Hardy & Hardy v. Wills5/19/1998
Appeal from an order of the district court declarIng respondent Wills' savings account funds exempt from execution and ordering appellant to return garnished funds. Eighth Judicial District Court, Clark County; Jeffrey D. Sobel, Judge.
Reversed and remanded.
Respondent John Wills retained the law firm of Hardy & Hardy in June 1991 to help him recover workers' compensation benefits for a job-related injury. Wills agreed to pay the firm 25% of the gross amount recovered, unless he terminated the representation before recovering benefits or receiving or accepting a settlement offer. In the event that Wills terminated the representation before recovering benefits or receiving or accepting a settlement offer, he agreed to pay for all services rendered at the firm's prevailing hourly rate plus out-of-pocket costs.
In September 1991, Wills was offered $40,664.68 to settle his claim. Wills rejected the offer, and fired Hardy and Hardy. The firm subsequently billed Wills $10,253.37: $10,161.17 as its fee (25% of the settlement of offer), plus out-of-pocket costs of $92.20. Wills refused to pay the bill, so the firm filed an action against Wills in October 1992. Wills' failure to answer resulted in the entry of a default Judgment-against him in February 1993 for the principle amount of, $10,253.37, plus prep-judgment interest of $1,743.07, costs of $255.00, and attorney's fees of $2,560.00.
On June 7, 1993, the district court clerk issued writs of execution and garnishment, which were immediately served on Wills, credit union. The credit union responded on June 8, 1993, and delivered to the sheriff a check for $118.32, the entire balance of Wills' savings account. On June 9, 1993, the sheriff endorsed the check and delivered it to counsel for Hardy & Hardy.
On June 15, 1993, Wills filed an affidavit claiming his savings account consisted of disability compensation, exempt from execution under NRS 616.550. Wills subsequently moved to set aside the default judgment. The district court denied the motion in December 1993.
Meanwhile, in October 1993, Hardy & Hardy filed a motion to determine claim of exemption." In support of its motion, the firm submitted an affidavit of the attorney representing it, asserting Wills testified in July 1993 at a show cause/contempt proceeding "that it was his routine practice, upon receipt of his monthly SIIS disability income check, to take that check to a casino for cashing at a paycheck wheel, and at some subsequent date, deposit any funds remaining into his bank account" at the credit union. Based on the cashing of the SIIS check and the subsequent deposit of remaining funds in a general account, the firm argued the funds lost their exempt status.
The district court disagreed. In February 1994, the coi-court declared Wills' savings account funds exempt from execution and ordered Hardy & Hardy to return the (garnished funds to the sheriff. Hardy & Hardy timely appealed.
We are asked to decide whether workers' compensation funds remain exempt from attachment, garnishment and execution under NRS 616C.205 (formerly NRS 616.550) after the compensation check is paid to the worker and negotiated by him. The question is one of statutory construction, which we review de novo. Nyberg v. Nev. Indus. Comm'n, 100 Nev. 322, 324, 683 P.2d 3, 4 (1984).
When the writ of execution was issued in this case, former NRS 616.550 provided, in relevant part:
compensation payable under this chapter, whether determined or due, or not, is not, before the issuance and delivery of the check, assignable, is exempt from attachment, garnishment and execution, and does no
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