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Court tosses use of contempt as way to order debt payment

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The Indiana Court of Appeals says that a southern county’s local rule permitting the use of contempt powers to enforce civil judgment payments violates the Indiana Constitution.

In a unanimous 14-page decision today in Deidre Carter v. Grace Whitney Properties,  No. 82A04-1003-SC-177, the appellate court reversed and remanded a small claims case that had come from Vanderburgh Superior Court.

The appeal involved a small claims complaint that Grace Whitney Properties had filed against Carter back in October 2003 and a post-trial judgment against the woman in the amount of $401.60 plus $44 in court costs and interest. The company later filed proceedings supplemental and in March 2004 the small claims court entered a personal order of garnishment against Carter pursuant to Vanderburgh County Local Rule 1.23(C) and Local Rule 1.05(E).

Those rules detailed how she’d be garnished the lesser of either: 25 percent of the defendant’s maximum disposable earnings, or the amount by which that person’s disposal earnings for the week exceed 30 times the federal minimum hourly wage.

Following that order, Grace Whitney Properties filed a dozen contempt notices against Carter and the small claims court made various orders about how she should make payments on the debt and at one point ordered Carter serve 30 days in jail. She contended that she’d been on disability since early 2004 and had a fixed income, and she requested the garnishment order be rescinded in part because it failed to state a claim upon which relief could be granted. The small claims court denied that request, leaving the garnishment order in place and pushing Carter to appeal.

One of the arguments Carter makes is that Article 1, Section 22 of the Indiana Constitution prohibits the court from using its contempt power to force a payment for a debt because that falls under imprisonment for a debt.

The appellate panel agreed.

“We conclude that (the Vanderburgh local rules), as applied here, violate Article I, Section 22 of the Indiana Constitution because they contemplate the use of contempt to enforce an obligation to pay money even where, as here, the debt does not involve child support or fraud,” Judge Michael Barnes wrote for the court. “Although a ‘personal order of garnishment’ is permitted under Indiana proceedings supplemental statutes, the small claims court erred by continuing the personal order of garnishment where Carter presented evidence that she had no non-exempt assets or income available to pay the judgment and that her circumstances were unlikely to change.”

Also referencing the many “fishing expeditions” initiated by Grace Whitney Properties in this matter, the appellate court noted that future proceedings supplemental against Carter in this case must be supported by a showing that new facts justifying a new order or examination have come to the court’s knowledge.
 

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  4. JLAP and other courtiers ... Those running court systems, have most substance abuse issues. Probably self medicating to cover conscience issues arising out of acts furthering govt corruption

  5. I whole-heartedly agree with Doug Church's comment, above. Indiana lawyers were especially fortunate to benefit from Tom Pyrz' leadership and foresight at a time when there has been unprecedented change in the legal profession. Consider how dramatically computer technology and its role in the practice of law have changed over the last 25 years. The impact of the great recession of 2008 dramatically changed the composition and structure of law firms across the country. Economic pressures altered what had long been a routine, robust annual recruitment process for law students and recent law school graduates. That has, in turn, impacted law school enrollment across the country, placing upward pressure on law school tuition. The internet continues to drive significant changes in the provision of legal services in both public and private sectors. The ISBA has worked to make quality legal representation accessible and affordable for all who need it and to raise general public understanding of Indiana laws and procedures. How difficult it would have been to tackle each of these issues without Tom's leadership. Tom has set the tone for positive change at the ISBA to meet the evolving practice needs of lawyers of all backgrounds and ages. He has led the organization with vision, patience, flexibility, commitment, thoughtfulness & even humor. He will, indeed, be a tough act to follow. Thank you, Tom, for all you've done and all the energy you've invested in making the ISBA an excellent, progressive, highly responsive, all-inclusive, respectful & respected professional association during his tenure there.

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