Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 77-C-4069 -- Joseph Sam Perry, Judge .
Before Fairchild, Sprecher and Cudahy, Circuit Judges.
Plaintiff Bertha Balark is a judgment creditor of the defendants, six City of Chicago policemen. Plaintiff had previously prevailed on her civil rights claim under 42 U.S.C. § 1983 pursuant to a stipulation reached at the close of trial.*fn1 The district court entered judgment in favor of Balark based upon the terms of the stipulation. One year later, plaintiff returned to federal court to collect her judgment by garnishing the wages of the defendants. Fed.R.Civ.P. 69, 70. Defendants filed a motion to quash the garnishment proceeding which was denied by the district court. Plaintiff then sought attorneys' fees under 42 U.S.C. § 1988 for her successful garnishment action. The district court denied her motion for fees. These consolidated appeals followed.
Defendants challenged the garnishment proceeding on two grounds. First, defendants alleged that the wording of the stipulation upon which the judgment order was based did not reflect the true understanding between the parties. Second, defendants asserted that the garnishment proceeding was barred by Illinois statute. We find both of these contentions to be without merit and, accordingly, affirm the judgment of the district court dismissing defendants' motion to quash the garnishment proceeding.
The alleged confusion concerning the stipulation focuses on clause 5 of the stipulation
5. That plaintiffs Bertha Balark, Dana Balark, Anne Balark, and Dane Balark have discussed this matter thoroughly with their attorneys, and are aware of the method of payment of the judgment against defendants,(*) and they are satisfied with the amount of Four Thousand Two Hundred Fifty and No/100 ($4,250.00) Dollars for each of the four plaintiffs, and the method of payment as total settlement of all claims arising out of this incident between plaintiffs herein and the defendants herein.
Defendants asserted that their typist failed to type the following phrase where the asterisk appears in clause 5:
"to wit through the City of Chicago."
Defendants offered parol evidence in the form of affidavits from their counsel to establish that the stipulation inadvertently failed to reflect the agreement between the parties. Under the defendants' view, the plaintiff agreed to proceed exclusively against the City of Chicago under the police officer's indemnity statute, Ill.Rev.Stat. ch. 24, § 1-4-5 (1979), and to collect the judgment from the City's tort judgment fund. Defendants wish to reform the stipulation by adding the omitted phrase. Plaintiff has responded with an affidavit from one of her attorneys as well as by argument in a memorandum before the district court. Plaintiff denies that there was an agreement that the exclusive means of collecting the judgment would be through the City of Chicago.
Defendants' burden on the reformation question is a heavy one. Defendants must establish by clear and convincing evidence that the instrument does not express the intent of the parties.*fn2 In re Vernon Hills, Inc., 348 F.2d 4, 9 (7th Cir. 1965). See also Aetna Insurance Co. v. Paddock, 301 F.2d 807 (5th Cir. 1962); Timber Investors, Inc. v. United States, 218 Ct. Cl. 408, 587 F.2d 472 (Ct.Cl.1978). On the face of the conflicting evidence in this case, however, the decision of the district court was not clearly erroneous. The affidavits filed by the defendants fail to establish that the parties agreed that the exclusive means of collection would be through the judgment fund even if the parties expected that the City would ultimately pay the judgment. The affidavit filed by one of the defendants' attorneys who was present at a portion of the settlement discussions reveals that certain settlement offers were rejected because they were too low given the time lag before the City would pay off the judgment. But this affidavit fails to indicate that the ultimate settlement was conditioned upon any agreement to proceed exclusively against the City of Chicago. If the requested modification of the stipulation here were less onerous to plaintiff, it might be more feasible to reach a different result, but in this case a major economic impact would apparently result from at least a four-year deferral of collection (the current backlog of payment from the City's tort judgment fund), while interest accrues only at rates substantially below the current market.*fn3
Defendants' statutory argument rests on the premise that the established right of a judgment creditor to garnish the wages of a public employee, see Henderson v. Foster, 59 Ill.2d 343, 319 N.E.2d 789 (1974), is limited where the City is an indemnitor of the claim and the garnishment would result in an immediate payment by the City in violation of the legal restrictions on the City's tort judgment fund.*fn4 Defendants argue that immediate indemnification is required by the indemnification statute but that immediate payment would contravene statutory restrictions on the judgment fund. The restriction in question requires that certain judgments against the City be paid from the judgment fund in the order in which the judgments were obtained.*fn5 Ill.Rev.Stat. ch. 24, § 8-1-16 (1979). Since there is a backlog of unpaid claims against the City, immediate payment would result in compensating plaintiff prior to antecedent judgment creditors.
The defendants' argument blurs important distinctions between their right to be indemnified by the City and their liability to the plaintiff. It is only the payment of the indemnification claim to the police officers that would involve any disbursement of the City's funds. When faced with a garnishment, a public "employer under the Wage Deduction Act will not lose any of its money but will be required to deliver over only that which it owes its employees." Henderson v. Foster, 59 Ill.2d 343, 350, 319 N.E.2d 789, 793 (1974).*fn6 Even if the City paid the indemnification claim immediately, the action that would possibly infringe upon the alleged judgment fund restrictions would be the indemnification action and not the garnishment proceeding. This result follows from the fact that only an indemnification action could possibly result in a judgment against the City within the meaning of the statute establishing the alleged restriction on the judgment fund. Ill.Rev.Stat. ch. 24, § 8-1-16 (1979).*fn7 The judgment in the instant case was entered against the individual policemen, which places it outside any alleged restriction on the operation of the judgment fund.
The defendants have also argued that, because indemnification is automatic, the two actions should be somehow merged so as to subject a judgment against an indemnified policeman to the alleged restrictions upon certain judgments against the City. Indemnification is not automatic, however, and the City can contest its liability where the "injury results from the wilful misconduct of the policeman." Ill.Rev.Stat. ch. 24, § 1-4-5 (1979).*fn8 Karas v. Snell, 11 Ill.2d 233, 142 N.E.2d 46 (1957); Banks v. City of Chicago, 11 Ill.App.3d 543, 297 N.E.2d 343, 348 (1973). The two actions are quite separate and the garnishment of an indemnified policeman's wages is not sufficient to force the City to expend any of its funds. Counsel for the defendants admitted as much at oral argument when she maintained that the City would feel free to oppose any indemnification claim even after a four year delay in the payment of the judgment because of the judgment fund backlog. This scenario presents the spectre (at least in theory) of forcing plaintiff to wait to collect ...