2006 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 chapter 518A 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.

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(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)).

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(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.

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(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.

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

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

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(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 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 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 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 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 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.
History: 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; 2005 c 164 s 29; 1Sp2005 c 7 s 28