Is Georgia's Post-judgment Garnishment Statute Still Unconstitutional?
| Publication year | 2011 |
| Pages | 0012 |
A Look at the Law
by Timothy H. Lee.
The Supreme Court of Georgia once described the litigation challenging the constitutionality of Georgia's garnishment statutes as a seemingly continuous "legal saga."[1] In 1975, the U.S. Supreme Court ruled in North Georgia Finishing, Inc. v. Di-Chem, Inc. that Georgia's statutory scheme for pre-judgment garnishments was unconstitutional.[2] The next year, the Supreme Court of Georgia ruled that Georgia's statute governing post-judgment garnishments, too, violated the Constitution.[3]
Prompted by these findings, the Georgia General Assembly overhauled the garnishment statutes in 1976 but to no avail. Shortly after the 1976 amendments, the Supreme Court of Georgia held that "the post-judgment garnishment procedure as set forth in the 1976 Act . . . fails to meet the requirements of judicial supervision and notice, and is therefore constitutionally inadequate."[4] In 1977, the Georgia General Assembly responded by completely transforming the statutory scheme. This time, the Supreme Court of Georgia ruled that the statutes met constitutional muster.[5]
The garnishment procedures resulting from the 1977 amendments have remained largely undisturbed, and the legality of Georgia's garnishment statutes has generally been assumed in recent years. But, if federal case law is any indication, the Georgia post-judgment garnishment statute's constitutionality remains highly doubtful. In fact, as this article explains below, a lawsuit challenging the constitutionality of Georgia's postjudgment procedures could succeed in federal court.
Georgia's Post-Judgment Garnishment Procedures
Garnishment is a "judicial proceeding in which a creditor (or potential creditor) asks the court to order a third party [the garnishee] who is indebted to or is bailee for the debtor to turn over to the creditor any of the debtor's property."[6] There are two primary types of garnishments. A pre-judgment garnishment is essentially a seizure of a defendant's property that occurs while a lawsuit is pending in court in order to facilitate the collection of a judgment in the event that the court renders a judgment in favor of the plaintiff. A post-judgment garnishment, in contrast, facilitates the collection of a judgment that the judgment creditor has already obtained in court. This article primarily addresses Georgia's post-judgment garnishment procedures.
Under Georgia law, a prevailing plaintiff is entitled to the process of garnishment following any money judgment. To begin the process, the plaintiff (now a judgment creditor) must present an affidavit—made under judicial supervision—to a clerk of any court having jurisdiction over the garnishee (often a bank or an employer of the judgment debtor), indicating the amount due on the judgment and the name of the judgment-rendering court.[7] The clerk then must direct a summons of garnishment to the garnishee. Within three days of the service of the summons on the garnishee, the judgment creditor is required to send "written notice" of the garnishment to the judgment debtor. Under Georgia law, "written notice" consists of:
a copy of the summons of garnishment or of a document which includes the names of the plaintiff and the defendant, the amount claimed in the affidavit of garnishment, a statement that a garnishment against the property and credits of the defendant has been or will be served on the garnishee, and the name of the court issuing the summons of garnishment.[8]
A judgment debtor receiving notice of the garnishment then has the opportunity to challenge the garnishment by filing a traverse. If the judgment debtor chooses to file a traverse, a hearing must be held within 10 days of its filing, and until such a hearing is held, "no further summons of garnishment may issue nor may any money or other property delivered to the court as subject to garnishment be disbursed "[9] However, the garnishee must still deliver the debtor's garnished money or property to the court pending the hearing, unless the debtor files a bond in favor of the plaintiff.[10]
Due Process Challenges to Garnishment Statutes
Because garnishment proceedings usually involve state officers— such as judicial or law enforcement personnel—acting jointly with a creditor to reach a debtor's property, garnishments typically involve the 14th Amendment to the U.S. Constitution,[11] which prohibits states from depriving "any person of life, liberty, or property without due process of law." The question, then, for courts considering due process challenges to postjudgment garnishment statutes has been, what sort of legal procedures—or more specifically, what sort of notice and hearing—must be made available to a judgment debtor during a garnishment?
The U.S. Supreme Court has addressed this question in five seminal cases. In the 1924 decision of Endicott-Johnson Corp. v. Encyclopedia Press, Inc., the Court held that due process does not entitle a post-judgment debtor to notice or a hearing prior to the issuance of a writ of garnishment.[12] The Court reasoned that in a post-judgment garnishment setting, the underlying case on the merits provides sufficient notice and opportunity for a hearing, such that no additional notice or hearing is necessary during the garnishment. In four subsequent decisions—Sniadach v. Family Finance Corp., Mitchell v. W.T. Grant Co., Fuentes v. Shevin, and North Georgia Finishing, Inc. v. Di-Chem, Inc.[13]—the Supreme Court considered four separate pre-judgment garnishment statutes and reached a substantially different conclusion, albeit without explicitly overruling Endicott-Johnson. Collectively, the four cases indicate that garnishment statutes must make available some sort of notice and hearing to judgment debtors.[14] The Court further explained that the precise type of notice and hearing required by due process must be determined on a case-by-case basis through a balancing of the parties' respective interests.[15] Although the Supreme Court stopped short of announcing a uniform test, as one federal appellate court has noted, the Supreme Court's decisions suggest that the constitutionality of a garnishment statute depends on whether the statute in question "represents a fair accommodation" of "the creditor's interest in enforcement" of a judgment debt and the debtor's competing "interest in the continued use and possession of her property."[16]
Although Sniadach, Fuentes, Mitchell and Di-Chem each involved pre-judgment garnishment statutes, lower courts addressing the constitutionality of post-judgment garnishment statutes have generally applied the balancing test articulated in those cases, rather than simply following Endicott-Johnson.[17] Indeed, many federal courts considering the issue have expressed serious doubt that Endicott-Johnson remains valid in light of the legal reasoning underlying Sniadach, Fuentes, Mitchell and Di-Chem.[18]
Binding Precedent?
Neither the U.S. Court of Appeals for the 11th Circuit nor the former 5th Circuit has addressed the constitutionality of the current version of the Georgia post-judgment garnishment procedures. In Brown v. Liberty Loan Corp. of Duval,[19] however, the former 5th Circuit considered a due process claim against Florida's post-judgment garnishment statute, which is somewhat similar to that of Georgia. There, Liberty Loan obtained a writ of garnishment against Brown, who later claimed that her wages were exempt from garnishment proceedings under Florida law. A county court found in Brown's favor and eventually dissolved the garnishment. Brown...
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