Michelle Kay (Clark) Love v. James Terrill Clark

05/17/2018
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs November 1, 2017
MICHELLE KAY (CLARK) LOVE v. JAMES TERRILL CLARK
Appeal from the General Sessions Court for Loudon County
No. 5195 Rex Alan Dale, Judge
No. E2017-01138-COA-R3-CV
A mother obtained a default judgment against her former spouse for child support
arrearages and other amounts. At the mother’s request, the trial court entered orders of
income assignment to the former spouse’s employers, each directing them to deduct a set
amount from the former spouse’s salary to satisfy the default judgment. Nearly fourteen
and one-half years later, the former spouse asked the court to terminate the wage
assignment, claiming the culmulative amount deducted from his income exceeded the
amount of judgment plus interest. The former spouse also sought a judgment against the
mother to the extent she had received more than she was entitled to under the default
judgment. The mother argued that the voluntary payment doctrine barred recovery. The
trial court found that the former spouse’s “overpayments were made with full knowledge
of the facts chargeable to him” but that they “were not voluntary payments.”
Accordingly, the court entered judgment against mother plus statutory post-judgment
interest.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the General Sessions Court
Affirmed
W. NEAL MCBRAYER, J., delivered the opinion of the court, in which ARNOLD B.
GOLDIN, J., joined. CHARLES D. SUSANO, JR., J., filed a dissenting opinion.
Jordan Long, Knoxville, Tennessee, for the appellant, Michelle Kay Love.
Robin Gunn, Knoxville, Tennessee, for the appellee, James Terrill Clark.1
1
After this case was submitted on briefs, we granted Mr. Clark’s motion to substitute James E.
Corcoran III, for Ms. Gunn, now Magistrate Gunn, as counsel for the appellee.
OPINION
I.
On February 10, 1992, the marriage of Michelle Kay Love, formerly Clark, and
James Terrill Clark ended in divorce. Three children were born to their union, and as part
of the divorce, the trial court ordered Mr. Clark to pay child support.
By mid-2001, Mr. Clark no longer had a continuing child support obligation.2 But
he owed past due child support and other amounts to Ms. Love. On June 22, 2001, the
court entered a default judgment against Mr. Clark. The default judgment, which totaled
$36,994.83, included amounts for child support arrearages, unreimbursed medical
expenses for the children, Ms. Love’s share of a lump sum severance payment resulting
from Mr. Clark’s early military discharge, and attorney’s fees. The default judgment also
specified that the amount awarded would “accrue statutory judgment interest pursuant to
the laws of the State of Tennessee.” And the court directed that the judgment “be paid at
the rate of $130 per week . . . through the registry of [the court] along with the attendant
5% administrative fee of $6.50 per week.”
As contemplated by the default judgment, the court issued a notice and order of
income assignment to Mr. Clark’s employer. The order directed the employer “to deduct
child support from the income of your employee . . . in the amount of $130.00 per week
plus the statutory administrative fee of $6.50 per week.” The order also informed the
employer that “[t]his income assignment is binding upon you until further notice by this
Court.” And it warned that, “[i]f you fail to withhold income in accordance with the
provisions of this notice and order, you are liable for any amount up to the accumulated
amount which should have been withheld from the income of your above referenced
employee.”
The court issued a total of five notices and orders of income assignment, the most
recent issued in May 2006. Each of the notices and the order contained similar, if not
identical, language to that quoted above. And each was signed by counsel for Ms. Love
as being “approved for entry.”
On December 4, 2015, Mr. Clark filed a “motion to stop income assignment and
for judgment of overpayment,” alleging that the garnishments of his income had
continued long after the default judgment was satisfied. In response, Ms. Love invoked
the voluntary payment doctrine. Under the doctrine, “[a] person cannot, either by way of
2
One of the parties’ children had reached the age of majority. And Mr. Clark had voluntarily
surrendered his parental rights with respect to the other two.
2
setoff or counterclaim, or by direct action, recover back money which he has voluntarily
paid with a full knowledge of all the facts, and without any fraud, duress or extortion
although no obligation to make such payment existed.” Still v. Equitable Life Assurance
Soc’y of U.S., 54 S.W.2d 947, 948 (Tenn. 1932) (quoting Standard Oil Co. of La. v.
Petroleum Prods. Storage Co., 44 S.W.2d 317, 320 (Tenn. 1931)).
Following a hearing, a transcript of which is not in the record, the trial court made
findings relating to Mr. Clark’s efforts to stop the wage assignments and to stay abreast
of the default judgment balance. Specifically, the court found as follows:
[Mr. Clark] did not file any pleading to terminate the garnishment of
his income until the motion of December 4, 2015, nine and one-half years
after the last Notice and Order of Income Assignment was ordered. [Mr.
Clark] claimed he called the Clerk’s office three times in the five years
preceding the hearing to try and check on his child support payments.
However, he could not remember when he called or who he had spoken to
in the Clerk’s office. He could not remember the questions he asked, nor
any responses given by the Clerk’s office. He admitted he knew the
payments being taken out of his pay were sent to the Child Support
Receipting Office, but offered no proof of any contact with that office. He
claimed that he did not intend to pay anything more than what he owed on
the judgment. However, he presented no testimony that would demonstrate
to the court that he took any affirmative steps to keep himself apprised of
how much he owed or had paid until the filing of his motion on December
4, 2015.
....
[Ms. Love] testified that [Mr. Clark] had asked her at one point in
time, “Do you know when the judgment will be paid in full?” She
responded that [s]he[3] did not know, and that he needed to call the (Loudon
County) Justice Center. She did not recall exactly when this conversation
took place. She also testified that she never knew when or if the balance
had been paid in full.
The court also made findings relating to when the default judgment was satisfied in
which it distinguished between the child support and non-child support related
components of the judgment. The court determined that the “child support related
3
The context of the order, other documents in the record, and both parties’ briefs all suggest that
the trial court’s use of the pronoun “he” was a typographical error and that “she” was intended.
3
judgment obligations were paid off in December 2008 (seven and one-half years after
entry of Judgment).” And Mr. Clark’s “non-child support judgment obligations were
paid off in November, 2011 (ten years and five months after entry of Judgment).”
Based on the findings, the trial court awarded Mr. Clark a judgment against
Ms. Love for $24,895.09 plus statutory post-judgment interest of 5.5% per annum until
she paid the judgment in full. In its detailed final order, the court analyzed each of
Ms. Love’s defenses. On the application of the voluntary payment doctrine, the court
made a “finding” that Mr. Clark’s payments were not voluntary “in that all overpayments
made were pursuant to the 2006 Order of Income Assignment.” The court also found
“that the 2006 Order of Income Assignment created a legal obligation to surrender those
payments even though the underlying judgment had been satisfied.”
II.
On appeal, Ms. Love raises two issues. First, she argues that Mr. Clark’s
overpayments were voluntary and that the trial court erred in not denying him recovery
based upon the voluntary payment doctrine. Second, she argues that, if the voluntary
payment doctrine does not bar Mr. Clark’s recovery, the trial court erred in awarding
post-judgment interest.
In non-jury cases, the trial court’s findings of fact are presumed to be correct
unless the evidence in the record preponderates against them. Tenn. R. App. P. 13(d).
Evidence preponderates against a finding of fact if the evidence “support[s] another
finding of fact with greater convincing effect.” Rawlings v. John Hancock Mut. Life Ins.
Co., 78 S.W.3d 291, 296 (Tenn. Ct. App. 2001). We review a trial court’s conclusions of
law under a de novo standard with no presumption of correctness attaching to the trial
court’s legal conclusions. Campbell v. Fla. Steel Corp., 919 S.W.2d 26, 35 (Tenn. 1996);
Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). We review mixed
questions of law and fact also under a de novo standard with no presumption of
correctness. Langschmidt v. Langschmidt, 81 S.W.3d 741, 745 (Tenn. 2002). We have
“great latitude to determine whether findings as to mixed questions of fact and law made
by the trial court are sustained by probative evidence on appeal.” Aaron v. Aaron, 909
S.W.2d 408, 410 (Tenn. 1995).
A.
The voluntary payment doctrine is “generally well settled.” Newman v. Aluminum
Co. of Am., 643 S.W.2d 109, 112 (Tenn. Ct. App. 1982). “[W]here a person with full
knowledge of the facts voluntarily pays money under a mistake of law on a demand not
legally enforceable against him, he cannot recover it in the absence of unjust enrichment,
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fraud, duress, or improper conduct by the payee.” Id. (quoting Donald M. Zupanec,
Annotation, Right of Insurer Under Health or Hospitalization Policy to Restitution of
Payments Made Under Mistake, 79 A.L.R. 3d 1113, 1117 (1977)).
In this case, the trial court considered some of the elements of the voluntary
payment doctrine.4 But the application of the doctrine turned on whether the deductions
from Mr. Clark’s pay under court order were voluntary. The trial court “found”
Mr. Clark’s overpayments to be involuntary. When the facts are not in dispute, whether a
payment is voluntary presents a question of law. See City of Clarksville v. Montgomery
County, 62 S.W. 33, 36 (Tenn. Ct. Ch. App. 1901) (determining the issue on demurrer);
21 RULING CASE LAW § 167, at 144 (William M. McKinney & Burdett A. Rich eds.,
1918). Otherwise, “whether the money was paid voluntarily or in consequence of
compulsion or duress” is a question of fact. 21 RULING CASE LAW, supra, § 167, at 144;
70 C.J.S. Payment § 107, Westlaw (database updated Mar. 2018) (“Whether in a given
case a payment is voluntary depends on whether the facts of the particular case indicate
an intention on the part of the payor to waive his or her legal rights.”).
When our supreme court considered the difficult question of what constitutes an
involuntary payment, it spoke in terms of free will.
From the nature of the question no very precise rules can be laid down.
The very word used to describe an involuntary payment imports a payment
made against the will of the person who pays. It implies that there is some
fact or circumstance which overcomes the will and imposes a necessity of
payment in order to escape further ills. Ordinarily it may be said duress is
that degree of constraint or danger either actually inflicted or threatened and
impending sufficient to overcome the mind and will of a person of ordinary
firmness.
Still, 54 S.W.2d at 949 (quoting 21 RULING CASE LAW, supra, § 170, at 146). Certainly a
wage assignment overcomes the will of an employee who would otherwise wish to
4
The trial court found that Mr. Clark had full knowledge of the facts. Specially, the court found
that he “knew the amount of the Judgment of June 2001, knew the amounts that were being garnished out
of his paychecks from his paystubs, knew where the payments were going, yet he failed to keep himself
informed as to remaining balance of the judgment and failed to take any action to stay the wage
assignment order once the judgment was satisfied until after four years had passed from the satisfaction of
the judgment.” The court also touched on the issue of unjust enrichment, noting that Ms. Love
“benefitted from receipt of the overpayments, and presented no proof as to how she utilized the
overpayments.” Ms. Love did offer testimony that she used the overpayments to support her adult
children and their child, all of whom apparently still lived with her. The court did not consider whether
there was fraud, duress, or improper conduct by Ms. Love.
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receive all of his compensation. And as the notices and orders of income assignment in
this case made clear, a wage assignment imposes a necessity of payment to escape further
ills. In cases of payments compelled by court process, courts typically deem the
payments involuntary. See, e.g., Carpenter v. Carpenter, 891 N.E.2d 587, 600 (Ind. Ct.
App. 2008) (“Father’s decision to pay child support via wage withholding was voluntary
only in the sense that Father voluntarily complied with the law.”); Perkins v. Grobben, 74
N.W. 469, 471 (Mich. 1898) (concluding that payment resulting from a garnishee process
involuntary); Chaker v. Chaker, 581 A.2d 737, 743-44 (Vt. 1990) (contrasting voluntary
child support payments with wage assignments). But see White v. White, 2009 Ark. App.
790, 2, 5 (2009) (affirming the trial court’s finding that father’s overpayments were
voluntary because, although his employer erroneously withheld a larger amount from
father’s paycheck each month than ordered by the court, “it was [father’s] responsibility
to verify that he was making child-support payments in the correct amount” during those
months).
Because the question of whether a payment is voluntary or involuntary is
dependent on the facts of each case, Still, 54 S.W.2d at 949, all payments exacted through
court process are not necessarily involuntary. A person whose assets or income are
garnished or subjected to a wage assignment has some responsibility to oppose invalid
process, for instance in circumstances in which no amounts are due. As one court
explained in an analogous context,
A judgment or order of court to a garnishee for the payment of money he is
supposed to owe his creditor is not always such compulsory process as will
protect the garnishee in a payment made thereon. It is his duty to see, as far
as may be, that the judgment or order is a valid one; and if he suffer an
order to be made against him by default when in fact he owed nothing,
without making an effort to show that fact or to have the order set aside, a
payment thereon must be regarded as voluntary.
Ambs v. Towle, 27 N.E. 625, 626 (Ind. App. 1891).
Turning to the unique circumstances here, we sustain the trial court’s
determination that the payments taken from Mr. Clark’s pay were involuntary. The
amount of time Mr. Clark took to seek a stop to the wage assignment is concerning. But
as the court’s final order made clear with its attached tables, determining when the
default judgment was satisfied was not as simple as finding a calculator. The default
judgment awarded interest at a statutory rate, without specifying that rate. As the trial
court correctly concluded, two different statutory rates applied to the judgment. See
Tenn. Code Ann. §§ 36-5-101(a)(5) (2001) (current version at Tenn. Code Ann. § 36-5-
101(f)(1) (2017)); 47-14-121 (2001) (amended 2012). The court then determined that
6
payments from the wage assignment should be applied first to the child support arrearage,
which further impacted the date the default judgment was satisfied. In addition, the proof
showed some effort on the part of Mr. Clark to determine from Ms. Love and the clerk’s
office the status of his payments. Thus, we agree with the trial court that the voluntary
payment doctrine did not apply to bar Mr. Clark’s recovery.
B.
Having determined that Mr. Clark’s recovery was not barred by the voluntary
payment rule, we consider the trial court’s award of post-judgment interest. Ms. Love
argues it was inequitable to award Mr. Clark post-judgment interest. She claims she was
prejudiced by Mr. Clark’s delay in acting “because he knew he was overpaying yet did
nothing about it and every time he made a payment it [wa]s going to be more money that
[she] w[ould] have to eventually pay back through interest.”
As an initial matter, we note that the trial court found that Ms. Love “was also
chargeable with full knowledge of the[ ] same facts [Mr. Clark was aware of].” The court
further found “that the overpayments began and continued as a result of the inaction of
both parties to keep themselves apprised of the declining balance of the Judgment and
take affirmative action to end the garnishment of [Mr. Clark’s] paychecks after the
Judgment had been satisfied.” Unlike Mr. Clark who made some inquiry regarding the
outstanding balance of the judgment, Ms. Love made none. But ultimately the equities
are irrelevant when it comes to post-judgment interest.
By statute, “[i]nterest shall be computed on every judgment from the day on which
the jury or the court, sitting without a jury, returned the verdict without regard to a
motion for a new trial.” Tenn. Code Ann. § 47-14-122 (2013). Our supreme court
interprets this language as mandatory. Ali v. Fisher, 145 S.W.3d 557, 565 (Tenn. 2004).
And this Court previously held that “the rate of interest prescribed by statute is deemed
controlling and not subject to reduction by reason of equitable considerations.” Bedwell
v. Bedwell, 774 S.W.2d 953, 956 (Tenn. Ct. App. 1989). So the trial court did not err in
awarding post-judgment interest.
III.
The trial court properly determined that the voluntary payment doctrine did not bar
Mr. Clark from recovery. And the court’s award of post-judgment interest was required
by statute. The judgment of the trial court is affirmed.
7
_______________________________
W. NEAL MCBRAYER, JUDGE
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