CNA National Warranty Corp. v. RHN Inc.

          ORDER

          DOUGLAS L. RAYES UNITED STATES DISTRICT JUDGE

         Before the Court is CNA National Warranty Corporation's (“CNA”) application for provisional remedy in the form of a writ of garnishment. (Docs. 4, 8). For reasons stated below, CNA's application is granted.

         I. Background

         On June 20, 2019, CNA filed this action, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, intentional misrepresentation, and negligent misrepresentation. (Doc. 1.) Concurrently, CNA filed an application for provisional remedy of garnishment. (Doc. 4.) CNA then filed its application for writ of garnishment with notice. (Doc. 8.) On July 5, 2019, Defendants filed an objection to CNA's application and requested a hearing pursuant to A.R.S. §§ 12-2403 and -2405. (Docs. 14 and 14-1.) On July 17, 2019, the Court held an evidentiary hearing. (Doc. 31.)

         II. Legal Standard

         “A party may at any time after the filing of a civil action, make application, under oath, to the court to issue any provisional remedy allowed by law.” A.R.S. § 12-2404(A). “Such application shall be filed with the [Court] . . . and shall set forth the factual and legal basis for each provisional remedy sought.” Id. § 12-2404(B). Upon the filing of an application, a notice is issued to any party against whom any provisional remedy would operate. Id. §§ 12-2405; -2406. The party against whom the remedy would operate may request a hearing. Id. §§ 12-2405; -2407.

         A hearing on an application for a provisional remedy is limited to the following issues: (1) “The probable validity of the applicant's claim or claims and any defenses and claims of personal property exemptions of the party against whom such provisional remedy will operate;” and (2) “[t]he existence of any statutory requirements for the issuance of any provisional remedies sought.” Id. § 12-2410(C). The purpose of the hearing “is to afford a defendant an opportunity to attack the validity of the plaintiff's claim before issuance of a pre-judgment writ.” Granmo v. Superior Court, 596 P.2d 36, 38 (Ariz.Ct.App. 1979). “If after hearing the court finds probable cause to believe the claim of the applicant is valid and that the statutory requirements for any provisional remedy have been met, such remedy shall be issued forthwith.” A.R.S. § 12-2410(D).

         III. Discussion

         The Court may grant a provisional remedy if: (1) the party against whom the remedy will be enforced is served with the application and notice; (2) the statutory requirements for the issuance of the provisional remedy (writ of garnishment) are met; and (3) the applicant shows that's its claim or claims are probably valid. Id. §§ 12-2403; -2410. The Court discusses each requirement in turn.

         A. Application, Notice, and Service

          An application and notice for issuance of any provisional remedy must be filed with the clerk of the court and a copy of such notice and application must be served on the party against whom any remedy will operate. Id. § 12-2403(2). CNA filed its application for provisional remedy and writ of garnishment with the Court. (Docs. 4, 8.) Defendants were served with the application and notice. (Docs. 4-2; 15-21.) CNA therefore has satisfied the application, notice, and service requirement.

         B. Statutory Requirements

         Next, the applicant must meet all statutory requirements for the issuance of such provisional remedy. A.R.S. § 12-2403(1). The statutory requirements for an application for writ of garnishment of monies are as follows:

1. A statement that the applicant is a judgment creditor.^[1]

2. A statement that the applicant has good reason to believe one of the following:

(a) That the garnishee is indebted to the judgment debtor for monies which ...