question presented whether the personal injury exemption ... · 2 appellee has found no maryland...
TRANSCRIPT
IN THE
COURT OF APPEALS OF MARYLAND
_______________
September Term, 2009
_______________
No. 39
_______________
CURTIS O. ROSEMANN
Appellant
vs.
SALSBURY, CLEMENTS, BEKMAN, MARDER & ADKINS, LLC
Appellee
_______________
ON WRIT OF CERTIORARI TO THE COURT OF SPECIAL APPEALS
_______________
BRIEF OF APPELLEE
_______________
QUESTION PRESENTED
Whether The Personal Injury Exemption From Execution On
Judgments (Section 11-504(b)(2) of Courts and Judicial Proceedings
Article) Applies To Judgments For Child Support Arrearages?
The appeal in this case to the Court of Special Appeals was an expedited appeal and proceeded1
under Rule 8-207(b). The Statement of Case and Facts were presented by a stipulation of counsel underRule 8-207(b)(2) and were approved by the circuit court pursuant to Rule 8-413(b). The Appellee’sStatement of Case and Statement of Facts are those that were presented to the Court of Special Appeals. The Statement of Case has been supplemented to reflect the decision of the Court of Special Appeals andthis Court’s Writ of Certiorari.
2
STATEMENT OF THE CASE1
In March of 2008, the Garnishee, Salsbury, Clements, Bekman, Marder & Adkins,
LLC, received a check in the amount of $30,000.00, representing moneys payable from the
personal injury settlement of the Judgment Debtor’s tort case. Shortly thereafter, the
Judgment Creditor served the Garnishee with two separate writs of garnishment issued from
the Circuit Court for Howard County. One writ sought to execute on a foreign judgment in
Case No. 13-C-08-072739 FJ in the amount of $30,709.38, plus interest, and the other writ
sought to execute on a judgment in Case No. 13-C-94-024696 CT in the amount of
$3,851.70, plus interest. The Garnishee filed timely Answers to each writ, stating that “[s]aid
funds are exempt from execution on a judgment pursuant to Section 11-504(b)(2) of the
Courts and Judicial Proceedings Article.”
The Judgment Creditor and the Garnishee both moved for summary judgment in Case
No. 13-C-08-072739 FJ. At the hearing on the motion, the Court consolidated Case No. 13-
C-08-072739 FJ with Case No. 13-C-94-024696 CT, and accepted the pending motions as
applying to the writs of garnishment in both cases. After hearing argument, the Court denied
the Judgment Creditor’s motion and granted the Garnishee’s motion, finding that the funds
being held by the Garnishee were exempt from the garnishment under Section 11-504(b)(2).
3
The Judgment Creditor filed a timely appeal from this final order.
The Court of Special Appeals, in an expedited appeal, affirmed (E.100-09). The
Judgement Creditor filed a Petition for a Writ of Certiorari, which this Court granted.
STATEMENT OF FACTS
After Rosalind Rosemann suffered a personal injury on May 6, 2005, she retained the
law firm of Salsbury, Clements, Bekman, Marder & Adkins, LLC (the “Garnishee”) to
represent her. Thereafter, the Garnishee acted as her attorneys in Rosalind Rosemann vs.
U.S. Airways, Civil No. RDB-1:07-cv-2105. In her lawsuit, Mrs. Rosemann alleged that she
was seriously injured on May 6, 2005, when a flight attendant aboard America West Flight
No. 196 lost control of a bag as he was removing it from the overhead luggage compartment,
and the bag fell downward smashing into Mrs. Rosemann’s left arm that was on the arm rest.
On January 28, 2008, Mrs. Rosemann attended a mediation in her case before the
Honorable Beth Gesner, United States Magistrate Judge for United States District Court for
the District of Maryland. Although the case did not settle that day, Mrs. Rosemann
subsequently agreed to a settlement in the amount of $30,000.00, from which she must pay
her attorneys’ fees, expenses and outstanding medical bills. Garnishee subsequently received
the moneys payable from the personal injury settlement in the form of a check in the amount
of $30,000.00, drawn on the account of AIG Aviation, Inc. and made payable to “Rosalind
Rosemann and Salsbury, Clements, Bekman, Marder & Adkins As Her Attorney.”
4
Later in late March and in early April of 2008, before any disbursement of the
settlement proceeds, the Garnishee was served with two separate writs of garnishment. One
writ sought to execute on a foreign judgment in Case No. 13-C-08-072739 FJ, and the other
writ sought to execute on a judgment in Case No. 13-C-94-024696 CT. While neither writ
describes on its face the source or the basis of the judgment being enforced, each judgment
shows that it was for child support arrears.
SUMMARY OF ARGUMENT
This is a case of statutory interpretation and application. The statute, §11-504(b)(2)
of the Court and Judicial Proceedings Article, provides that “[m]oney payable in the event
of sickness, accident, injury, or death of any person, including compensation for loss of
future earnings,” is “exempt from execution on a judgment.” The statute also states that the
“exemption includes, but is not limited to money payable on account of judgments,
arbitrations, compromises, insurance, benefits, compensation, and relief.” Id. The funds that
the Appellant seeks to garnish were paid by an insurer to compensate Mrs. Rosemann for the
personal injuries she received in an accident. Accordingly, they are exempt from
garnishment.
Appellant argues that a judgment of child support arrears trumps the §11-504(b)(2)
exemption, noting at page 26 of its Brief that “[t]ime and time again this Court has
invalidated exemptions when the underlying judgment is for child support.” The fact is,
however, that the Court has never held any particular exemption to be inapplicable to
5
judgments based on child support arrearages. Moreover, none of the language in §11-504
even suggests that there is a child support exception to §11-504(b)(2), and elsewhere in the
Code the General Assembly has specifically recognized the application of all §11-504
exemptions to child support arrearages. See FL § 10-108.3(h)(4).
Because no statutory support exists for his argument, Appellant asks this Court, solely
on policy grounds, to judicially create a child support exception to §11-504(b)(2). The
caselaw upon which the Appellant relies only addresses exceptions to earning attachments,
which are designed to provide familial support, not to make an injured person whole.
Furthermore, the numerous statutes cited by Appellant demonstrate only that the legislature
is well versed in assisting the custodial parent, within the confines of the law, by providing
the non-paying parent with incentives to pay past due support. That the General Assembly
has passed such laws does not empower this Court to judicially amend §11-504(b)(2) to
expand the assets available to satisfy a judgment for child support.
ARGUMENT(Standard of Review)
Whether the circuit court properly granted summary judgment is a question of law that
on appeal is subject to de novo review. If no material facts are in dispute, then this Court
must determine if summary judgment was correctly entered as a matter of law. The Court’s
review is limited to the grounds upon which the circuit court relied in granting summary
judgment. See Property & Casualty Ins. Guaranty Corp. v. Yanni, 397 Md. 474, 480-81, 919
A. 2d 1, 4-5 (2007).
Appellee has found no Maryland appellate case that addresses the application of the §11-5042
exemptions to judgments based on past due child support or alimony.
Other exemptions include a limited amount of “[w]earing apparel, books, tools, instruments, or3
appliances” necessary for use in a trade or profession (§11-504(b)(1)), certain health aids (§11-504(b)(3)), minimal interest in items held for personal, family or household use (§11-504(b)(4)), cash orother property not exceeding $6,000 (§11-504(b)(5)), money payable for child support (§11-504(b)(6)) ormoney payable for alimony (§11-504(b)(7)).
6
THE CIRCUIT COURT CORRECTLY HELD THAT THE
PERSONAL INJURY SETTLEMENT FUNDS HELD BY THE
APPELLEE-GARNISHEE ARE EXEMPT BY LAW FROM
EXECUTION ON A JUDGMENT.
A. The Settlement Funds Held by Salsbury, Clements, Bekman, Marder & Adkins,
LLC Are Exempt From Execution Pursuant to § 11-504(b)(2) of the Courts and
Judicial Proceedings Article.
At issue is whether the circuit court correctly held that the exemptions from execution
on a judgment set out in §11-504(b) of the Courts and Judicial Proceedings Article (“CJ”),
and specifically the personal injury exemption contained within §11- 504(b)(2), apply to
judgments for child support arrearages. This question can be answered simply by reading2
and applying the statutory exemption. The statute leaves no room for argument.
Article III, § 44 of the Maryland Constitution states “[l]aws shall be passed by the
General Assembly, to protect from execution a reasonable amount of the property of the
debtor.” Pursuant to this directive, the General Assembly has spelled out in §11-504(b) “a
comprehensive legislative scheme apparent for over a century to preclude an individual from
being completely stripped of his property by execution of a judgment against him.” In re
Taylor, 312 Md. 58, 63, 537 A.2d 1179, 1182 (1988). One facet of this comprehensive
scheme is the personal injury exemption, which provides:3
A personal injury exemption first appeared in Acts 1904, ch. 381 (see p. 28, infra,) which4
amended Art. 83, § 8 of the 1888 Code to exempt “all money payable in the nature of insurance, benefitor relief in the contingency or event of sickness, accident, hurt or death of any person” from theexecution of any civil judgment except those for breach of promise to marry or for seduction.
7
(b) In general. – The following items are exempt from execution on a
judgment:
* * *
(2) Money payable in the event of sickness, accident, injury, or death
of any person, including compensation for loss of future earnings. This
exemption includes, but is not limited to money payable on account of
judgments, arbitrations, compromises, insurance, benefits, compensation, and
relief.
See §11-504(b)(2). (Emphasis added.)4
It is undisputed that the money which Appellee-Garnishee, Salsbury, Clements,
Bekman, Marder & Adkins, LLC (“Salsbury”), presently holds in escrow was obtained as
part of a settlement or compromise of Rosalind Rosemann’s personal injury claim in
Rosalind Rosemann vs. U.S. Airways. The escrowed funds represent “money payable on
account of . . . [a] compromise[]” “in the event of . . . accident [or] injury . . . of [a] person.”
See Governor Plaza Associates v. Butcher, 125 F.3d 238 (4 Cir. 1997)(money payable inth
a structured personal injury settlement having a value of $4.5 million are exempt from
judgment under §11-504(b)(2)). The circuit court, therefore, did not err in finding that the
settlement funds held by Salsbury are, pursuant to §11-504(b)(2), exempt from execution on
the Appellant’s judgments.
Appellant concedes the applicability of §11-504(b)(2) to personal injury settlements generally. 5
While Appellant refers to various statues on child support, none of those statutes concern any6
exemption to attachment or garnishment.
8
Appellant, Curtis Rosemann, when he served the two writs of garnishment in this case
seemingly admitted that the statutory exemptions applied. Salsbury was informed in the writs
that it could assert “any defense that the judgment debtor could assert.” (E. 36, 42). The
writs further advised that the judgment debtor, Mrs. Rosemann, had “the right under
Maryland law to claim an exemption [for] . . . money payable in the event of sickness,
accident, injury or death of any person including compensation for loss of future earnings.”
(E. 37, 43).
Appellant argues here, however, as he did before the circuit court and the Court of
Special Appeals, that no exemptions, including the statutory personal injury exemption, apply
to judgments for child support arrearages. His argument is contrary to the language in the5
writs, is not based on §11-504, and is not based on any other law passed by the General
Assembly relating to the exemptions generally or to child support specifically. The inability6
of Appellant to find such statutory support is simple. The General Assembly intended the
§11-504 exemptions to apply to all judgments.
When the General Assembly wants to place limitations on the § 11-504 exemptions,
it does so expressly. Section 11-504(e) states that “[t]he exemptions . . . do not apply to wage
attachments.” Section 11-504(h)(2) says that the exemption set out in “[p]aragraph (1) of this
subsection does not apply to” an “alternative payee under a qualified domestic relations
“‘Obligor’ means an individual who is required to pay support under a court order.” See FL §7
10-101(g).
In Acts 2002, ch 536, the General Assembly passed FL §10-108.3, which gave the Child8
Support Enforcement Administration the authority to garnish financial accounts.
Appellant directs this Court to FL §10-119.3 and §16-203 of the Transportation Article for9
actions that the Child Support Enforcement Administration can pursue when a parent fails to pay childsupport, but he ignores the fact that the Child Support Enforcement Administration cannot garnishmonies exempt under CJ §11-504(b)(2).
9
order,” to certain retirement plans, or to certain other bankruptcy assets. No other limitations
or exceptions are set out in §11-504, and more specifically, nowhere in §11-501, et. seq., has
the General Assembly said or implied that the §11-504 exemptions do not apply to judgments
for child support arrearages.
The failure of the General Assembly to carve out a child support exception to the §11-
504 exemptions is hardly surprising given that elsewhere in the Code it has specifically
recognized the application of those exemptions to child support arrearages. In the Child
Support Enforcement Administration laws set out in Title 10, Subtitle 1, Part II of the Family
Law Article (“FL”), the Administration is provided with certain garnishment rights, allowing
it to seize the funds of an obligor held by a financial institution and to apply them to child7
support arrears. See FL §10-108.3. The obligor, however, “may challenge the actions of8
the Administration based on an exemption in §11-504 or §11-603 of the Courts Article.” See
FL §10-108.3(h)(4). Funds that are exempt under CJ §11-504, therefore, are not subject to
garnishment by the Administration. See FL §§10-108.3(i)(3)-(5). The General Assembly’s9
express recognition, therefore, that the CJ §11-504 exemptions apply to garnishments by the
Although this case only involves the personal injury exemption, Appellant’s argument is that10
NONE of the CJ §11-504 exemptions apply to his judgments. Thus, he contends that he is free, withoutlimitation, to satisfy his judgments from any and all of Mrs. Rosemann’s property.
Cf. MPJI 10:11 (compensatory damages awarded are not income within the meaning of Federal11
and Maryland income tax laws)
10
Administration to collect child support arrears, only reaffirms that the exemptions apply to
garnishments by a custodial parent such as Appellant when executing on a judgment for child
support arrearages.
B. The Caselaw and Policy Upon Which the Appellant Relies Involve Exceptions
to Earnings Attachments, Not the CJ § 11-504 Exemptions.
Because he lacks statutory support for his argument, Appellant relies on the policy
considerations underlying a few cases dealing with earnings attachments and the collection
of past due alimony. None of those cases involve any CJ §11-504 exemption. Nor do they
empower this Court to use policy considerations to judicially create a “child support”
exception to the §11-504 exemptions. 10
Prior to examining Appellant’s cases, the Court should bear in mind that the primary
source of familial, alimony and child support is an individual’s wages or earnings, which are
periodic and continuing. The definition of “actual income” found in the Child Support
Guidelines of the Family Law Article does not include moneys payable from a personal
injury lawsuit or settlement. See FL §12-201(b). The definition of “Earnings” in the Title
10 (Support in General) of the Family Law Article likewise does not include moneys payable
from a personal injury lawsuit or settlement. See FL §10-101(c).11
But see Article III, §38 of the Maryland Constitution which states:12
“No person shall be imprisoned for debt, but a valid decree of a court of competent jurisdictionor agreement approved by decree of said court for the support of a spouse or dependent children,or for the support of an illegitimate child or children, or for alimony (either common law or asdefined by statute), shall not constitute a debt within the meaning of this section.”
11
A personal injury recovery, on the other hand, is designed to compensate the injured
individual and to pay his or her past and future medical expenses. The purpose of the
exemption in CJ §11-504(b)(2) is to make the injured person whole. See Governor Plaza
Assoc., 125 F.3d at 241. As aptly observed in Niedermayer v. Adelman, 90 B.R. 146 (D.
Md. 1988):
A fundamental civility to our jurisprudence subordinates financial
obligations to claims of life and liberty. Thus, without the citation of authority,
our system does not permit incarceration to satisfy a debt. Nor does it permit
the sale of human beings as chattels. We would never require, for example,
the extraction of a pint of blood from a person for sale in satisfaction of a
money judgment.
Likewise an exemption law that permits a debtor to retain his claim to
recompense himself for personal injury avoids a creditor’s stripping him of his
means of possibly becoming whole when injured in tort. The law will, within
limits, allow for attachment of his property for the satisfaction of debts, . . . but
it will not allow for attachment of his person for such purpose. . . . [A] person
is not a chattel subject to attachment in satisfaction of a debt, and so, too, a
lawsuit seeking to recompense him for damage to his person is likewise
protected from attachment.
90 B.R. at 148.12
The primary case relied upon by Appellant is United States v. Williams, 279 Md. 673,
370 A.2d 1134 (1977). Williams does not involve a recovery of damages for personal
injuries; nor does it involve a judgment based on child support. Williams is a case regarding
As noted previously at page 8, CJ §11-504 exemptions do not apply to wage attachments. See13
CJ §11-504(e).
12
the extent to which a person’s wages are subject to attachment under Section 15-601, et seq.
of the Commercial Law Article (“CL”). 13
Wages, unlike damages recovered for personal injury, are subject to attachment. In
Williams, the former wife filed a writ of attachment under 42 U.S.C. §659 to collect on a
monetary judgment she obtained for arrearages in alimony. The Court of Appeals, after
holding that federal military pay constitutes “wages” to which a wage attachment can be
made, considered to what extent the limits on wage attachments apply to alimony. The focus
of the Court was on what is now CL §15-601.1(b), which exempts a portion of wages from
attachment. Williams held that this exemption does not apply to cases involving arrearages
of alimony. The “very purpose” of the limits on wage attachments is “to protect a family
from being deprived of all support by attachment proceedings brought by an outsider.”
Williams, 279 Md. at 678, 370 A.2d at 1137. The Court refused to allow the former husband
to use exemptions to wage attachments to harm the family (i.e., former wife) by limiting
intra-family support. Id. Such a result is not surprising since a spouse’s primary sources of
familial support are the periodic wages and payments received from employment, retirement
or unemployment benefits. In divorce, continued familial support is accomplished in part by
way of alimony, which is funded from the paying spouse’s wages or earnings.
The other cases relied upon by Appellant apply the same reasoning and policy considerations as14
Williams. See Pope v. Pope, 283 Md. 531, 390 A.2d 1128 (1978) (following Williams and holding thatunemployment benefits are earnings subject to a lien on earnings); Blum v. Blum, 295 Md. 135, 453 A.2d824 (1983) (holding that CL §15-601.1 does “not apply to a wage lien for contractual spousal support”).
The Court of Special Appeals stated that the exemptions set out in CJ §11-504(b) “can be15
divided into two categories: protection of family support and protection of personal dignity.” See SlipOp., at 9 (E. 109). In refusing to judicially create a child support exception to §11-504(b)(2), the Courtplaced “[t]he exemption encompassing personal injury awards . . . into the second category.” Id. Leftunstated is whether a child support exception may exist under the reasoning of Williams to those §11-504(b) exemptions that fall in the first category. As shown above, all of the monies or assets protectedunder §11-504(b) are exempt from execution on a judgment for child support arrearages.
13
The reasoning and policy considerations of Williams find no place in this case. The14
funds held by Salsbury are not wages, retirement benefits, unemployment benefits or any type
of earnings. They represent moneys paid on a single occasion to compensate Mrs. Rosemann
for her personal injuries. The purpose of the exemption in CJ §11-504(b)(2) is to make Mrs.
Rosemann whole. See Governor Plaza Assoc., 125 F.3d at 241. Moreover, unlike the
exemptions under consideration in the Williams line of cases where the General Assembly
was silent as to their application to the collection of past due alimony, the General Assembly
has already decided in FL §10-108.3(h)(4) that the CJ §11-504 exemptions apply to the
collection of child support arrears. This Court, therefore, should not legislate by creating a
child support exception to the CJ § 11-504 exemptions. The judgment below should be
affirmed.15
C. The General Public Policy Argument Made By Appellant Does Not Permit
This Court To Judicially Amend CJ §11-504.
Appellant expands his public policy argument before this Court, arguing for the first
time that a judicially created child support exception to the §11-504 exemptions is
Appellant also cites cases and law demonstrating that one’s obligation to pay child support16
cannot be bargained away nor discharged in bankruptcy. Mrs. Rosemann’s obligation to pay, and theRosemann children’s right to receive, child support is not at issue in this case.
14
appropriate because miscellaneous other statutes and court rules demonstrate that the right
to receive, and the obligation to pay, child support is of the highest order. Those rules and
statutes, however, while designed to better enforce a child support award, are also packed
with due process protections that Appellant never discusses. Furthermore, none empower
a court or agency to confiscate or seize any particular assets of the non-paying parent.
A non-paying parent may be imprisoned pursuant to Md. Rule 15-207(e), but only
after a hearing and a finding of a present ability to pay the purge amount. See Rawlings v.
Rawlings, 362 Md. 535, 766 A.2d 98 (2001). The Rule does not permit the Court itself to
order that any particular fund or asset be used to pay the purge amount or any portion of the
outstanding arrears.
The non-paying parent may lose his or her professional licenses pursuant to FL §10-
119.3, but such can occur only after proper notification, an investigation and an exhaustion
of appeal rights. Similarly the suspension of a non-paying parent’s driver’s license under
§16-203 of the Transportation Article can occur only after notice and an opportunity to be
heard; and can be ameliorated through the issuance of a work-restricted license pursuant to
§16-203(b)(2). Neither statute, however, grants either the Child Support Enforcement
Administration or any licensing authority the power to garnish, attach or seize any assets or
funds to reduce the child support arrears.16
15
Regardless of the laws that the General Assembly may have passed and placed
elsewhere in the Code which demonstrate a public policy favoring the enforcement of child
support, this Court has no power to judicially amend §11-504 to create a child support
exemption where no such exemption presently exists. If the Appellant has shown anything
in his brief, he has shown that when the General Assembly wants to pass laws to assist in the
enforcement of child support, it has done so. Accordingly, this Court should not legislate in
an area that is heavily statutory. Nor should it use public policy underlying other child
support laws as “a springboard for judicial legislation.” See Simpson v. Moore, 323 Md. 215,
227, 592 A.2d 1090, 1095 (1991). As the Court of Special Appeals stated at the end of its
opinion, “[a] change in the law [will] have to be made by the General Assembly.” (E. 109)
CONCLUSION
This case presents two strong state interests, neither of which this Court can elevate
above the other. Maryland has a strong interest in preserving personal injury awards and
settlements to permit the injured person to become whole, and it has a strong interest in
insuring that a parent will provide for his or her children. If the General Assembly had
intended for child support judgments to take precedence over personal injury recoveries, it
could have done so by expressly stating that the personal injury exemption does not apply to
child support judgments or liens. It did not.
Instead, the General Assembly has crafted the law to advance both state interests. As
can be seen in CJ §11-504 and FL §10-108.3, the General Assembly is well versed in the
16
interplay between the exemptions to execution on judgment and the collection of child
support. It has decided to uphold the CJ §11-504 exemptions against judgments for child
support arrearages.
For all of the foregoing reasons, the judgment of the circuit court should be affirmed.
________________________________
Michael P. Smith
SALSBURY CLEMENTS BEKMAN
MARDER & ADKINS, LLC
300 W. Pratt Street, Suite 450
Baltimore, Maryland 21201
410-539-6633
Attorneys for the Appellee, Salsbury Clements
Bekman Marder & Adkins, LLC
CERTIFICATE OF SERVICE
THIS IS TO CERTIFY that two copies of the foregoing Brief of Appellee were
mailed, via first-class mail, this ____ day of September, 2009, to:
Harry B. Siegel, Esquire
Kristine J. Rea, Esquire
10211 Wincopin Circle
Suite 110
Columbia, Maryland 21044
Attorneys for Appellant
Michael P. Smith
17
Constitutional Provisions, Statutes and Court Rules
Article III, § 44 of the Maryland Constitution
Laws shall be passed by the General Assembly, to protect from execution a reasonableamount of the property of the debtor.
§ 11-603 of the Court and Judicial Proceedings Article
(a) (1) Except as provided in paragraph (2) of this subsection, a garnishment against propertyheld jointly by husband and wife, in a bank, trust company, credit union, savings bank, or savingsand loan association or any of their affiliates or subsidiaries is not valid unless both owners of theproperty are judgment debtors.
(2) Paragraph (1) of this subsection does not apply unless the property is held in an accountthat was established as a joint account prior to the date of entry of judgment giving rise to thegarnishment.
(b)(1) A garnishment against property held in a bank, trust company, credit union, savingsbank, or savings and loan association, or any of their affiliates or subsidiaries, by one person in trustfor that person and another person or persons, is not valid unless all of the persons are judgment debtors.
(2) A garnishment against property held in a bank, trust company, credit union, savings bank,or savings and loan association, or any of their affiliates or subsidiaries, by one or more persons intrust for another person or persons, is not valid unless all of the persons are judgment debtors.
(3) A garnishment against property held in a bank, trust company, credit union, savings bank,or savings and loan association, or any of their affiliates or subsidiaries, to be payable on the deathof one or more persons to another person or persons, is not valid unless all of the persons arejudgment debtors.
(c)(1) Notwithstanding subsections (a) and (b) of this section and regardless of therelationship between or among the persons, if property held in an account in the name of 2 or morepersons at a bank, trust company, credit union, savings bank, or savings and loan association or anyof their affiliates or subsidiaries is garnished, and fewer than all of the persons named on the accountare the judgment debtors, the garnishee may answer the writ of garnishment by stating:
(i) That the property is held in an account at the garnishee in the name of 2 or more persons,1 or more of whom but fewer than all of whom, are judgment debtors; and
(ii) The amount held in the account at the time the writ of garnishment was served on thegarnishee.
18
(2) If the garnishee answers as described in paragraph (1) of this subsection, the garnisheeshall hold the lesser of the amount of the judgment or the amount in the account subject to an entryof a court order releasing the property held by the garnishee or a final judgment in the garnishmentproceeding.
(3) If the garnishee answers and holds property as provided under paragraphs (1) and (2) ofthis subsection, the garnishee may not be held liable to the judgment creditor or to any person namedon the account for wrongful dishonor or for any other claim relating to the garnishment.
§ 10-101 of the Family Law Article
(a) In this title the following words have the meanings indicated.
(b) "Administration" means the Child Support Enforcement Administration of theDepartment of Human Resources.
(c) "Earnings" includes:
(1) any form of periodic payment to an individual, including:
(i) an annuity;(ii) a pension;(iii) Social Security payments;(iv) workers' compensation payments; and(v) unemployment insurance benefits; and
(2) any commissions or fees paid in connection with the obligor's employment.
(d)(1) "Employer" means any person who is paying earnings to an obligor.
(2) "Employer" includes a governmental entity.
(e) "Local support enforcement office" means 1 of the following that is responsible forsupport enforcement:
(1) a county agency; or
(2) a component of the circuit court for a county.
(f)(1) "Obligee" means any person who is entitled to receive support.
(2) "Obligee" includes a state.
19
(g) "Obligor" means an individual who is required to pay support under a court order.
(h) "Support" includes:
(1) child support;(2) spousal support;(3) support of destitute adult children; and(4) support of destitute parents.
(i) "Support enforcement agency" means 1 of the following that receives support paymentsunder a court order:
(1) the Administration; or(2) a local support enforcement office.
§ 10-108.3 of the Family Law Article
(a)(1) In this section and in § 10-108.4 of this subtitle, "financial institution" means:
(i) a depository institution, as defined in the Federal Deposit Insurance Act at 12 U.S.C. §1813(c);(ii) a federal or state credit union, as defined in the Federal Credit Union Act at 12 U.S.C.§ 1752;(iii) a State credit union regulated under Title 6 of the Financial Institutions Article; or(iv) a benefit association, insurance company, safe deposit company, money market mutualfund, or similar entity doing business in the State that holds property or maintains accountsreflecting property belonging to others.
(2) In this section and in § 10-108.4 of this subtitle, "financial institution" does not includean institution-affiliated party, as defined in § 10-108.2(a)(4)(ii) and (v) of this subtitle.
(b)(1) If an obligor identified in a report submitted under § 10-108.2 of this subtitle or in areport made to the Federal Parent Locator Service under 42 U.S.C. § 666(a)(17) is $500 or more inarrears of a child support obligation and has not paid child support for more than 60 days, theAdministration may institute an action to attach and seize the amount of the arrearage in one or moreof the accounts of the obligor with a financial institution to satisfy the amount of arrearage owed bythe obligor.
(2) Before attaching and seizing the obligor's accounts, the Administration shall send a noticeto the obligor at the obligor's last known address advising the obligor of the enforcement actions thatmay be taken, including that the obligor's accounts may be subject to garnishment for payment ofa child support arrearage.
(c)(1) If the Administration institutes an action against an obligor under subsection (b) of this
20
section, the Administration shall send a notice to the financial institution in which one or more ofthe obligor's accounts are located, by certified mail, return receipt requested, or by other methodacceptable to the financial institution, at the address designated for this purpose by the financialinstitution or, if no address has been designated, to the principal office of the financial institution.
(2) The notice shall contain the following information, to the extent knownby theAdministration:
(i) the address of the Administration;(ii) the telephone number, address, and name of a contact person at the Administration;(iii) the name and Social Security number or other taxpayer identification number of theobligor;(iv) the address of the obligor;(v) for each account of the obligor, the obligor's account number and known balance with thefinancial institution;(vi) the amount of arrearage that the financial institution shall seize and attach from one ormore of the accounts of the obligor; and(vii) a statement instructing the financial institution to immediately attach and seize theamount of arrearage stated in item (vi) of this paragraph from one or more of the accountsof the obligor and, upon subsequent notice by the Administration, to forward the amount tothe Administration.
(d)(1) On receipt of the notice under subsection (c) of this section, the financial institutionshall promptly seize and attach from one or more of the accounts identified in the Administration'snotice to the financial institution an aggregate amount equal to the lesser of the amounts in allaccounts or the amount stated in the notice.
(2) Not later than 30 days after the financial institution receives the notice directing it to seizeand attach accounts of the obligor, the financial institution shall send notice to the Administrationby regular mail specifying the aggregate amount held under this subsection.
(3) If an account that has been seized and attached is maintained by the obligor with one ormore account holders of interest as reflected on the records of the financial institution, the financialinstitution's notice to the Administration shall state that fact and shall provide, to the extent reflectedin the financial institution's records, the name and address of the other person or persons.
(4)(i) The financial institution may assess a fee against the accounts or the obligor, inaddition to the amount identified in the notice under subsection (c) of this section.(ii) In the case of insufficient funds to cover both the fee and the amount identified in thenotice under subsection (c) of this section, the financial institution may first deduct and retainthe fee from the amount seized and attached as provided in this section.
(5) The financial institution may not be held liable to any person, including the
21
Administration, the obligor, or any person named on the account, for wrongful dishonor or for anyother claim relating to the seizure and attachment of the account or other actions taken in compliancewith this section.
(e)(1) Within 2 days after the Administration has received the return receipt from the noticesent to the financial institution under subsection (c) of this section, the Administration shall promptlysend a notice to the obligor, by regular mail, to the obligor's last known address, or if the homeaddress is not known, to the place of last known employment.
(2) The notice shall contain the following information, to the extent known by theAdministration:
(i) the address of the Administration;(ii) the telephone number, address, and name of a contact person at the Administration;(iii) the name and Social Security number or other taxpayer identification number of theobligor;(iv) the address of the obligor;(v) for each account of the obligor, the obligor's account number and known balances withthe financial institution;(vi) the total amount of the arrearage owed by the obligor;(vii) the date the notice is being sent;(viii) a statement informing the obligor that the Administration has directed the financialinstitution to seize and attach the amount of the arrearage owed by the obligor from one ormore of the accounts of the obligor and, upon subsequent notice by the Administration, toforward the amount to the Administration; and(ix) a statement informing the obligor that, unless a timely challenge is made to theAdministration by the obligor or an account holder of interest under subsection (h) of thissection, the Administration shall notify the financial institution to forward the amount seizedand attached by the financial institution to the Administration.
(f) If a timely challenge is not made by the obligor or an account holder of interest undersubsection (h) of this section, the Administration shall send a notice to the financial institution, inthe manner specified in subsection (c) of this section, directing the institution to forward the amountseized and attached by the financial institution to the Administration.
(g) The Administration shall apply the amount seized and forwarded by the financialinstitution to the obligor's child support arrears. If the obligor has more than one child support casewith arrears, the Administration shall allocate the amount received among one or more of theobligor's cases, as determined appropriate by the Administration.
(h)(1) An obligor or an account holder of interest may challenge the actions of theAdministration under this section by:
22
(i) filing a request for an investigation with the Administration; or(ii) filing a motion with the circuit court.
(2) A challenge under paragraph (1)(i) of this subsection shall:
(i) be in writing;(ii) be received by the Administration within 30 days from the date of the notice undersubsection (e) of this section;(iii) be sent to the contact person identified in the notice sent to the obligor under subsection(e) of this section; and(iv) specify, in detail, the reasons for the challenge.
(3) An obligor or account holder of interest may not challenge the actions of theAdministration on issues related to visitation, custody, or other matters not related to an account.
(4) An obligor or an account holder of interest may challenge the actions of theAdministration based on an exemption in § 11-504 or § 11-603 of the Courts Article or for any othergood cause.
(i)(1) Upon receipt of a challenge under subsection (h) of this section, the Administrationshall review the challenge in accordance with this subsection.
(2) The Administration shall release or reduce the amount seized and attached by thefinancial institution for a mistake of fact, including:
(i) a mistake in the identity of the obligor;(ii) a mistake in the ownership of an account;(iii) a mistake in the contents of an account;(iv) a mistake in the amount of arrearage due; or(v) any other good cause.
(3) The Administration shall release or reduce the amount seized and attached by thefinancial institution if the account is exempt under § 11-504 or § 11-603 of the Courts Article or forany other good cause.
(4) The Administration shall send a notice to the financial institution, in the manner specifiedin subsection (c) of this section, directing the financial institution to release the amount seized andattached by the financial institution if the Administration determines that a mistake of fact hasoccurred, the account is exempt under § 11-504 or § 11-603 of the Courts Article, or other goodcause exists.
(5) The Administration shall send a notice to the financial institution, in the manner specifiedin subsection (c) of this section, directing the financial institution to reduce the amount seized and
23
attached to the revised amount stated and to release the excess amount if the Administrationdetermines that:
(i) the amount owed by the obligor is less than the amount originally indicated on the noticeunder subsection (b) of this section;(ii) the obligor does not have an ownership interest in one or more of the accounts seized andattached or a portion thereof; or(iii) the account or a portion of the account is exempt under § 11-504 or § 11-603 of theCourts Article or other good cause exists.
(j)(1) The Administration shall send by regular mail a notice of its findings, including afinding of no mistake of fact, to the obligor and any other challenging party.
(2) The notice shall inform the obligor or the challenging party of the right to appeal thedecision of the Administration to the Office of Administrative Hearings or to the circuit court.
(k) If no timely appeal is filed, the Administration shall send a notice to the financialinstitution, in the manner specified in subsection (c) of this section, directing the financial institutionto forward the amount specified in the notice, including any revised amount under subsection (i)(5)of this section, to the Administration.
(l)(1) An appeal to the Office of Administrative Hearings authorized under subsection (j) ofthis section shall be conducted in accordance with Title 10, Subtitle 2 of the State Government Article.
(2) An appeal to the Office of Administrative Hearings shall be:
(i) in writing; and(ii) received by the Office of Administrative Hearings within 30 days after the notice is sentto the obligor or other challenging party under subsection (j) of this section.
(m) After the completion of an appeal to the Office of Administrative Hearings authorizedunder subsection (j) of this section, the Administration shall:
(1) send a notice to the financial institution, in the manner specified in subsection (c) of thissection, directing the financial institution to release the amount seized and attached by the financialinstitution if the Office of Administrative Hearings finds that:
(i) there is a mistake of identity;(ii) the obligor does not have an ownership interest in the contents of any account held; or(iii) there is no arrearage;
(2) send a notice to the financial institution, in the manner specified in subsection (c) of thissection, directing the financial institution to release the attachment on any amount in excess of the
24
revised amount stated and that the revised amount stated be forwarded to the Administration if theOffice of Administrative Hearings finds that:
(i) the obligor is delinquent, but the amount of the arrearage is less than the amount indicatedin the notice under subsection (c) of this section or in a subsequent notice under subsection(i)(5) of this section; or(ii) the obligor does not have ownership interest in one or more of the accounts seized andattached or a portion of the accounts; or
(3) send a notice to the financial institution, in the manner specified in subsection (c) of thissection, directing the financial institution to transfer the amounts seized and attached to theAdministration if the Office of Administrative Hearings upholds the determination of theAdministration.
(n)(1) A challenging party may withdraw an administrative challenge or appeal by submittinga notice of the withdrawal to the person identified as the contact person for the Administration in thenotice under subsection (e) of this section, or to the Office of Administrative Hearings.
(2) The Administration may withdraw the notice to attach accounts by sending notice to thefinancial institution, in the manner specified in subsection (c) of this section, directing the financialinstitution to release the attachment on the account.
(o) If a determination is made by the Administration or by the Office of AdministrativeHearings that the account or accounts of the obligor should not have been held, the Administrationshall notify the financial institution, in the manner specified in subsection (c) of this section, torelease the amount seized and attached by the financial institution.
(p)(1) A financial institution that complies with a request or notice from the Administrationmade under this section is not liable under State law to any person for:
(i) any disclosure of information to the Administration under this section;(ii) seizing and attaching any amounts from an account, sending any amount seized andattached by the financial institution to the Administration, or releasing all or a part of theamount seized and attached by the financial institution; or(iii) any other action taken in good faith to comply with the requirements of this section.
(2) An institution-affiliated party, as defined in § 10-108.2(a)(4)(ii) and (v) of this subtitle,is immune from any civil liability or criminal penalty for any action taken under this section.
(q)(1) Notwithstanding any other statutory provisions or rules of court that provide for theexecution, attachment, garnishment, or levy against an account, and subject to paragraph (2) of thissubsection, the Administration may utilize the procedures established in this section exclusively tocollect delinquent child support.
25
(2) This section may not be construed to prohibit the Administration from collectingdelinquent child support in any other manner authorized by law.
§ 12-201 of the Family Law Article
(a) In this subtitle the following words have the meanings indicated.
(b)(1) "Actual income" means income from any source.
(2) For income from self-employment, rent, royalties, proprietorship of a business, or jointownership of a partnership or closely held corporation, "actual income" means gross receipts minusordinary and necessary expenses required to produce income.
(3) "Actual income" includes:
(i) salaries;(ii) wages;(iii) commissions;(iv) bonuses;(v) dividend income;(vi) pension income;(vii) interest income;(viii) trust income;(ix) annuity income;(x) Social Security benefits;(xi) workers' compensation benefits;(xii) unemployment insurance benefits;(xiii) disability insurance benefits;(xiv) for the obligor, any third party payment paid to or for a minor child as a result of theobligor's disability, retirement, or other compensable claim;(xv) alimony or maintenance received; and(xvi) expense reimbursements or in-kind payments received by a parent in the course ofemployment, self-employment, or operation of a business to the extent the reimbursementsor payments reduce the parent's personal living expenses.
(4) Based on the circumstances of the case, the court may consider the following items asactual income:
(i) severance pay;(ii) capital gains;(iii) gifts; or(iv) prizes.
26
(5) "Actual income" does not include benefits received from means-tested public assistanceprograms, including temporary cash assistance, Supplemental Security Income, food stamps, andtransitional emergency, medical, and housing assistance.
(c) "Adjusted actual income" means actual income minus:
(1) preexisting reasonable child support obligations actually paid; and
(2) except as provided in § 12-204(a)(2) of this subtitle, alimony or maintenance obligationsactually paid.
(d) "Adjusted basic child support obligation" means an adjustment of the basic child supportobligation for shared physical custody.
(e) "Basic child support obligation" means the base amount due for child support based onthe combined adjusted actual incomes of both parents.
(f) "Combined adjusted actual income" means the combined monthly adjusted actual incomesof both parents.
(g)(1) "Extraordinary medical expenses" means uninsured expenses over $100 for a singleillness or condition.
(2) "Extraordinary medical expenses" includes uninsured, reasonable, and necessary costsfor orthodontia, dental treatment, asthma treatment, physical therapy, treatment for any chronichealth problem, and professional counseling or psychiatric therapy for diagnosed mental disorders.
(h) "Income" means:
(1) actual income of a parent, if the parent is employed to full capacity; or
(2) potential income of a parent, if the parent is voluntarily impoverished.
(i) "Ordinary and necessary expenses" does not include amounts allowable by the InternalRevenue Service for the accelerated component of depreciation expenses or investment tax creditsor any other business expenses determined by the court to be inappropriate for determining actualincome for purposes of calculating child support.
(j) "Potential income" means income attributed to a parent determined by the parent'semployment potential and probable earnings level based on, but not limited to, recent work history,occupational qualifications, prevailing job opportunities, and earnings levels in the community.
(k)(1) "Shared physical custody" means that each parent keeps the child or children overnight
27
for more than 35% of the year and that both parents contribute to the expenses of the child orchildren in addition to the payment of child support.
(2) Subject to paragraph (1) of this subsection, the court may base a child support award onshared physical custody:
(i) solely on the amount of visitation awarded; and(ii) regardless of whether joint custody has been granted.