April 29, 2017

Bail Bonds Are Subject To Garnishment

Category: Indianapolis Law Club, Verdicts | Author: | Share:

It is one thing to get a judgment. It is another to collect. This case introduces a new way to collect against people who may otherwise be judgment-proof: by garnishing their bail.

In Garner v. Kempf, Garner obtained a judgment against Kempf in 2013 for $20,600, but has been unable to collect. In July 2015, Kempf was arrested and a $5,000 bond was posted on his behalf. The next day, Garner filed a motion for proceedings supplemental in the civil case seeking to garnish the bond proceeds and naming the Vanderburgh County Clerk (the Clerk) as a garnishee defendant. Garner served a copy of the motion on the Clerk, and notified Kempf and the Clerk of the lien. The Clerk did not make a note of the lien on the CCS in the criminal case, and there is no indication that the criminal court had any knowledge of its existence.

In August 2015, Kempf asked the criminal court to release the bond proceeds to his criminal defense attorney, and the criminal court granted that motion. At a September 2015 hearing on the motion for proceedings supplemental, the Clerk explained these facts, and the civil court declined to enter a judgment against the Clerk, finding that his failure to place an entry on the CCS in the criminal case notifying the criminal court of the lien was dispositive. Garner appealed.

On appeal, the Clerk argued that the civil court’s decision was correct, because a local rule required that the lienholder place an entry on the criminal court’s CCS. This argument did not impress the Court, as the “rule” was not a rule—it was an internal memo from the local courts to the Clerk which was not apparently publicized. But although the trial court erred when relying on this “rule” when declining to enter judgment against the Clerk, “trial court’s ruling on a motion for proceedings supplemental as a general judgment and affirm on any legal theory supported by the evidence.”

The Court went on to address whether a bail bond could be garnished, and found that it could. It noted that a judgment creditor acquires an equitable lien on funds owed by a third party to the judgment debtor from the time the third party receives service of process in proceedings supplemental, and that no statute limits the rights of creditors when those funds are a bail bond.

Specifically, where a criminal court has notice of an unsatisfied civil judgment or a pending civil action “arising out of the same transaction or occurrence forming the basis of the criminal case,” the criminal court may not declare bond proceeds forfeited. Instead, the criminal court must order the clerk to continue to hold the bond proceeds, and payment of the civil judgment must be made from those funds before any remainder may be forfeited. Essentially, by protecting the bond proceeds from forfeiture where the criminal court has notice of a pending civil action or unsatisfied civil judgment arising out of the same circumstances giving rise to the criminal case, I.C. § 35-33-8-7(b) provides an additional safeguard for the victims of the crime for which the defendant is being prosecuted. The statute does nothing, however, to undermine the general law applicable to other types of creditors seeking to garnish bond proceeds posted in unrelated criminal cases.

Garner took the step required of him by the garnishment statutes to preserve his claim to the bond proceeds. After this, it was the Clerk’s responsibility, not Garner’s, to ensure that the criminal court was notified of the lien. Therefore, the case was remanded with instructions for the trial court to enter judgment against the Clerk.

Judge Pyle dissented. He interpreted the statutes governing bonds to require that the bond be returned to the criminal defendant and that it allowed the deduction of only certain fees (such as attorney’s fees). And he interpreted these statutes to say that the only circumstance in which a bond could be used to satisfy a civil judgment is if that judgment arose out of the same transaction or occurrence as the criminal charges. “Because bail statutes are criminal statutes which must be strictly construed, I would conclude that the absence of legislative authorization allowing unrelated third parties to bring civil judgments into criminal courts to attach bond money means that there is no error in this case.”

Lesson:

Judgment creditors can garnish bail bonds that judgment debtors pay in criminal cases.

Read the full March 2017 Law Club Handout or listen to the recording here.