Chapter 303 Oregon Laws 1999

Session Law

AN ACT

SB 69

Relating to garnishment; creating new provisions; and amending ORS 29.142.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 29.142 is amended to read:

29.142. When a defendant receives a copy of a writ of garnishment under ORS 29.215, the defendant may claim such exemptions from garnishment as are permitted by law. This section establishes provisions and procedures applicable to a defendant's claim of exemption. The following apply as described:

(1) The defendant may claim an exemption by completing the claim of exemption form described in ORS 29.225 or a substantially similar form and by delivering, in person or by first-class mail, the completed original form to the clerk of the court that issued the writ of garnishment. A claim of exemption must be filed:

(a) Within 120 days after the writ of garnishment is delivered to the defendant if the writ is a writ of continuing garnishment described in ORS 29.401 to 29.415; or

(b) Within 30 days after the writ of garnishment is delivered to the defendant if the writ is not a writ of continuing garnishment described in ORS 29.401 to 29.415.

(2) The clerk, upon receipt of a claim of exemption under subsection (1) of this section, shall retain payments as provided under ORS 29.138 or 29.139 and, without unreasonable delay, shall provide written notice of the claim of exemption as provided under this subsection. Upon receipt, the notice creates the duties under subsection (4) of this section. The notice may include the notice of hearing under subsection (5) of this section. The notice shall apprise garnishees, plaintiffs and plaintiffs' attorneys of consequences under this section of failure to comply with requirements under subsection (4) of this section. The clerk shall provide notice of claim of exemption as follows:

(a) To the plaintiff or the plaintiff's attorney.

(b) To the garnishee named in the writ. The clerk is not required to provide notice to the garnishee if the clerk knows that the garnishee has already forwarded any money or property subject to the garnishment.

(c) To the sheriff of the county where the writ was delivered to the garnishee. The clerk is not required to provide notice to the sheriff if the clerk knows that the garnishee was not required to notify the sheriff under ORS 29.235 or that the sheriff has already forwarded any property or proceeds subject to the garnishment.

(3) All the following apply to a defendant regarding a claim of exemption under this section:

(a) Nothing in the notice of exemption form under ORS 29.215 and 29.225 is intended either to expand or restrict the law relating to exempt property. Whether property is exempt from execution, attachment and garnishment shall be determined by reference to this section and other law.

(b) The court may impose sanctions on a defendant who files a claim of exemption in bad faith. The sanctions a court may impose under this paragraph are a fine of not more than $100 and responsibility for attorney fees under ORS 20.105. A court's imposition of sanctions under this paragraph does not limit any remedy otherwise available to the plaintiff.

(d) In addition to any other claims of exemption, the defendant may claim an exemption where the writ of garnishment claims an amount greater than the total amount the defendant asserts is due the creditor.

(e) In addition to any other claims of exemption, the defendant may claim as exempt any property that may not be taken by garnishment as described under ORS 29.205.

(4) The following are duties imposed upon the described parties who have received notice of claim of exemption from the clerk under this section:

(a) The plaintiff or plaintiff's attorney shall send any garnished debt or obligation payable in money to the court by cash or by check or other draft made payable to the court. If the funds have not reached the court by the time of the exemption hearing, the clerk shall so notify the judge presiding at the hearing. If the court determines that any of the garnished funds should be disbursed to the defendant and the funds have not reached the court by the time of that determination, the court shall issue an order that the person obligated to return the funds under this paragraph appear and show cause why the person should not be held in contempt. In addition to contempt proceedings, the court may require the person to pay attorney fees under ORS 20.105. A court's imposition of sanctions under this paragraph does not limit any remedy otherwise available to the defendant. This paragraph does not apply in any circumstances where:

(A) The debt or obligation has not been forwarded to the plaintiff or plaintiff's attorney; or

(B) A garnishee is not required or allowed, by law, to disburse the debt or obligation.

(b) A garnishee who holds and has not yet forwarded:

(A) A debt or obligation payable in money shall send or deliver the garnished debt or obligation to the court by cash or by check or other draft made payable to the court. The garnishee shall make the delivery to the court within the time the garnishee would have otherwise been required to deliver or send the debt or obligation to the plaintiff. Any payments to be delivered from the garnishee to the clerk of the court under this paragraph shall be made payable to the court and not payable to the plaintiff. A garnishee who fails to comply with this paragraph is subject to ORS 29.275 and 29.285.

(B) Other property or a debt or obligation in existence but not yet due and which will not become due within 45 days shall comply with the direction of the sheriff under ORS 29.237 and 29.255.

(c) A sheriff who has received notice from a garnishee under ORS 29.235 or who holds property under the writ shall hold the property as provided under ORS 29.265.

(5) A defendant's claim of exemption is subject to the procedures under ORS 23.168 for a claim of exemption from execution. The clerk of the court shall immediately set a hearing date and send notice of the hearing to the parties. Hearings on a claim of exemption may be held by telecommunication.

(6) Except as provided in subsection (8) of this section, if a claim of exemption is allowed by the court, the clerk shall mail the amount of money or proceeds determined to be exempt to the defendant within 10 judicial days after the court's order allowing the claim of exemption.

(7) Except as provided in subsection (8) of this section, any money or proceeds determined not to be exempt after a hearing shall be mailed to the plaintiff or plaintiff's attorney within 10 judicial days after the court's order denying the exemption as to those funds.

(8) The Judicial Department may by written policy establish time limitations different from the 10-day period provided in subsections (6) and (7) of this section for the delivery of money or proceeds after a judicial determination on a claim of exemption. The time limitations established by the department may be longer or shorter than the 10-day period. The policy may provide for a period longer than 10 days for a category of money or proceeds only if the department determines that the category is subject to special circumstances that create substantial difficulties in meeting a requirement of delivery within 10 days. The policy shall provide for delivery in less than 10 days for any category of money or proceeds that the department determines can be delivered within a shorter period of time. The department shall consider federal guidelines and rules relating to the timing of transactions in financial institutions in developing a policy under this subsection. Any policy adopted under this subsection applies to all courts of this state, except that municipal courts and justice courts are not bound by any requirement that a category of money or proceeds be delivered in less than 10 days.

SECTION 2. The amendments to ORS 29.142 by section 1 of this 1999 Act apply only to garnishments issued on or after the effective date of this 1999 Act.

Approved by the Governor June 22, 1999

Filed in the office of Secretary of State June 22, 1999

Effective date October 23, 1999

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