Prejudgment Wage Garnishment: Notice and Hearing Requirements under Sniadach v. Family Finance Corp.

Boston College Law Review Volume 11 Issue 3 Number 3 Article 4 3-1-1970 Prejudgment Wage Garnishment: Notice and Hearing Requirements under Sniadach v. Family Finance Corp. Charles J. Hely Follow this and additional works at: http://lawdigitalcommons.bc.edu/bclr Part of the Consumer Protection Law Commons Recommended Citation Charles J. Hely, Prejudgment Wage Garnishment: Notice and Hearing Requirements under Sniadach v. Family Finance Corp., 11 B.C.L. Rev. 462 (1970), http://lawdigitalcommons.bc.edu/bclr/vol11/iss3/4 This Comments is brought to you for free and open access by the Law Journals at Digital Commons @ Boston College Law School. It has been accepted for inclusion in Boston College Law Review by an authorized editor of Digital Commons @ Boston College Law School. For more information, please contact . PREJUDGMENT WAGE GARNISHMENT: NOTICE AND HEARING REQUIREMENTS UNDER SNIADACH v. FAMILY FINANCE CORP. I. GARNISHMENT STATUTES Wage garnishment is the process by which a creditor obtains a judicial writ ordering a debtor's employer to withhold payment to the debtor of wages earned.' The writ is obtained by the creditor, either as a means of securing payment of a judgment entered against the wage earner, or as security for a claim pending adjudication. 3 In the former case the amount of the judgment is withheld from the debtor's paycheck and paid over to the creditor. The judgment is thereby enforced, and the creditor obtains his settlement indirectly through the debtor's employer. 3 In the latter case, referred to as prejudgment garnishment, the plaintiff-creditor obtains the writ of garnishment when he files a claim against the alleged debtor. The amount of the claim is withheld from the defendant's paycheck and remains frozen until the dispute is settled. 4 The process provides the plaintiff with security for the anticipated judgment; if the defendant defaults or if the plaintiff wins a judgment, the amount withheld will be paid directly to the creditor. In both cases the process of garnishment is designed to serve the needs of the creditor. The collection of the debt is both insured and enforced by the court. The process of ordering the employer to withhold wages is identical whether it is initiated for security prior to judgment or for execution of a judgment already obtained. 3 Prejudgment garnishment, however, raises special questions. Focusing on the statutes of the jurisdictions that retain the prejudgment remedy will point up these problems, as well as illustrate the basic process common to all garnishments. A. Prejudgment Provisions The states which provide for garnishment prior to judgment permit the plaintiff to set the garnishment process in motion at the time the complaint for the suit on the debt is issued.' The initial claim, the basis 1 6 Am. Jur. 2d Attachment and Garnishment §§ 1-4 (1963). 2 Id. § 12. 3 Id. § 4. 4 Id. § 12. 6 See, e.g., Cal. Civ. Proc. Code § 537 (West Supp. 1969), amending Cal. Civ. Proc. Code § 537; Cal. Civ. Proc. Code § 541 (West 1954). 8 Alaska Stat. §§ 09.40.010, -.030, -.35.080 (1962) ; Ariz. Rev. Stat. Ann. § 12-1571 (1956) ; Ark. Stat. Ann. § 31-501 (1962) ; Cal. Civ. Proc. Code §§ 537, 543 (West Supp. 1969), amending Cal. Civ. Proc. Code §§ 537, 543 (West 1954) ; D.C. Code Encyd. Ann. § 16-501 (1967) ; Idaho Code §§ 8-501, -505, -508 (1947) ; Iowa Code Ann. §§ 639.1, -.3, -.25 (1946) ; Mont. Rev. Codes Ann. §§ 93-4301, -4306, -4314 (1963) ; N.M. Stat. Ann. §§ 36-11-1, -14-I (Supp. 1969) ; N.D. Cent. Code §§ 32-09-01, -06 (1960) ; Ore. Rev. Stat. §§ 29.110, -.140, -.270 (1967) ; R.I. Gen. Laws Ann. §§ 10-5-1, -2, -7, -8 (1956) ; Vt. Stat. Ann. tit, 12, §§ 3011, 3013 (1958) ; Wyo. Stat. Ann. §§ 1-226, -235 (1957). 462 PREJUDGMENT WAGE GARNISHMENT for a writ of garnishment, must be an action founded on a contract, either expressed or implied, and ordinarily one that is unsecured by any other property? In a few states plaintiffs must also allege that the defendant has disposed of or is about to dispose of his property, "with the fraudulent intent to cheat, hinder or delay his creditors." 8 A special affidavit from the plaintiff is necessary to obtain a writ of garnishment in nearly all states. Although the language varies from state to state, the affidavit requirements are quite similar. Plaintiffs in Washington must affirm that the debt is "just, due and unpaid, and that the garnishment applied for is not sued out to injure either the defendant or the garnishee."8 Garnishment affidavits in Oregon must assert that there is a "bona fide, existing debt due and owing from the defendant to the plaintiff . . . A clause common to affidavits in many states requires that the writ not be sought "to hinder, delay, or defraud any creditor of the defendant." Generally, prejudgment garnishment statutes also require that the plaintiff post a bond or undertaking prior to obtaining the writ, agreeing to pay to the defendant all costs and damages in the event that the garnishment is wrongfully obtained or the defendant wins the judgment." Once a writ of garnishment is obtained by the plaintiff, it is then served directly on the garnishee-employer. This places the employer under order from the court to withhold from the defendant's wages a specified amount which remains under the court's control until a judgment is entered on the case." Under the prejudgment garnishment statutes, the defendant's wages are withheld as security on the claim until the suit has been fully adjudicated." If the defendant has a valid defense he may assert it at a trial on the merits, obtain judgment in his favor, and have his wages remitted at the conclusion of the trial. However, once the plaintiff files the claim and submits the required affidavit and undertaking, causing the garnishment writ to issue, the defendant has lost the use of his wages until the conclusion of the case. There are methods by which the defendant may have a prejudgment writ dismissed prior to a trial of the claim. Dismissal of such a writ must result from an attack upon the garnishment itself, and not the underlying claim.° Examples of grounds for dismissal are: the cause of action is not one for which a garnishment may issue, for ex7 Compare Cal. Civ. Proc. Code § 537 (West Supp. 1969), amending Cal. Civ. Proc. Code § 537 (West 1954), with Vt. Stat. Ann. tit. 12, § 3011 (1958). 8 See, e.g., Ark. Stat. Ann. §§ 31-101(7), (8) (1962) ; D.C. Code Encycl. Ann. § 16-501(d) (4) (1966). See also note 96 infra. 0 Wash. Rev. Code Ann. app. 7.1 § (1) (b) (Supp. 1960). 10 Ore. Rev. Stat. § 29.120(2) (1968). 11 See, e.g., Cal. Civ. Proc. Code § 538(3) (West 1954) ; Ariz, Rev. Stat. Ann. § 12-1571(A) (2) (1956). 12 See, e.g., Idaho Code § 8-503 (1947) ; Iowa Code Ann. § 639.11 (1946). 13 6 Am. Jur. 2d Attachment and Garnishment §§ 3, 511 (1963). 14 Id. § 12. 15 Id. 431. 463 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW ample, a tort claim; irregularities in the proceedings t (...truncated)