When Can Post-Judgment Collection Efforts Begin In Indiana?
November 22, 2013
How long must the holder of an Indiana judgment wait before executing on the judgment? The answer depends on whether the case is in state or federal court. Two opinions by Magistrate Judge Cherry address that issue and other proceedings supplemental basics: Artmann v. Center Garage, 2012 U.S. Dist. LEXIS 153966 (N.D. Ind. 2012) (“Artmann I” - .pdf) and 2012 U.S. Dist. LEXIS 160908 (N.D. Ind. 2012) (“Artmann II” - .pdf).
Procedural posture. In Artmann I, the U. S. District Court for the Northern District of Indiana entered judgment in plaintiff’s favor, and one day later plaintiff filed its motion seeking to freeze, and collect upon, defendant’s bank accounts pursuant to Ind. Code §§ 28-9-3-4 and 28-9-4-2. The opinion dealt with plaintiff’s motion and defendant’s corresponding motion to quash plaintiff’s motion.
14 days. The defendant contended that plaintiff’s efforts were premature. Specifically, Federal Rule 62(a) provides for a 14-day stay of execution on a judgment. The purpose of the rule is to “afford litigants an ample period of time to consider whether to appeal, to file a motion for new trial and/or to seek a stay of execution of judgment.” Plaintiff argued that the rule did not bar its request for interrogatories and a hold because plaintiff sought only to “preserve” defendant’s property for eventual satisfaction. Plaintiff stipulated that it would not actually collect any money until after the 14-day stay had expired.
Yes and no. The Court concluded that it could not permit garnishment proceedings before the expiration of the 14-day stay. As such, plaintiff filed its motion too early. Clearly the Court could not issue any order granting the motion until the stay ended. Having said that, the ultimate result in Artmann I was a practical one in that the Court allowed plaintiff’s motion to remain pending until the expiration of the stay period. (I learned that the Court granted plaintiff’s motion on day 15.)
State law. Indiana state court Rule 62(A) does not articulate a 14-day automatic stay of execution, or any stay whatsoever. Historically, the Indiana state rule provided for a 60-day automatic stay, which later evolved into a 30-day stay and ultimately to no stay at all. As such, the Artmann I holding only applies in federal court proceedings. Plaintiffs in Indiana state courts may undertake post-judgment collection efforts immediately. (Note: In instances of enforcing a foreign judgment in Indiana, the domestication process cannot commence until 21 days after the entry of the judgment in the original [non-Indiana] court.)
Pro supp basics. Artmann II dealt with defendant’s contention that plaintiff’s Artmann I motions did not follow certain technical requirements for proceedings supplemental. The Artmann II opinion provides a nice summary for judgment creditors and their counsel struggling with the nuts and bolts of proceedings supplemental in federal court. Specifically, judgment creditors need to remain mindful that, under Indiana law, before courts can entertain a garnishment motion under I.C. §§ 28-9-3-4 and 28-9-4-2, creditors must first (or simultaneously) file a separate motion for proceedings supplemental.
Pro supp relief. Finally, for those wondering what “proceedings supplemental” can accomplish, the Artmann II opinion noted the three fundamental types of relief available: (1) requiring a judgment debtor (a defendant) to appear in court for an examination as to available property, (2) requiring a judgment debtor to apply particular property to satisfy the judgment and (3) joining a third-party (a garnishee) to the action and requiring that party to answer as to property held by that party for the judgment debtor. For more posts on garnishment and proceedings supplemental, including freezing bank accounts, please click on the those Categories to your right.