You asked whether a November XX, 2015 Order Appointing Receiver submitted by the F~
Law Firm, appointing D~ as receiver (the “Receiver”) of S~, is a court-ordered garnishment
of alimony payments in Michigan, such that garnishment of Title II benefits is permissible.
For the reasons discussed below, we conclude that the Order Appointing Receiver and
the related Judgment of Separate Maintenance are not legal process appropriate to
implement withholding. In addition, even if the Receiver subsequently serves SSA with
legal process, the Agency cannot comply with his request that he be assigned one hundred
percent of S~’s benefits, because the garnishment amount is restricted under applicable
Michigan and federal law.
S~ currently receives Title II retirement insurance benefits. He and his wife, M~,
obtained a Judgment of Separate Maintenance on May XX, 2015, from the Circuit Court
for the County of O~, Michigan. In Michigan, married couples can obtain a separate
maintenance order, dividing assets in a manner similar to divorce, but without dissolving
the bonds of matrimony. See Mich. Comp. Laws § 552.7. The Judgment of Separate Maintenance obligated S~ to “pay,
through the Michigan State Disbursement Unit,” $4,000 per month of spousal support
until M~’s death or further order of the court. Id. at ¶ 2. Paragraph 5(e) of the Judgment of Separate Maintenance indicated that one
hundred percent of S~’s Social Security benefits were his sole and separate property,
“with the exception of the non-taxable spousal support amount as set forth in paragraph
2” of $4,000 per month.
On June XX, 2015, SSA received an Original Income Withholding Order/Notice for Support
(“IWO” or “income withholding order”) from the O~ County, Michigan Friend of the Court,
numbered 20XXXXXXXXX. The income withholding order ordered SSA to remit to the Michigan
State Disbursement Unit $4,083.50 per month ($4,000 plus $80 past-due spousal support
and $3.50 intergovernment support arrears and/or fees) to satisfy his spousal support
obligations to M~. On June 18, 2015, SSA sent a letter to S~, explaining that SSA
would begin withholding $1,148.40 monthly, starting July 2, 2015, pursuant to the
income withholding order numbered 20XXXXXXXXX.
On November XX, 2015, the Circuit Court for O~ County, Michigan issued an Order Appointing
Receiver, granting D~ “full powers as receiver of all of [X~’s] assets and property,
real, personal or mixed, tangible and intangible, and wherever situated,” for the
purpose of enforcing the May 2015 Judgment of Separate Maintenance. The court noted
that the Receiver’s powers were subject to the limitations in two other documents
not provided to SSA: an October XX, 2015 Order Granting in Part Renewed Motion to
Enforce Judgment of Separate Maintenance and a Motion for Relief from Stay entered
by the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach
On August XX, 2016, A~ of the F~ instructed SSA to remit “any/all benefits payable
to S~” to the Receiver at his office address.
A Termination of IWO dated February XX, 2017, terminated the June 2015 income withholding
order numbered 20XXXXXXXXX. No reason for the termination was provided in the order.
On March XX, 2017, SSA notified S~ that the Agency would no longer withhold alimony
from his Social Security benefits.
U.S. Treasury Department offset notices dated July XX, 2017, and August XX, 2017,
indicate that S~ had or has both tax and non-tax federal debt, for which part of his
Social Security benefits were being withheld.
A state agency or individual which serves SSA with legal process may garnish Social
Security Title II benefits to enforce an individual’s legal obligation to provide
alimony. 42 U.S.C. § 659(a), (h)(1)(A)(ii)(I); 5 C.F.R. § 581.103(c)(1); 20 C.F.R.
§ 404.1820(b); POMS GN 02410.200(A). SSA is required to comply with legal process to enforce an individual’s support
obligations “to the same extent as if the United States . . . were a private person.”
See 42 U.S.C. § 659(a); see also 5 C.F.R. §§ 581.101(b), 581.305(a). “Legal process” is defined as “any writ, order,
summons, notice to withhold income pursuant to [Section 466 of the Social Security
Act], or other similar process in the nature of garnishment” which — is issued by:
(1) a court of competent jurisdiction (domestic or foreign),
(2) an authorized official pursuant to a court order or state or local law, or
(3) a State agency authorized to issue income withholding notices pursuant to State
or local law or pursuant to Section 466(b) of the Social Security Act; and
(4) is directed to a governmental entity to compel it to make a payment, from moneys
otherwise payable to an individual, to another party in order to satisfy the individual’s
legal obligation to provide child support or alimony.
See 42 U.S.C. § 659(i)(5); 5 C.F.R. § 581.102(f); POMS GN 02410.200(B).
Legal process must, on its face, conform to the laws of the issuing jurisdiction.
See 5 C.F.R. § 581.305(a)(1); POMS GN 02410.210(A)(1)(b). Legal process must also be properly served on SSA in accordance with the
law of the issuing state. See 42 U.S.C. § 659(c)(2); 5 C.F.R. § 581.202; POMS GN 02410.205.
The Receiver has repeatedly argued that he has completed legal process, relying entirely
on the powers conferred onto him through the Order Appointing Receiver. He asserted
in a supplemental written submission to our office that he qualifies as an “authorized
official” pursuant to the court order appointing him as receiver. Further, he claimed
that his written demands that SSA redirect S~’s Social Security benefits to him satisfy
the requirement that legal process be “directed” to a governmental entity.
However, Michigan law does not delegate such broad powers to a receiver. Under Michigan
law, if a party defaults on a spousal or child support obligation, a court can (1)
appoint a receiver for the purpose of sequestering real and/or personal property and
(2) “cause the personal estate and rents and profits of the real estate to be applied
to the payment of defaulted alimony.” See Mich. Comp. Laws § 552.27(c); see also Brown v. Brown, 335 Mich. 511, 518 (1953). The plain language of the statute does not delegate any
authority to the receiver to garnish and redistribute earnings independent of court
action. Instead, Michigan law places the responsibility “for the centralized receipt
and disbursement of support” with the State Disbursement Unit and “office of the friend
of the court.” Mich. Comp. Laws § 552.24.
Consistent with applicable statutes, Michigan cases illustrate the need for a court
order or action of the friend of the court in implementing garnishments in a divorce
context. See, e.g., Wiand v. Wiand, 443 N.W.2d 464, 467 (1989) (court ordered party in default of spousal
support payments to execute wage assignment); Sommerville v. Sommerville, 417 N.W.2d 574, 575 (1987) (even though receiver was authorized to discover and
liquidate all of husband’s property to satisfy judgment against him under divorce
property settlement, receiver still needed to obtain writ of garnishment or court
order to garnish husband’s pension); Schaeffer v. Schaeffer, 308 N.W.2d 226, 228-29 (1981) (court ordered party in default of spousal support
payments to execute wage assignment); Petrie v. Petrie, 199 N.W.2d 673, 675 (1972) (court appointed friend of the court as a receiver for
the purpose of taking possession of workers compensation payments and applying proceeds
toward unpaid alimony); McDonald v. McDonald, 88 N.W.2d 398, 399 (1958) (as receiver, friend of the court was authorized to collect
monthly pension checks and apply proceeds to alimony). A receiver “stands in the shoes”
of the person or estate whose interests he was appointed to represent and “can enforce
only such rights and contracts or maintain only such action or defense as could be
enforced or maintained” by that person or estate. Coppola v. Manning, No. 323994, 2015 WL 7288050, at *4 (Mich. Ct. App. Nov. 17, 2015) (citing 75 C.J.S.
Receivers § 392). Because a receiver’s powers are limited to those specified in statutes,
court rules, and court orders, see Woodliff v. Frechette, 236 N.W. 799, 800 (1931), none of which grant the Receiver judicial powers to garnish
income, we conclude that the Receiver is not an “authorized official” empowered to
issue a writ, order, summons, or notice to withhold income compelling SSA to withhold
payments for spousal support. Thus, the Receiver must complete legal process to garnish
Social Security benefits in the same way any other party would in the state of Michigan.
In Michigan, a party can complete legal process to withhold income for spousal support
by obtaining an income withholding order. A party could also attempt to obtain a writ
of garnishment, but likely would have difficulty prevailing for the reasons explained
below. The Receiver provided no evidence that he completed either form of legal process.
Under the Support and Parenting Time Enforcement Act, the circuit court will provide
an order of income withholding with each support order entered or modified by the
court. Mich. Comp. Laws Ann. §§ 552.602(u), 552.604. The office of the friend of the
court has various responsibilities in enforcing income withholding orders. See, e.g., Genesee Cty. Friend of Court v. Gen. Motors Corp., 626 N.W.2d 395, 396 (2001). A notice of income withholding must contain certain
language notifying the recipient of applicable law, including federal limits on withholding;
the effective date of orders of withholding; priority of orders over other legal process;
the possibility of contempt proceedings; and the requirement that the source notify
the office of the friend of the court if income will be terminated. Mich. Comp. Laws
Ann. § 552.609(2)(c) (citing §§ 552.611, 552.611a, 552.612, 552.613, 552.614, 552.623).
The notice of income withholding must also instruct the garnishee to pay funds directly
to the Michigan State Disbursement Unit or the office of the friend of the court.
See Mich. Comp. Laws §§ 552.24, 552.609(2)(d).
Here, we are not aware of any valid income withholding order for spousal support.
The Receiver has not provided a copy of any income withholding order. The only income
withholding order for spousal support in S~’s claims file (number 20XXXXXXXXX) was
terminated pursuant to the February 6, 2017 Termination of IWO. The documents that
the Receiver provided to SSA—the Judgment of Separate Maintenance and Order Appointing
Receiver—do not contain the language required under Michigan law for an income withholding
order. See, e.g., Mich. Comp. Laws Ann. § 552.609. Thus, the documents do not satisfy
the requirement that legal process must, on its face, conform with state law. See 5 C.F.R. § 581.305(a)(1); POMS GN 02410.210(A)(1)(b). Furthermore, any amounts subject to withholding pursuant to an income withholding
order would be payable to the Michigan State Disbursement Unit or office of the friend
of the court, not to the Receiver. See Mich. Comp. Laws §§ 552.24, 552.609(d).
The other method of completing legal process would be to obtain and properly serve
a writ of garnishment. However, we believe it is unlikely that the Receiver would
be able to obtain a writ of garnishment for spousal support because a Michigan court
likely would conclude that spousal support cannot be sought through a garnishment
action. See Toth v. Toth, 217 N.W. 913, 915 (1928) (garnishment must be based on judgment or final decree
regarding debt, but garnishment action cannot be maintained on a decree for alimony,
which is not a debt); see also Sommerville, 417 N.W.2d at 575 (garnishment is remedy for money owed under property settlement
of divorce, whereas income withholding by office of friend of court only applies to
alimony or child support); Beyerlein v. Ashburn, 53 N.W.2d 666, 667 (1952) (garnishment
action was a proper remedy to recover costs of appealing alimony dispute).
In any case, here the documents the Receiver provided are not a writ of garnishment
pursuant to Michigan law. A party requesting garnishment must file the required documentation
in substantially the same form approved by the state court administrator. Mich. Ct.
Rules 3.101(C). The required documentation includes a writ of garnishment, a disclosure
form, and a verified statement that (1) indicates judgment against the defendant has
been entered but remains unsatisfied; (2) provides the original and outstanding judgment
amount, interest, costs, and other related details; and (3) affirms knowledge or good
reason to believe that the garnishee has property belonging to or a financial obligation
owed to the defendant. See Mich. Ct. Rules 3.101(C)-(D). If the garnishment request satisfies all legal requirements,
the clerk of the court will issue a writ of garnishment. Mich. Ct. Rules 3.101(D).
Within 182 days after issuance, the party requesting garnishment must serve upon the
garnishee a writ of garnishment and other required documentation and fees. Mich. Ct.
Rules 3.101(F). SSA will only comply with legal process once a writ of garnishment
has been properly served under state law. See 42 U.S.C. § 659(c)(2); 5 C.F.R. § 581.202; POMS GN 02410.205.
The Judgment of Separate Maintenance and Order Appointing Receiver are not “substantially
in the form approved by the state court administrator,” as required under Michigan
law. Mich. Ct. Rules 3.101(C). Therefore, in light of Michigan law on garnishment,
the Order Appointing Receiver does not satisfy the requirement that legal process
must, on its face, conform with state law. See 5 C.F.R. § 581.305(a)(1); POMS GN 02410.210(A)(1)(b).
In sum, neither the Judgment of Separate Maintenance nor the Order Appointing Receiver
complies with state laws on withholding of income, either under the framework of income
withholding for spousal support or writs of garnishment. Furthermore, the documents
do not satisfy the other requirements of legal process. Neither of the two documents
makes any provision for income or benefits withholding by any third-party payors and
therefore cannot satisfy the requirement that they be “in the nature of garnishment.”
See 42 U.S.C. § 659(i)(5); 5 C.F.R. § 581.102(f); POMS GN 02410.200(B). In addition, neither document satisfies the requirement that it be “directed
to . . . a governmental entity” to compel payment to another party. Id.
Because the Judgment of Separate Maintenance and Order Appointing Receiver do not
constitute a valid income withholding order or a writ of garnishment, any garnishment
of S~’s monthly Title II benefits would be prohibited by 42 U.S.C. § 407(a), which
provides that “[t]he right of any person to any future payment under [Title II] shall
not be transferable or assignable, at law or in equity, and none of the moneys paid
or payable or rights existing under this title shall be subject to execution, levy,
attachment, garnishment, or other legal process,” unless some other provision of law
expressly provides for such collection.
In sum, we conclude that the Order Appointing Receiver and Judgment of Separate Maintenance
are not legal process appropriate to implement withholding of S~’s Social Security
benefits. In order to withhold a portion of S~’s Social Security benefits for spousal
support, the Receiver, D~, should obtain from the circuit court or friend of the court
an order of income withholding in compliance with the Support and Parenting Time Enforcement
Act. The order’s language must direct a governmental entity to compel it to make a
payment, from moneys otherwise payable to S~, to another party to satisfy his legal
obligation to provide child support or alimony.
In addition, even if legal process is properly executed and served on SSA, the Receiver
will not be entitled to full withholding of S~’s benefits as requested, because garnishment
is subject to state and federal limits.