Lead Opinion
Appellant Diana Alexandroni, the mother and supervisory parent of juvenile respondent Robby Lampart, appeals by delayed leave granted
I. PERTINENT FACTS AND PROCEDURAL HISTORY
In 2007, Lampart, a juvenile at the time, entered a plea of admission to arson. Restitution was ordered in the total amount of $28,210. The trial court subsequently ordered Alexandroni, on behalf of Lampart, to pay restitution, pursuant to MCL 712A.30(15), in the amount of $250 per month. See also In re McEvoy,
In September 2009, Alexandroni suffered a heart attack. Her resultant heart condition left her unemployed. At the time of her heart attack, the unpaid restitution totaled $22,960. Because Alexandroni was unemployed, the wage garnishment of $62.50 that was originally ordered by the trial court terminated.
On April 18, 2011, the trial court held a reimbursement hearing regarding Alexandroni’s obligation under the restitution order in light of the fact that garnishment of her wages was no longer available. In an affidavit, Alexandroni averred that she was unemployed and that her only source of income was $730 per month in SSDI benefits.
The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law orin equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
Alexandroni argued that any attempt to enforce the restitution order would constitute “other legal process” under 42 USC 407(a), and that such attempt would be barred by the statute.
In an opinion and order dated April 27,2011, the trial court concluded that enforcing a restitution order under the juvenile code, MCL 712A.1 et seq., did not constitute “execution, levy, attachment, garnishment or other legal process.” The trial court concluded that it could consider Alexandroni’s SSDI benefits as “income” and enforce the restitution order against Alexandroni personally, through the power of contempt, after the income was in her possession. The trial court reasoned that to hold otherwise would have the effect of making Alexandroni exempt from making payments under the restitution order.
On May 12, 2011, the trial court entered an order for reimbursement requiring Alexandroni to pay $150 per month beginning on June 1, 2011, and continuing until the balance was paid in full. That order also was not appealed.
In 2012, Alexandroni filed a motion for relief from judgment under MCR 2.612(C)(1)(d) and (f), seeking to modify or cancel the obligation to make restitution payments. In an opinion and order dated January 25, 2013, the trial court denied that motion, noting that “[t]he crux of this case boils down to whether the Court’s action in enforcing a restitution order subject to contempt is ‘other legal process’ ” under 42 USC 407(a). Citing Washington State Dep’t of Social & Health Servs v Guardianship Estate of Keffeler,
[T]he Court cannot reconcile the arguments with a common sense result. That is, how can a Social Security-Disability recipient (as opposed to a recipient of SSI, which is minimal and means tested) be exempt when often their income is greater than the working poor who are subject to enforcement. The guidelines promulgated by the collection statute for juvenile courts, MCL 712A.18(6), specifically mention Social Security Disability benefits as income that can be considered. Those guidelines also start collecting SOMETHING on incomes as low as $100 per week. To allow the exemption argued for would mean that no individual with any court obligation, no speeder, no drunk driver, no felon whose only income was Social Security Disability would ever have to pay restitution or court costs or fines of any nature. That result simply does not make sense. [Citation omitted.]
The trial court denied the motion to modify or cancel Alexandroni’s restitution obligation. Noting that Alexandroni had suffered a reduction in household income
On appeal, Alexandroni requests that this Court “amendQ” the trial court’s April 27, 2011 order “to provide that the Social Security benefits of [Alexandroni and Lampart] are exempt,” and that the “obligation requiring payment of restitution be canceled” because Alexandroni’s sole source of income is her SSDI benefits.
II. ANALYSIS
Resolution of this issue involves an issue of statutory interpretation, which we review de novo. Edge v Edge,
A. RESTITUTION STATUTE
Under the Michigan Constitution, crime victims are entitled to restitution. Const 1963, art 1, § 24. Under the Crime Victim’s Rights Act (CVRA), MCL 780.751 et seq., it is mandatory, not discretionary, for trial courts to order convicted defendants to “make full restitution to any victim of the defendant’s course of conduct that gives rise to the conviction . . . People v Fawaz,
Under the juvenile code, MCL 712A.1 et seq., restitution also is required, and many of its provisions are substantively identical to those of the CVBA. In re McEvoy,
B. 42 USC 407(a)
Alexandroni contends that 42 USC 407(a) prohibits a state court from enforcing the restitution order against her because her sole income is her SSDI benefits. 42 USC 407(a) acts as an antiattachment statute for Social Security benefits, and provides:
The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
The protection afforded to money received as Social Security benefits extends before and after the benefits are received. Philpott v Essex Co Welfare Bd,
C. OTHER LEGAL PROCESS
In the case at bar, it appears undisputed that, at least as of the trial court’s April 27, 2011 order, Alexandroni’s only income came from her SSDI benefits. It is also undisputed that Alexandroni’s SSDI benefits were not subject to direct execution, levy, attachment, or garnishment, nor did the trial court employ any of those mechanisms. Rather, the issue is whether the trial court’s decision to consider Alexandroni’s SSDI benefits, after they were received, as income reachable through enforcement of the restitution order under the court’s powers of contempt, amounted to “other legal process” and thus violated 42 USC 407(a).
In Keffeler,
should be understood to be process much like the processes of execution, levy, attachment, and garnishment, and at a minimum, would seem to require utilization of some judicial or quasi-judicial mechanism, though not necessarily an elaborate one, by which control over property passes from one person to another in order to discharge or secure discharge of an allegedly existing or anticipated liability. [Id. at 385.]
The Court explained that its definition was consistent with definitions of “other legal process” that were contained in the Social Security Administrator’s Program Operations Manual System (POMS). Id. One such definition explained “other legal process” as “ ‘the means by which a court (or agency or official authorized by law) compels compliance with its demand; generally, it is a court order.’ ” Id., quoting POMS GN 02410.001 (2002). Elsewhere, the POMS defined “other legal process” as “ ‘any writ, order, summons or other similar process in the nature of garnishment.’ ” Id.
In applying Keffeler, it is important to note the particular circumstances that were presented in that case. Specifically, Washington’s Department of Social and Health Services provided foster care for children who were in need of such care, some of whom were recipients of Social Security benefits. The department was
After defining the term “other legal process,” the Supreme Court rejected the notion that the department’s “efforts to become [the children’s] representative payee and its use of [their] benefits in that capacity” fit within the definition. Id. at 386. Rather, “the department’s reimbursement scheme operates on funds already in the department’s possession and control, held on terms that allow the reimbursement.” Id.
It is significant that the alleged “legal process” in Keffeler involved no resort whatsoever to the judicial process. For that reason, the Court contrasted the situation before it with one where there was “utilization of some judicial or quasi-judicial mechanism, though not necessarily an elaborate one, by which control over property passes from one person to another in order to discharge or secure discharge of an allegedly existing or anticipated liability.” Id. at 385. As the Supreme Court ruled, “other legal process” (1) requires the use of some judicial or quasi-judicial mechanism, (2) by which control over property passes from one person to another, (3) in order to discharge or secure discharge of an existing or anticipated liability.
Unlike in Keffeler, we find that a judicial mechanism is being used here. Indisputably, resort is being made to the courts to secure payment. We further find that the judicial mechanism is being used to secure the discharge of an existing liability, i.e., restitution. The question, therefore, is whether it is being used to pass control over property from one person to another, in a manner that runs afoul of 42 USC 407(a).
We find that the reasoning of the trial court, if effectuated through its contempt powers so as to cause Alexandroni to satisfy her restitution obligations from her SSDI benefits, would be the use of a judicial mechanism to pass control over those benefits from one person to another. Thus, it would constitute “other legal process” that is prohibited under 42 USC 407(a). The process by which the trial court would enforce the restitution order would be the employment of its civil-contempt powers. Civil contempt is defined as “[t]he failure to obey a court order that was issued for another party’s benefit.” Black’s Law Dictionary (9th ed), ]3§30. “A civil-contempt proceeding is coercive or remedial in nature.” Id.
When used in this manner, the court’s use of its civil-contempt powers to enforce a restitution order would act as a process much like the processes of execution, levy, attachment, and garnishment, because in that context, the process would involve a formal procedure by which the restitution victim, through the trial court, would gain control over Alexandroni’s SSDI benefits. See Keffeler,
In this case, it appears undisputed that Alexandroni’s only source of income, at least as of the April 27, 2011 trial court order, was her SSDI benefits. The trial court clearly was aware of this, and nonetheless decided to consider her SSDI benefits as income for purposes of fashioning a restitution order subject to contempt. While we find no error merely in the trial court’s consideration of Alexandroni’s SSDI benefits as income, because 42 USC 407(a) does not directly proscribe such consideration, we hold that, to the extent the trial court’s consideration of those benefits results in an order of restitution that could only be satisfied from those benefits, the use of the court’s contempt powers then would violate 42 USC 407(a). As noted, the protection afforded to SSDI benefits extends after those benefits are received. Philpott,
Plainly, pursuant to 42 USC 407(a), money received as social security benefits is not subject to execution or garnishment even after received and deposited by the recipient. Therefore, the trial court clearly erred when it found that the protection against garnishment ended when the social security proceeds were deposited into defendants’ account.
It appears to us that the trial court carefully avoided holding Alexandroni in contempt, yet came perilously close to using the threat of its contempt powers to compel Alexandroni to satisfy her restitution obligations from her SSDI benefits, which would violate 42 USC 407(a). On remand, the trial court should be careful to avoid any order that in fact would compel Alexandroni to satisfy her restitution obligation from the proceeds of her SSDI benefits. That said, the current record does not reflect whether Alexandroni possesses any assets, other than as generated by her SSDI benefit income, from which her restitution might be satisfied. Nor does the record reflect whether Alexandroni’s income remains solely her SSDI benefits, as her income and income sources conceivably could change over time. Those are matters that the trial court should explore on remand.
We note that it could be argued that, in imposing a civil contempt, a court does not touch a contemnor’s money directly, but rather imposes a personal sanction on the contemnor that will be lifted if the contemnor chooses to comply. In other words, civil contempt imposes a choice-, perhaps a choice in which neither alternative is appealing, but nonetheless a choice that the
Given that the trial court in this case has not yet held Alexandroni in contempt, has not made a determination with regard to whether she has any other assets (apart from any that are proceeds of her SSDI benefits) from which restitution may be satisfied, and has not made any recent determination of her income sources to ascertain whether any exist apart from her SSDI benefits, we decline to determine whether circumstances exist that might warrant a contempt order at this time. However, on remand, the trial court should follow our direction in this opinion, to appropriately (and perhaps periodically) ascertain Alexandroni’s assets and sources of income, perhaps through a contempt hearing,
Finally, we note the differing approaches of other state and federal circuit courts regarding whether the mere threat of contempt (as arguably already exists in this case) itself amounts to “other legal process” under 42 USC 407(a). For example, in Chambliss v Buckner,
By contrast, the court in Becker Co Human Servs v Peppel,
Although we find that a contempt order that would cause Alexandroni to satisfy her restitution obligations from her SSDI benefits would be the use of “other legal process” in contravention of 42 USC 407(a), we decline to conclude that the mere specter of a contempt hearing necessarily constitutes such “other legal process.” That is, although we recognize that there is some level of threat and coercion inherent in a prospective contempt proceeding itself, the specter of contempt also can serve the legitimate purpose of providing a mechanism by which an obligor’s assets and income can be determined. See Causley v LaFreniere,
We also note that the trial court found, as a matter of policy, that SSDI benefits should be used to satisfy restitution or court-imposed fines because SSDI benefits are not awarded on the basis of need. The trial court determined that SSDI benefits should not be exempt from satisfying costs or fines because, unlike a recipient of SSI benefits, an SSDI recipient’s benefits are not based on need, and may in certain instances be “greater than the working poor who are subject to enforcement.” The trial court correctly recognized that SSDI benefits, unlike SSI benefits, are not based on need. Mathews v Eldridge,
If it were determined that Alexandroni’s only asset, or source of income, is and remains from SSDI benefits, 42 USC 407(a) prohibits the use of legal process— including by a finding of contempt — from reaching those benefits to satisfy the restitution order. See Philpott,
The trial court’s contempt powers similarly remain a valid tool in enforcing the restitution order, and our decision today should not be read otherwise. Again, a contempt hearing can be an appropriate vehicle for determining income and assets from which the restitution order may properly be enforced. See Causley,
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
Notes
In re Lampart, unpublished order of the Court of Appeals, entered November 1, 2013 (Docket No. 315333).
Lampart received an additional $545 per month.
The trial court made a similar finding regarding Lampart’s Social Security benefits.
MCL 780.766 concerns restitution following conviction of a felony. MCL 780.794 is the similarly mandatory statute in the CVRA pertaining to juvenile adjudications.
18 USC 3613(a) provides:
The United States may enforce a judgment imposing a fine in accordance with the practices and procedures for the enforcement of a civil judgment under Federal law or State law. Notwithstanding any other Federal law (including section 207 of the Social Security Act), a judgment imposing a fine may be enforced against all property or rights to property of the person fined[.]
This provision also applies to the United States when it seeks enforcement of restitution orders. 18 USC 3613(f). Accordingly, although state courts may not enforce restitution orders or fines against an individual’s Social Security benefits, “[t]he United States may enforce” fines or restitution orders against an individual’s Social Security benefits. 18 USC 3613(a) and (f) (emphasis added).
When interpreting federal statutes, we may look to decisions from other jurisdictions for guidance. See Abela v Gen Motors Corp,
The Supreme Court in Keffeler made clear that its definition of “other legal process” was a product of statutory interpretation, which was merely “confirmed” by the “legal guidance” in the POMS. Keffeler,
As noted, the current version of the POMS does not expressly use this definition, hut it continues to describe 42 USC 407(a) as generally providing protection to Social Security benefits, and as allowing the recipient to use 42 USC 407(a) “as a personal defense if ordered to pay his or her payments to someone else, or if his or her payments are ordered to be taken by legal process.” POMS GN 02410.001 (2014).
A contempt hearing can he a proper mechanism for ascertaining a person’s assets or income for the purpose of satisfying a legal obligation. See, e.g., Causley v LaFreniere,
Although 42 USC 407(a) does not itself distinguish between SSDI benefits and SSI benefits, the Becker Court stressed that SSI benefits (unlike SSDI benefits, as the trial court in this case correctly noted) are intended to protect indigent persons. Becker,
Dissenting Opinion
(dissenting) I respectfully dissent and would affirm the trial court. I believe that the majority’s conclusion eliminates the distinction between the kinds of legal processes that the United States Supreme Court has explained are contemplated by 42 USC 407(a) and other legal processes of any kind, and as a result trial courts will be hamstrung and Social Security Disability Insurance (SSDI) recipients will have essentially free rein to scoff at any law unless the violation thereof necessitates incarceration. I do not believe the plain language of the statute reflects an intent by Congress to achieve such an absurd result, so I would not create it.
The majority’s recitation of the facts and the relevant statutes and caselaw requires no repetition. Where I part ways is with the majority’s conclusion that 42 USC 407(a) reflects a choice to exempt SSDI benefits from any legal process not explicitly enumerated as an exception. The United States Supreme Court emphatically explained that the term “other legal process” in that statute would be a way in which a court compels compliance with some requirement, but also that any such process would be “ ‘in the nature of garnishment.,’ ” Washington State Dep’t of Social & Health Seros v Keffeler, 537 US 371, 385;
As the majority correctly notes, under 42 USC 407(a), “moneys paid” (emphasis added) are also not subject to “execution, levy, attachment, garnishment, or other legal process”; the fact that such paid benefits are on deposit in a recipient’s bank account does not shed them of that protection until they are in some way converted into some other kind of asset. Philpott v Essex Co Welfare Bd,
Nevertheless, the United States Supreme Court observed that the terms “ ‘execution, levy, attachment, [and] garnishment’ ’’are “legal terms of art” referring to “formal procedures by which one person gains a degree of control over property otherwise subject to the control of another, and generally involve some form of judicial authorization.” Keffeler,
The majority accurately notes that the factual scenario in Keffeler did not entail a party resorting to judicial process. That does not, in my opinion, invalidate any of the Court’s reasoning. Beyond that, the majority apparently makes an end run around the Court’s straightforward construction by concluding that any process that would have the ultimate result of conveying any portion of a recipient’s SSDI proceeds into the hands of a court must be in the nature of garnishment. I simply cannot agree with that conclusion. The exercise of a trial court’s contempt power is not in the same nature as the “other legal process” contemplated by 42 USC 407(a).
The power to punish contempt has always been considered inherent in courts and “essential to the exercise of their functions” or “the laws would be partially and imperfectly administered.” See United States v Sheldon, Case No. 1315 (Mich Terr Sup Ct, 1829) (opinion by Chipman, J.), in 5 Blume, Transactions of the Supreme Court of the Territory of Michigan 1825-1836, pp 337, 344-345. This power was regarded as being “inherent in, and as ancient as, courts themselves,” and, critically, in the nature of “attachment of the offender... .” In re Chadwick,
Unlike the majority, however, I do not believe this distinction to be semantic pettifoggery without real-world relevance. The legal processes listed in the statute and discussed by the United States Supreme Court involved processes that either bypassed the SSDI recipient entirely or otherwise assumed control over the money itself. Exercising authority over a person is in the nature of something entirely different from garnishment. Under a narrow reading of what 42 USC 407(a) means by “other legal process,” as the United States Supreme Court has held is appropriate, the protections of that statute do not extend to precluding courts from exercising their contempt powers to compel compliance with their orders.
That being said, I wish to emphasize that the trial court apparently determined that Alexandroni is indigent and consequently waived or suspended her payment of fees pursuant to MCR 2.002(D). Although ability to pay is not a consideration for determining the obligation to pay restitution, present income and resources are considerations under the guidelines for making actual payments thereon. See MCL 712A.18(6); In re Juvenile Commitment Costs,
Consequently, the trial court may not compel payments in the instant case at this time by using its contempt power, because insofar as I am aware, Alexandroni would not be able to comply. An inability to survive on the funds remaining after payment is, in my opinion, functionally identical to a lack of the funds altogether under any legal system that purports to have any concern for justice. However, the mere fact that her sole source of income is SSDI payments does not per se immunize her from the theoretical possibility of being ordered to make payments on pain of contempt. To hold otherwise would be essentially to neuter an inherent function of the courts and immunize recipients of SSDI benefits — even if they have funds to make payments— from having to pay traffic tickets, parking tickets, fines for misdemeanors, and indeed a great many other fees
I would therefore affirm.