April 20, 2018

How to Garnish a Bail Bond; Garner v. Kempf

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Last April, we told you about a decision from the Indiana Court of Appeals that addressed whether a bail bond can be subject to garnishment. Since then, the Indiana Supreme Court granted transfer, and it has now weighed in on the issue.

Garner obtained a judgment against Kempf, and began proceedings supplemental so that he could collect. While Garner’s judgment was unsatisfied, Kempf was arrested in an unrelated criminal matter. Kempf posted a $5,000 cash bond with the county clerk.

After learning of the bond, Garner began new proceedings supplemental to garnish the bond. Garner served Kempf and the clerk, but filed nothing about the bond in Kempf’s criminal case.

Kempf later moved the criminal court to release the bond to defense counsel to pay his legal fees. The criminal court granted the motion and ordered the clerk to issue a check to Kempf’s lawyer. No one notified the criminal court of Garner’s proceedings supplemental.

Subsequently, the civil court held a hearing on Garner’s attempt to garnish the bond. The clerk argued that it properly released the bond pursuant to the criminal court’s order because there was no final garnishment order. The civil court ruled against Garner, relying on an internal memorandum which said that any attempt to garnish a bond must be entered on the criminal case’s CCS. Garner appealed, the Court of Appeals reversed, and the Supreme Court granted transfer.

On transfer, the Court generally agreed with the Court of Appeals. First, it recognized that court clerks are subject to garnishment proceedings, as a clerk may be a third party that possesses or manages property of the debtor subject to execution. Garner properly named the clerk as a defendant in the proceedings supplemental. “We see no ambiguity in these statutes.”

The clerk argued that even if it was a proper garnishee-defendant, that Garner was not entitled to relief because bond proceeds can only be garnished when the underlying civil judgment arises out of the same transaction or occurrence as the criminal proceedings. The Court disagreed, but not without a vigorous dissent. The statute in question provides as follows:

In a criminal case, if the court having jurisdiction over the criminal case receives written notice of a pending civil action or unsatisfied judgment against the criminal defendant arising out of the same transaction or occurrence forming the basis of the criminal case, funds deposited with the clerk of the court under section 3.2(a)(2) of this chapter may not be declared forfeited by the court, and the court shall order the deposited funds to be held by the clerk. If there is an entry of final judgment in favor of the plaintiff in the civil action, and if the deposit and the bond are subject to forfeiture, the criminal court shall order payment of all or any part of the deposit to the plaintiff in the action, as is necessary to satisfy the judgment. The court shall then order the remainder of the deposit, if any, and the bond forfeited.

The majority found that this statute “merely limits the authority of criminal courts to forfeit bond proceeds when the underlying civil judgment derived from the judgment debtor’s crime.” It did not prevent a judgment-creditor from garnishing that bond. But Justices David and Rush disagreed.

They concluded that statutes governing bail bonds are criminal in nature, and must be construed strictly. And the statutes governing bail bonds do “not explicitly authorize wholesale garnishment of bail bonds by judgment creditors.” Rather, they note a single situation in which this is allowed—when the underlying judgment arises from the same occurrence as the crime. The majority thought it was inappropriate to apply the rule of lenity (strict construction of criminal statutes) because “disputed bail-bond provisions are not penal statutes; they neither define a crime nor prescribe a penalty.”

The dissent also argued that another canon of statutory construction—the expression of one thing implies the exclusion of others —supported its conclusion, for the statutes describe what may be done with bail bonds, and do not include satisfying unrelated judgments. But the majority again disagreed, and described when this canon applies.

Neither does the negative-implication canon apply here. This canon—also known by the Latin phrase expressio unius est exclusio alterius (“the expression of one is the exclusion of another”)—is a powerful interpretive rule when it applies. But it must be applied “with great caution, since its application depends so much on context.” As Scalia and Garner explain, the canon applies only when the thing expressed reasonably identifies all things included within the grant of what is being permitted or excluded. Consider the familiar restaurant sign “No dogs allowed”. Nobody reasonably believes the restaurant intends to exclude only dogs and to welcome all other animals. The reason for the sign’s limited exclusion is not that dogs are the only unwelcome animal, but that dogs are the animal most likely to be brought into a restaurant.

Similar context-based interpretive limits also apply to the bail-bond statute. This statute specifies when bail proceeds can be diverted for other purposes—to pay the “costs of representation and fines, costs, fees, and restitution that the court may order the defendant to pay if the defendant is convicted.” The dissent infers from this list of approved uses that all other uses are forbidden, including the proposed use here of garnishing Kempf’s bond to satisfy his unrelated civil judgment in favor of Garner. But that is not the best understanding of the legislature’s enumeration. What the legislature has identified are approved alternative uses for bail proceeds in a specific, narrow context. That context, by its terms, is confined to what criminal courts may order done with bail bonds in the aftermath of a defendant’s conviction. In other words, the legislature has identified an exhaustive list of authorized uses within that specific context. By negative implication, it follows that all other proposed uses within that context are foreclosed. But the disputed issue here falls outside that context—i.e., outside the criminal court’s authority over the bond after a defendant’s conviction—so the negative-implication canon does not apply. The legislature has not limited the extent to which a civil court may garnish bail proceeds to satisfy a civil judgment, and we decline to impose any such limits.

This did not mean that Garner was entitled to the money once the trial court entered a final garnishment order, for the Court found that “the judgment-creditor may not recover on the bond until the criminal court releases it.” But it does mean that the clerk was liable for releasing the bond to Kempf’s attorney.

Here, the Clerk’s duty was to hold the cash bond posted in the criminal matter pending the Civil Court’s determination of Garner’s right to the proceeds to satisfy his judgment. The Clerk failed to inform the Criminal Court of the lien, and then she released the bond to Kempf’s attorney despite having been served with the garnishment complaint in the Civil Court. It is no excuse that the Criminal Court ordered the Clerk to release the bond to the attorney.

I don’t know how often we will be using bail bonds to help collect funds for our clients. Rather, the Court’s discussion of the canons of statutory construction may be the portion of this opinion that is most widely cited in the future.

Lessons:

  1. Bail bonds are subject to garnishment.
  2. The judgment-creditor is not entitled to the funds until the criminal court releases the bond.
  3. The rule of lenity does not apply unless the statute at issue defines a crime or prescribes a penalty.
  4. When arguing that the inclusion of something in a statute excludes others, the analysis must be limited to things that fall within the specific context of what is being included.