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13.5.3 Prompt Post-Garnishment Notice Is Required

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  5. 13.5.3 Prompt Post-Garnishment Notice Is Required

13.5.3 Prompt Post-Garnishment Notice Is Required

Courts applying the Matthews analysis have almost uniformly ruled that state laws violate due process when they allow garnishment without any notice (other than the actual notice the debtor gets upon, for example, receiving a smaller paycheck).262 The reason for this is fairly clear: a notice requirement places little burden on a creditor and gives the debtor an opportunity to challenge any improper garnishment.

Nevertheless, a number of courts have ruled that due process does not require notice prior to garnishment.263 This position is based on the fear that, in cases involving the garnishment of bank accounts or moveable property, a debtor might remove the property to defeat a valid garnishment. However, a prior notice requirement has also been rejected in some wage garnishment cases,264 even though there can be no reason to fear that unpaid wages will be concealed or removed. In the case of wage garnishment, the only burden placed on the creditor by prior notice would be a minor delay in the commencement of the garnishment while the debtor is given an opportunity to defend their wages.

Instead of pre-garnishment notice, courts have required that notice be contemporaneous with, or immediately follow, the garnishment. Exactly what this means in practice is unclear. For example, a district court in Hawaii required notice and a hearing within two days of garnishment.265 The Second Circuit upheld a rule allowing the mailing of notice within four days of garnishment.266 Another court found twenty days between garnishment and notice to be clearly too long.267 A district court in Idaho held that notice provided only when garnished funds were about to be turned over to the creditor was insufficient.268 Because there will necessarily be a delay from when the debtor receives notice of a garnishment until the debtor can obtain a hearing, it is important for the debtor to receive notice as soon as possible.

A related procedural protection would be to require the creditor, in seeking a writ of garnishment, to file an affidavit with a judicial officer, stating that the assets to be garnished are not exempt. One court held, in the wage garnishment context, that the absence of such a requirement was a “substantial defect,” although it found the garnishment procedure as a whole to meet due process requirements.269

Footnotes

  • 262 See Dionne v. Bouley, 757 F.2d 1344 (1st Cir. 1985); Jones v. Marion Cty. Small Claims Ct., 701 F. Supp. 1414 (S.D. Ind. 1988) (state statute for garnishment of bank accounts violated due process requirements of prompt notice and hearing); Reigh v. Schleigh, 595 F. Supp. 1535 (D. Md. 1984), rev’d on other grounds, 784 F.2d 1191 (4th Cir. 1986); Clay v. Fisher, 584 F. Supp. 730 (S.D. Ohio 1984); Deary v. Guardian Loan Co., 534 F. Supp. 1178 (S.D.N.Y. 1982); E.J. McKernan Co. v. Gregory, 643 N.E.2d 1370 (Ill. App. Ct. 1994) (former version of Illinois non-wage garnishment law was unconstitutional because, prior to issuance of garnishment summons, it failed to provide notice and hearing regarding possible exemptions); Dorwart v. Caraway, 966 P.2d 1121 (Mont. 1998); Cole v. Goldberger, Pederson & Hochron, 410 N.Y.S.2d 950 (N.Y. Sup. Ct. 1978). See also Leleux v. Hassan, 2017 WL 6883992 (W.D. La. Dec. 4, 2017) (Mag.) (declining to dismiss debtor’s wife’s section 1983 challenge to Louisiana law that allowed garnishment of her wages as community property, without notice to her, to collect judgment against debtor), later decision at 2018 WL 4469427 (W.D. La. Sept. 6, 2018) (granting summary judgment to defendant; notice to one spouse with respect to enforcement of judgment against community property is constitutionally sufficient if spouses reside together), adopted by 2018 WL 4440886 (W.D. La. Sept. 17, 2018); Doyle v. Schultz, 97 F. Supp. 2d 763 (W.D. La. 2000) (Louisiana procedure for executing on judgments was unconstitutional as applied when house was seized pursuant to Texas judgment without notice that judgment had been domesticated); CBM v. Sevier, 910 P.2d 654 (Ariz. Ct. App. 1996) (when creditor sought to garnish one spouse’s wages for pre-marital debt, in a community property state non-debtor spouse should be joined in order to have notice and opportunity to be heard on what property each spouse contributed); Romero v. Star Mkts., 922 P.2d 1018 (Haw. Ct. App. 1996) (when procedure for collecting workers’ compensation awards was to move for entry of court judgment, employer who had already participated in administrative hearing must be served with motion; employee’s ex parte garnishment violated due process). Cf. Sheppard v. Welch, 2005 WL 1656873 (S.D. Ind. July 5, 2005) (child support obligor stated due process claim when prosecutor issued wage and bank account garnishment orders without the required notice to obligor), later decision at 2006 WL 3134869 (S.D. Ind. Oct. 3, 2006) (summary judgment for state; no section 1983 violation when lack of notice was “random and unauthorized” and state post-deprivation remedy was adequate); Savage v. Scales, 310 F. Supp. 2d 122 (D.D.C. 2004) (due process requires only reasonable effort to provide notice; sending notice of administrative garnishment for student loan to last known address is sufficient); First Resolution Inv. Corp. v. Seker, 795 A.2d 868 (N.J. 2002) (holding that notice procedure permitting ordinary mail if certified mail “unclaimed” satisfied due process, but recommending that rule be revised to require that creditor show how it obtained debtor’s “last known address”). But cf. Roush v. Basham, 1998 U.S. App. LEXIS 12903 (4th Cir. June 18, 1998) (no denial of due process when child support enforcement agency was simply negligent, and state court had already ordered return of improperly garnished wages); Farrar v. Glantz, 2000 U.S. Dist. LEXIS 6502 (N.D. Ill. Apr. 25, 2000) (no due process violation when computer error prevented consumer from receiving notice of small claims proceeding; simple negligence is not sufficient, and state court proceeding enabled consumer to prevent taking of any property); Price v. Sec’y of Revenue & Taxation, 664 So. 2d 802 (La. Ct. App. 1995) (under community property law, wages of non-debtor wife could be garnished without notice for tax debt of husband’s corporation).

  • 263 See, e.g., Lind v. Midland Funding, L.L.C., 688 F.3d 402 (8th Cir. 2012) (notice that allows assertion of exemptions is sufficient even if given after garnishment is issued; notice just to debtor sufficient when non-debtor co-owner of bank account had actual notice); Nat’l Labor Relations Bd. v. E.D.P. Med. Comput. Sys., Inc., 6 F.3d 951 (2d Cir. 1993) (ex parte writ justified by extraordinary situation); McCahey v. L.P. Inv’rs, 774 F.2d 543 (2d Cir. 1985) (bank account); Dionne v. Bouley, 757 F.2d 1344 (1st Cir. 1985) (bank account); Finberg v. Sullivan, 634 F.2d 50 (3d Cir. 1980) (bank account); Brown v. Liberty Loan Corp., 539 F.2d 1355 (5th Cir. 1976) (due process does not require notice and opportunity for hearing prior to wage garnishment; here, debtor learned of garnishment on day it was served on her employer, filed exemption claim that same day, and had hearing fifteen days later); Tift v. Snohomish County, 764 F. Supp. 2d 1247 (W.D. Wash. 2011) (judgment debtor need not be provided opportunity to claim exemptions at the moment of seizure of personal property; providing notice of procedure to assert exemptions is sufficient); Hollowell v. Hosto, 2010 WL 1416519 (E.D. Ark. Apr. 8, 2010) (prompt post-garnishment hearing sufficient to protect rights in bank account containing Social Security funds; neither due process nor Social Security Act forbids temporary freeze while debtor exercises exemption rights), aff’d as modified, 389 Fed. Appx. 583 (8th Cir. 2010); Nelson v. Silverman, 888 F. Supp. 1041 (S.D. Cal. 1995) (Internal Revenue Service may levy on wages or real property without pre-seizure notice or hearing; post-seizure procedures satisfy due process); Roy v. Smith, 735 F. Supp. 313 (C.D. Ill. 1990) (wages); Ortiz v. Valdez, 971 P.2d 1076 (Colo. App. 1998) (following Endicott; Colorado’s postjudgment garnishment scheme acceptable, even though it resulted in non-debtor’s exempt Social Security funds being frozen for at least five weeks); First Union Nat’l Bank v. Knyal, 874 So. 2d 716 (Fla. Dist. Ct. App. 2004) (pre-garnishment notice not required for postjudgment garnishment); Collection Prof’ls, Inc. v. Logan, 695 N.E.2d 1344 (Ill. App. Ct. 1998) (amended Illinois postjudgment garnishment statute provided due process when it required debtors to be notified of garnishment, exemptions, procedure for claiming them, and hearing within two days of service of garnishment summons); Leger v. Comm’r of Revenue, 654 N.E.2d 927 (Mass. 1995) (tax collection an exception to rule that requires pre-seizure notice for liens on real estate). See also Huggins v. Pataki, 2002 WL 1732804 (E.D.N.Y. July 11, 2002) (New York’s bank account garnishment procedure, which requires creditor to send notice to debtor after account is frozen, is constitutional even though bank could have determined that account consisted entirely of directly-deposited Social Security funds and even though creditor failed to send the required notice); United Presidential Life Ins. Co. v. King, 361 So. 2d 710 (Fla. 1978) (constitution does not require notice to judgment debtor and hearing before issuance of writ of garnishment); Harrel v. State, 286 S.W.3d 315 (Tex. 2009) (prisoner has property right in inmate trust account, but garnishment for court costs presents small risk of erroneous deprivation when costs set at time of conviction and defendant has opportunity to contest; notice at time of garnishment and post-garnishment hearing sufficient to handle claim that amount of garnishment does not accord with court order). Cf. Kennedy v. Comm’r of Social Sec., 1999 U.S. App. LEXIS 34031 (6th Cir. Dec. 21, 1999) (Social Security recipient failed to state due process claim for state’s failure to follow state procedures in garnishing exempt funds when he did not allege that state failed to provide meaningful post-deprivation process); Carter v. Welch, 1999 U.S. Dist. LEXIS 6705 (S.D. Ala. Mar. 12, 1999) (due process requirements satisfied by offering a deprivation hearing before taking funds from inmate account to satisfy court-ordered restitution), adopted by 1999 U.S. Dist. LEXIS 6771 (S.D. Ala. Apr. 27, 1999). But see Doyle v. Schultz, 97 F. Supp. 2d 763 (W.D. La. 2000) (Louisiana procedure for executing on judgments unconstitutional as applied when it allowed seizure for out-of-state judgment before notifying debtors that judgment had been domesticated).

  • 264 Brown v. Liberty Loan Corp., 539 F.2d 1355 (5th Cir. 1976); Roy v. Smith, 735 F. Supp. 313 (C.D. Ill. 1990); Betts v. Coltes, 467 F. Supp. 544 (D. Haw. 1979). See also Raigoza v. Sperl, 110 Cal. Rptr. 296 (Cal. Ct. App. 1973); Wilson v. Grimes, 207 S.E.2d 5 (Ga. 1974); Hehr v. Tucker, 472 P.2d 797 (Or. 1970).

  • 265 Betts v. Tom, 431 F. Supp. 1369 (D. Haw. 1977). But see Aga v. Steele, 2009 WL 649914 (D. Haw. Mar. 12, 2009) (Endicott still good law; for judgment debt, right to prompt post-garnishment notice and hearing not “clearly established”).

  • 266 McCahey v. L.P. Inv’rs, 593 F. Supp. 319 (E.D.N.Y. 1984), aff’d, 774 F.2d 543 (2d Cir. 1985). But see Mayers v. N.Y. Cmty. Bancorp, Inc., 2005 WL 2105810 (E.D.N.Y. Aug. 31, 2005) (suggesting that McCahey should be re-evaluated in light of technological changes), later decision at 2006 WL 2013734 (E.D.N.Y. July 18, 2006) (denying defendants’ motion for interlocutory appeal).

  • 267 Neeley v. Century Fin. Co., 606 F. Supp. 1453 (D. Ariz. 1985).

  • 268 New v. Gemini Capital Grp., 859 F. Supp. 2d 990 (S.D. Iowa 2012) (denying judgment creditor’s motion for summary judgment; notice also failed to disclose existence of exemptions or procedure for claiming them).

  • 269 Brown v. Liberty Loan Corp., 539 F.2d 1355, 1369 (5th Cir. 1976). See also Betts v. Tom, 431 F. Supp. 1369 (D. Haw. 1977) (affidavit required for ex parte garnishments). See generally N. Ga. Finishing Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S. Ct. 719, 42 L. Ed. 2d 751 (1975).