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Pumilite Tualatin Inc. v. Cromb Leasing Inc.

filed: July 26, 1996.

PUMILITE TUALATIN, INC., AS OREGON CORPORATION, RESPONDENT,
v.
CROMB LEASING, INC., AND ELIZABETH R. LOVE, PERSONAL REPRESENTATIVE OF THE ESTATE OF JAMES LORD, APPELLANTS.



Superior Court of Clark County. Superior Court Docket No. 93-2-00334-3. Date Filed In Superior Court: April 29, 1994. Superior Court Judge Signing: James Ladley.

Written By: Armstrong, J., Concurred In By: Turner, J., Bridgewater, J.

Author: Armstrong

ARMSTRONG, J. -- Pumilite got a judgment against James Lord; thus, a statutory lien attached to Lord's real property. He later sold the property under a real estate contract. Pumilite then executed upon Lord's interest in the contract. Under the lien statute, the real estate to which a lien attaches does not include a seller's interest in a real estate contract. The question before us is: In enacting this provision of the lien statute, did the legislature intend to defeat an existing lien when the judgment debtor sells the property and retains only a seller's interest? We hold that the sale does not defeat the lien, and we affirm the execution sale.

FACTS

In 1992, Pumilite obtained a default judgment in Oregon against Cromb Leasing, Inc. and James Lord, a Washington resident. Pumilite filed the judgment in Clark County, thus obtaining a lien on all Lord's nonexempt real property. In 1993, Lord sold real property he owned in Clark County under a real estate contract. Shortly thereafter, Lord died.

Pumilite then obtained a writ of execution against Elizabeth Love, the personal representative of Lord's estate. The writ directed the Clark County sheriff to execute upon Lord's interest in the real estate contract. Love moved to quash the writ of execution. In the alternative, she asked the court to declare that any sale of Lord's interest in the real estate contract would be subject to a right of redemption. The trial court denied Love's motion, and she appeals.

Discussion

RCW 4.56.190 provides that a lien attaches to all nonexempt real estate of any judgment debtor. In 1983, the Legislature added the sentence at issue here: "As used in this chapter, real estate shall not include the vendor's interest under a real estate contract for judgments rendered after [August 23, 1983]." Laws of 1983, 1st Ex. Sess., ch. 45, § 5.

Love argues that this sentence means Pumilite's lien no longer remained attached after Lord sold the property. Under the probate code, a deceased person's judgment creditor cannot execute on the judgment unless a lien has attached to the deceased's property. If no lien has attached, the creditor must present its claim to the estate. RCW 11.40.130. Thus, Love contends, because the lien no longer attached, Pumilite was limited to presenting its judgment as a creditor's claim against Lord's estate.

Pumilite argues that its lien attached to all of Lord's interest in the real estate before the sale. It points out that a judgment debtor cannot destroy a lien by transferring his or her interest in the real property. Fed. Intermediate Credit Bank of Spokane v. O/S Sablefish, 111 Wash. 2d 219, 227, 758 P.2d 494 (1988). Thus, according to Pumilite, the lien followed Lord's interest as seller.

The task before us is to determine the meaning of RCW 4.56.190. Nothing in the statute indicates whether it applies only when property is sold and a judgment is later obtained against the seller, or whether it also applies when a lien had attached and the property is later sold. The latter situation occurred here.

A statute's intent must be determined primarily from the language itself. State Dep't of Transp. v. State Employees' Ins. Board, 97 Wash. 2d 454, 458, 645 P.2d 1076 (1982). But where the intent is not clear, we may resort to statutory construction, ascertaining and giving effect to the Legislature's intent. State Dep't of Transp., 97 Wash. 2d at 458; Shoreline Comm. College Dist. v. Employment Sec. Dep't, 120 Wash. 2d 394, 405, 842 P.2d 938 (1992). "Such statutory construction may involve a consideration of the legislative history . . . ." State Dep't of Transp., 97 Wash. 2d at 458. The legislative history of the amendment to RCW 4.56.190 shows that it is aimed at solving the problem that occurs when real estate is sold under a contract, and then a judgment lien is entered against the seller. See Final Legislative Bill Report, HB 428, enacted as Laws 1983, 1st Ex. Sess., ch. 45, § 5.

This problem is illustrated by Heath v. Dodson, 7 Wash. 2d 667, 110 P.2d 845 (1941). In Heath, the Denmans sold real property under a contract to Garner Vaughn, with payments due annually. Almost two years later, Thomas Dodson recovered a judgment against the Denmans. Later, the Denmans assigned their interest in the contract to their daughter, Edith Heath. Although the Vaughns apparently knew about the judgment, they continued making payments first to the Denmans, then to their daughter. Heath, 7 Wash. 2d at 668-69. Dodson levied on the property, which was sold at a sheriff's sale; Heath sought to quiet title in her. Heath, 7 Wash. 2d at 670. The court held that Dodson's judgment was a lien on the legal title remaining in the Denmans and bound the land to the extent of the unpaid purchase price. Heath, 7 Wash. 2d at 673.

The difficulty with this rule is that a purchaser has no way of knowing about a lien that attaches after the purchaser enters into a contract to buy the property. Thus, the purchaser may continue to make payments to the seller, only to discover upon completing the purchase that a cloud is on the property's title. The amendment to RCW 4.56.190 provides that a lien ...


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