This appeal presents an opportunity for this Court to clarify the procedure for enforcing a judgment against an award of maintenance. This procedure differs from those applicable to other types of collection efforts because it harmonizes the judgment creditor’s right to reach these funds with the public policy of protecting the recipients of such funds, though they be judgment debtors.
Counsel said that, the respondent and his former wife, were divorced pursuant to a judgment entered in the Supreme Court, Suffolk County. The judgment of divorce incorporated the terms of a duly-binding separation agreement which provided, inter alia, that respondent would make monthly maintenance payments to his wife. Upon respondent’s failure to make these payments, the Supreme Court, Suffolk County, entered an income execution for support directing his employer, the respondent Prospective Computer, to deduct the maintenance payments from his income and to pay them over to the wife on a monthly basis.
Subsequently, in July 2002, the petitioner obtained a judgment against the respondent on her default in Supreme Court, Nassau County, for unpaid legal services. In an attempt to satisfy the judgment, the petitioner served the respondents, with restraining notices alleging that the respondents were in possession of property in which the petitioner had an interest, to wit, the wife’s monthly maintenance payments. When the respondents refused to pay the petitioner, he commenced this proceeding to enforce the restraining notices in Supreme Court, Nassau County, on notice to the wife.
The Supreme Court held that the respondents did not violate the restraining notices because their payment of the wife’s monthly maintenance was exempt from restraint pursuant to CPLR 5205 (d) (3). The court further stated that any determination of the extent to which the maintenance was not exempt should be made by the court that issued the award (i.e. the Supreme Court, Suffolk County). On this basis, the court, inter alia, dismissed the petition and vacated the previously-issued restraining notices.
On appeal, the petitioner argues that the Supreme Court, Nassau County, should have enforced the restraining notices in the proceeding because the wife failed to claim her exemption and prove the amount of her reasonable requirements upon notice of this proceeding. Under the circumstances of this case, the petitioner’s contention is lacking in merit. A review of the relevant enforcement statutes contained in CPLR article 52, in conjunction with an examination of their legislative history, reveals that the petitioner took the wrong initial steps in his attempt to enforce his money judgment against the wife’s award of maintenance. As discussed more fully below, her burden to claim and prove her exemption would not be triggered until the petitioner submits a proper application for an installment payment order to reach the amount of her maintenance in excess of her reasonable requirements.
In general, CPLR 5205 enumerates the kinds of personal property that are exempt from application to the satisfaction of money judgments. For instance, CPLR 5205 (a) provides exemptions for personal tangible goods, such as stoves kept in the judgment debtor’s dwelling house (see CPLR 5205 [a] [1]), the family bible and family pictures (see CPLR 5205 [a] [2]), and “necessary working tools not exceeding six hundred dollars in value” (CPLR 5205 [a] [7]). CPLR 5205 (d) further provides that certain types of income are exempt from application to the satisfaction of a money judgment, including, inter alia, 90% of a judgment debtor’s earnings for personal services (see CPLR 5205 [d] [2]), and payments made pursuant to an award in a matrimonial action for the support of a former wife, where the former wife is a judgment debtor (see CPLR 5205 [d] [3]). These provisions derive from various sections of the Civil Practice Act.
Traditionally, the judgment debtor bears the burden of claiming and proving the applicability of an exemption, but only when the exempt status of the property is unclear to the judgment creditor or a levying officer. For example, the debtor has the burden of claiming and proving the applicability of an exemption under CPLR 5205 (a) (7). The judgment debtor has the burden of proving this exemption because he or she possesses the facts required to prove that the items are “necessary working tools” for his or her profession, which do not exceed $600 in value. Neither the judgment creditor nor a levying officer may have knowledge of what kinds of tools a judgment debtor needs for his or her profession, nor how much they are worth. Accordingly, due to the qualified nature of the exemption, the judgment debtor has to claim and prove its applicability or risk waiving the exemption.
Similarly, when a judgment creditor seeks to restrain funds in a judgment debtor’s bank account, the judgment debtor has the burden of claiming and proving the applicability of an exemption because only he or she knows the source of the funds which may qualify for an exemption. By contrast, if property or funds are easily identifiable as exempt, the judgment debtor does not have the burden of claiming the exemption in order to benefit from its application.
In the case at bar, it is clear that the petitioner sought to satisfy his money judgment with maintenance payments awarded for the wife’s support in a matrimonial action. Indeed, the respondents were directed to pay the wife pursuant to an “income execution for support” entered in the Supreme Court, Suffolk County. The petitioner and the respondents knew the nature of these payments at the time the restraining notices were served. The restraining notices expressly stated that they applied to “Maintenance (alimony) payments.” Moreover, in his petition, the petitioner acknowledged that he went through the file in the matrimonial action prior to serving the restraining notices. Accordingly, the exempt nature of the wife’s maintenance payments was self-evident from the start.
Moreover, unlike funds in a bank account or personal goods subject to a monetary limitation, the exemption for maintenance under CPLR 5205 (d) (3) is only qualified by a condition subsequent dependent upon an application to the court. Like salary, wages, and other forms of income, an award of support in a matrimonial action is exempt “except such part as a court determines to be unnecessary for the reasonable requirements of the judgment debtor and his dependents” (CPLR 5205 [d] [emphasis added]). While it has generally been held that the judgment debtor bears the burden of proving his or her reasonable requirements the judgment creditor bears the initial burden of tendering and framing the issue upon his or her own motion. The petitioner in the instant case did not make the appropriate application.
The normal device for reaching income in excess of the debtor’s reasonable requirements is the installment payment order pursuant to CPLR 5226, not the restraining notice to which the petitioner resorted. CPLR 5226 provides that, upon motion of the judgment creditor, the court shall order the judgment debtor to make specified installment payments to the judgment creditor where it is shown that the judgment debtor is “receiving or will receive money from any source” (CPLR 5226). In fixing the amount of the payments, the court “shall take into consideration the reasonable requirements of the judgment debtor” (CPLR 5226). The petitioner in the instant case did not use this procedure before serving his restraining notices and seeking the wife’s maintenance directly from its third-party sources. However, a review of the legislative history of both CPLR 5226 and CPLR 5205 (d) (3) reveals that he was required to do so.
Prior to 1941, there was no statute expressly exempting alimony or, as it is now called, maintenance. Despite the lack of a statute, the courts accorded a common-law exemption to alimony on the theory that it was a “specific fund provided for the specific purpose of the wife’s support and that it cannot be diverted from that purpose”. This common-law exemption clearly was available where the creditor’s claim against the wife arose before she was awarded the alimony. By contrast, the courts began to recognize that the creditor had available “some remedy against the alimony” when the claim arose after the award was made to the wife and where the claim was based upon the furnishing of necessaries to the wife. However, under these circumstances a “conflict of opinion” arose with respect to how much of the wife’s alimony could be reached by the creditor. Due to the lack of any statutory standards, the procedure for seizing alimony and the allowable extent of such seizure were unclear.
In order to eliminate the “great deal of confusion regarding the status of alimony,” the Judicial Council proposed certain amendments to the Civil Practice Act in 1941. At that time the Civil Practice Act contained a number of articles addressing the various enforcement procedures available to a judgment creditor. For instance, articles 42 and 43 addressed the procedures for execution and levy, and article 45 outlined the procedures for enforcement through supplementary proceedings. Unlike the procedures for execution and levy, a judgment creditor’s enforcement of a money judgment through supplementary proceedings required him or her to obtain a court order to reach the debtor’s property. In 1941, the Legislature addressed the issue of alimony by amending sections 792 and 793 as contained in Civil Practice Act article 45, which dealt with supplementary proceedings. The amendment clarified that alimony was generally exempt from seizure, but subject to a creditor’s application to satisfy his or her judgment in supplementary proceedings.
Specifically, Civil Practice Act § 792 (d), as amended in 1941 (L 1941, ch 694), provided that a judgment creditor was not authorized to seize or interfere with “moneys payable pursuant to the direction of a judgment rendered or an order made in a matrimonial action, for the support of the wife, where the wife is the judgment debtor, except to the extent and in the manner provided in section seven hundred and ninety-three of this act upon application of a judgment creditor of the wife”.
In turn, Civil Practice Act § 793, entitled “Installment payments by debtors,” provided in relevant part that “the court may order the judgment debtor to pay to the judgment creditor or apply on the judgment, in installments, such portion of his income, however or whenever earned or acquired, as the court may deem proper, after due regard for the reasonable requirements of the judgment debtor and his family.”
Accordingly, the clear terms of the Civil Practice Act, as amended in 1941, required a judgment creditor to apply for a section 793 installment payment order in order to reach alimony awards in excess of a judgment debtor’s reasonable requirements. The Judicial Council expressly stated that this amendment would “accord a reasonable remedy to creditors which should not prove unduly oppressive for the wife” (7th Ann Report of NY Jud Council, supra at 346). Thus, Civil Practice Act § 792 (d) and § 793 served the purpose of protecting recipients of alimony while providing creditors with an opportunity to enforce their judgments against such funds.
Accordingly, in order for the judgment creditor to reach matrimonial awards of support under the CPLR, the Legislature intended that he or she apply for a determination of the judgment debtor’s reasonable requirements via the installment payment device, now codified in CPLR 5226. This common derivation from Civil Practice Act § 793 further demonstrates the legislative intent to require the judgment creditor to apply for this type of an order prior to allowing seizure of maintenance funds.
In light of the above, the Supreme Court correctly dismissed the petition and vacated the restraining notices as they sought to restrain clearly exempt funds at their source without any prior determination by the matrimonial court regarding the wife’s reasonable requirements. However, the judgment is modified by adding a provision thereto stating that the dismissal of the petition and the vacatur of any previously-issued restraining order shall be without prejudice to the petitioner applying for an installment payment order pursuant to CPLR 5226 in the Supreme Court, Nassau County.
Accordingly, the court held that the judgment is modified, on the law, by adding a provision thereto stating that the dismissal of the petition and the vacatur of any previously-issued restraining order shall be without prejudice to an application in the Supreme Court, Nassau County, for an installment payment order and, upon transfer to the Supreme Court, Suffolk County, a determination of the judgment debtor’s reasonable requirements; as so modified, the judgment is affirmed, without costs or disbursements.
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