Lesson. Wolberg offers a great summary of some of the hoops a judgment creditor must go through before garnishing bank accounts of a judgment debtor. Most importantly, garnishment is not a stand-alone proceeding but must occur within the context of a motion for proceedings supplemental, which motion must be filed before, or at the time of, a garnishment motion.
Case cite. Wolberg v. Stamer, 2015 U.S. Dist. LEXIS 153516 (N.D. Ind. 2015) (.pdf).
Legal issue. Whether successful plaintiffs can immediately garnish bank accounts post-judgment.
Vital facts. Plaintiff held a judgment in the amount of $262,383.50 and sought the garnishment of bank accounts possibly held by Defendant at nine banks. Plaintiff did not first file a motion for proceedings supplemental.
Procedural history. The Wolberg opinion was a U.S. Magistrate Judge’s decision on Plaintiff’s “motion for writs of garnishment.”
Key rules. Federal Rule of Civil Procedure 69(a) governed Plaintiff’s motion and, in pertinent part, states:
A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution—and in proceedings supplementary to and in aid of judgment or execution—must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies.
Since this was an Indiana case, “proceedings supplemental are generally required before the Court issues a garnishment order.”
Indiana Trial Rule 69(E) controlled the proceedings supplemental, including garnishment generally. The rule, as applicable in Wolberg, requires, among other things, a verified motion alleging:
that [the] garnishee has or will have specified or unspecified nonexempt property of, or an obligation owing to, the judgment debtor subject to execution or proceedings supplemental to execution, and that the garnishee be ordered to appear and answer concerning the same or answer interrogatories submitted with the motion.
Garnishment “is a means … to reach property … of a [defendant] which are in the hands of a third person so that they may be applied in favor of the judgment.”
As to bank accounts, Ind. Code 28-9-3-4(d) outlines what a plaintiff needs to establish in order to garnish.
Holding. The Court in Wolberg denied Plaintiff’s motion for the following reasons: (1) Plaintiff did not file a motion for proceedings supplemental, (2) the motion for garnishment was not verified, (3) Plaintiff did not allege that he had no cause to believe that levy of execution would satisfy the judgment, (4) as to the nine garnishee banks, Plaintiff alleged they “may hold” bank accounts for Defendant instead of first alleging that Defendant “had or will have” nonexempt property subject to execution and (5) Plaintiff did not represent to the Court his compliance with Ind. Code 28-9-3-4(d).
Policy/rationale. Courts usually aren’t going to let plaintiff/judgment creditors circumvent the applicable trial rules and statutes. T’s must be crossed, and I’s must be dotted. The Court granted Plaintiff leave to re-file papers in order to achieve his objective. So, Plaintiff got a do-over, but the judgment debtor will be given the appropriate notice and opportunity to be heard.
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I frequently counsel both plaintiffs and defendants in connection with judgment collection matters. My colleagues and I also pursue proceedings supplemental, including the garnishment of bank accounts, for judgment creditors. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at firstname.lastname@example.org. Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.