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Rule 4.2 – Trustee Process

May 14, 2021 | Civil Procedure, Vermont

(a)Availability of Trustee Process. In any personal action in which an attachment would be available under Rule 4.1(a), trustee process may be used, in the manner and to the extent provided by law and by this rule, to attach goods, effects, or credits of the defendant in the hands of a third person for the purpose of securing satisfaction of any judgment for damages and costs which the plaintiff may recover; provided, however, that trustee process shall issue against any person for an amount due from such person to the defendant as earnings only as provided in subdivision (j) of this rule; provided further that proceedings for wage withholding to secure child support, spousal support, or arrearages thereof shall be conducted only as provided in Rule 4.3(b) (o ) of the Vermont Rules for Family Proceedings.
(b)Summons to Trustee: Issuance.

(1) Each summons to a trustee shall be filled out as provided in subdivision (c) of this rule and issued to the plaintiff’s attorney by the clerk of the court in the county where the action is pending or the trustee resides. Except as provided in subdivision (j) of this rule, such summons shall issue only on order of approval as required for writ of attachment in Rule 4.1(b)(1). Except where the order of approval otherwise provides, the summons shall go to any trustee specified by the plaintiff, and more than one summons may be issued as long as the sum of the amounts for which the goods, effects or credits of the defendant to be attached on trustee process does not exceed the amount specified in the order of approval. On request of the plaintiff, the clerk shall issue a substitute summons to trustee with respect to any trustee in order to modify the amount for which the goods, effects or credits of the defendant are attached unless by doing so the amount specified in the order of approval would be exceeded.
(2) Except as provided in paragraph (3) of this subdivision, an order of approval may be issued only upon motion after notice, hearing, and findings as required for writ of attachment in Rule 4.1(b)(2).
(3) An order of approval may be issued ex parte upon motion and findings by the court (A) that there is a reasonable likelihood that the plaintiff will recover judgment, including interest and costs, in an amount equal to or greater than the amount of the trustee process over and above any liability insurance, bond, or other security known or reasonably believed to be available to satisfy the judgment and (B) that either (i) there is a clear danger shown by specific facts that the defendant if notified in advance of the attachment on trustee process will withdraw the goods and credits from the hands and possession of the trustee and remove them from the state or conceal them, leaving insufficient attachable property to satisfy the judgment; or (ii) there is immediate danger shown by specific facts that the defendant will dissipate the credits, or damage, destroy, or sell to a bona fide purchaser, the goods to be attached on trustee process, leaving insufficient attachable property or other assets to satisfy the judgment. The motion shall be filed and supported by affidavit and certificate as provided for writ of attachment in Rule 4.1(b)(3). The motion, affidavit or affidavits, and certificate shall be served upon the defendant with the trustee summons as provided in subdivision (d) of this rule.
(c)Same: Form. The summons to a trustee shall be dated and signed by the clerk. It shall contain the name of the court, the names of the parties, and the order of approval issued under subdivision (b) of this rule; be directed to the trustee, state the name and address of the plaintiff’s attorney, the amount for which the goods, effects, or credits of the defendant are attached on trustee process, and the time within which these rules require the trustee to make disclosure; and shall notify the trustee that in case of the trustee’s failure to do so the trustee will be defaulted and adjudged trustee as alleged. The amount so attached shall not exceed the amount specified in the order of approval.
(d)Same: Service; Interrogatories. The plaintiff’s attorney shall deliver to the person who is to make service the original trustee summons upon which to make his or her return of service and two copies thereof for service upon the defendant and trustee. The trustee summons shall be served in like manner and with the same effect as other process. If the trustee process was issued in connection with the commencement of the action and is approved on ex parte order in accordance with paragraph (3) of subdivision (b) of this rule, the defendant, when the summons and complaint are served as provided in Rule 4, shall be served with a copy of the trustee summons with the date or dates of service upon the trustee or trustees indorsed thereon by the person making such service. Any trustee process shall be served within 30 days after the filing of the complaint. If the trustee process is approved on order upon notice and hearing in accordance with paragraph (2) of subdivision (b) of this rule in connection with the commencement of the action, or on order or subsequent or additional trustee process under subdivision (i) and paragraph (2) or (3) of subdivision (b) of this rule, a copy of the trustee summons indorsed as required above shall be promptly served upon the defendant in the manner provided in Rule 5. Any such trustee process shall be served within 30 days after the order approving it. Plaintiff’s attorney shall also serve a disclosure form on the trustee along with the summons. If the answers on the disclosure form do not provide adequate information, plaintiff may submit interrogatories to the trustee pursuant to Rule 33, but such interrogatories must be concise. A list of exemptions also shall be served on the defendant and the trustee.
(e)Dissolution, Modification, or Discharge Upon Motion. On two days notice to the plaintiff or on such shorter notice as the court may prescribe, a defendant whose goods or credits have been attached on trustee process pursuant to an ex parte order issued in accordance with paragraph (3) of subdivision (b) of this rule may appear and move the judge who ordered issuance of the summons or the Presiding Judge of the court in which the action is pending for an order dissolving, modifying, or discharging the attachment. Such appearance shall not submit the person of the defendant to the jurisdiction of the court. The judge shall proceed to hear and determine such motion as provided for writ of attachment in Rule 4.1(e)(1). At any time before entry of final judgment, defendant or the trustee may move the Presiding Judge of the court in which the action is pending for an order modifying or discharging the attachment. After notice and hearing, the judge may modify or discharge the attachment as provided for writ of attachment in Rule 4.1(e)(2).
(f)Disclosure by Trustee. A trustee shall serve a disclosure under oath within 30 days after the service of the trustee summons upon the trustee, unless the court otherwise directs.
(g)Adjudication and Judgment. Any party intending to contest the information contained in the trustee’s disclosure form or interrogatories, or to produce any other relevant evidence, shall be entitled to a hearing upon written request. That party may subpoena the trustee or any other witness to appear at the hearing. The court shall base its judgment upon the disclosure, the answers to interrogatories and all of the other evidence submitted. The imposition of costs shall be as provided by law.
(h)Trustee Process on Counterclaim, Cross-Claim or Third-Party Complaint. Trustee process may be used by a party bringing a counterclaim, a cross-claim, or a third-party complaint in the same manner as upon an original claim.
(i)Subsequent or Additional Trustee Process. If no trustee process has issued or if any trustee process has issued and cause is shown why the order of approval should be amended to authorize additional attachment, the court on motion may issue an order of approval for attachment on trustee process against the same or an additional trustee. The order may issue at any time before judgment, and, notwithstanding the pendency of any appeal, at any time after judgment and before execution may issue. The provisions of subdivision (b) of this rule apply to the motion, except that notice, if appropriate, shall be served upon the defendant in the manner provided in Rule 5.
(j)Trustee Process Against Earnings.

(1)In General. No trustee process shall issue against any person for any amount due from such person to the defendant as earnings except where:

(i) The claim has first been reduced to judgment;
(ii) Execution may issue on the judgment pursuant to these rules;
(iii) The judgment debtor has neglected or refused to pay or make reasonable arrangements to pay the judgment; and
(iv) The judgment debtor has not, within the two-month period prior to the hearing provided in paragraph (4) of this subdivision, been a recipient of assistance from the Vermont Department of Prevention, Assistance, Transition, and Health Access.
(2)Monetary Limitations. The earnings of the judgment debtor shall be exempt as follows:

(i) Seventy-five (75) percent of the debtor’s weekly disposable earnings, or 30 times the federal minimum hourly wage, whichever is greater; or
(ii) If the judgment debt arose from a consumer credit transaction, as that term is defined by 15 U.S.C. ยง 1602 and implementing regulations of the Federal Reserve Board, eighty-five (85) percent of the debtor’s weekly disposable earnings, or 40 times the federal minimum hourly wage, whichever is greater; or
(iii) If the court finds that the weekly expenses reasonably incurred by the debtor for his or her maintenance and that of dependents exceed the amounts exempted by the preceding subparagraphs, such greater amount of earnings as the court shall order.
(3)Notice. The judgment creditor’s attorney shall file a motion for trustee process describing in detail the grounds for the motion, the amount alleged to be unpaid and the source of earnings of the judgment debtor. Upon receipt of the motion, the clerk shall notify the parties of the date and time of hearing on the motion. The judgment creditor’s attorney shall prepare a summons on a form provided by the court, a disclosure form and a list of exemptions and shall serve them and the motion on the trustee and any judgment debtor against whom judgment was issued by default in the manner provided by Rule 4. Service shall be completed at least fourteen (14) days prior to the date set for hearing by the clerk. The trustee shall appear at the hearing or shall serve a disclosure under oath at least 5 days before the hearing. If the judgment is satisfied prior to the date set for hearing, the judgment creditor shall notify the clerk. The Presiding Judge shall thereupon cancel the summons, and the clerk shall cancel the hearing, notifying the trustee and judgment debtor in the manner provided by Rule 77(d) for notification of a party.
(4)Hearing and Order. At the hearing on the motion, the court shall consider the testimony offered by any party or the trustee and any affidavit of the judgment creditor. The court shall make the findings specified by section 3169 of Title 12, if possible, and shall issue an order granting or denying the motion. If the motion is granted, the order shall provide:

(i) the address of the judgment creditor to which amounts withheld are to be delivered;
(ii) the amount of earnings of the judgment debtor that shall be exempt;
(iii) the period in which withholding of wages is authorized to occur;
(iv) a statement that section 3172 of Title 12 prohibits discharge of the employee subject to the order because of the exercise of trustee process against the employee; and
(v) a statement that failure to withhold and deliver nonexempt earnings as directed in the order may make the trustee liable to the judgment creditor for the amounts the trustee fails to withhold and deliver together with any costs, interest and reasonable attorneys’ fees incurred in their collection. The order shall be served upon the trustee and any judgment debtor against whom judgment was issued by default as provided in Rule 4 for service of a summons.
(5)Definitions. For the purposes of this rule:

(i) The term “earnings” means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program and proceeds from the sale of milk with respect to an individual engaged in the occupation of dairy farming, but does not include payments from sources which by law are exempt from attachment.
(ii) The term “disposable earnings” means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld.
(k)Post-Judgment Trustee Process. Where issuance of post-judgment trustee process is authorized by law, the judgment on which execution has issued shall be deemed an order of approval authorizing the clerk to issue one or more summons to any trustee specified by the judgment creditor, provided that no such summons shall be issued with respect to earnings and the sum of the amounts for which the goods, effects or credits of the debtor are attached on trustee process does not exceed the amount that may be collected in levying execution. The judgment creditor also shall serve on the trustee and the debtor a disclosure form and list of exemptions. If at any time the clerk finds the judgment has been satisfied in whole or in part, based on the return of the officer who held the execution or the representation of the judgment creditor, the Presiding Judge shall cancel any summons which is outstanding or reduce the amounts for which the goods, effects or credits of the defendant are attached so the sum of all amounts does not exceed the amount that may be collected in levying execution of that part of the judgment that remains unsatisfied. The clerk shall notify the trustee of the action of the Presiding Judge in the manner provided for notification of a party of the action of the court.

V.R.C.P. 4.2

Amended Feb. 12, 1973, eff. May 1, 1973; March 12, 1975, eff. April 1, 1975; Feb. 15, 1977, eff. March 1, 1977; Oct. 30, 1979, eff. Dec. 3, 1979; Dec. 11, 1980, eff. Feb. 2, 1981; Dec. 28, 1981, eff. March 1, 1982; Nov. 9, 1982, eff. Feb. 1, 1983; Oct. 21, 1983, eff. Jan. 1, 1984; Jan. 9, 1985, eff. March 15, 1985; Nov. 25, 1986, eff. March 1, 1987; Nov. 9, 1987, eff. March 1, 1988; Nov. 4, 1994, eff. March 1, 1995; March 6, 2002, eff. July 1, 2002; Feb. 5, 2008, eff. April 7, 2008; Aug. 25, 2016, eff. Dec. 5, 2016; amended Sept. 20, 2017, eff. Jan. 1, 2018.

Reporter’s Notes-2018 Amendment

Rule 4.2(j)(3) is amended to extend its 3-day time period to 5 days consistent with the simultaneous “day is a day” amendments to V.R.C.P. 6.

Reporter’s Notes-2016 Amendment

Y.R.C.P. 4.2(a) is amended for conformity with the simultaneous abrogation of former V.R.F.P. 4 and promulgation of restyled and reorganized V.R.F.P. 4.0–4.3. See Reporter’s Notes to those rules.