Carter v. Grace Whitney Properties
939 N.E.2d 630
Ind. Ct. App.2010Background
- Grace Whitney Properties sued Carter in small claims court in Oct 2003, obtaining a judgment for $401.60 plus $44 court costs and interest.
- Grace Whitney filed proceedings supplemental, and in Mar 2004 the court entered a personal order of garnishment under Vanderburgh County Local Rules 1.23(C) and 1.05(E) to collect non-exempt income.
- Local Rules allowed contempt information to enforce the personal garnishment after an order for garnishment.
- Grace Whitney filed numerous informations for contempt from 2004–2010; Carter appeared at many hearings and was repeatedly ordered to pay, including a 30-day jail threat in 2009, which was later expunged.
- Carter presented evidence of disability, Social Security Disability income, and no non-exempt assets or income; she moved to rescind/modify the garnishment, which the court denied, keeping the garnishment in place.
- The Indiana Court of Appeals reversed and remanded, holding (1) local rules enabling contempt for a monetary debt violated Article 1, Section 22 of the Indiana Constitution, (2) the personal garnishment order was improper given Carter’s lack of ability to pay, and (3) future proceedings supplemental require new facts showing the creditor’s knowledge of assets before continuing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do Vanderburgh County local rules authorize contempt to enforce a money debt in violation of Article 1, Section 22? | Carter argues the rules permit imprisonment for debt. | Grace Whitney contends rules authorize contempt to enforce garnishment. | Yes; local rules conflict with Article 1, Section 22 and are improper. |
| Was the personal order of garnishment properly maintained given Carter’s disability and lack of non-exempt assets? | Carter showed inability to pay; sought rescission. | Grace Whitney argued the order could continue to collect. | No; personal garnishment unjustified; reversed and removed the order. |
| Whether future proceedings supplemental may continue without new facts justifying them? | Grace Whitney must show new facts indicating assets. | Grace Whitney should be allowed to continue examinations. | Must show new facts; fishing expeditions improper; remanded for consistent proceedings. |
Key Cases Cited
- Pettit v. Pettit, 626 N.E.2d 444 (Ind. 1993) (enforces that money judgments are not typically enforceable by contempt)
- State ex rel. Wilson v. Monroe County Superior Court IV, 444 N.E.2d 1178 (Ind.1983) (no imprisonment for debt absent fraud or child support)
- Cowart v. White, 711 N.E.2d 523 (Ind.1999) (contempt not generally available to enforce money judgments)
- Button v. James, 909 N.E.2d 1007 (Ind.Ct.App.2009) (proceedings can’t impose payment unless debtor’s ability shown)
- In re Paternity of A.M.C., 758 N.E.2d 536 (Ind.Ct.App.2001) (local rules; court governance consistent with higher rules)
- In re Lawrance, 579 N.E.2d 32 (Ind.1991) (moot but issue likely to recur; reconsideration allowed when issues recur)
- Kirk v. Monroe County Tire, 585 N.E.2d 1366 (Ind.Ct.App.1992) (creditor must show debtor has property or income to satisfy judgment)
- State Farm Mut. Auto. Ins. Co. v. Estep, 873 N.E.2d 1021 (Ind.2007) (statutory framework for proceedings supplemental)