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Divided Supreme Court finds clerk liable for released bail proceeds

March 26, 2018

The Vanderburgh County Clerk is liable for a $5,000 cash bond she released in a criminal case while a related civil proceeding’s supplemental was pending, a ruling two dissenting Indiana Supreme Court justices fear could put clerks in a tight spot.

In 2013, Dennis Garner obtained a default judgment against Gregory Kempf in the Vanderburgh Superior Court and initiated proceedings supplementary to execution to collect on the civil judgment by garnishing Kempf’s bank account and tax refunds. Kempf never satisfied the judgment and was later arrested on an unrelated criminal matter, prompting him to post a $5,000 cash bond with the Vanderburgh County clerk.

Garner initiated new proceedings supplemental in civil court to garnish the cash bond, naming the clerk as the garnishee-defendant. Meanwhile, Kempf moved the criminal court to release his bond to his defense counsel for legal fees. The criminal court had not been notified of the civil proceedings supplemental, so the criminal judge granted the motion and the clerk issued a check payable to Kempf’s lawyer.

In response, Garner sought a $5,000 judgment against the clerk, arguing a judicial lien attached to the bon once she received notice of the proceedings supplemental. The Vanderburgh Superior Court ruled against Garner, relying on an internal court memo that if bonds released in criminal cases are subject to garnishment orders and must be entered on the criminal chronological case summary, but a divided Court of Appeals reversed more than one year ago.

After hearing oral arguments in June, a divided Indiana Supreme Court ruled in Garner’s favor, with Justice Geoffrey Slaughter writing in the majority opinion in Dennis Garner v. Gregory S. Kempf and Clerk of Vanderburgh County (garnishee), 82S01-1705-PL-334, that Indiana law allows judgment-creditors like Garner to garner cash bail bonds posted by judgment-debtors like Kempf that are held by the clerk in unrelated criminal matters. Slaughter pointed to Indiana Code section 35-33-8-7(b) (Supp. 2012), which he said “merely limits the authority of criminal courts to forfeit bond proceeds when the underlying civil judgment derived from the judgment-debtor’s crime.”

“Stated differently, Section 7(b) delays forfeiture when the criminal court learns a crime victim is simultaneously seeking a civil judgment against the defendant for injury resulting from the crime,” Slaughter wrote in the majority opinion joined by justices Mark Massa and Christopher Goff. “Section 7(b) thus stands as a narrow exception to the general rule that a court may declare a bond forfeited and order the funds transferred to the state common school fund when the criminal defendant fails to appear. But this provision is not a broad rule generally exemption cash bail bonds from garnishment.”

Thus, because I.C. sections 34-25-3-1(a)(1)(A), 1(b) (2008 Repl.) subjects clerks to garnishment, the majority determined there is no prohibition against garnishing bail bonds, and that cash-bond proceeds held by clerks are garnishable. Given that holding, the Vanderburgh County clerk should have held Kempf’s cash bond until the civil court determined what right Garner had to the proceeds, Slaughter wrote, and her failure to do so makes her liable for the $5,000 bond proceeds.

The majority reversed the trial court’s judgment and remanded with instructions for a $5,000 judgment in favor of Garner, but Justice Steven David and Chief Justice Loretta Rush dissented. Writing separately, David said he was not convinced that bail bonds are subject to garnishment in the same way other money held by a third party is.

David interpreted section 7(b) to mean that bail bonds can be used to satisfy a civil judgment only when the civil case arose from the underlying criminal matter, the same argument put forth by the clerk. Further, David said I.C. 35-33-8-3.2(a)(2) provides several exceptions in which bail money can be taken, and none of those exceptions including satisfying an unrelated civil judgment. The dissenting justices also found that under I.C. 35-33-8-7(f), bail money must be returned to the defendant.   

“In sum, I believe a reading of the statute as broad as our majority has allowed…departs from the way we treat criminal statutes,” David wrote. “I also fear the majority overlooks the tension within our statutes that this holding creates and the impossible predicament it places our court clerks in.”

Addressing the dissent’s argument, Slaughter disagreed with the statement that the majority’s interpretation would impose irreconcilable differences on clerks.

“Under our approach, bond proceeds presumptively belong to the defendant and are to be returned to the defendant unless – and it’s an important unless – someone else has a claim to that property,” Slaughter wrote. “…This dissent’s view would effectively overrule appellant precedent holding that a bond posted by a third party is to be returned to the third party. We believe that precedent to be correct and disagree with the dissent’s implicit rejection of it.”

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