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Campbell v. Walker

IN THE SUPERIOR COURT OF PENNSYLVANIA


October 14, 2009

CHRYSTAL CAMPBELL
v.
EARL R. WALKER, JR.
APPEAL OF: DEPARTMENT OF PUBLIC WELFARE

Appeal from the Order entered May 20, 2008, in the Court of Common Pleas, Philadelphia County, Domestic Relations, No. 99-17726; Pacses No. 849101063.

The opinion of the court was delivered by: McEWEN, P.J.E.

BEFORE: BENDER, SHOGAN, JJ., and McEWEN, P.J.E.

OPINION

¶ 1 The Commonwealth of Pennsylvania Department, of Public Welfare (hereinafter DPW) has appealed from a Court of Common Pleas order that vacated a lien against proceeds that were due appellee, Earl R. Walker, Jr., from Allstate Insurance Company pursuant to the settlement of a personal injury lawsuit. We reverse.

¶ 2 The underlying facts of this case are not in dispute. On or about March 19, 2008, appellee, through his attorney, negotiated the settlement of a personal injury lawsuit that would have netted him the sum of $3,083.83. However, because appellee was on notice of a pre-existing claim asserted by DPW, due to prior welfare payments that had been issued for the benefit of appellee's child,*fn1 appellee's attorney notified the Office of the Philadelphia District Attorney, which served as counsel for DPW in such situations, of the existence of the settlement in the net amount of $3,083.83. The District Attorney then, on April 3, 2008, obtained a "non-distribution" order from the Court of Common Pleas of Philadelphia,*fn2 by the terms of which appellee's attorney was directed to hold the settlement proceeds in escrow. Appellee thereafter sought a hearing in the Court of Common Pleas of Philadelphia in an effort to have the court vacate the non-distribution order. Following that hearing, and a "voluntary" agreement by appellee to pay mother the sum of $957.00 in satisfaction of an arrearage in court ordered support for the child, the trial court entered an order on May 20, 2008, releasing to appellee the sum of $2,126.83, the proceeds remaining from the settlement, and denying any distribution to DPW. This appeal followed.

¶ 3 DPW, in the brief filed in support of this appeal, raises the following questions for our review:

Whether the trial court erred in finding that the statutory lien in 23 Pa.C.S. § 4308.1 was the only method of enforcing a support order against a monetary award, thereafter striking the non-distribution order against appellee's monetary award before the Department [DPW] could seek enforcement of its support arrears through the open petitions for civil contempt?

Whether the trial court abused its discretion by ordering appellee to pay all of mother's arrears, but none of the arrears owed to the DPW, without any justification for the disproportionate distribution?

See: Brief of Appellant, p. 9.

¶ 4 The resolution of this appeal turns on the interplay between two statutory sections contained in the Support Chapter of the Pennsylvania Domestic Relations Title, namely sections 4305 and 4308.1.*fn3 Section 4305 provides, in relevant part:

4305. General administration of support matters

(a) Powers and duties.-Subject to any inconsistent general rules and to the supervision and direction of the court, the domestic relations section shall have the power and duty to:

...

(7) Make effective the orders of support entered....

(b) Additional powers.-Subject to the supervision and direction of the court but without the need for prior judicial order, the domestic relations section shall have the power to...:

(10) Issue orders in cases where there is a support arrearage to secure assets to satisfy current support obligation and the arrearage by:

...

(ii) Intercepting or seizing judgments or settlements.

...

23 Pa.C.S. § 4305 (a)(7), (b)(10)(ii) (emphasis supplied). Section 4308.1 provides, in relevant part:

§ 4308.1. Collection of overdue support from monetary awards

(a) General rule.-Overdue support shall be a lien by operation of law against the net proceeds of any monetary award, as defined in subsection (i), owed to an obligor, and distribution of any such award shall be stayed in an amount equal to the child support lien provided for under this section pending payment of the lien.....

(i) Definitions.-As used in this section, the following words and phrases shall have the meanings given to them in this subsection:

"Monetary award." Any portion of a settlement paid as a lump sum negotiated in lieu of, or subsequent to the filing of a lawsuit for, or any civil judgment or civil arbitration award that is paid as a third party claim for bodily injury or death under a property and casualty insurance policy[.]

"Net proceeds." Moneys in excess of $5,000 payable to a prevailing party or beneficiary[.]

...

23 Pa.C.S. § 4308.1(a), (i) (emphasis supplied). Thus, the question is whether the broad language contained in section 4305 authorized the retention and ultimate seizure of appellee's monetary recovery even though that sum was below the amount affected by the "lien by operation of law" language contained in section 4308.1.*fn4

¶ 5 The trial court concluded that the dispute over the settlement proceeds was governed solely by section 4308.1*fn5 and, in support of that conclusion, offered the following rationale:

Section 4305 cannot, by operation of law, negate the effect of section 4308.1 because section 4308.1 is a specific, rather than a general statute, and was enacted after section 4305 (in 2006). Under Pennsylvania law, if two provisions of a statute are in conflict, the special provisions shall prevail unless the general provision was enacted later and was intended to prevail:

Whenever a general provision in a statute shall be in conflict with a special provision in the same or another statute, the two shall be construed, if possible, so that effect may be given to both. If the conflict between the two provisions is irreconcilable, the special provisions shall prevail and shall be construed as an exception to the general provision, unless the general provision shall be enacted later and it shall be the manifest intention of the General Assembly that such general provision shall prevail.

1 Pa.C.S. § 1933..

[DPW's] argument would essentially nullify section 4308.1. If section 4305 were interpreted to prevail over section 4308 to authorize the seizure of all judgments regardless of the monetary amount, then no purpose would have been served in enacting section 4308.1, limiting the power of the domestic relations section to seize judgments to [sic] awards in excess of $5,000. It cannot be said that section 4308.1 was enacted without a purpose.

Trial Court Opinion, August 28, 2008, pp. 5--6.

¶ 6 As is apparent from the above excerpt, the analysis of the trial court was grounded in its belief that the germane statutory provisions were in conflict, and that that conflict was irreconcilable. We, however, do not view the provisions as in conflict, and are compelled to reverse the decision of the trial court.

¶ 7 The threshold distinction between the two sections is that section 4308.1, by its explicit terms, imposes a lien "by operation of law" upon the recovery of a monetary judgment in excess of $5,000. Consequently, the lien attaches immediately upon the recovery by the obligor, with no action by the obligee, here DPW, required.*fn6 Thus, section 4308.1 is a separate device intended to insure that an obligor notifies the "Pennsylvania child support enforcement system" of any new or unexpected assets. By contrast, the statutory powers granted pursuant to section 4305 to a designated "domestic relations" agent, here the Office of the Philadelphia District Attorney acting on behalf of DPW, permit that designee to affirmatively act to collect arrears in any amount, without regard to a statutory minimum sum, from defaulting obligors by, inter alia, issuing orders "[i]ntercepting or seizing judgments or settlements." 23 Pa. C.S. § 4305(b)(10)(ii). Consequently, the two sections are not irreconcilable, but are complementary measures designed to achieve the overarching public policy goal of insuring the collection of support arrears.*fn7

¶ 8 Order reversed. Case remanded for proceedings consistent with this Opinion.


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