THE COURTS

PART I. GENERAL

[231 PA. CODE CH. 3000]

Rules Governing Exemption from Levy and Attachment Upon Enforcement of a Money Judgment; Proposed Recommendation No. 215

[36 Pa.B. 3523]
[Saturday, July 8, 2006]

   The Civil Procedural Rules Committee is proposing the promulgation of new Rule 3111.1 and the amendment of other rules of civil procedure governing exemption from levy and attachment upon enforcement of a money judgment. The proposed recommendation is being submitted to the bench and bar for comments and suggestions prior to its submission to the Supreme Court of Pennsylvania.

   All communications in reference to the proposed recommendation should be sent not later than August 31, 2006 to:

Harold K. Don, Jr.,
Counsel
Civil Procedural Rules Committee
5035 Ritter Road, Suite 700
Mechanicsburg, Pennsylvania 17055
 
or E-Mail to
civil.rules@pacourts.us

   The Explanatory Comment which appears in connection with the proposed recommendation has been inserted by the Committee for the convenience of the bench and bar. It will not constitute part of the rules of civil procedure or be officially adopted or promulgated by the Court.

Annex A

TITLE 231. RULES OF CIVIL PROCEDURE

PART I. GENERAL

CHAPTER 3000. JUDGMENTS

Subchapter D. ENFORCEMENT OF MONEY

JUDGMENTS FOR THE PAYMENT OF MONEY

Rule 3111. Service of the writ on garnishee; effect.

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   (b)  Service of the writ upon the garnishee shall attach all property of the defendant which may be attached under these rules which is in the possession of the garnishee. It shall also attach all property of the defendant which may be attached under these rules and which comes into the garnishee's possession thereafter until judgment against the garnishee even though no such property of the defendant was in the garnishee's possession at the time of service.

   Official Note: For limitations on the power to attach tangible personal property see Rule 3108(a).

   See Rule 3111.1 providing that certain funds on deposit in a bank or other financial institution may not be attached.

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Rule 3111.1. Exemptions from levy and attachment.

   In the absence of a court order, service of the writ upon a bank or other financial institution as garnishee shall not attach the defendant's funds on deposit with the bank or other financial institution in an account in which

   (1)  funds are deposited electronically on a recurring basis and are identified as being funds that are exempt from execution, levy or attachment under Pennsylvania or federal law, or

   Official Note: Examples of state and federal laws are set forth in the note to Rule 3123.1.

   See Rule 3146(b)(2) governing judgment against a bank or other financial institution as garnishee upon admission in answer to interrogatory.

   (2)  the funds on deposit, not including any otherwise exempt funds, do not exceed the amount of the general monetary exemption under 42 Pa.C.S. § 8123. The plaintiff shall have the right to file an objection if the plaintiff believes that the defendant has exhausted the statutory exemption.

Rule 3123.1. Claim for exemption or immunity of property; prompt hearing.

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   Official Note: Pennsylvania and Federal law provide numerous exemptions of property from execution, including the following:

   Exemptions under Pennsylvania Law

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   3.  Certain retirement funds and accounts, 42 Pa.C.S. § 8124(b):

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   Retirement or annuity funds provided for under the Internal Revenue Code, 42 Pa.C.S. § 8124(b)(1)(ix).

   Cities of the Second Class A Employees Retirement System Annuity, 53 P. S. § 30577.

   Third Class City Code Pension Funds for certain employees, 53 P. S. § 39351.

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Rule 3146. Judgment against garnishee upon default or admission in answer to interrogatories.

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   (b)(1)  [The] Subject to paragraph (2) of this subdivision, the prothonotary, on praecipe of the plaintiff, shall enter judgment against the garnishee for the property of the defendant admitted in the answer to interrogatories to be in the garnishee's possession, subject to any right therein claimed by the garnishee, but no money judgment entered against the garnishee shall exceed the amount of the judgment of the plaintiff against the defendant together with interest and costs. The entry of judgment shall not bar the right of the plaintiff to proceed against the garnishee as to any further property or to contest any right in the property claimed by the garnishee.

   (2)  If the garnishee is a bank or other financial institution, the prothonotary, in the absence of an order of court, shall not enter judgment pursuant to paragraph (1) of this subdivision as to funds of any account of the defendant that is identified in the garnishee's answer to interrogatories nos. 7 or 8.

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Subchapter E. ENFORCEMENT OF JUDGMENTS IN SPECIAL ACTIONS

FORMS

Rule 3252. Writ of execution; money judgments.

   (a)  The writ of execution shall include a notice to the defendant, a summary of major exemptions, and a claim for exemption, and shall be substantially in the following form[:]:

(Caption)

WRIT OF EXECUTION

NOTICE

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WRIT OF EXECUTION

   Commonwealth of Pennsylvania      )
   County of ______      )

   To the Sheriff of ______ County:

   To satisfy the judgment, interest and costs against ___________________________ , (Name of Defendant)
defendant,

   (1)  you are directed to levy upon the property of the defendant and to sell his interest therein;

   (2)  you are also directed to attach the property of the defendant not levied upon in the possession of _________________ , as (Name of Garnishee)
garnishee, _________________ and (Specifically describe property)
to notify the garnishee that

   (a)  an attachment has been issued;

   (b)  except as provided in paragraph (c), the garnishee is enjoined from paying any debt to or for the account of the defendant and from delivering any property of the defendant or otherwise disposing thereof;

   (c)  the attachment shall not include any funds in an account of the defendant with a bank or other financial institution

   (i)  in which funds are deposited electronically on a recurring basis and are identified as being funds that are exempt from execution, levy or attachment under Pennsylvania or federal law. A list of exempt funds is set forth in the Note to Rule 3123.1, or

   (ii)  that total $300 or less. If multiple accounts are attached, a total of $300 in all accounts shall not be subject to levy and attachment as determined by the executing officer. The funds shall be set aside pursuant to the defendant's general exemption provided in 42 Pa.C.S. § 8123.

Rule 3253. Interrogatories in attachment.

   Interrogatories of the plaintiff to the garnishee shall be substantially in the following form:

[Caption]

''To ______:
         (Garnishee)

   ''You are required to file answers to the following interrogatories within twenty (20) days after service upon you. Failure to do so may result in judgment against you:

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   ''7.  If you are a bank or other financial institution, at the time you were served or at any subsequent time did the defendant have funds on deposit in an account in which funds are deposited electronically on a recurring basis and which are identified as being funds that are exempt from execution, levy or attachment under Pennsylvania or federal law? If so, identify each account.''

   ''8.  If you are a bank or other financial institution, at the time you were served or at any subsequent time did the defendant have funds on deposit in an account in which the funds on deposit, not including any otherwise exempt funds, did not exceed the amount of the general monetary exemption under 42 Pa.C.S. § 8123? If so, identify each account.''

Explanatory Comment

   Numerous federal and state statutes provide that funds paid to individuals pursuant to the statutes are exempt from execution, levy and attachment. Perhaps the premier statute in this regard is the Social Security Act which provides, 42 U.S.C. § 407:

§ 407. Assignment; amendment of section

(a)  The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

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   Section 407 provides that not only are future payments exempt from execution but so too are the funds once they have been deposited in the recipient's account in a bank or other financial institution.

   The Pennsylvania Rules of Civil Procedure do not presently accommodate these provisions. The writ of execution under Rule 3252, paragraph 2(b), provides that ''the garnishee is enjoined from paying any debt to or for the account of the defendant and from delivering any property of the defendant or otherwise disposing thereof.'' The writ contains no exception for funds of the defendant which are exempt from execution. In addition, the defendant is required to claim the exemption by filing a claim under Rule 3123.1.

   The proposed amendments to the execution rules address this problem. Under the amended rules, the judgment creditor rather than the defendant has the burden of raising an issue with respect to exempt payments within the scope of new Rule 3111.1. The defendant need not file a claim for exemption as exempt funds are not attached.

   The amendments are as follows:

   1.  New Rule 3111.1 is to be promulgated, explicitly stating that certain funds of the defendant on deposit in a bank or other financial institution are exempt from execution. Social security payments are not named. Rather, the rule speaks in terms of ''funds on deposit'' which ''are deposited electronically on a recurring basis and are identified as being funds that are exempt from execution, levy or attachment under Pennsylvania or federal law.'' A note cross-refers to a note to Rule 3123.1 which contains a list of statutes providing for the exemption of certain funds from execution.

   2.  The form of the writ of execution set forth in Rule 3252 is amended by incorporating the language of new Rule 3111.1(1). New paragraph 2(c) of the writ advises the garnishee that the attachment does not include the defendant's funds in an account which exempt funds are deposited electronically on a recurring basis.

   3.  Rule 3253 governing interrogatories to the garnishee is amended by adding new interrogatory no. 7. This interrogatory inquires of a bank or other financial institution as garnishee whether the defendant had ''funds on deposit in an account in which funds are deposited electronically on a recurring basis and which are identified as being funds that are exempt from execution, levy or attachment under Pennsylvania or federal law.'' The garnishee is then required to ''identify each account.''

   4.  The usual practice under Rule 3146(b) is that ''the prothonotary, on praecipe of the plaintiff, shall enter judgment against the garnishee for the property of the defendant admitted in the answer to interrogatories to be in the garnishee's possession.'' It is proposed that Rule 3146(b) be amended by adding new paragraph (2) providing that if the answer of a bank or other financial institution to interrogatory no. 7 identifies one or more accounts as containing exempt funds, ''the prothonotary, in the absence of an order of court, shall not enter judgment pursuant to paragraph (1) of this subdivision as to funds of any account of the defendant that is identified in the garnishee's answer'' to the interrogatory.

   5.  Section 8123 of the Judicial Code, 42 Pa.C.S. § 8123, provides for a $300 monetary exemption. This exemption is treated separately in new Rule 3111.1(2), in new paragraph (2)(c)(ii) of the writ of execution prescribed by Rule 3252 and in a new interrogatory to the garnishee under Rule 3253, interrogatory no. 8. The proposed amendments provide a similar procedure for the $300 monetary exemption as for recurring electronic deposits described above. The $300 monetary exemption is exempt from attachment, the writ of execution notifies the garnishee that the $300 or less in an account of the defendant is not attached and interrogatory no. 8 inquires of the garnishee concerning the funds of the defendant on deposit in accounts with the garnishee. As the $300 amount is exempt from attachment, the defendant need not claim it under Rule 3123.1 governing claim of exemption.

By the Civil Procedural Rules Committee

R. STANTON WETTICK, Jr.,   
Chair

[Pa.B. Doc. No. 06-1261. Filed for public inspection July 7, 2006, 9:00 a.m.]

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