Reigh v. Schleigh

• Decision Date: 01 April 1986
• Docket Number: No. 85-1021,85-1021
• Parties: Esther V. REIGH and Ivery Mae Simpkins and David Michael Simpkins and Lenora C. Dannie, Appellees, v. Charles L. SCHLEIGH, in his official capacity as principle clerk of the District Court for Washington County and Nancy Mueller, in her official capacity as clerk of the District Court for Howard County and William A. Dorsey, in his official capacity as administrative clerk of the District Court of Baltimore City, Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1191

784 F.2d 1191

54 USLW 2473

Esther V. REIGH and Ivery Mae Simpkins and David Michael

Simpkins and Lenora C. Dannie, Appellees, v. Charles L. SCHLEIGH, in his official capacity as principle

clerk of the District Court for Washington County and Nancy

Mueller, in her official capacity as clerk of the District

Court for Howard County and William A. Dorsey, in his

official capacity as administrative clerk of the District

Court of Baltimore City, Appellants.

No. 85-1021.

United States Court of Appeals, Fourth Circuit.

Argued July 17, 1985.

Decided March 4, 1986.

Rehearing and Rehearing En Banc Denied April 1, 1986.

Diana G. Motz (James G. Klair, Asst. Atty. Gen.; Stephen H. Sachs, Atty. Gen., Andrew H. Baida, Staff Atty., on brief), for appellants.

Elizabeth A. Renuart, Legal Aid Bureau, Inc. (Julie Landau, on brief), for appellees.

Before WINTER, Chief Judge, and RUSSELL and WIDENER, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

This is a suit challenging the constitutionality of Maryland's District Rules governing post-judgment attachments of property of a judgment debtor as issued by the Maryland Court of Appeals and separately codified at the time this suit was filed as the Maryland District Rules, Chapter 1, 100-700, 1100-1300. Chapter 100, Subtitles G & F contain the challenged procedures. The four plaintiffs are judgment debtors whose bank accounts had been attached in 1982 under writs of attachment which had been issued under such Rules but which had been vacated before this action was begun. They allege, and it was not disputed, that their bank accounts, which had been attached, consisted exclusively of either Social Security or Aid to Families with Dependent Children payments. In all cases, the plaintiffs filed with the Maryland court exemption claims and the claimed exemptions were sustained by the court in 1982. It was not until January 24, 1983 after the claims of exemption were upheld that the plaintiffs filed this action asserting the unconstitutionality on due process grounds of the procedures established under the Maryland Rules for the issuance of post-judgment writs of attachment.

The Maryland post-judgment attachment Rules, in force when this action was begun, made no provision for notice to the judgment debtors of their possible state or federal exemptions. The rules did provide that, if the judgment debtor, after learning of the garnishment, moved to quash the writ within thirty days, the court was required to hear such motion "forthwith." Prior to judgment below, however, the Rules were amended by the Maryland Court of Appeals to provide (1) for notice of the attachment to be given the judgment debtor by the person serving the writ upon the judgment debtor "promptly after service upon the garnishee" and (2) for notice to the judgment debtor at the same time as notice of attachment "that federal and state exemptions may be available" to him or her. The Rules, also, gave the judgment debtor notice of the right to file a motion claiming an exemption or objecting to the garnishment within thirty (30) days and to request a hearing on such motion, which, when requested, must be held "promptly." The parties seem to have agreed that the action should be determined on the basis of the Rules as amended and the decision of the district court from which this appeal is taken, proceeded on that basis.

After denying the defendants' motion to dismiss the action for mootness, the district court reviewed the Rules as revised and concluded that the notice of the issuance and service of the writ on the judgment debtor, as provided in the Rules, complied to that extent with the requirements of due process but that the procedure in the Rules remained defective in two respects:

(1) They "do not provide for adequate notice to a judgment debtor of the claims of exemption which are available"; and

(2) They do not "assure resolution of a claim of exemption within a reasonable time," which the district court fixed as "within two weeks" from the time the claim of exemption is filed.

In order to correct these perceived defects, the district court enjoined the issuance of post-judgment writs of attachment without conforming to a form to be approved by the court listing all exemptions and setting forth a procedure for resolving such claims for exemption by the judgment debtor within two weeks (later stated as 15 days). Reigh v. Schleigh, 595 F.Supp. 1535 (D.Md.1984).

The defendants have appealed from the judgment entered by the district court. Their first ground on appeal is the mootness of plaintiffs' claim. Turning to the merits, they cite Endicott Johnson Corporation v. Encyclopedia Press, Inc., 266 U.S. 285, 45 S.Ct. 61, 69 L.Ed. 288 (1924) as authority for the proposition that there is no due process right on the part of a judgment debtor to notice of the issuance of a writ of attachment, of his entitlement to state or federal exemptions, or to a right to contest the writ promptly. Assuming, however, that due process guarantees these rights to the judgment debtor, the defendants argue that the amended Rules, which were the rules on which the district court based its ruling, fully satisfied due process requirements and the contrary judgment of the district court is in error.

While there is much to be said for the mootness argument since the writs of attachment in the case of all four plaintiffs had been vacated before this action was commenced; ¹ we are of opinion that under our decision in Harris v. Bailey, 675 F.2d 614 (4th Cir.1982), the facts of which are almost identical to those in this case, the claim of mootness by the defendants is without merit. Nor is an issue posed in this case on the duty of the defendants under due process grounds to provide notice in a post judgment proceeding of the issuance of the writ of attachment to the judgment debtor and to acquaint him of his opportunity to make a timely contest of the writ or of his right to a "prompt" hearing on request. The amended Rules give the judgment debtor those rights. What is challenged in these Rules and only what is challenged is whether the notice of the writ must include notice of all possible federal and state exemptions, and whether the hearing afforded the judgment debtor must be held "within two weeks" or "fifteen days" after request therefor.

Addressing the first of these two questions, we begin by recognizing that there is a conflict in the decisions on the necessity for the notice to the judgment debtor of the writ to include a list of all available federal and state exemptions that might be available to the judgment debtor. Finberg v. Sullivan, 634 F.2d 50 (3d Cir.1980) (en banc) is generally cited as the recognized authority for the view that all available exemptions must be listed in the notice to the judgment debtor, though the actual holding in that case did not go that far. For other cases, generally cited to this effect, see Neeley v. Century Finance Co. of Arizona, 606 F.Supp. 1453 (D.Ariz.1985); McCahey v. L.P. Investors, 593 F.Supp. 319 (E.D.N.Y.1984); Clay v. Fisher, 584 F.Supp. 730 (D. Ohio 1984); Dionne v. Bouley, 583 F.Supp. 307 (D.R.I.1984), modified, 757 F.2d 1344 (1st Cir.1985); Deary v. Guardian Loan Co., Inc., 534 F.Supp. 1178 (S.D.N.Y.1982); Betts v. Tom, 431 F.Supp. 1369 (D. Hawaii 1977). In Finberg the bank account of the judgment debtor had been seized; the account consisted of funds "entirely exempt from attachment and garnishment," representing deposits of Social Security benefits and moneys within a general "exemption to a class of debtors which includes Mrs. Finberg." 634 F.2d at 52. Both of these exemptions were said to be "designed to protect a debtor's means of purchasing basic necessities" and failure to recognize such exemptions could cause "serious, undue hardship" to a debtor in Mrs. Finberg's situation. The majority in that case, after declaring that "the content of the notice depends upon the circumstances of the particular case," required that the notice to Mrs. Finberg should expressly identify those two exemptions but it added this cautionary note: "Because Mrs. Finberg did not claim other exemptions under Pennsylvania law, we need not determine the effect of our decision on Pennsylvania exemptions not claimed by Mrs. Finberg." 634 F.2d at 62. Finberg, thus, is not authority for the proposition that due process requires that the notice to the judgment debtor include all possible exemptions; it only declared that, based on "the circumstances" of Mrs. Finberg's particular case, two express exemptions claimed by Mrs. Finberg should have been noticed. ²

Many of the decisions which have followed Finberg and have been cited in support of a rule that due process compels a listing of all exemptions in the notice to the debtor have generally had the same ambiguity as Finberg. Thus, in Neeley v. Century Finance Co., 606 F.Supp. at 1465, the court said categorically that "[d]ue process does not require that all exemption statutes be identified and set forth in detail" in the notice given to the judgment debtor in a post-judgment garnishment or attachment, but only "[t]hose exemptions that occur frequently should be included in the notice" and, in that context, the court declared it was "not deciding, other than for wages, [under the Arizona statute] what particular exemptions must be identified." To the same purport is Harris v. Bailey, 574 F.Supp. 966, 971 (W.D.Va.1983). There the court expressly said that "notice of all available exemptions," which would represent, in the court's words, "a potentially confusing laundry list" more likely to confuse than to clarify, was not required by due process. Its rule was "that the summons served on the debtor contain a list of those essential federal and state exemptions that provide the basic necessities of life for someone in Mrs. Harris' position. The Social Security exemption certainly should be included; such benefits provide the bare...