Rule 4B.Trustee Process

Furthermore, clause (iii) in speaking of "immediate danger that the defendant will dissipate the credits" refers to something more than normal withdrawals that the defendant would make in the ordinary course irrespective of an impending trustee process. For example, the fact that a business concern will write many payroll checks. on its bank account for its weekly payday does not by itself justify an ex parte order for immediate trustee process.

Advisory Committee's Note — September 23, 1971

Amendments to Rule 4B(a), (c), and (g), and the abrogation of Rule 4B(h), are made necessary by the enactment of 1971 Laws, ch. 408, which makes major changes in the procedure for obtaining satisfaction of a money judgment. The Act adds a new Chapter 502 to Title 14 M.R.S.A., replacing the present disclosure proceedings of Title 14 with a hearing before a judge of the District Court. Under new 14 M.R.S.A. §§ 3127-3130, the judge is empowered to order a judgment debtor to make installment payments to his creditor in an amount proportionate to his earnings, up to limits similar to those incorporated in former Rule 4B(h)(2). New 14 M.R.S.A. § 3137 permits the court to order such payments to be made directly by the employer in the event of default by the employee. Consistent with these provisions, section 2 of the Act amends 14 M.R.S.A. § 2602(6), the trustee process exemption provision, to prohibit use of trustee process against wages at any time.

The present amendments to Rule 4B eliminate provisions of the rule intended to implement state and federal statutory limitations upon the use of trustee process against earnings. See Advisory Committee's Notes to amendments of December 31, 1967, and ,July 1, 1970. Rule 4B(a) continues to

prohibit trustee process against earnings and carries forward the broad definition of earnings contained in new 14 M.R.S.A. § 3121(1), which is substantially that of former Rule 4B(h)(3)(i). These provisions are necessary to make clear that disclosure proceedings under new Chapter 502 are the creditor's exclusive remedy against earnings as thus defined. This is clearly the intent of the Act, although literally it exempts only the narrower "wages" under the amendment to 14 M.R.S.A. § 2602(6).

M.R.C.P. Form 2C and Alternate Form 2C, summons to trustee for earnings, as well as the parallel forms for use in the District Court, have been abrogated.

Advisory Committee's Note — July 1, 1970

The amendments to Rule 4B are made principally for two purposes: (1) To eliminate the restriction to 30 days after judgment for the service of trustee process against earnings; and (2) to write into the rule for the convenience of practicing lawyers the present practical effect of the monetary limitations imposed upon trustee process against earnings by a federal statute that goes into effect in this regard on July 1, 1970; namely, the Consumer Credit Protection Act. Also, the word "earnings" as used in the federal Act has been substituted for the phrase "wages or salary" used previously in Rule 4B.

The Committee considered but rejected as unnecessary an amendment in the last sentence of Rule 4B(c) to make clear that the thirty-day limitation upon service of trustee process used in connection with the commencement of the action against types of goods and credits other than earnings may be extended by court order under Rule 6(b). That time period, like the thirty-day period for attachments under Rule 4A(c) and all other time periods under the rules may be enlarged except as restricted under Rule 6(b) itself.

The thirty-day restriction on post-judgment trustee process against earnings is eliminated as a result of a widely held belief that the restriction served no useful purpose and often resulted in real hardship to the judgment debtor. It was reported to the Committee that in light of the thirty-day restriction collection attorneys armed with a judgment often feel compelled to demand immediate payment in full or to serve several trustee summonses against earnings in rapid succession, without leaving time to work out an

accommodation. No time restriction upon use of trustee process against earnings after judgment appears in either the 1965 Maine Act which made judgment a prerequisite for such trustee process, or the federal Consumer Credit Protection Act.

Rule 4B(h)* is now divided for convenience into three paragraphs. The first paragraph incorporates the substance of the prior Rule 4B(h), substituting the phrase "at any time" for the prior phrase "during a period of thirty days", and adding to the last sentence an express requirement, that certainly was implicit previously, that the judgment plaintiff using trustee process against earnings must serve upon the judgment debtor a copy of the trustee summons with the officer's endorsement thereon of the date of service upon the trustee.

The new paragraphs (2) and (3) of Rule 4B(h) incorporate the principal provisions of title III of the federal Consumer Credit Protection Act, P.L. 90-321, 15 U.S.C.A. §§ 1671-77, which imposes certain maximum limits upon the amount of "earnings" as defined in the Act that may be garnished to satisfy a debt and forbids any state or federal court to "make, execute or enforce any order or process in violation of" the Act. Under Section 303 of the Act, 15 U.S.C.A. § 1673, the maximum amount which may be garnished is the lesser of (1) 25% of defendant's weekly disposable earnings or (2) the amount by which those earnings exceed 30 times the federal minimum hourly wage. For pay periods other than a week, the Secretary of Labor is to provide by regulation a means for computing the equivalent of the latter sum. The amended rule expresses the requirements of the Act in terms of their practical effect. A sum equal to 30 times the federal minimum wage, which would presently be $48, is exempt from attachment in any case. If earnings are between $48 and $64 a week, the excess over $48 will be less than 25% of the total, so only that excess may be attached. When earnings are more than $64 a week, 25% will be the lesser amount and hence subject to attachment.

Subparagraph (iii) of the rule simply incorporates the Secretary's regulations for pay periods other than a week. Currently, the Secretary proposes merely to multiply the weekly figure by the number of full weeks and fractions of a week in the pay period. For example, the figure for a monthly pay period would be 4 1/3 times $48 or $208. See Proposed Regulations, 29 C.F.R. Ch. V, 34 Fed.Reg. 19296-97 (Dec. 5, 1969). Present Maine law would not satisfy

* Rule 4B(h) was abrogated September 23, 1971.

the standards of the federal Act. Under 14 M.R.S.A. § 2602(6) earnings at the rate of $40 per week are exempt, presumably for whatever period of time they are owed at the time of attachment. See 1 Field, McKusick & Wroth, Maine Civil Practice, 140–42 (2d ed. 1970). Under the Maine statute, if defendant had total disposable earnings of $64 for one week, $24 would be subject to attachment, while the federal Act would limit attachment to $16. While, as previously noted, the rule will supersede the statute, it will be desirable to repeal 14 M.R.S.A. § 2602(6) as obsolete and potentially confusing. Under Section 305 of the federal Act, 15 U.S.C.A. § 1675, the Secretary may "exempt" from the statute's preemptive bar state laws with restrictions "substantially similar" to the federal provisions. While regulations governing such exemptions are not yet final (see Proposed Regulations, 29 C.F.R. Ch. V, 34 Fed.Reg. 19296–97 [Dec. 5, 1969]) one of the Consultants to the Committee has been assured by the Regional Solicitor of the Department of Labor that the proposed rule satisfies the federal requirements.

Note that Section 304 of the federal Act, 15 U.S.C.A. § 1674, forbids discharge of any employee for garnishment where only one debt is involved and imposes criminal penalties for willful violation. No rule seems appropriate or necessary to implement this provision, which is self-operating regardless of state law.

Rule 4(h)(3) incorporates verbatim the definitions of "earnings" and "disposable earnings" found in Section 302 of the federal Act, 15 U.S.C.A. § 1672. The definition of "earnings" makes clear that the entire rule applies to all forms of compensation, including payments under pension or retirement plans, thus eliminating a possible inequity. The definition of "disposable earnings" solves the otherwise difficult problem of what deductions from wages are to be included in the attachment. Those deductions "required by law to be withheld", such as income and social security taxes, are excluded, while others, such as health insurance premiums for insurance not imposed by law, are included.

The amendments of Rule 4B made to conform with and to declare the practical effect of the federal Act are derived from a Vermont rule which went into effect on May 1, 1970.

Advisory Committee's Note — December 31, 1967

The change in subdivision (a) and the addition of subdivision (h) are intended to bring the rule into conformity with the 1965 amendment of 14 M.R.S.A. § 2602(6), which prevents the use of trustee process against the wages or salary of the principal defendant for personal labor until after judgment has been obtained. Under the statute and the existing rule the plaintiff was put to the expense and trouble of an action on the judgment, and the employer served with a trustee process in the second action had no way of knowing whether or not a prior judgment had been obtained or for how much or even that it was an action on a judgment. See Field and McKusick, Maine Civil Practice, § 4B.3 (Supp.1967).

Subdivision (h) allows the use of trustee process as a part of the principal action, but permits it to be served only during a period of 30 days after the entry of judgment therein. The proviso added to 4B(a) simply incorporates the 1965 amendment.

To accompany these changes, Form 2C and Alternate Form 2C, entitled "Summons to Trustee for Wages", are added. The forms advise the trustee of the date and amount of the judgment upon which the trustee process is based.

The provision in 4B(c) for service of trustee process upon a partnership has been rendered unnecessary in view of the addition of Rule 4(d) (10) providing for a simplified service of all process upon partnerships.

Explanation of Amendment — February 1, 1960

This amendment was promulgated at the same time and for the same reason as the amendment to Rule 4A(c) discussed above. Again the purpose is to make the task of the officer making the service less burdensome and to lessen the possibility for error.

Reporter's Notes — December 1, 1959

The purpose of this rule is to preserve existing practice with respect to trustee process. Subdivision (a) states the actions in which trustee process may be used, as set forth in R.S.1954, Chap. 114, Sec. 1 (amended in 1959) [now 14 M.R.S.A. § 2601], and incorporates existing law by reference.

Subdivision (b) prescribes the form of the summons to the trustee, which will have the effect of the present trustee writ and summons. See Form 2A and Alternate Form 2A in the Appendix of Forms.

The amount for which the defendant's goods or credits are attached should not exceed the amount named in the demand for judgment together with a reasonable allowance for interest and costs. The object is to limit the amount caught by trustee process to a value sufficient to cover the plaintiff's prospective judgment including interest and costs. The plaintiff's attorney will fill in the summons to show the total amount attached.

Subdivision (c) calls for service upon a trustee in the manner provided for service generally, but with the proviso, taken from R.S.1954, Chap. 114, Sec. 4 [now 14 M.R.S.A. § 2603], that service upon a single partner is sufficient attachment of the defendant's property in the possession of the firm.* When the summons and complaint are served upon the defendant, he is also to be served with a copy of the trustee summons and the return of service thereof.** As with other process, the serving officer makes proof of service upon the trustee summons and returns it to the plaintiff's attorney. Practice under this rule differs from present practice in that it substitutes a summons to the trustee and a separate summons and complaint to the principal defendant for the trustee writ in which the declaration is inserted, but its practical effect is unchanged.

* [According to Field, McKusick & Wroth, “This provision was eliminated as superfluous, effective Dec. 31, 1967. See Rule 4(d) (10).” 1 Field, McKusick & Wroth, Maine Civil Practice at 131 (2d ed. 1970)]. ** [According to Field, McKusick & Wroth, “by virtue of the February 1, 1960, amendment of Rule 4B(c), the officer's endorsement on the trustee summons of the date of execution is sufficient.” 1 Field, McKusick & Wroth, Maine Civil Practice at 131 (2d ed. 1970)].

As in the case of attachment, this rule prescribes a uniform time limit of 30 days from the date of the complaint for the service of a trustee process, but this time is subject to enlargement under Rule 6 (b). Under present law this limit is a variable one, depending upon the relationship between the date of commencement of the action and the return term.

Subdivision (d) requires the trustee to serve his disclosure under oath within 20 days after service upon him. The form of the disclosure is very similar to that now in use. See Form 21A in the Appendix of Forms. Existing law as to subsequent proceedings is incorporated by reference. The last two sentences of this subdivision are taken from Revised Rules of Court 12.

Subdivision (e) similarly incorporates by reference existing law as to adjudication and judgment.

Subdivision (f) provides for the use of trustee process by a party bringing a counterclaim, cross-claim or third-party complaint if the venue is proper as to the trustee. If the counterclaim is compulsory, trustee process may be used irrespective of where the trustee resides. The latter provision is a practical necessity in order not to force upon the counterclaiming party the disadvantage of losing his chance to get security by trustee process for any judgment he might recover. This adds to the burden of a trustee by compelling him to appear outside his own county, but he is already required to do so in cases where the action is brought in a different county in which another trustee resides. See R.S.1954, Chap. 114, Sec. 5 (amended in 1959) [now 14 M.R.S.A. § 2604].

Subdivision (g) provides means of obtaining a court order for an additional attachment on trustee process after service on the principal defendant. Wages or salary of the defendant cannot, however, be reached by such subsequent trustee process. Successive trustee services for this purpose will therefore be limited to the 30-day period between the commencement of the action and service upon the defendant.*** It is believed that any further extension would place an unwarranted burden upon the wage-earner.

*** [According to Field, McKusick & Wroth, “The sentence in the text should have read, ‘Successive

trustee services for this purpose will therefore be limited to the 30-day period after the date of the complaint. Rule 4B(c).’ In any event, trustee process against wages is now limited under Rule 4B(h) to the 30-day period after entry of judgment. See Advisory Committee's Note and § 4B.3a below.” 1 Field, McKusick & Wroth, Maine Civil Practice at 132 (2d ed. 1970)].