HF 569 (LSB 1527HV (3) 86)

HOUSE FILE 569

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO HSB 168)

A BILL FOR

An Act relating to notice of garnishment and levy to a judgment debtor.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 626.50, Code 2015, is amended to read as follows:
   626.50  Duty to levy —— notice of ownership or exemption —— notice to defendant.
   1.  An officer is bound to levy an execution on any personal property in the possession of, or that the officer has reason to believe belongs to, the defendant, or on which the plaintiff directs the officer to levy, after having received written instructions for the levy from the plaintiff or the attorney who had the execution issued to the sheriff, unless the officer has received notice in writing under oath from some other person, or that person’s agent or attorney, that the property belongs to the person, stating the nature of the person’s interests in the property, how and from whom the person acquired the property, and the consideration paid for the property; or from the defendant, that the property is exempt from execution.
   2.  a.  The officer making the levy in subsection 1 shall promptly serve written notice of the levy on the defendant. The notice shall be served in the same manner as provided for original notice.
   b.  This section subsection is not applicable to garnishment proceedings.
    Sec. 2.  Section 642.5, subsection 2, Code 2015, is amended to read as follows:
   2.  The sheriff shall append file the answers to the examination to the sheriff’s return within seven business days of receiving the answers.
    Sec. 3.  Section 642.14, Code 2015, is amended to read as follows:
   642.14  Notice of garnishment proceedings.

   Judgment against the garnishee shall not be entered until notice as required by section 642.14A or 642.14B has been served upon the defendant in the main action has had ten days’ notice of the garnishment proceedings, to be served in the same manner as original notices. However, if the garnishment is to earnings owed such defendant by the garnishee, judgment may be entered if notice to the defendant is served with the notice of garnishment to the garnishee who shall deliver the notice to the defendant with the remainder of or in lieu of the defendant’s earnings. The garnishee shall state in answer to the service of notice of garnishment whether or not service of notice was delivered to the defendant.

   The notice required by this section shall contain the full text of section 630.3A.
    Sec. 4.  Section 642.14A, Code 2015, is amended to read as follows:
   642.14A  Notice of garnishment and levy to defendant —— non-employer garnishees.
   1.  Within seven If the garnishment is to property other than earnings an employer owes a defendant, the judgment creditor shall serve upon a debtor who is a natural person not later than seven business days after execution is served upon a garnishee, the sheriff shall send the sheriff’s filing of a garnishee’s answers pursuant to section 642.5, subsection 2, which show that the garnishee is indebted to the defendant, a notice of garnishment and levy to the defendant in the main action informing notifying the defendant that certain real and personal property of the defendant may be exempt from execution or garnishment and that a hearing process is available for the defendant to claim such exemptions of the information required in subsection 3.
   2.  The notice required by this section shall be served by personal service or restricted certified mail and first class mail to the last known address of the defendant and to the defendant’s attorney. The judgment creditor shall provide the sheriff with the last known address of the defendant and the defendant’s attorney if there is an attorney of record. Proof of mailing or personal such service by the sheriff shall be by affidavit filed with the court.
   3.  The notice required by this section shall:
   a.  Inform the defendant that judgment has been entered in the main action and the defendant’s funds or other property is subject to execution under the judgment.
   b.  Inform the defendant that the defendant has the right to claim funds or other property exempt from execution or garnishment and a right to be timely heard on those claims request and have a timely hearing before a judge to claim such exemptions.
   c.  Inform the defendant that if the defendant does not file a motion or other appropriate pleading to claim funds or other property exempt from execution or garnishment under state or federal law, the defendant may lose any such rights and the funds or other property may be applied to the judgment against the defendant.
   d.  Inform the defendant that state and federal laws may place limits on the amount of earnings that may be garnished annually and per pay period and limits on other funds and property that may be garnished or levied against.
   e.  Contain the full text of section 630.3A.
   f.  State that the defendant may wish to consult a lawyer for advice as to the meaning of the notice.
   g.  Inform the defendant that any garnishment for fines imposed on a defendant in a criminal case is subject to section 909.6, including the provision that any law which exempts a person’s personal property from any lien or legal process is not applicable for such garnishment.
   4.  An additional court filing fee shall not be assessed for proceedings under this section.
    Sec. 5.  NEW SECTION.  642.14B  Notice to defendant —— employer garnishees.

   If the garnishment is to earnings an employer owes a defendant, the employer shall deliver the notice of garnishment to the defendant with the remainder of or in lieu of the defendant’s earnings. The garnishee shall state in answer to the sheriff’s examination whether or not service of the notice of garnishment was delivered to the defendant. The notice required by this section shall contain the information required by section 642.14A, subsection 3, and shall be delivered by personal service, mail, or electronic means.
    Sec. 6.  NEW SECTION.  642.25  Sheriff not an agent.

   The sheriff’s actions under this chapter, including service of notice, shall not be construed to be that of an agent of any person or party in the proceedings.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to notice of garnishment and levy to a judgment debtor.
   The bill amends Code section 626.50 to provide that in garnishment proceedings, an officer who has received written instructions for the levy from a plaintiff who had an execution issued to a sheriff is bound to levy an execution on any personal property in the possession of, or that belongs to, the defendant, unless either another person provides the officer notice in writing that the property belongs to such person or the defendant provides the officer notice in writing that the personal property is exempt from execution.
   Under current law when a sheriff, at the direction of a plaintiff, submits interrogatories to a garnishee, the sheriff appends the examination to the sheriff’s return. The bill requires the sheriff, within seven business days after receiving the answers, to file the garnishee’s answers in the case.
   Under current law, judgment against a garnishee who is not the judgment debtor’s employer cannot be entered until the defendant in the main action (i.e., the judgment debtor) has had 10 days’ notice of the garnishment proceedings. Current Code section 642.14A requires that within seven days after execution is served upon a garnishee, a sheriff is required to send a notice of garnishment and levy to the judgment debtor and the judgment debtor’s attorney which contains information about exemption from garnishment for certain types of property.
   The bill provides that judgment against a garnishee who is not the judgment debtor’s employer cannot be entered until notice required by Code section 642.14A is served on the judgment debtor. The bill provides that, under Code section 642.14A, instead of the sheriff sending notice of garnishment and levy within seven days after execution, the judgment creditor shall serve a natural person debtor with notice of garnishment and levy not later than seven business days after the sheriff’s filing of the garnishee’s answers. In addition to the existing notice items Code section 642.14A requires, the bill provides that the notice inform the judgment debtor that if the garnishment is for fines imposed in a criminal case, laws that otherwise exempt the judgment debtor’s personal property from garnishment are not applicable pursuant to Code section 909.6. The bill eliminates the requirement that the judgment debtor’s attorney receive a copy of the notice.
   Under current Code section 642.14, judgment against an employer garnishee may be entered if the employer delivers the notice of garnishment to the judgment debtor with the remainder of or in lieu of the judgment debtor’s earnings. The bill moves this requirement to new Code section 642.14B to more clearly distinguish the requirements of employer and non-employer garnishees. The bill requires an employer garnishee to provide the information currently required by Code section 642.14A(3) to the judgment debtor.
   The bill provides that a sheriff’s actions under Code chapter 642, including service of notice, shall not be construed to be that of an agent of any person or party in the garnishment proceedings.