Bill Text: MI HB5390 | 2013-2014 | 97th Legislature | Engrossed

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Bill Title: Civil procedure; garnishment; writ of garnishment regarding periodic payments; modify liability of garnishee. Amends sec. 4012 of 1961 PA 236 (MCL 600.4012). TIE BAR WITH: HB 5391'14

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2014-12-11 - Referred To Committee Of The Whole With Substitute S-1 [HB5390 Detail]

Download: Michigan-2013-HB5390-Engrossed.html

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HB-5390, As Passed House, September 18, 2014

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 5390

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending section 4012 (MCL 600.4012), as amended by 2012 PA 304.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 4012. (1) Except for garnishment of a tax refund under

 

section 4061a or garnishment of wages, salary, commissions, or

 

other earnings, and subject to subsection (2), a A writ of

 

garnishment of periodic payments remains in effect for the period

 

prescribed by the Michigan court rules. A writ of garnishment of

 

wages, salary, commissions, or other earnings remains in effect for

 

182 days.until the balance of the judgment is satisfied.

 

     (2) A garnishee is not liable for a writ of garnishment of

 

periodic payments under subsection (1) to the extent that the

 

garnishee is required to satisfy another writ of garnishment

 

against the same defendant having a higher priority or having the

 

same priority but received at an earlier date. For purposes of this

 

subsection, writs of garnishment have priority in the following

 

order:

 

     (a) A garnishment resulting from an obligation of court

 

ordered support as defined in section 2 of the support and

 

parenting time enforcement act, 1982 PA 295, MCL 552.602.

 

     (b) A levy of the state or a governmental unit of the state to

 

satisfy a tax liability.

 

     (c) Any other garnishments, in the order in which they are

 

served.

 

     (3) If a garnishment is suspended pursuant to an order under

 

section 6201 and the order is subsequently set aside, the

 

garnishment retains its priority.

 

     (4) A writ of garnishment of periodic payments is not valid or

 

enforceable unless the writ is served on the garnishee in

 

accordance with the Michigan court rules.

 

     (5) While a writ of garnishment for periodic payments is in

 

effect, the plaintiff shall do both of the following:

 

     (a) At least once every 6 months after the plaintiff receives

 

the first payment under the garnishment, provide to the garnishee

 

and defendant a statement setting forth the balance remaining on

 

the judgment, including interest and costs. A failure to send a

 

timely statement under this subdivision does not affect the

 

garnishment or any obligation of the garnishee under the

 

garnishment.

 

     (b) Within 14 days after the balance of the judgment has been

 

paid in full, including all interest and costs, provide to the

 

garnishee and defendant a release of garnishment.

 

     (6) A plaintiff shall not request that a default be entered

 

against a garnishee under a garnishment of periodic payments unless

 

both of the following apply:

 

     (a) If the garnishee fails to file a disclosure within 14 days

 

after service of a writ of garnishment or fails to perform any

 

other required act, the plaintiff has served on the garnishee a

 

notice of failure setting forth the required act or acts that the

 

garnishee has failed to perform.

 

     (b) The garnishee has failed, within 28 days after the date of

 

service of the notice of failure under subdivision (a), to cure the

 

identified failure by mailing to the plaintiff and defendant a

 

disclosure certifying that the garnishee has begun to withhold any

 

available money pursuant to the writ of garnishment as provided by

 

statute or court rule, or has commenced performing any other

 

required act.

 

     (7) The plaintiff shall attach to a request for entry of a

 

default under subsection (6) proof of serving the notice of

 

failure. The plaintiff shall send a copy of the request for entry

 

of a default by certified mail to the garnishee at the garnishee's

 

principal place of business or registered agent.

 

     (8) After entry of a default under subsection (6) and before

 

entry of a default judgment, the garnishee may cure the identified

 

failure by mailing to the court, plaintiff, and defendant a

 

disclosure certifying that the garnishee has begun to withhold any

 

available money pursuant to the writ of garnishment as provided by

 

statute or court rule or that it has commenced performing any other

 

required act.

 

     (9) After a default has been entered under subsection (6), the

 

plaintiff may file with the court a request for default judgment

 

for an amount that does not exceed the full amount of the unpaid

 

judgment, interest, and costs, as stated in the request and writ

 

for garnishment. The plaintiff shall send a copy of the request for

 

default judgment by certified mail to the garnishee at the

 

garnishee's principal place of business or resident agent.

 

     (10) On motion of the garnishee filed within 21 days after

 

entry of a default judgment under subsection (9), the court shall

 

do 1 or more of the following, as applicable:

 

     (a) If the garnishee certifies by affidavit that its failure

 

to comply with the writ of garnishment was inadvertent or caused by

 

an administrative error, mistake, or other oversight and it has

 

begun to withhold any available money pursuant to the writ of

 

garnishment as provided by statute or court rule, reduce the

 

default judgment to not more than the amount that would have been

 

withheld if the writ of garnishment had been in effect for 56 days.

 

     (b) If any of the following circumstances exist, set aside the

 

default judgment:

 

     (i) The garnishee was not liable to the defendant for any

 

periodic payments after service of the writ of garnishment.

 

     (ii) The writ of garnishment, notice of failure, request for

 

entry of a default, or request for default judgment was not

 

properly served or sent as required by this section.

 

     (iii) The notice of failure was materially inaccurate or

 

incomplete.

 

     (11) A garnishee may recover an amount for which the garnishee

 

is liable under this section from future periodic payments to the

 

defendant as provided in section 7 of 1978 PA 390, MCL 408.477.

 

     (12) (3) Except as otherwise provided by statute, a plaintiff

 

shall pay a fee of $6.00 $35.00 to the garnishee at the time a writ

 

to the garnishee of garnishment of periodic payments is served upon

 

on the garnishee.

 

     (13) As used in this section, "garnishment" means any court

 

order directed to a third party to withhold periodic payments.

 

     (14) (4) As used in this section and section 8410a, "periodic

 

payments" means wages, salary, commissions, and other earnings,

 

land contract payments, rent, and other periodic debt or contract

 

payments that are or become payable during the effective period of

 

the writ of garnishment. Periodic payments do not mean any of the

 

following:

 

     (a) Payments by a financial institution of interest on a

 

deposit account.

 

     (b) Charges made by a financial institution automatically

 

against an account which applies that are applied to a debt under

 

an automatic payment authorization executed by the account owner.

 

     (c) Payments made by a financial institution to honor a check

 

or draft or to comply with an account holder's order of withdrawal

 

of funds from an account.

 

     (d) Interest earned on a certificate of deposit that is paid

 

into a deposit account.

 

     Enacting section 1. This amendatory act applies to all writs

 

of garnishment of periodic payments issued after March 31, 2015.

 

     Enacting section 2. This amendatory act does not take effect

 

unless House Bill No. 5391 of the 97th Legislature is enacted into

 

law.