Archive for the ‘Debt Collection’ Category
This is a collection of links to Texas appellate opinions touching on various aspects of wage garnishment. All links are to Google Scholar. Cases arranged by date. The Texas court system has fourteen Courts of Appeals that review both civil and criminal appeals, except for death penalty cases, a Court of Criminal Appeals that has the final appellate jurisdiction in criminal cases, and a Supreme Court which has the final appellate jurisdiction in civil and juvenile cases.
- Southwestern Warehouse Corporation v. Wee Tote, Inc., 504 SW 2d 592 – Tex: Court of Civil Appeals 1974
Issue: Constitutional Due Process of pre- judgment garnishment. Not specifically wage garnishment.
- Prewitt v. Smith, 528 SW 2d 893 – Tex: Court of Civil Appeals, 3rd Dist. 1975
Held that funds of the State’s retirement system are “a part of a member’s compensation or wages which are not subject to garnishment,” citing Byrd v. City of Dallas, 118 Tex. 28, 6 S.W.2d 738, 741 (1928); Tex. Const. Art. XVI, Sec. 28. Sydnor v. City of Galveston, 15 S.W. 202 (Tex.App.1890), holds that amounts due a physician for professional services for a specific sum per day are not subject to garnishment. Bonus or commissions payable to a salesman at year’s end in addition to his regular salary is exempt as current wages for personal service. J.M. Radford Grocery Co. v. McKean, 41 S.W.2d 639 (Tex.Civ.App.1931, no writ). Commissions on the sale of gasoline and oil, payable monthly to a service station operator, were exempt. Alemite Co. of North Texas v. Magnolia Pet. Co., 50 S.W.2d 369 (Tex.Civ.App.1932, no writ).
- King v. Floyd, 538 SW 2d 166 – Tex: Court of Civil Appeals 1976
Money owed by Houston Oilers to former player for breach of an employment contract constituted current wages and therefore exempt from garnishment.
- United States v. Stelter, 553 SW 2d 227 – Tex: Court of Civil Appeals, 8th Dist. 1977
Issue: Can the ex-wife in a Texas divorce, who has been awarded a portion of the military retirement pay of her ex-husband as her share of the community property, garnish the United States under 42 U.S.C. Sec. 659. Answer: Yes. REVERSED by Texas Supreme Court in United States v. Stelter, 567 SW 2d 797 on grounds of sovereign immunity.
- United States v. Fleming, 565 SW 2d 87 – Tex: Court of Civil Appeals, 8th Dist. 1978
Military retirement pay is not “current wages,” but is property and it is not exempt from garnishment. Case reversed on other grounds. The procedure followed was in violation of due process rights in that it was a prejudgment garnishment; also, it was carried out under an unconstitutional statute.
- United States v. Stelter, 567 SW 2d 797 – Tex: Supreme Court 1978
At the time of this case 42 USC 659 gave consent to suits for “legal obligations to provide child support or make alimony payments,” but 42 USC 662(c) specifically excluded “community property settlement, equitable distribution of property, or other division of property between spouses or former spouses” from the meaning of alimony. 42 USC 662(c) has since been repealed.
- United States v. Wakefield, 572 SW 2d 569 – Tex: Court of Civil Appeals, 2nd Dist. 1978
(1) “[G]arnishment of military pay involves suit against the United States and raises the issue of sovereign immunity. An order for an allotment does not involve suing the United States. It merely requires LeMaster to direct the United States Air Force to pay the retirement benefits to Mrs. Wakefield. No issue of sovereign immunity is raised.”(2) “It is well settled that garnishment should be in the amount of the debt absolutely owed at the time the garnishee files his answer. Burkitt v. Glenney, 371 S.W.2d 412 (Tex.Civ.App.—Houston 1963, writ ref. n.r.e.). For LeMaster’s retirement pay to accrue he must remain alive. Therefore, the debt being garnished is contingently but not absolutely owed. The trial court erred in ordering garnishment of future accruing military retirement pay.”
- Texaco, Inc. v. LeFevre, 610 SW 2d 173 – Tex: Court of Civil Appeals 1980
A New York court ordered Texaco to withhold wages. A Texas court ordered Texaco to not withhold wages. Texaco sought to resolve the conflicting court orders by way of interpleader in federal court. The Federal District Court ruled the New York wage garnishment should prevail. The Texas Court of Appeals decided the federal court judgment should be honored.
We hold that Texaco was entitled to submit the cause to the federal district court, that that court was empowered under the above mentioned statutes to determine the questions involved and that our state court was bound to follow the decision of the federal district court even if the effect would be to allow the garnishment of wages, which our state court could not do because of the prohibition of art. 3836 and art. 4099, V.A.C.S., and art. 16, § 28 Constitution of the State of Texas.
- Benton v. Wilmer-Hutchins Ind. Sch. Dist., 662 SW 2d 696 – Tex: Court of Appeals, 5th Dist. 1983
A school district decided it had overpaid its teachers by mistake one year and that it would simply deduct the over-payments from salary the next year. The Texas Court of Appeals ruled this to be improper.
The district contends that since it has a duty to recover public funds paid out under a mistake of fact, it may resort to self-help by deducting the overpayments from current salaries due. We do not agree. By such action the district is treating current salaries as already paid to the extent of the previous overpayments, contrary to the common-law rule that mutual debts do not extinguish each other in the absence of agreement or judicial action.The teachers could either agree to the repayment or the school district could sue the teachers and prove the claim. But, the school district could not just withhold the money.
- Davidson Texas, Inc. v. Garcia, 664 SW 2d 791 – Tex: Court of Appeals, 3rd Dist. 1984
A creditor sought to garnish money owed by Santa Fe Energy to debtor, who was not an employee. Debtor provided personal service as a leasing agent and real estate title examiner for Santa Fe Energy’s oil and gas business without being on Santa Fe Energy’s payroll. He was paid $200 per day for his services, plus expenses. He did no work for any business other than Santa Fe Energy. He worked for Santa Fe Energy full time. Santa Fe did not withhold taxes or pay any share of debtor’s Social Security. Although the debtor’s daily activity was self-supervised, he was very specifically directed by Santa Fe Energy to the oil and gas lands they were interested in. The creditor argued that as an independent contractor, and not an employee, the debtor’s payments from Santa Fe Energy were not “wages” exempt from garnishment.The Texas Court of Appeals stated, “The garnishment exception for current wages applies without regard to whether compensation is denominated as “wages” or “salary,” the controlling issue being whether it is compensation for personal service.” citing King v. Floyd, 538 S.W.2d 166 Tex.Civ.App.1976. Additionally,
In Prewitt v. Smith, 528 S.W.2d 893, 896 (Tex.Civ.App.1975, no writ) this Court held that funds of the State’s retirement system are “a part of a member’s compensation or wages which are not subject to garnishment,” citing Byrd v. City of Dallas, 118 Tex. 28, 6 S.W.2d 738, 741 (1928); Tex. Const. Art. XVI, Sec. 28. Sydnor v. City of Galveston, 15 S.W. 202 (Tex.App.1890), holds that amounts due a physician for professional services for a specific sum per day are not subject to garnishment. Bonus or commissions payable to a salesman at year’s end in addition to his regular salary is exempt as current wages for personal service. J.M. Radford Grocery Co. v. McKean, 41 S.W.2d 639 (Tex.Civ.App.1931, no writ). Commissions on the sale of gasoline and oil, payable monthly to a service station operator, were exempt. Alemite Co. of North Texas v. Magnolia Pet. Co., 50 S.W.2d 369 (Tex.Civ.App.1932, no writ).Under the specific facts of this case, the court held that the money owed was for personal services and therefore exempt from a garnishment.
- Hennigan v. Hennigan, 666 SW 2d 322 – Tex: Court of Appeals 1984
The Texas Turnover and do an attorney’s receivables have the characteristics of ‘wages’ exempt from execution? This is the case to look to for some answers. If garnishment is not an effective method for collecting a judgment from canny uncooperative debtors, like lawyers, Texas has Civil Practice &. Remedies Code § 31.002 (former TEX.REV.CIV.STAT.ANN. art. 3827a), the Texas Turnover Statute, which allows courts to assist creditors collect judgments by digging a little deeper.
The question of whether attorney fees constitute current wages, thus being exempt from garnishment, was answered negatively in First National Bank of Cleburne v. Graham, 22 S.W. 1101 (Tex.Civ. App.1889, no writ). Almost as if it were anticipating our question, that court stated:“Can an attorney’s fee for legal services rendered or to be rendered in a single case, or in the transaction of a single matter, or in the transaction of any amount of legal business, in any manner be correctly termed “current wages,” where he has not been hired for his services by the day, week, or month, to be paid at the expiration of the time for which he was hired, and not in proportion to the business done? We think not.”
- City of Houston v. Nelius, 693 SW 2d 567 – Tex: Court of Appeals 1985
This is another case where an employer (City of Houston) withheld pay from an employee (a police officer) who owed the city money, along the lines of Benton v. Wilmer-Hutchins Ind. Sch. Dist.. Like the Benton case, the employer lost.
- Sloan v. Douglass, 713 SW 2d 436 – Tex: Court of Appeals, 2nd Dist. 1986
- Barlow v. Lane, 745 SW 2d 451 – Tex: Court of Appeals, 10th Dist. 1988
- Cain v. Cain, 746 SW 2d 861 – Tex: Court of Appeals, 8th Dist. 1988
- Davis v. Raborn, 754 SW 2d 481 – Tex: Court of Appeals 1988
- Schmerbeck v. River Oaks Bank, 786 SW 2d 521 – Tex: Court of Appeals, 6th Dist. 1990
- Caulley v. Caulley, 806 SW 2d 795 – Tex: Supreme Court 1991
- Orange County v. Ware, 819 SW 2d 472 – Tex: Supreme Court 1991
- Tamez v. Tamez, 822 SW 2d 688 – Tex: Court of Appeals, 13th Dist. 1991
- AMERICAN EXP. v. Harris, 831 SW 2d 531 – Tex: Court of Appeals 1992
- Knighton v. IBM, 856 SW 2d 206 – Tex: Court of Appeals 1993
- Bergman v. Bergman, 888 SW 2d 580 – Tex: Court of Appeals, 8th Dist. 1994
- Foreness v. Hexamer, 971 SW 2d 525 – Tex: Court of Appeals, 5th Dist. 1997
- General Elec. Capital Corp. v. ICO, INC., 230 SW 3d 702 – Tex: Court of Appeals 2007
- TEXAS WORKFORCE COMMISSION v. BUSKE LINES, INC., Tex: Court of Appeals, 12th Dist. 2010
- Stanley v. Reef Securities, Inc., 314 SW 3d 659 – Tex: Court of Appeals, 5th Dist. 2010
- Marrs v. Marrs, 401 SW 3d 122 – Tex: Court of Appeals 2011
- Heller v. Heller, 359 SW 3d 902 – Tex: Court of Appeals, 9th Dist. 2012
- Stephens v. DYCK O’NEAL, INC., Tex: Court of Appeals, 1st Dist. 2012
- Palmer v. Palmer, Tex: Court of Appeals, 2nd Dist. 2012
- Free v. Lewis, Tex: Court of Appeals, 13th Dist. 2012
- Spencer v. GC Services Limited Partnership, Tex: Court of Appeals, 1st Dist. 2013
The writ of scire facias was created by the English Parliament in 1285 and it migrated to America as part of our English common law tradition. In modern times scire facias has been mostly abolished in the United States, with a few exceptions mainly in the Old South where the love of tradition combines with a playful fondness for baffling the uninitiated. Anyone served with a writ of scrie facias knows he or she has been hit by something very important even while being hard pressed to know exactly what it is.
Roughly, the Latin ‘scrie facias’ means ‘tell them.’ Generally, the writ of scrie facias means “tell them (or serve notice) to do something, or else.” North of the Mason-Dixon Line a similar court order might be called an Order to Appear and Show Cause why something should or should not be done. Commonly, a party might be ordered to appear and show cause why he or she should not be held in contempt of court.
Some Tennessee courts call their conditional judgments in garnishment a scrie facias, at least in the legal forms published online. The most charming and practical part of the Tennessee use of scrie facias is the fact that the person serving the writ literally reads the notice aloud to the person being served. They tell them right to their face.
Generally speaking, a conditional judgment is one that depends upon contingent future events. An example of this might be when a court uses a conditional judgment as a threat for the purpose of coercion, as with, “If the party does not appear in court by the date specified, then this judgment will become final.”
The use of conditional judgments in judicial garnishment proceedings arises when the third-party garnishee fails to respond to a garnishment order and summons. As a reminder, the garnishee is neither the creditor nor debtor in the debt collection garnishment process. The garnishee is the third party who owes money to the debtor, like the debtor’s employer who owes wages to the debtor or like a bank holding the debtor’s money in a deposit account.
Normally when a third-party garnishee receives a court issued garnishment order and summons there is a time limit within which the garnishee must formally answer to the court. The most common ways a garnishee answers a garnishment order are, (1) “Sorry, but we do not have any of the debtor’s property nor do we owe the debtor any money. Please go away.”, or (2) “Yes, we have $xxxx.xx of debtor’s money. What do you want us to do with it?”
Sometimes, however, the garnishee simply ignores the garnishment order and summons and does not provide the court with any answer at all. This is where a conditional judgment may come into play, in some states.
Tennessee, for example, has a statute specifically providing for a conditional judgment if the garnishee fails to appear or answer the garnishment order. TC 26-2-209 provides:
The date garnishee’s answer is received by the court clerk shall be noted on the docket book in the proper manner, whether or not the answer discloses any property subject to garnishment. If the garnishee fails to appear or answer, a conditional judgment may be entered against the garnishee for the plaintiff’s debt, upon which a notice shall issue to the garnishee returnable at such time as the court may require, to show cause why judgment final should not be rendered against the garnishee. On failure of the garnishee to appear and show cause, the conditional judgment shall be made final, and execution awarded for the plaintiff’s entire debt and costs. [emphasis added]
The threat of this type of conditional judgment is that the whole of the defendant’s debt will be piled up the garnishee directly, whether anything is owed by the garnishee to the debtor or not, simply because the garnishee did not do what garnishees are supposed to do.
It has the look of a very effective way to compel the garnishee’s compliance. By showing up in court and answering the garnishment order, the garnishee can avoid a financially painful result. Thus, the judgment is conditional upon the garnishee’s actions.
Georgia Code § 18-4-66, Forms for postjudgment garnishment, provides seven specific legal forms for use in Georgia post-judgment garnishment court proceedings:
For the purpose of Articles 1 through 5 of this chapter, the following forms are declared to be sufficient for garnishment after judgment, provided that nothing in this Code section shall be construed to require the use of particular forms in any proceeding under this article: See: Georgia Garnishment Statutes
For the sake of legibility and usefulness, I have formatted these seven forms in a way that is difficult to do on a web page, as downloadable and printable PDF files:
§ 18-4-66 makes it clear that these particular forms are sufficient for use in Georgia garnishment proceedings, but they are not exclusive or mandatory.
Form numbers three and five, above, are traverses. The word ‘traverse’ is an ancient common law term that simply means a general denial. For example, form number three, the defendant’s traverse, is not a verified pleading, it can be signed by either the defendant’s or the defendant’s attorney and all it states is this:
Now comes the defendant in the above-styled case and traverses the plaintiff’s affidavit by saying the same is untrue or legally insufficient.
It is likewise the same way with form five, the plaintiff’s traverse of the defendant’s answer.
The way these forms are structured, as general denials without specific verified factual allegations, the whole process is designed to culminate in a hearing where actual evidence is presented to a judge. If the parties have any hope of having the issue decided on the pleadings without the necessity of a court hearing, using these forms is not the way to accomplish it.
TITLE 18 | Chapter 4 | Garnishment Proceedings
Current Through the 2013 Regular Session
ARTICLE 1. GENERAL PROVISIONS
- § 18-4-1. Definitions; practice and procedure generally
- § 18-4-2. Discovery
- § 18-4-3. Amendment of affidavits, bonds, garnishee answer, or pleadings
- § 18-4-4. Judge to perform functions of clerk where court has no clerk
- § 18-4-5. Challenge to sufficiency of bond; requiring of additional security; discharge of original surety
- § 18-4-6. Issuance of release of garnishment
- § 18-4-7. Discharge of employee subject to garnishment
ARTICLE 2. PROPERTY AND PERSONS SUBJECT TO GARNISHMENT
- § 18-4-20. Property subject to garnishment generally; claim amount and defendant’s social security number on summons; information to be contained on summons of garnishment upon financial institution
- § 18-4-21. Garnishment of salaries of officials and employees of state and its subdivisions; exemption; summons
- § 18-4-23. Service of summons of garnishment controlled by Civil Practice Act
ARTICLE 3. PREJUDGMENT GARNISHMENT PROCEEDINGS GENERALLY
- § 18-4-40. Grounds for issuance of writ of garnishment prior to judgment
- § 18-4-41. Application to judge for writ; contents
- § 18-4-42. Entry of order by judge authorizing garnishment prior to judgment; issuance of summons of garnishment pursuant to order by clerk of court generally
- § 18-4-43. Bond required prior to issuance of summons of garnishment; amount; presentation of bond to clerk of court for approval
- § 18-4-44. Service of order and summons of garnishment on defendant
- § 18-4-45. Traverse of affidavit of plaintiff by defendant; show cause order; revocation of order upon failure of plaintiff to prove grounds
- § 18-4-46. Personal earnings of defendant not subject to garnishment prior to judgment; statement of substance of of Code section to appear on summons of garnishment
- § 18-4-47. Funds and property paid into court or subject to garnishment to be held by clerk pending judgment; exception
- § 18-4-48. Proceedings subsequent to final judgment in action upon which garnishment summons issued generally; final judgment required
ARTICLE 4. POSTJUDGMENT GARNISHMENT PROCEEDINGS GENERALLY
- § 18-4-60. Right to writ of garnishment after judgment
- § 18-4-61. Affidavit for issuance of summons of garnishment; making and approval of affidavit
- § 18-4-62. Contents and service of summons of garnishment; requirements as to filing of answer to summons
- § 18-4-63. Issue of additional summons of garnishment; dismissal of garnishment proceedings upon nonissuance of summons
- § 18-4-64. Service of copy of summons of garnishment upon defendant; notice of filing and issuance of summons of summons of garnishment; time for distribution
- § 18-4-65. Issues defendant may raise by traverse of plaintiff’s affidavit
- § 18-4-66. Forms for postjudgment garnishment
ARTICLE 5. ANSWER BY GARNISHEE AND SUBSEQUENT PROCEEDINGS
- § 18-4-80. Effect of release of summons of garnishment on garnishee
- § 18-4-81. Effect of defendant’s traverse on garnishee; filing of bond by defendant; entry of judgment on bond
- § 18-4-82. Contents of garnishee answer
- § 18-4-83. Service of answer of garnishee on plaintiff or attorney
- § 18-4-84. Delivery to court of property admitted to be subject to garnishment; property in safety deposit box
- § 18-4-85. Traverse of answer of garnishee by plaintiff — Time period; discharge for failure to traverse
- § 18-4-86. Traverse of answer of garnishee by plaintiff — Contents
- § 18-4-87. Traverse of answer of garnishee by plaintiff — Service
- § 18-4-88. Order of proceedings after answer of garnishee generally
- § 18-4-89. Proceedings after answer of the garnishee if no traverse or claim filed
- § 18-4-90. Entry of default judgment upon failure of garnishee to file garnishee answer to summons; opening of default
- § 18-4-91. Relief of garnishee from default judgment
- § 18-4-92. Effect of garnishee’s failure to respond properly to summons of garnishment
- § 18-4-92.1. Relief of garnishee from liability; definitions
- § 18-4-93. Right of defendant to become a party to garnishment proceedings; procedure
- § 18-4-94. Procedure where defendant prevails generally; establishment of interests in money or other property in in court by parties filing claims thereto; distribution of money or other property
- § 18-4-95. Right of claimants of property subject to garnishment to become parties; procedure
- § 18-4-96. Procedure where money or other property in court subject to conflicting cases
- § 18-4-97. Right of garnishee to actual reasonable expenses in making true garnishee answer of garnishment; procedure for collection; reimbursement
ARTICLE 6. CONTINUING GARNISHMENT PROCEEDINGS
- § 18-4-110. Right of plaintiff who has obtained money judgment to process of continuing garnishment; methods, practices, and procedures for continuing garnishment generally
- § 18-4-111. Property, money, or effects subject to continuing garnishment
- § 18-4-112. Filing and contents of affidavit for continuing garnishment; issuance of summons; notice and service of summons
- § 18-4-113. Contents of summons of continuing garnishment; filing and contents of garnishee answers
- § 18-4-114. Traverse of garnishee answer by plaintiff
- § 18-4-115. Entry of default judgment against garnishee; relief from default judgment
- § 18-4-116. Effect of and proceedings upon filing of traverse by defendant
- § 18-4-117. Effect of termination of employment relationship between garnishee and defendant
- § 18-4-118. Forms for continuing garnishment
ARTICLE 7. CONTINUING GARNISHMENT FOR SUPPORT
- § 18-4-130. Continuing garnishment for family support; issuance of writ of garnishment
- § 18-4-131. Definitions
- § 18-4-132. Contents of affidavit for a continuing garnishment for support; attachment of certified copy of judgment; amendment of affidavit
- § 18-4-133. Service of summons; requirements as to filing of first garnishee answer accompanied by money; application of money
- § 18-4-134. Filing further garnishee answers and tendering money; application of money; filing of final garnishee answer by garnishee upon termination of defendant’s employment
- § 18-4-135. Period of attachment of writ of garnishment; garnishee’s reliance upon information in affidavit of garnishment
For the full text of Georgia’s garnishment statutes, read more: Read the rest of this entry »