Hj Ventures v. candelario/carmax

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

HJ VENTURES, LLC, Plaintiff/Appellant,

v.

MANLIO CANDELARIO, et al., Defendants/Appellees.

No. 1 CA-CV 23-0331
FILED 2-6-2024

Appeal from the Superior Court in Maricopa County
No. TJ2023-000053
The Honorable Gary L. Popham, Judge Pro Tempore

AFFIRMED

COUNSEL

Southwest Legal Associates, Mesa
By Garren R. Laymon
Counsel for Plaintiff/Appellant

Manlio Candelario, Maxwell, TX
Defendant/Appellee

Carmax Enterprise Services, LLC, Richmond, VA
Defendant/Appellee

HJ VENTURES v. CANDELARIO/CARMAX
Decision of the Court

MEMORANDUM DECISION

Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Daniel J. Kiley and Judge D. Steven Williams joined.

C A T T A N I, Judge:

¶1 Creditor HJ Ventures, LLC appeals the superior court’s
judgment overruling its Objection to Nonexempt Earnings Statement
(“Objection”). HJ Ventures contends that a recently amended statute that
lowers the amount of disposable earnings that may be garnished by a
creditor does not apply to a debt for which there was a judgment prior to
the effective date of the amended statute. We agree with the superior court
that the new version of the statute applies to any garnishment proceedings
initiated after the effective date of the statute. Accordingly, and for reasons
that follow, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 HJ Ventures is a creditor that obtained a default judgment
against Manlio Candelario in 2016. The record does not indicate the basis
for that judgment.

¶3 In December 2022, Proposition 209 took effect, amending
Arizona’s wage garnishment statute, A.R.S. § 33-1131, to reduce the
percentage of a debtor’s wages subject to garnishment. Section 33-1131(B)
now reads:

the maximum part of the disposable earnings of a debtor for
any workweek that is subject to process may not exceed ten
percent of disposable earnings for that week or the amount by
which disposable earnings for that week exceed sixty times
the applicable minimum hourly wage in effect at the time the
earnings are payable, whichever is less.

(Emphasis added.) Under the previous version of the statute, 25% (rather
than 10%) of a debtor’s disposable earnings were subject to garnishment.
See 2022 Prop. 209, § 6 (initiative measure approved Nov. 8, 2022).

¶4 In February 2023, HJ Ventures filed an garnishment
application, and the superior court issued a writ of garnishment to

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HJ VENTURES v. CANDELARIO/CARMAX
Decision of the Court

Candelario’s employer, CarMax Enterprise Services, LLC, naming CarMax
as the garnishee. In its answer, CarMax admitted it employed Candelario
and would owe him earnings after the date of the service of garnishment.
CarMax indicated that it would withhold 10% of Candelario’s disposable
earnings.

¶5 HJ Ventures objected, requesting that CarMax be required to
withhold 25% of Candelario’s disposable earnings based on the previous
version of A.R.S. § 33-1131(B). HJ Ventures asserted that the new version
of the statute applied only to judgments obtained after the effective date of
Proposition 209. Neither Candelario nor CarMax responded.

¶6 In the meantime, HJ Ventures submitted a proposed order
directing CarMax to withhold 15% of Candelario’s disposable earnings,
which the superior court signed. The court subsequently realized that HJ
Ventures had filed an objection and thus set a hearing.

¶7 Neither Candelario nor CarMax appeared at the hearing. HJ
Ventures argued that the new version of § 33-1131(B) does not apply to
Candelario’s debt because the 2016 judgment against him predated the
effective date of the new law. The superior court rejected HJ Ventures’
argument, finding that CarMax was “obligated to apply the law in effect at
the time of service of the Writ of Garnishment”; thus, only 10% of
Candelario’s disposable earnings were subject to garnishment. The court
then vacated its previous order and directed HJ Ventures to submit an
amended order requiring 10% withholding.

¶8 The court entered the amended order, and HJ Ventures timely
appealed. We have jurisdiction under A.R.S. § 12-2101(A)(1).

DISCUSSION

I. Applicability to Non-Residents.

¶9 Preliminarily, HJ Ventures contends that the exemption
provided by § 33-1131(B) does not apply to Candelario because he is a Texas
resident. But HJ Ventures has waived this argument on appeal by failing
to raise it in the superior court. See Roebuck v. Mayo Clinic, 256 Ariz. 161,
166, ¶ 16 (App. 2023). Moreover, HJ Ventures is seeking to garnish wages
from an Arizona employer, and HJ Ventures cites no controlling authority
for its assertion that Arizona’s garnishment statutes do not apply to an
Arizona garnishee, regardless of the residency of the debtor.

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HJ VENTURES v. CANDELARIO/CARMAX
Decision of the Court

II. Prospective Applicability of Amended § 33-1131(B).

¶10 HJ Ventures argues that the saving clause of Proposition 209
precludes retroactive applicability of the new statute. The saving clause
provides:

This act applies prospectively only. Accordingly, it does not
affect rights and duties that matured before the effective date
of this act, contracts entered into before the effective date of
this act or the interest rate on judgments that are based on a
written agreement entered into before the effective date of
this act.

See 2022 Prop. 209, § 10. HJ Ventures asserts that Candelario’s debt
predated Proposition 209, so the new version of the statute cannot be
invoked.

¶11 We review the interpretation of statutes de novo. Premier
Physicians Grp., PLLC v. Navarro, 240 Ariz. 193, 194–95, ¶ 6 (2016). We
interpret statutes according to the drafters’ intent, and the plain language
of the statute is the best indicator of that intent. Fragoso v. Fell, 210 Ariz.
427, 430, ¶ 7 (App. 2005). Here, HJ Ventures’ argument fails for two
reasons.

¶12 First, a garnishment proceeding is a separate action from the
underlying debt. Davis v. Chilson, 48 Ariz. 366, 370 (1936); see also Bennett
Blum, M.D., Inc. v. Cowan, 235 Ariz. 204, 207, ¶ 13 (App. 2014)
(“Garnishment proceedings are . . . ‘treated in all respects . . . as an original
independent action’ from the underlying lawsuit.”). And Arizona courts
have consistently held that “a judgment against a garnishee is dependent
upon the situation at the time the writ of garnishment is served.” Reeb v.
Interchange Res., Inc. of Phx., 106 Ariz. 458, 459 (1970); see also Able Distrib.
Co. v. James Lampe, Gen. Contractor, 160 Ariz. 399, 402 (App. 1989) (“In order
to determine the liability of the garnishee, a court must look to the facts as
they were found to exist at the time the writ was served.”).

¶13 The superior court issued the writ of garnishment in February
2023, after Proposition 209 took effect. The garnishment proceeding was a
separate action even though it was based on a 2016 judgment. Accordingly,
the court correctly applied the new version of § 33-1131(B) even though
Candelario’s debt arose from a pre-Proposition 209 judgment.

¶14 Second, the conditions necessary to invoke the saving clause
are not present in this case. The “rights and duties” at issue here are those

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HJ VENTURES v. CANDELARIO/CARMAX
Decision of the Court

affecting the garnishee, and those rights and duties did not come into
existence until the writ of garnishment issued in February 2023. Nor is
there a contractual agreement addressing the amount of money to be
garnished or the interest rate to be charged on a judgment. Thus, the saving
clause does not apply. Accordingly, the court did not err by ordering
CarMax to withhold 10% of Candelario’s disposable earnings under the
amended statute.

III. Alleged “Overreach” by Superior Court.

¶15 HJ Ventures also argues that the superior court’s overruling
of its objection constituted judicial “overreach” because the court
purportedly raised a non-jurisdictional defense sua sponte on behalf of
Candelario and CarMax. But rather than raising defenses on behalf of the
absent parties, the court correctly engaged in an analysis of the merits of HJ
Ventures’ objection. The court’s ruling did not constitute “overreach.”

CONCLUSION

¶16 For the foregoing reasons, we affirm.

AMY M. WOOD • Clerk of the Court
FILED: AA

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