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IN RE NORTHWEST HOMES OF CHEHALIS

August 8, 1973

In the Matter of NORTHWEST HOMES OF CHEHALIS, INC., a Washington corporation, Debtor

Lindberg, District Judge.


The opinion of the court was delivered by: LINDBERG

Lindberg, District Judge.

 Now, upon said Petition for Review, dated December 5, 1972, and all the proceedings had before the Court; and the Court having found that the decision of the Honorable Sidney C. Volinn, Referee in Bankruptcy, and subsequent order based thereon, is in accordance with the law; it is hereby

 Ordered, adjudged and decreed that the Order of the Honorable Sidney C. Volinn, Referee in Bankruptcy, entered on December 4, 1972, be and it hereby is affirmed.

 REFEREE'S DECISION

 In The District Court of the United States for the Western District of Washington, at Seattle

 In the Matter of Northwest Homes of Chehalis, Inc., a Washington corporation, Debtor, Weyerhaeuser Company, Respondent

 In Proceedings for an Arrangement Under Chapter XI-No. 951-71B2

 MEMORANDUM DECISION

 Memorandum decision

 An order has been entered adopting the stipulation of facts entered into between the Debtor's Receiver and the Respondent in this particular proceeding, Weyerhaeuser Company. From the stipulation, it appears that Weyerhaeuser claimed the Debtor owed it some $88,000 for goods sold and delivered during the year 1970, plus an additional $4,400-odd in delinquent charges, for a total of $92,000 and sued thereon in the Superior Court for the State of Washington in Lewis County. The Debtor denied that it owed the plaintiff anything. Thereafter, Weyerhaeuser caused to be issued a writ of attachment without prior notice to the Debtor nor hearing, pursuant to the Washington attachment statute, R.C.W. 7.12. On April 15, 1971, the Sheriff of Lewis County executed the writ by recording with the Lewis County Auditor a notice of attachment pursuant to the procedure prescribed in R.C.W. 7.12.030(1), which does not require such notice nor hearing. Trial of the issues was set for January 6, 1972. However, on December 15, 1971, the Debtor instituted these proceedings for an arrangement in Chapter XI of the Bankruptcy Act and on the same day an order was entered in the bankruptcy proceeding staying all lawsuits against the Debtor including that of Weyerhaeuser. This order is still in force. Weyerhaeuser, complying with this order, caused the trial date to be stricken and has not prosecuted said action further. The Debtor has at all times continued in possession of the foregoing property. As appears from the foregoing dates, the attachment lien accrued more than four months prior to the institution of the Chapter XI proceedings. The Debtor, in its bankruptcy schedule A-2(a), sets forth an indebtedness to Weyerhaeuser in the sum of $65,166.57. It is agreed that while the exact amount of the debt is in dispute, there is a substantial debt due from the Debtor to Weyerhaeuser. The attachment lien has been an encumbrance on the Debtor's title to the real estate and has been shown to be such on all title reports covering said property. Weyerhaeuser, on request of the Debtor, prior to these proceedings, released certain real estate subject to the attachment without insisting that its lien be transferred to the proceeds. Since the institution of the Chapter XI proceedings, Weyerhaeuser has released its lien, on request, authorizing the sale of real estate subject to the Court-imposed requirement that its lien be transferred to the proceeds of such sales.

 The foregoing facts, centered as they are on a prejudgment attachment of real estate, focus on the issue of whether or not Sniadach v. Family Fin. Corp., 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969), and cases following it require invalidation of the Weyerhaeuser attachment lien. Sniadach declared a statute of the State of Wisconsin authorizing pre-judgment wage garnishments to be unconstitutional because it allowed the taking of property without notice and prior hearing thereby violating the due process clause of the 14th Amendment. Sniadach has had a marked influence and in a relatively short period of time has been extended into other areas by State and Federal Courts. The Supreme Court of California, in the course of a considered and analytical opinion, Randone v. Appellate Department of the Supreme Court of Sacramento County, 5 Cal. 3d 536, 96 Cal. Rptr. 709, 488 P. 2d 13, 20 (1971), notes:

 
". . . the liberal application that had been accorded the Sniadach principle in a wide variety of contexts outside of wage garnishment . . ."

 In a footnote to this statement, a number of State and Federal cases are cited showing the application of Sniadach to various kinds of property subjected to seizure without requisite notice or hearing, e.g., termination of welfare payments, seizure by innkeeper, confession of judgment, repossession of residence, landlord's distraint of tenants' possessions, seizure by hospital, imprisonment of ...


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