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Unrepresented litigants don't forfeit exemptions even if not pleaded

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The Indiana Supreme Court has ruled in favor of a couple who were ordered in small claims court to pay $100 a month toward judgments and look for work each week. The couple’s only income is exempt under the general wage and the Social Security Income exemptions.

Quincy and Shannon Branham were unrepresented by counsel when the trial judge ordered them to pay on two separate garnishment actions. They did not assert that their income was exempt and the judge did not assert the two applicable statutory exemptions – general wage and Social Security Income – on their behalf. Quincy only made $100 a week working at a salvage yard; his wife Shannon receives $674 a month in SSI. After paying for rent, their car, food, and utilities, they said they have no money left over each month.

They appealed the order in each case, which also included that Quincy submit five job applications a week and show proof to the plaintiff’s attorney. The judge also scheduled a status conference to check on Quincy’s job situation.

The Indiana Court of Appeals was divided over whether Mims v. Commercial Credit Corp., 261 Ind. 591, 307 N.E.2d 867 (1974), requires a trial court to assert exemptions in garnishment actions on behalf of debtors who aren’t represented by counsel. The majority held the trial court shouldn’t assert those exemptions. The appellate court unanimously agreed the judge shouldn’t have ordered Quincy to submit five job applications a week.

In two opinions released Tuesday, the Supreme Court reversed the trial court, holding that entitlement to the statutory exemptions at issue in the case is not forfeited by the failure of an unrepresented litigant to plead them as an affirmative defense “in the course of purposefully informal small claims proceedings.”

Chief Justice Randall T. Shepard authored Quincy Branham & Shannon Branham v. Rodney Varble & Norman Chastain, No. 62S01-1103-SC-141, and the companion opinion, Quincy Branham & Shannon Branham v. Rodney Varble & Carol Varble, No. 62S04-1103-SC-139.

Citing Mims, the chief justice wrote that the Supreme Court held if a debtor-defendant isn’t represented by an attorney, the trial court must determine whether the debtor is a resident-householder, and, if so, which exemption would be least burdensome on the debtor.  The Branhams argued that Indiana Code 24-4.5-5-105(2)(b) exempts their income, as it limits the amount that can be garnished from any single workweek to the lesser of 25 percent of that week’s disposable earnings – the part of the earnings remaining after required deductions such as taxes – or  the amount of that week’s disposable income that exceeds 30 times the federal minimum hourly wage. The Branhams haven’t had to pay federal or state income taxes since 2003 and Quincy doesn’t have any money withheld from his wages.

Using Quincy’s weekly wages, 25 percent would be $25 a week. The federal minimum wage at the time of the proceedings supplement was $7.25 an hour. Thirty times the minimum wage is $217.50. Since Quincy’s weekly wages don’t exceed that amount, all of his wages are protected from garnishment, wrote the chief justice. Shannon’s SSI income is not subject to garnishment.

“The facts of this case suggest why holding unrepresented litigants to account on appeal for affirmatively pleading particular exemptions may often prove too harsh,” wrote the chief justice. “We finish by emphasizing that a judicial officer hearing small claims is not charged with identifying and applying the entire gamut of exemptions. The two involved here — the general wage exemption and the SSI exemption — are the stuff of everyday life in collections work. We cannot say on appeal that they are lost through failure of formal pleading.”

In addition to reversing the order that Branhams pay $50 a month in each case, the justices held that a court doesn’t err when it orders a party to return for status checks a limited number of times, even if an information of contempt hasn’t been filed.  The high court also agreed with the Court of Appeals that the trial court erred in ordering Quincy to submit five job applications a week, as orders to seek employment or better employment aren’t a proper part of a proceeding supplemental.
 

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  3. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

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