2002 Minnesota Statutes

     552.04 General provisions. 

    Subdivision 1.    Rules of civil procedure.  Unless this 
 chapter specifically provides otherwise, the Minnesota Rules of 
 Civil Procedure for the district courts and section 518.551 
 apply in all proceedings under this chapter. 

    Subd. 2.    Property attachable by service of levy.  
 Subject to the exemptions provided by subdivision 3 and section 
 550.37, and any other applicable statute, to the extent the 
 exemptions apply in cases of child support enforcement, the 
 service by the public authority of a notice of support judgment 
 levy under this chapter attaches all nonexempt indebtedness or 
 money due or belonging to the judgment debtor and owing by the 
 third party or in the possession or under the control of the 
 third party at the time of service of the notice of support 
 judgment levy, whether or not the indebtedness or money has 
 become payable.  The third party shall not be compelled to pay 
 or deliver the same before the time specified by any agreement 
 unless the agreement was fraudulently contracted to defeat an 
 execution levy or other collection remedy. 

    Subd. 3.    Property not attachable.  The following 
 property is not subject to attachment by a notice of support 
 judgment levy served under this chapter:  

    (1) any indebtedness or money due to the judgment debtor, 
 unless at the time of the service of the notice of support 
 judgment levy the same is due absolutely or does not depend upon 
 any contingency; 

    (2) any judgment owing by the third party to the judgment 
 debtor, if the third party or the third party's property is 
 liable on an execution levy upon the judgment; 

    (3) any debt owing by the third party to the judgment 
 debtor for which any negotiable instrument has been issued or 
 endorsed by the third party; 

    (4) any indebtedness or money due to the judgment debtor 
 with a cumulative value of less than $10; and 

    (5) any disposable earnings, indebtedness, or money that is 
 exempt under state or federal law to the extent the exemptions 
 apply in cases of child support enforcement.  

    Subd. 4.    Notice and disclosure forms.  When levying 
 upon money owed to the judgment debtor by a third party, the 
 public authority shall serve a copy of the notice of support 
 judgment levy upon the third party either by registered or 
 certified mail, by personal service, or by electronic 
 transmission.  Along with a copy of the notice of support 
 judgment levy, the public authority shall serve upon the third 
 party a notice of support judgment levy and disclosure form that 
 must be substantially in the form set forth below. 

                          DISTRICT COURT

                              File No. ...........
 ........ (Public authority)
 against                        NOTICE OF SUPPORT JUDGMENT
 ........ (Judgment Debtor)     LEVY AND DISCLOSURE
 and                            (OTHER THAN EARNINGS)
 ........ (Third Party)

    PLEASE TAKE NOTICE that pursuant to Minnesota Statutes, 
 chapters 518 and 552, the undersigned, as representative of the 
 public authority responsible for child support enforcement, 
 makes demand and levies execution upon all money due and owing 
 by you to the judgment debtor for the amount of the judgment 
 specified below.  A copy of the notice of support judgment levy 
 is enclosed.  The unpaid judgment balance is $...... 

    In responding to this levy, you are to complete the 
 attached disclosure form and mail it to the public authority, 
 together with your check payable to the public authority, for 
 the nonexempt amount owed by you to the judgment debtor or for 
 which you are obligated to the judgment debtor, within the time 
 limits in chapter 552. 

                      Public Authority
                       Address
                       (........)
                       Phone number

    

                            DISCLOSURE

    On the ... day of ......, ......., the time of service of 
 the execution levy herein, there was due and owing the judgment 
 debtor from the third party the following: 

    (1) Money.  Enter on the line below any amounts due and 
 owing the judgment debtor, except earnings, from the third party.

    ......................... 

    (2) Setoff.  Enter on the line below the amount of any 
 setoff, defense, lien, or claim which the third party claims 
 against the amount set forth on line (1).  State the facts by 
 which the setoff, defense, lien, or claim is claimed.  (Any 
 indebtedness to you incurred by the judgment debtor within ten 
 days prior to the receipt of the first execution levy on a debt 
 may not be claimed as a setoff, defense, lien, or claim against 
 the amount set forth on line (1)). 

    ......................... 

    (3) Exemption.  Financial institutions shall not complete 
 this line.  Enter on the line below any amounts or property 
 claimed by the judgment debtor to be exempt from execution. 

    ......................... 

    (4) Adverse Interest.  Enter on the line below any amounts 
 claimed by other persons by reason of ownership or interest in 
 the judgment debtor's property. 

    ......................... 

    (5) Enter on the line below the total of lines (2), (3), 
 and (4). 

    .........................  

    (6) Enter on the line below the difference obtained (never 
 less than zero when line (5) is subtracted from the amount on 
 line (1)).  

    ......................... 

    (7) Enter on the line below 100 percent of the amount of 
 the public authority's claim which remains unpaid.  

    ......................... 

    (8) Enter on the line below the lesser of line (6) and line 
 (7).  You are instructed to remit this amount only if it is $10 
 or more.  

    ......................... 

                           AFFIRMATION

    I, .......... (person signing Affirmation), am the third 
 party or I am authorized by the third party to complete this 
 nonearnings disclosure, and have done so truthfully and to the 
 best of my knowledge. 

 Dated:..........                Signature
                                  ..........
                                  Title
                                  ..........
                                  Telephone Number

    Subd. 5.    Third party disclosure and remittance.  
 Within 15 days after receipt of the notice of support judgment 
 levy, unless governed by section 552.06, the third party shall 
 disclose and remit to the public authority as much of the amount 
 due as the third party's own debt equals to the judgment debtor. 

    Subd. 6.    Oral disclosure.  Before or after the 
 service of a written disclosure by a third party under 
 subdivision 5, upon a showing by affidavit upon information and 
 belief that an oral examination of the third party would provide 
 a complete disclosure of relevant facts, any party to the 
 execution proceedings may obtain an ex parte order requiring the 
 third party, or a representative of the third party designated 
 by name or by title, to appear for oral examination before the 
 court.  Notice of the examination must be given to all parties.  
 This subdivision does not apply to financial institutions 
 complying with section 552.06. 

    Subd. 7.    Supplemental complaint.  If a third party 
 holds property, money, earnings, or other indebtedness by a 
 title that is void as to the judgment debtor's creditors, the 
 property may be levied on although the judgment debtor would be 
 barred from maintaining an action to recover the property, 
 money, earnings, or other indebtedness.  In this and all other 
 cases where the third party denies liability, the public 
 authority may move the court at any time before the third party 
 is discharged, on notice to both the judgment debtor and the 
 third party for an order making the third party a party to 
 supplemental action and granting the public authority leave to 
 file a supplemental complaint against the third party and the 
 judgment debtor.  The supplemental complaint shall set forth the 
 facts upon which the public authority claims to charge the third 
 party.  If probable cause is shown, the motion shall be 
 granted.  The supplemental complaint shall be served upon the 
 third party and the judgment debtor and any other parties.  The 
 parties served shall answer or respond pursuant to the Minnesota 
 Rules of Civil Procedure for the district courts, and if they 
 fail to do so, judgment by default may be entered against them.  

    Subd. 8.    Judgment against third party upon failure to 
 disclose or remit.  Judgment may be entered against a third 
 party who has been served with a notice of support judgment levy 
 and fails to disclose or remit the levied funds as required in 
 this chapter.  Upon order to show cause served on the third 
 party and notice of motion supported by affidavit of facts and 
 affidavit of service upon both the judgment debtor and third 
 party, the court may render judgment against the third party for 
 an amount not exceeding 100 percent of the amount claimed in the 
 execution.  Judgment against the third party under this section 
 shall not bar the public authority from further remedies under 
 this chapter as a result of any subsequent defaults by the third 
 party.  The court upon good cause shown may remove the default 
 and permit the third party to disclose or remit on just terms.  

    Subd. 9.    Satisfaction.  Upon expiration, the public 
 authority making the execution may file a partial satisfaction 
 by amount or, if applicable, shall file the total satisfaction 
 with the court administrator without charge.  

    Subd. 10.    Third party good faith requirement.  The 
 third party is not liable to the judgment debtor, public 
 authority, or other person for wrongful retention if the third 
 party retains or remits disposable earnings, indebtedness, or 
 money of the judgment debtor or any other person, pending the 
 third party's disclosure or consistent with the disclosure the 
 third party makes, if the third party has a good faith belief 
 that the property retained or remitted is subject to the 
 execution.  In addition, the third party may, at any time before 
 or after disclosure, proceed under Rule 67 of the Minnesota 
 Rules of Civil Procedure to make deposit into court.  No third 
 party is liable for damages if the third party complies with the 
 provisions of this chapter.  

    Subd. 11.    Bad faith claim.  If, in a proceeding to 
 determine a claim of exemption, the claim of exemption is not 
 upheld, and the court finds that it was asserted in bad faith, 
 the public authority shall be awarded actual damages, costs, 
 reasonable attorney's fees resulting from the additional 
 proceedings, and an amount not to exceed $100.  If the claim of 
 exemption is upheld, and the court finds that the public 
 authority disregarded the claim of exemption in bad faith, the 
 judgment debtor shall be awarded actual damages, costs, 
 reasonable attorney's fees resulting from the additional 
 proceedings, and an amount not to exceed $100.  If the exemption 
 claim of the judgment debtor is found to be in bad faith, the 
 underlying judgment shall be modified to reflect assessment of 
 damages, costs, and attorney's fees.  However, if the party in 
 whose favor a penalty assessment is made is not actually 
 indebted to that party's attorney for fees, the attorney's fee 
 award shall be made directly to the attorney, and if not paid, 
 an appropriate judgment in favor of the attorney shall be 
 entered.  Any action by a public authority made in bad faith and 
 in violation of this chapter renders the execution levy void and 
 the public authority liable to the judgment debtor named in the 
 execution levy in the amount of $100, actual damages, and 
 reasonable attorney's fees and costs.  

    Subd. 12.    Discharge of a third party.  Subject to 
 subdivisions 6 and 13, the third party, after disclosure, shall 
 be discharged of any further obligation to the public authority 
 when one of the following conditions is met:  

    (a) The third party discloses that the third party is not 
 indebted to the judgment debtor or does not possess any 
 earnings, property, money, or indebtedness belonging to the 
 judgment debtor that is attachable as defined in subdivision 2.  
 The disclosure is conclusive against the public authority and 
 discharges the third party from any further obligation to the 
 public authority other than to retain and remit all nonexempt 
 disposable earnings, property, indebtedness, or money of the 
 judgment debtor which was disclosed.  

    (b) The third party discloses that the third party is 
 indebted to the judgment debtor as indicated on the execution 
 disclosure form.  The disclosure is conclusive against the 
 public authority and discharges the third party from any further 
 obligation to the public authority other than to retain and 
 remit all nonexempt disposable earnings, property, indebtedness, 
 or money of the judgment debtor that was disclosed. 

    (c) The court may, upon motion of an interested person, 
 discharge the third party as to any disposable earnings, money, 
 property, or indebtedness in excess of the amount that may be 
 required to satisfy the public authority's claim.  

    Subd. 13.    Exceptions to discharge of a third party.  
 The third party is not discharged if:  

    (a) Within 20 days of the service of the third party's 
 disclosure, an interested person serves a motion relating to the 
 execution levy.  The hearing on the motion must be scheduled to 
 be heard within 30 days of the service of the motion.  

    (b) The public authority moves the court for leave to file 
 a supplemental complaint against the third party, as provided 
 for in subdivision 7, and the court upon proper showing vacates 
 the discharge of the third party.  

    Subd. 14.    Joinder and intervention by persons in 
 interest.  If it appears that a person, who is not a party to 
 the action, has or claims an interest in any of the disposable 
 earnings, other indebtedness, or money, the court shall permit 
 that person to intervene or join in the execution proceeding 
 under this chapter.  If that person does not appear, the court 
 may summon that person to appear or order the claim barred.  The 
 person so appearing or summoned shall be joined as a party and 
 be bound by the judgment.  

    Subd. 15.    Appeal.  A party to an execution proceeding 
 aggrieved by an order or final judgment may appeal as allowed by 
 law.  

    Subd. 16.    Priority of levy.  Notwithstanding section 
 52.12, a levy by the public authority made under this section on 
 a judgment debtor's funds on deposit in a financial institution 
 located in this state has priority over any unexercised right of 
 setoff of the financial institution to apply the levied funds 
 toward the balance of an outstanding loan or loans owed by the 
 judgment debtor to the financial institution.  A claim by the 
 financial institution that it exercised its right to setoff 
 prior to the levy by the public authority must be substantiated 
 by evidence of the date of the setoff and must be verified by 
 the sworn statement of a responsible corporate officer of the 
 financial institution.  For purposes of determining the priority 
 of a levy made under this section, the levy must be treated as 
 if it were an execution made under chapter 550. 

    HIST: 1997 c 203 art 6 s 88; 1998 c 254 art 1 s 100,107; 1998 
 c 382 art 1 s 22; 2000 c 458 s 11-14,16