HB-4119, As Passed House, February 19, 2015

SUBSTITUTE FOR

HOUSE BILL NO. 4119

     A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

by amending section 4012 (MCL 600.4012), as amended by 2012 PA 304.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 4012. (1) Except for garnishment of a tax refund under

section 4061a or garnishment of wages, salary, commissions, or

other earnings, and subject to subsection (2), a writ of A

garnishment of periodic payments remains in effect for the period

prescribed by the Michigan court rules. A writ of garnishment of

wages, salary, commissions, or other earnings remains in effect for

182 days.until the balance of the judgment is satisfied.

     (2) A garnishee is not liable for a writ of garnishment of

periodic payments under subsection (1) to the extent that the

garnishee is required to satisfy another writ of garnishment

against the same defendant having a higher priority or having the

same priority but received at an earlier date. For purposes of this

subsection, writs of garnishment garnishments have priority in the

following order:

     (a) A garnishment resulting from an obligation of court

ordered support as defined in section 2 of the support and

parenting time enforcement act, 1982 PA 295, MCL 552.602.

     (b) A levy of the state or a governmental unit of the state to

satisfy a tax liability.

     (c) Any other garnishments, in the order in which they are

served.

     (3) If a garnishment is suspended pursuant to an order under

sections 6201 to 6251 and the order is subsequently set aside, the

garnishment retains its priority.

     (4) A garnishment or a notice of failure is not valid or

enforceable unless the garnishment is served on the garnishee in

accordance with the Michigan court rules.

     (5) While a garnishment is in effect, the plaintiff shall do

both of the following:

     (a) At least once every 6 months after the plaintiff receives

the first payment under the garnishment, provide to the garnishee

and defendant a statement setting forth the balance remaining on

the judgment, including interest and costs. A failure to send a

timely statement under this subdivision does not affect the

garnishment or any obligation of the garnishee under the

garnishment.

     (b) Within 21 days after the balance of the judgment has been

paid in full, including all interest and costs, provide to the

garnishee and defendant a release of garnishment.

     (6) A plaintiff shall not request that a default be entered

against a garnishee under a garnishment unless both of the

following apply:

     (a) If the garnishee fails to file a disclosure within 14 days

after service of the garnishment or fails to perform any other

required act, the plaintiff has served on the garnishee a notice of

failure setting forth the required act or acts that the garnishee

has failed to perform.

     (b) The garnishee has failed, within 28 days after the date of

service of the notice of failure under subdivision (a), to cure the

identified failure by mailing to the plaintiff and defendant a

disclosure certifying that the garnishee will immediately begin

withholding any available funds pursuant to the garnishment as

provided by statute or court rule, or has commenced performing any

other required act.

     (7) The plaintiff shall attach to a request for entry of a

default as allowed under subsection (6) proof of serving the notice

of failure. The plaintiff shall send a copy of the request for

entry of a default by certified mail to the garnishee at the

garnishee's principal place of business or registered agent.

     (8) After entry of a default under subsection (6) and before

entry of a default judgment, the garnishee may cure the identified

failure by mailing to the court, plaintiff, and defendant a

disclosure certifying that the garnishee will immediately begin

withholding any available funds pursuant to the garnishment as

provided by statute or court rule or that it has commenced

performing any other required act.

     (9) After a default has been entered under subsection (6), the

plaintiff may file with the court a request for default judgment

for an amount that does not exceed the full amount of the unpaid

judgment, interest, and costs, as stated in the request and

garnishment. The plaintiff shall send a copy of the request for

default judgment by certified mail to the garnishee at the

garnishee's principal place of business or resident agent.

     (10) On motion of the garnishee filed within 21 days after

entry of a default judgment under subsection (9), the court shall

do 1 or more of the following, as applicable:

     (a) If the garnishee certifies by affidavit that its failure

to comply with the garnishment was inadvertent or caused by an

administrative error, mistake, or other oversight and it will

immediately begin withholding any available funds or immediately

begin performing any other required act pursuant to the garnishment

as provided by statute or court rule, reduce the default judgment

to not more than the amount that would have been withheld if the

garnishment had been in effect for 56 days.

     (b) If any of the following circumstances exist, set aside the

default judgment:

     (i) The garnishee was not liable to the defendant for any

periodic payments after service of the garnishment.

     (ii) The garnishment, notice of failure, request for entry of a

default, or request for default judgment was not properly served or

sent as required by this section.

     (iii) The notice of failure was materially inaccurate or

incomplete.

     (11) A garnishee may recover an amount for which the garnishee

is liable because of the entry of a default judgment under

subsection (9) or (10) from future periodic payments to the

defendant as provided in section 7 of 1978 PA 390, MCL 408.477.

(12) (3) Except as otherwise provided by statute, a plaintiff

shall pay a fee of $6.00 $35.00 to the garnishee at the time a writ

to the garnishee of garnishment of periodic payments is served upon

on the garnishee.

     (13) As used in this section, "garnishment" means any court

order directed to a third party to withhold periodic payments.

(14) (4) As used in this section and section 8410a, "periodic

payments" means wages, salary, commissions, and other earnings,

land contract payments, rent, and other periodic debt or contract

payments that are or become payable during the effective period of

the writ of garnishment. Periodic payments do not mean any of the

following:

     (a) Payments by a financial institution of interest on a

deposit account.

     (b) Charges made by a financial institution automatically

against an account which applies that are applied to a debt under

an automatic payment authorization executed by the account owner.

     (c) Payments made by a financial institution to honor a check

or draft or to comply with an account holder's order of withdrawal

of funds from an account.

     (d) Interest earned on a certificate of deposit that is paid

into a deposit account.

     Enacting section 1. This amendatory act applies to a writ of

garnishment issued after September 30, 2015.

     Enacting section 2. This amendatory act does not take effect

unless House Bill No. 4120 of the 98th Legislature is enacted into

law.