Show Your Clients the Money: Enforcing Judgments in Minnesota Thursday, January 29, 2015 2.0 CLE credits applied for. MBCLE Event Code: 201019 PENDING AGENDA 2:00-400 PM Docketing the Judgment Transcribing the Judgment Satisfaction of the Judgment How Long Does a Judgment Last? Lien on Real Estate Homestead Exemption Discovering/Locating Assets of the Judgment Debtor Post-Judgment Discovery Writ of Execution Minn. Stat. 550.135 Execution Sale by Sheriff Garnishment of Earnings Minn. Stat. 571.71, et seq. Garnishment Upon Financial Institution Minn. Stat. 571.71, et seq. Contempt of Court Motion Small Money Judgment Levy Receiverships Minn. Stat. 576.25 Pre-Litigation Attachment Minn. Stat. 570.01 Pre-Judgment Interest Post-Judgment Interest Minn. Stat. 549.09 Fair Debt Collection Practices Act (FDCPA) Featuring: Caryn Boisen, Partner, Larson King and Joseph F. Kueppers, Chancellor for Civil Affairs, Archdiocese of Saint Paul and Minneapolis
Faculty Caryn A. Boisen, a partner with Larson King, focuses her practice in the areas of construction, products liability, commercial litigation, and business litigation. She provides advice to clients regarding business planning and avoiding disputes. She also has significant experience in all aspects of defensive and offensive litigation including jury trials, bench trials, arbitrations, and mediations. Caryn volunteers for the Tubman Chrysalis Center s Safety Project, where she provides pro bono legal representation to low income domestic violence victims who are seeking Orders for Protection. She serves as a mentor to law students through a local law school s formal mentoring program. Caryn also has served and continues to serve on several trade association, non-profit, and for-profit advisory boards. Caryn obtained her undergraduate degree from the University of St. Thomas in St. Paul, and her law degree from Hamline University School of Law in St. Paul, graduating magna cum laude. Prior to joining Larson King, Caryn worked for a large Washington, D.C. law firm. Joseph Kueppers currently serves as Chancellor for Civil Affairs for the Archdiocese of St. Paul and Minneapolis. In this position he serves as the chief legal officer for the Archdiocese. Prior to be appointed Chancellor he was a shareholder and president of Kueppers, Kronschnabel & Daly, P.A. working in the areas of civil litigation, business law and estate planning. Joe also served as a Judge in Small Claims Court (Conciliation Court) in Ramsey County. Joe has been on the Board of Directors of many non-profit organizations in the Twin City area and has served as the President of five non-profits. Joe received his undergraduate degree from the University of Minnesota and his law degree from Hamline University School of Law.
1 Show Your Clients The Money: Enforcing Judgments in Minnesota Caryn A. Boisen Larson King, LLP and Joseph F. Kueppers Archdiocese of Saint Paul and Minneapolis Enforcing a judgment requires a working knowledge of: 2 Select Minnesota Statutes The Rules of Civil Procedure How and when to use specific postjudgment creditor s remedies Procedures in sheriffs offices 1
3 Docketing the Judgment After the judgment is entered by the Court, the judgment creditor should docket the judgment. Docketing starts the process the judgment creditor uses to try to collect payment of the judgment. Occurs when the winning party in a case files an Affidavit of Identification of Judgment Debtor form with the Court. 4 2
5 Transcribing the Judgment This process is used for judgments obtained in Conciliation Court. Must request that Conciliation Court transcribe the judgment to District Court. After the transcript is prepared, all the paperwork will be sent to District Court, and you will receive a new file number from District Court. 6 Satisfaction of the Judgment Once the judgment is paid in full, or is paid to the judgment creditor's satisfaction, the next step is to notify the Court that the judgment has been paid. To do this, the judgment creditor completes a Satisfaction of Judgment form and files it with the Court. If the creditor does not cooperate with completing the Satisfaction of Judgment form, the judgment debtor can file a Motion to Satisfy Judgment with the Court, which will also update the Court records to show that the judgment has been paid. 3
7 8 4
9 How Long Does a Judgment Last? A judgment can be enforced for 10 years from the date it was entered. It can also be "renewed" if not satisfied (paid) within the 10 years. Multiple renewals are permitted. See Dahlin v. Kroening, 796 N.W.2d 503 (Minn. 2011). To enforce a judgment that was not paid during the 10 year timeframe, you have to start a new lawsuit before the end of the 10 year period, based on a claim for failure to pay a judgment. 10 Lien on Real Estate A judgment is a lien on all real estate in the county where it is docketed Minn. Stat. 548.09. The judgment lien on real estate is automatic with respect to abstract property. With respect to Torrens property, the Transcript of Judgment must be memorialized on the Certificate of Title to be a lien on the property Minn. Stat. 508.63. 5
11 Homestead Exemption The first $390,000 of equity in a homestead property is exempt from a judgment lien. The first $975,000 of equity in a homestead used for agricultural purposes is exempt from a judgment lien. Minn. Stat. 510.02. Discovering/Locating Assets of the Judgment Debtor 12 Asset search firms. Order for Disclosure Minn. Stat. 550.011. Financial Disclosure Form Minn. Stat. 491A.02. 6
13 14 7
15 16 Post-Judgment Discovery Post judgment interrogatories Minn. R. Civ. P. 69 and 33. Post judgment depositions Minn. R. Civ. P. 69. Court Order in supplementary proceedings Minn. Stat 575.01. 8
Writ of Execution Minn. Stat. 550.135 17 Money. Personal property. Real estate. 18 Execution Sale by Sheriff Notice of Sale Minn. Stat. 550.18. Service on Judgment Debtor Minn. Stat. 550.19. Time and Manner of Sale Minn. Stat. 550.20. Exempt Property Minn. Stat. 550.37. 9
Garnishment of Earnings Minn. Stat. 571.71, et seq. 19 The judgment creditor must serve the judgment debtor with a Garnishment Exception Notice and Notice of Intent to Garnish Earnings. Format and content set forth in Minn. Stat. 571.925. Must serve personally or by mail at least 10 days before attempting to garnish wages. The Notice is valid for one year. If no statement of exemption is received, the judgment creditor may proceed with the garnishment. Garnishment of Earnings (continued) 20 The Notice informs the judgment debtor that: His/her wages may be garnished, without any further notice, after 10 days. He/she has a right to a hearing if the garnishment by the employer is incorrect. There are some types of assistance he/she may receive that are exempt from garnishment. If he or she wants to claim an exemption, he/she must fill out a form and send it to the judgment creditor and the employer. 10
Garnishment of Earnings (continued) To proceed with the garnishment, the judgment creditor must serve the judgment debtor s employer with a Garnishment Summons and Disclosure Form. Format and content set forth in Minn. Stat. 571.74 and 571.75 The Garnishment Summons directs the employer to serve upon the judgment creditor a completed Earnings Garnishment Disclosure Form. The Garnishment Summons also directs the employer to retain earnings subject to garnishment, not to exceed 110% of the judgment creditor s claim, until the judgment creditor causes a writ of execution to be served on the employer. 21 Garnishment of Earnings (continued) 22 The judgment creditor must mail a copy of the Garnishment Summons and Earnings Garnishment Form to the judgment debtor within 5 days of service on the employer. The judgment creditor must also serve the judgment debtor with a Notice to Debtor. Format and content set forth in Minn. Stat. 571.74. 11
Garnishment Upon Financial Institution Minn. Stat. 571.71, et seq. 23 To proceed with the garnishment of funds in a bank or other financial institution, the judgment creditor must serve the bank or financial institution with a Garnishment Summons and Disclosure Form. Format and content set forth in Minn. Stat. 571.74 and 571.75. The bank or other financial institution must retain the debtor s funds. The judgment creditor must mail a copy of the Garnishment Summons and Disclosure Form to the judgment debtor within 5 days of service on the bank or other financial institution. The judgment creditor must also serve the judgment debtor with a Notice to Debtor. Format and content set forth in Minn. Stat. 571.74. Contempt of Court Motion 24 Minn. Stat. 558 and Minn. R. Civ. P. 45.07 and 69. The District Court may hold the judgment debtor in contempt of court for failure to obey a subpoena or a court order in supplementary proceedings. Contempt of court motion documents must be served personally on the person failing to obey the prior subpoena or court order in supplementary proceedings. No substituted service of process is allowed. Sanctions on the judgment debtor that may be imposed by the court include incarceration and/or fine. 12
25 Small Money Judgment Levy Minn. Stat. 551.01, et. seq. permits attorneys to levy on money, personal property, and earnings using a quick alternative to a formal Writ of Execution. Notice of Execution Levy on third-parties holding money of the debtor is served by certified mail, along with two copies of an Exemption Notice if debtor is an individual. The maximum amount that can be levied upon in the possession of a particular third-party is $10,000. Small Money Judgment Levy (continued) 26 There is an affirmative duty imposed by Minn. Stat. 551.04 on a third-party holding money to immediately remit funds to the attorney who served the Notice of Execution levy, if the debtor is a corporation, or 15 days after the third-party mails to exemption notice to the debtor. 13
27 Receiverships Minn. Stat. 576.25 Receiverships are used by lenders to protect the value of property in foreclosure. The judgment creditor must file a motion with the court to appoint a receiver. Appointment of a receiver is a matter of discretion with the trial court. A receiver may be appointed on allegation and proof of waste or threatened waste of the property due to either misuse or non-use. Examples: Leaving the property vacant to its detriment. Failing to pay taxes and insurance. Neglecting to make necessary repairs. 28 Pre-Litigation Attachment Minn. Stat. 570.01 An order of attachment may be issued by the court in connection with a civil action for the recovery of money. The claimant may have the property of the respondent attached as security for the satisfaction of any judgment the claimant may recover. Only a judge of the court in the county in which the civil action is pending may issue the order for attachment. 14
Pre-Litigation Attachment Continued The claimant must show that the respondent has: Assigned, secreted, or disposed of, or is about to assign, secrete, or dispose of, any non-exempt property, with intent to delay or defraud the respondent's creditors; Removed, or is about to remove, any non-exempt property from this state, with intent to delay or defraud the respondent's creditors; Converted or is about to convert any non-exempt property into money or credits, for the purpose of placing the property beyond the reach of the respondent's creditors; Committed an intentional fraud giving rise to the claim upon which the civil action is brought; Committed any act or omission for which the respondent has been convicted of a felony, giving rise to the claim upon which the civil action is brought; or Violated the law of this state respecting unfair, discriminatory, and other unlawful practices in business, commerce, or trade. 29 30 Pre-Judgment Interest The pre-judgment interest rate is governed by Minn. Stat. 549.09. Interest accrues on pecuniary damages from the earlier of: The time of the commencement of the action; or The time of a written notice of the claim. 15
Pre-Judgment Interest (continued) 31 Pre-judgment interest accrues even if the damages are not readily ascertainable, such as consequential damages or pain and suffering. Pre-judgment interest does not accrue for certain enumerated items such as: Future damages, Cost and disbursements, Punitive or non-compensatory damages, and Workers compensation awards. Post-Judgment Interest Minn. Stat. 549.09 32 Post-judgment interest accrues on the unpaid balance of judgments from final entry of judgment until satisfaction of the judgment. Prior to 2009, the rate for all post-judgment interest was computed annually and remained steady at about 4 percent for many years. In 2009, the Minnesota Legislature amended 549.09, setting the interest rate for judgments over $50,000 at 10 percent. This does not include judgments against a governmental body. 16
Fair Debt Collection Practices Act (FDCPA) Establishes ethical guidelines for the collection of consumer debts. 33 Prohibits a debt collector from using any false, deceptive, or misleading representation or means in connection with the collection of any debt. 15 U.S.C. 1692e. Broadly defines a debt collector as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. 15 U.S.C. 1692a. In their first communication with the consumer, debt collectors are required to notify debtors about their ability to challenge the validity of a debt and to provide other basic information. Scenario One The judgment debtor has several judgments against him. 34 The judgment debtor is avoiding service. The judgment debtor s assets are unable to be identified easily. How should you proceed? 17
Scenario Two You have a judgment against the judgment debtor in Ramsey County. When you obtained the judgment in 2012, the judgment debtor lived in Ramsey County. The judgment debtor has since moved to Polk County, Wisconsin. 35 How should you proceed? Scenario Three The judgment debtor has a bank account with U.S. Bank that has substantial funds in it. Two other judgment creditors recently obtained judgments and are proceeding against the U.S. Bank funds. 36 How should you proceed? 18
37 Questions? 38 Thank You! Caryn A. Boisen Larson King, LLP (651) 312-6529 and Joseph F. Kueppers Archdiocese of Saint Paul and Minneapolis (651) 291-4405 19