explain below, Alaska's probate code
definitively hinges the estate's right to Frye's payments on when
Reynolds perfected his security interest.
As already mentioned, AS 13.16.505 prohibits a new
execution or levy after a judgment debtor dies only if the
execution or levy is directed "against any property of the
estate."15 A writ of attachment is a type of levy. The pivotal
questions presented, then, are whether Frye's future payments for
the two vans can be considered "property" and, if so, whether
these payments became "property of the estate" under
AS 13.16.505. Alaska's probate code adopts an
expansive view of "property," defining the word to mean
"anything that may be the subject of ownership, and includes both
real and personal property and an interest in real or personal
property."16 The contractual right to payments from Frye
certainly is something that "may be the subject of ownership" so
it is unquestionably property. We must thus proceed to ask
whether this contractual right became property of the estate.
Another probate code provision, AS 13.16.385, squarely controls
this issue, unequivocally granting personal representatives
exclusive power to prosecute claims on behalf of unsecured
creditors for any unencumbered property transferred by a decedent
through "void or voidable" means:
The property liable for the payment of
unsecured debts of a decedent includes all
property transferred by the decedent by any
means which is in law void or voidable as
against creditors, and subject to prior
liens, the right to recover this property, so
far as necessary for the payment of unsecured
debts of the decedent, is exclusively in the
personal representative.[17]
By giving Sisson's personal representative exclusive
authority to maintain an action to set aside the allegedly
fraudulent chain of conveyances unless Frye's payments were
"subject to prior liens," this provision effectively recognizes
that the right to the outstanding payments would pass to the
estate if Reynolds's claim against the funds remained unperfected
- that is, if the writ of attachment remained unserved - when
Sisson died.18
Here, before Sisson died he transferred all three of
his vans to Erickson, who titled them in her name. By the time
of his death, two of the three - the two that remained unseized -
had been further transferred from Erickson to Frye in return for
his promise to make forty-eight monthly payments of $1,027.50.
Reynolds had filed a complaint asserting that these transactions
were fraudulent and were therefore voidable; and he had obtained
a prejudgment writ of attachment. But whether the writ was
served on Frye before Sisson died is unclear on the current
record and was not decided below. Because the record fails to
disclose when the writ was served, entry of summary judgment on
this point was inappropriate. Accordingly, we must set aside the
summary judgment with respect to Frye's payments and remand this
case for further proceedings to determine if the writ of
attachment was served before Sisson's death.
IV. CONCLUSION
We REVERSE the superior court's judgment with respect
to the seized van and direct entry of judgment in Reynolds's
favor; we VACATE the judgment with respect to Frye's payments and
REMAND for further proceedings.
_______________________________
1See Lundgren v. Gaudiane, 782 P.2d 285, 288 (Alaska 1989)
(quoting S. Riesenfeld, Creditors' Remedies and Debtors'
Protection, 84-85 (3d ed. 1979) (citations omitted)).
2Sheehan v. Estate of Gamberg, 677 P.2d 254, 256-57 (Alaska 1984)
(citing In re Hogan's Estate, 229 Wis. 600, 282 N.W. 5, 9
(1938)).
3See AS 13.16.005 (devolution statute); see also Wright, Uniform
Probate Code Practice Manual 12.1 (1972) (stating that under
the UPC's definition of devolution, "Title to a decedent's
property, both real and personal, passes to his heirs . . . or to
the devisees . . . , immediately upon death").
4Sheehan, 677 P.2d at 257-58.
5Id. at 257. More recently, in Lundgren v. Gaudiane, we
confirmed Sheehan's reading of AS 13.16.505, emphasizing that AS
13.16.505 prevails insofar as it conflicts with language in AS
09.35.060 that would seemingly allow execution on a judgment
after the judgment debtor dies. Lundgren, 782 P.2d at 288
(confirming Sheehan's holding and resolving conflict between AS
13.16.505 and AS 09.35.060, which provides: "If the judgment
debtor dies after judgment, execution may be issued on the
judgment in the manner and with the effect as if the debtor were
still living, except as provided in AS 13.16.505.").
6Because this appeal arises on undisputed facts from a summary
judgment order and because Reynolds's argument raises a pure
question of law, we decide the case de novo by applying our
independent judgment. Guin v. Ha, 591 P.2d 1281, 1284 (Alaska
1979).
7Sheehan, 677 P.2d at 257 (emphasis added).
8See Lundgren, 782 P.2d at 288 (quoting S. Riesenfeld, Creditors'
Remedies and Debtors' Protection, 84-85 (3d ed.1979) (citations
omitted) (emphasis added)).
9AS 09.35.100; AS 09.35.110; Alaska R. Civ. P. 69(f).
10AS 09.35.110.
11See AS 09.35.030; cf. AS 09.40.010(a) (allowing attachment of
property "as security for the satisfaction of a judgment").
12See AS 09.35.030; cf. Alaska Nat'l Ins. Co. v. Jones, 993 P.2d
424, 427-28 (Alaska 1999) (construing a statute to give rise to
an equitable lien because it established "an interest in and a
right to seek reimbursement from" a particular source).
13Cf. AS 09.35.160 (giving a judgment creditor and the process
server who levies on property under a writ of execution full
control over the timing of a sale in satisfaction of the
judgment).
14See Alaska R. Civ. P. 89(a).
15AS 13.16.505.
16AS 13.06.050(39). This definition comports with the definition
set out in Uniform Probate Code section 1-201(33), which states:
" `Property' includes both real and personal property or any
interest therein and means anything that may be the subject of
ownership."
17Cf. Goldstein v. Prien, 299 P.2d 344, 346 (Cal. App. 1956)
(recognizing under analogous section of California Code "that the
right to recover property conveyed by a decedent in fraud of
creditors is an asset of his insolvent estate and that the
executor or administrator is a trustee thereof for the benefit of
creditors.").
18Since AS 13.16.505 prohibits liens from being perfected after
the date of death, the term "prior liens" in AS 13.16.385 must
refer to liens on voidably transferred property or proceeds
thereof perfected before the date of death.
