1998 Minnesota Statutes

     552.05 Summary execution upon funds at a financial 
  institution. 

    Subdivision 1.    Procedure.  In addition to the 
 provisions of section 552.04, when levying upon funds at a 
 financial institution, the public authority must comply with 
 this section.  If the notice of support judgment levy is being 
 used by the public authority to levy funds of a judgment debtor 
 who is a natural person and if the funds to be levied are held 
 on deposit at any financial institution, in lieu of service the 
 public authority shall send with the notice of support judgment 
 levy and disclosure required by section 552.04, subdivision 4, 
 one copy of an exemption and right to hearing notice.  The 
 notice must be substantially in the form determined by the 
 commissioner in accordance with section 552.05, subdivision 10.  
 Failure of the public authority to send the notice renders the 
 execution levy void, and the financial institution shall take no 
 action.  Upon receipt of the notice of support judgment levy and 
 exemption and right to hearing notice, the financial institution 
 shall retain as much of the amount due as the financial 
 institution has on deposit owing to the judgment debtor, but not 
 more than 100 percent of the amount remaining due on the 
 judgment until directed by the public authority or the court to 
 release the funds to the public authority or the judgment debtor 
 in accordance with this chapter. 

    Subd. 2.    Duties of financial institution.  Within two 
 business days after receipt of the execution levy and exemption 
 and right to hearing notice, the financial institution shall 
 serve upon the judgment debtor the exemption and right to 
 hearing notice.  The financial institution shall serve the 
 notice by first class mail to the last known address of the 
 judgment debtor.  If no claim of exemption or request for 
 hearing is received by the public authority within 14 days after 
 the notice is mailed to the judgment debtor, the public 
 authority shall notify the financial institution within seven 
 days that the funds remain subject to the execution levy and 
 shall be remitted to the public authority.  If a claim of 
 exemption or a request for hearing is received by the public 
 authority within 14 days after the exemption notice is mailed to 
 the judgment debtor, the public authority shall within seven 
 days notify the financial institution either to release the 
 funds to the judgment debtor or that the funds remain subject to 
 the execution levy pending the determination of an 
 administrative law judge at a requested contested case 
 proceeding.  When notified by the public authority to release 
 the funds, the financial institution shall release the funds to 
 the public authority or to the judgment debtor, as directed by 
 the public authority, within two business days. 

    Subd. 3.    Process to claim exemption.  If the judgment 
 debtor elects to claim an exemption, the judgment debtor shall 
 complete the applicable portion of the exemption and right to 
 hearing notice, sign it under penalty of perjury, and deliver 
 one copy to the public authority within 14 days of the date 
 postmarked on the correspondence mailed to the judgment debtor 
 containing the exemption and right to hearing notice.  Failure 
 of the judgment debtor to deliver the executed exemption and 
 right to hearing notice does not constitute a waiver of any 
 claimed right to an exemption.  Upon timely receipt of a claim 
 of exemption, funds not claimed to be exempt by the judgment 
 debtor remain subject to the execution levy.  Within seven days 
 after the date postmarked on the envelope containing the 
 executed exemption and right to hearing notice mailed to the 
 public authority, or the date of personal delivery of the 
 executed exemption and right to hearing notice to the public 
 authority, the public authority shall either notify the 
 financial institution to release the exempt portion of the funds 
 to the judgment debtor or schedule a contested administrative 
 proceeding pursuant to subdivision 5. 

    Subd. 4.    Process to request hearing.  If the judgment 
 debtor elects to request a hearing on any issue specified in 
 subdivision 6, the judgment debtor shall complete the applicable 
 portion of the exemption and right to hearing notice, sign it 
 under penalty of perjury, and deliver one copy to the public 
 authority within 14 days of the date postmarked on the 
 correspondence mailed to the judgment debtor containing the 
 exemption and right to hearing notice.  Upon timely receipt of a 
 request for hearing, funds not claimed to be exempt by the 
 judgment debtor remain subject to the execution levy.  Within 
 seven days after the date postmarked on the envelope containing 
 the executed request for hearing mailed to the public authority, 
 or the date of personal delivery of the executed request for 
 hearing to the public authority, the public authority shall 
 either notify the financial institution to release the exempt 
 portion of the funds to the judgment debtor or schedule a 
 contested administrative proceeding under section 518.5511 and 
 notify the judgment debtor of the time and place of the 
 scheduled hearing. 

    Subd. 5.    Duties of public authority if hearing is 
 requested.  Within seven days of the receipt of a request for 
 hearing or a claim of exemption to which the public authority 
 does not consent, the public authority shall schedule a 
 contested administrative proceeding under section 518.5511.  The 
 hearing must be scheduled to occur within five business days.  
 The public authority shall send written notice of the hearing 
 date, time, and place to the judgment debtor by first class 
 mail.  The hearing may be conducted by telephone, audiovisual 
 means or other electronic means, at the discretion of the 
 administrative law judge.  If the hearing is to be conducted by 
 telephone, audiovisual means, or other electronic means, the 
 public authority shall provide reasonable assistance to the 
 judgment debtor to facilitate the submission of all necessary 
 documentary evidence to the administrative law judge, including 
 access to the public authority's facsimile transmission machine. 

    Subd. 6.    Issues relevant at hearing.  At any hearing 
 requested by the judgment debtor under this chapter, the only 
 issues to be determined are whether: 

    (1) the public authority complied with the process required 
 by this chapter; 

    (2) the amount stated in the notice of support judgment 
 levy is owed by the judgment debtor; 

    (3) the amount stated in the notice of support judgment 
 levy is correct; or 

    (4) any of the funds levied upon are exempt. 

    Subd. 7.    Notice of order.  Within one business day of 
 receipt of the order of the administrative law judge, the public 
 authority shall send a copy of the order to the judgment debtor 
 at the judgment debtor's last known address and to the financial 
 institution. 

    Subd. 8.    Release of funds.  At any time during the 
 procedure specified in this section, the judgment debtor or the 
 public authority may direct the financial institution to release 
 the funds in question to the other party.  Upon receipt of a 
 release, the financial institution shall release the funds as 
 directed. 

    Subd. 9.    Subsequent proceedings; bad faith claim.  If 
 in subsequent proceedings brought by the judgment debtor or the 
 public authority, the claim of exemption is not upheld, and the 
 office of administrative hearings finds that it was asserted in 
 bad faith, the public authority shall be awarded actual damages, 
 costs, and reasonable attorney fees resulting from the 
 additional proceedings, and an amount not to exceed $100.  The 
 underlying judgment must 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 the 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.  
 Upon motion of any party in interest, on notice, the office of 
 administrative hearings shall determine the validity of any 
 claim of exemption, and may make any order necessary to protect 
 the rights of those interested.  No financial institution is 
 liable for damages for complying with this section.  The 
 financial institution may rely on the date of mailing or 
 delivery of a notice to it in computing any time periods in this 
 section. 

    Subd. 10.    Forms.  The commissioner of human services 
 shall develop statutory forms for use as required under this 
 chapter.  In developing these forms, the commissioner shall 
 consult with the attorney general, representatives of financial 
 institutions, and legal services.  The commissioner shall report 
 back to the legislature by February 1, 1998, with recommended 
 forms to be included in this chapter. 

    HIST: 1997 c 203 art 6 s 89