Whitted v. Jordan

STEPHAN EARLWHITTED, Appellant/Cross-Respondent, v. LORI JONES JORDAN, Respondent/Cross-Appellant.

No. 77967-2-I

Court of Appeals of Washington, Division 1

April 22, 2019

UNPUBLISHED OPINION

MANN J.

This is the second appeal involving the enforcement of a decree dissolving the parties' marriage entered by a Georgia court more than a decade ago. In the first proceeding, the Washington court entered a judgment against Stephen Whitted for approximately $165, 000 in unpaid child support. In the second proceeding that is the subject of this appeal, the court entered judgment against Lori Jordan for a principal sum of $55, 000-enforcing a provision of the decree that required her to transfer retirement account funds to Whitted. The court allowed Jordan to offset the amount she owed to Whitted against the larger amount Whitted owed to her. Both parties appeal, challenging the offset, the calculation and rate of interest on the principal judgment amount, and the allocation of responsibility for any penalties or taxes stemming from the withdrawal of retirement funds. We affirm.

I.

The background facts surrounding the parties' dissolution and the first lawsuit to enforce the decree are derived from our unpublished decision affirming the judgment against Whitted for unpaid child support. See Jordan v. Whitted noted at 2 Wn.App. 2d 1034(2018).

Jordan and Whitted dissolved their marriage in 2007 in Georgia. The divorce decree required Whitted to pay monthly child support for the parties' three children and required Jordan to transfer $55, 000 from her retirement account to Whitted. Whitted stopped paying child support in 2010. Jordan never transferred the retirement funds.

At some point, Whitted moved to Maryland and Jordan moved to Washington. In 2016, Jordan registered the Georgia decree in Washington and filed an action to enforce the child support provisions. The court entered a judgment against Whitted for unpaid child support of $167, 868.85, plus interest. The court declined to offset the arrearage by Jordan's unpaid retirement fund obligation, concluding that the issue of the retirement fund transfer was not properly before it. Whitted appealed, and this court affirmed.

Meanwhile Whitted initiated the instant proceeding by filing a "Declaration re: Foreign Judgment" and supporting documents. He claimed entitlement to a judgment of $55, 000 under the decree, plus "appx. $85, 000" in interest based on an interest rate of "10.9 % per annum." Whitted then applied for a writ of garnishment seeking to garnish Jordan's earnings. Jordan moved to stay the writ of garnishment. Following a hearing, the court granted the motion.^[1]

The parties did not challenge the principal judgment amount, but disputed the calculation and rate of interest, whether the principal judgment amount should be reduced to account for penalties and taxes, and whether the judgment should be offset by the existing judgment for unpaid child support. After a second hearing, the court ruled that Whitted was entitled to judgment of $55, 000, the applicable rate of interest under Georgia law was 10.9 percent, and interest applied only to the principal. The court also ruled that Jordan was entitled to offset the amount she owed, $114, 950 by the outstanding amount owed by Whitted, which the court calculated as $197, 598.40 as of the date of the hearing. The court declined to reduce the judgment amount based on estimated penalties and/or taxes. The court then denied Jordan's motion for reconsideration. Both parties appeal.

II.

When the court made its ruling granting an offset, the judgment against Whitted for unpaid child support was pending on appeal. Whitted therefore argues that the judgment against him was not final and the trial court erred "as a matter of law" in allowing the offset.

An offset or setoff "allows entities that owe each other money to apply their mutual debts against each other, thereby avoiding 'the absurdity of making A pay B when B owes A.'" Citizens Bank of Maryland v. Strumpf, 516 U.S. 16, 18, 116 S.Ct. 286, 133 L.Ed.2d 258 (1995) (quoting Studley v. Boylston Nat. Bank, 229 U.S. 523, 528, 33 S.Ct. 806, 57 L.Ed. 1313 (1913)). We review a trial court's decision to offset a judgment for abuse of discretion. Eagle Point Condo. Owners Ass'n v. Coy, 102 Wn.App. 697, 701, 9 P.3d 898 (2000). '"[W]hether mutual judgments may be satisfied by being set off against each other rests largely within the court's discretion ... the application to set off judgments should be made in equity and controlled by equitable principles.'" Rapid Settlements. Ltd.'s App. for Approval of Transfer of Structured Settlement Payment Rights. 166 Wn.App. 683, 694, 271 P.3d 925 (2012) (quoting Reichlin v. First Nat'l Bank, 184 Wash. 304, 314-15, 51 P.2d 380 (1934) (citations omitted)).

Explaining its decision to allow the offset, the trial court noted that while Whitted appealed the judgment, he had taken no measures to stay enforcement of the judgment pending appeal. A judgment in a civil case is enforceable unless enforcement is delayed in the manner provided by in the Rules of Appellate Procedure. RAP 8.1. "A trial court decision may be enforced pending appeal or review unless stayed pursuant to the provisions of this rule. Any party to a review proceeding has the right to stay enforcement of a money judgment, or a decision affecting real, personal or intellectual property, pending review." RAP 8.1(b). A party may stay enforcement of a monetary judgment by filing a supersedeas bond in the trial court. RAP 8.1(b)(1).^[2]

No persuasive authority supports Whitted's position that a pending appeal precludes an offset. He primarily relies on Reichlin in which the court held that equitable principals supported the trial court's decision to offset a judgment entered against the defendant by the amount of a separate judgment entered against the plaintiff. The court concluded:

[A] judgment, especially a judgment entered by the same court, when pleaded as a set-off, must, as a matter of law, be credited upon any recovery which the judgment debtor, as plaintiff, may establish against the judgment creditor as defendant. No other course would be equitable.

Reichlin, 184 Wash, at 313.

In the context of a general discussion about equitable set offs, the Reichlin court quoted an excerpt from a treatise suggesting that the pendency of an appeal may, in some cases, prevent a judgment from being "final and conclusive" for purposes of an offset, for instance, when "execution of the judgment has been stayed." Reichlin, 184 Wash, at 314. But, here again, Whitted took no action to stay enforcement of the judgment. And since Reichlin did not concern judgments that had been appealed, the quoted language was dicta and unnecessary to the court's holding.^[3]

The trial court acted within its discretion in granting the offset.

III.

A.

Jordan contends the court erred when it imposed postjudgment interest at the rate of 10.9 percent. We review an award of postjudgment interest de novo. TJ Landco. LLC v. Harley C. Douglass. Inc.. 186 Wn.App. 249, 256, 346 P.3d 777 (2015). The rate of interest payable on a foreign judgment registered in Washington is determined by the law of the state that rendered the judgment. RCW 6.36.140. Under Georgia law, the default interest rate applicable to judgments is the prime rate of interest on the date of the judgment, plus 3 percent. Ga. Code Ann. § 7-4-12(a). The parties do not dispute that, at the time of the decree, 10.9 percent was the rate of interest under this provision.

Jordan contends that a more specific statute, former Ga. Code Ann. § 7-4-12.1, applied to the award under the divorce decree. In 2007, when the Georgia court entered the decree, that statute provided, in relevant part:

(a) All awards of child support expressed in monetary amounts shall accrue interest at the rate of 7 percent per annum commencing 30 days from the day such award or payment is due. This Code section shall apply to all awards, court orders, decrees, and judgments rendered pursuant to Title 19.

Former Ga. Code Ann. § 7-4-12.1(a) (2006).

By its express terms, the statute applied a 7 percent rate of interest to "awards of child support." Jordan argues that the discounted interest rate was not limited to child support and applied to "all awards, court orders, decrees, and judgments rendered pursuant to Title 19." Title 19 of the Georgia code includes chapters related to "divorce," child support, and several other related family law topics. Thus, she contends that the 7 percent rate applied to any award or judgment in a domestic relations matter.

But Jordan's interpretation of the provision results in superfluous statutory language. If the discounted rate of interest applied to all judgments or awards under Title 19, it would have been unnecessary to specify that it applied to child support awards. Both Georgia and Washington courts interpret statutes to give effect to all language, so as to render no portion meaningless or superfluous. Motors Acceptance Corp. v. Rozier, 278 Ga. 52, 53, 597 S.E.2d 367 (2004); Rivard v. State, 168 Wn.2d 775, 783, 231 P.3d 186 (2010). The alternative interpretation that gives meaning to all provisions of the statute is that under the version of the statute in effect at the time of the decree, the discounted rate of interest applied to child support regardless of whether that support was encompassed within a decree, court order, award, or other another vehicle under Title 19.^[4] The trial court did not err in ruling that the default rate of postjudgment interest under Georgia law, here 10.9 percent, applied.

Whitted agrees with the rate of interest but claims the court erred by imposing simple interest on only the principal judgment...