Thursday, June 2, 2011

Florida Court Holds that Creditor, Not Creditor's Attorney, Must Sign Sworn Denial of Garnishment Exemption

A very recent ruling by Florida's Fourth District Court of Appeals discusses the procedure for denying a judgment debtor's head of household exemption to garnishment, and spells trouble for creditor's attorneys, especially attorneys representing major banks and credit card companies. At issue in Caproc Third Ave., LLC v. Donisi Ins., Inc., ___ So. 3d ____ (Fla. 4th DCA June 1, 2011) (pdf), was Fla. Stat. § 222.12, which provides that,
"When such an affidavit [of head of household] is made [by a judgment debtor facing a writ of garnishment], notice of same shall be forthwith given to the party, or her or his attorney, who sued out the process, and if the facts set forth in such affidavit are not denied under oath within 2 business days after the service of said notice, the process shall be returned, and all proceedings under the same shall cease. If the facts stated in the affidavit are denied by the party who sued out the process within the time above set forth and under oath, then the matter shall be tried by the court from which the writ or process issued, in like manner as claims to property levied upon by writ of execution are tried, and the money or thing attached shall remain subject to the process until released by the judgment of the court which shall try the issue."
The creditor's attorney attempted to file an affidavit denying the exemption himself, rather than having his client do so. Most creditors attorneys that we know have in the past done it that way. After this case, however, that practice appears to be no longer viable. The court ruled that the attorney was not "the party who sued out the process," and therefore he could not sign the affidavit of denial. As a result, the writ of garnishment was immediately dissolved without the need for an evidentiary hearing. The court also noted that the affidavit filed by the attorney was insufficient because he himself had no basis for personal knowledge as to the defendant's claim of exemption.

As a practical matter, given the strict time constraints for filing the sworn denial - 2 days - the requirements imposed by this case will make it difficult for the attorney who represents a hard to reach client to defeat a claim of head of household exemption [regardless of the claim's merit].

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