Simon PLC Attorneys & Counselors – June 2023 Memorandum
Judgment Creditors Beware: Garnishee Defendants May Not Object to Post-Judgment Writs of Garnishments
Troy, MI. A recent, soon to be published opinion from the Michigan Court of Appeals (COA) made it clear that garnishee defendants may not file an objection to a judgment creditor’s (a/k/a garnishee plaintiff) writ of garnishment under Michigan Court Rule 3.101(K). This case is the first published decision by the COA addressing this issue.
In a unanimous decision dated March 16, 2023, the COA held in Velocity MRS Funds IV v. Nextgen Pain Assoc. & Rehab.; No. 358712, that Auto-Owners Insurance Company, as garnishee defendant may not file an objection to a writ of garnishment.
Here, plaintiff/judgment creditor Velocity obtained a $3mm default judgment against Nextgen from a Texas court and moved to enforce its judgment in the State of Michigan. Velocity registered its foreign/out of state judgment in Michigan and commenced a judgment enforcement proceeding to collect its judgment. Part of that process was to issue writs of garnishments to over 300 possible targets that could owe money to Nextgen and from whom the judgment could be satisfied. Auto-Owners was the subject of one such writ of garnishment. Auto-Owners then filed an objection and a motion to quash the writ, claiming that it did not owe Nextgen any money. The trial court denied Auto-Owners’ objection and denied the motion to quash the writ holding that Auto-Owners, as garnishee defendant, did not have standing to object to a writ of garnishment under MCR 3.101(K)(1) – only judgment debtors/defendants have such standing.
This decision is important because it clarifies the court rules and also is an important reminder that garnishments in the State of Michigan must be timely complied with. Garnishee defendants are often banks, credit unions and employers. Caution to garnishee defendants is required in order to timely respond to writs of garnishment because if they owe money to a judgment debtor and fail to timely disclose it, the garnishee defendant could be liable to the judgment creditor for the judgment.
Instead of objecting to the writ of garnishment, the garnishee defendant must provide a written response within 14 days. This could lead to requests for documents through a subpoena or even a deposition of a representative of the garnishee defendant. Garnishee plaintiffs have an arsenal of tools provided by the Michigan Court Rules in order to facilitate the enforcement of the judgment.
The attorneys at Simon PLC Attorneys & Counselors are experts in state and federal court judgment enforcement and judgment enforcement defense. If you have any questions about judgment enforcement, please contact us.
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