TN 10 (04-12)

PR 04505.029 Montana

A. PR 12-071 Assignment Order -- Montana (NH Raymond)

DATE: March 12, 2012

1. SYLLABUS

An inquiry was made to Regional counsel regarding whether SSA may honor a December 2011 garnishment order directing us to withhold, for maintenance for life, from the insured’s Social Security benefits. The inquiry further asks whether SSA must return amounts withheld from the insured’s monthly benefits pursuant to the divorce decree.

SSA will not honor the order because it is facially invalid and service on the agency under state law was improper. SSA must return amounts withheld pursuant to the order to the insured. Also, SSA must also return amounts previously withheld pursuant to the divorce decree.

2. OPINION

Question Presented

You asked whether SSA may honor a December 2011 “garnishment” order directing the agency to withhold $600 for maintenance for life from the insured’s Social Security benefits, beginning on January 27, 2011, the date of entry of the Decree of Dissolution (“divorce decree”). You also asked whether SSA must return amounts withheld between May and November 2011 from the insured’s monthly benefits pursuant to the divorce decree alone to him.

Short Answer

The order is for “assignment” of periodic earnings and is permissible under Montana law. However, SSA may not honor the order because it is facially invalid and service on the agency under state law was improper. Therefore, SSA must return amounts withheld pursuant to the order to the insured. For your convenience, attached to this opinion is a draft letter explaining to the court why SSA may not honor the order. Further, SSA must return amounts withheld pursuant to the divorce decree alone to the insured, since the decree is not an order to enforce a legal obligation of support.

Background

On January 27, 2011, a Montana district court judge issued a decree dissolving the marriage between the petitioner and the insured. The divorce decree ordered the insured to pay the petitioner $600 per month for maintenance for life. In May 2011, pursuant to the divorce decree, SSA began withholding $600 from the insured’s monthly benefits. In September 2011, however, we advised that since the divorce decree is not an order to enforce the insured’s legal support obligations, SSA may not withhold his benefits pursuant to the decree alone. See Memorandum from Reg. Chief Counsel, Denver, to Ass’t Reg. Comm.-MOS, Denver, Date of Divorce Pursuant to Decree of Dissolution and Garnishment—Montana (Sept. 30, 2011) (hereinafter “Memorandum, Date of Divorce”). SSA subsequently terminated the garnishment. You estimated that between May and November 2011, SSA withheld and paid to the petitioner $3,600 from the insured’s monthly benefits.

On December 16, 2011, noting “good cause appearing therefore,” a Montana district court entered an order directing SSA to withhold and pay to the petitioner $600 per month for maintenance for life from the insured’s Social Security “income,” beginning January 27, 2011, and to “bring all payments current.” You informed us that the petitioner hand-delivered a certified copy of the order to the Billings, Montana Field Office in January 2012. The Western Program Service Center (WPSC) informed us that the petitioner’s attorney faxed a copy of the order to that office.

DISCUSSION

Although the district court used the term “income” and did not cite to the applicable statute, see Mont. Code Ann. § 40-4-207, the order is for assignment of the insured’s periodic earnings.1 SSA is subject to state laws for the enforcement of child support and alimony obligations through withholding, garnishment or other legal process, such as an assignment order. See 42 U.S.C. § 659(a). However, SSA may only comply with a court order to enforce legal obligations for child support or alimony that is facially valid and served on SSA in a manner prescribed by state law. See 5 C.F.R. § 581.305(a)(1); POMS GN 02410.205. As explained below, the assignment order is not valid on its face, 2 and service on the agency was improper.

Section 40-4-207 (Assignments) provides that:

[t]he court may order the person obligated to pay support or maintenance to make an assignment of a part of the person’s periodic earnings or trust income to the person entitled to receive the payments. The assignment is binding on the . . . payor of the funds 2 weeks after service upon the payor of notice that the assignment has been made. The payor shall withhold from the earnings or trust income payable to the person obligated to support the amount specified in the assignment and shall transmit the payments to the person specified in the order . . . .

Mont. Code Ann. § 40-4-207 (emphasis added).

Here, the order directs SSA to ”withhold the sum of SIX HUNDRED DOLLARS ($600.00) per month, for life, beginning January 27, 2011, from the [insured’s] social security income,” and “to bring all payments current.” The order clearly specifies that SSA is to withhold $600 each month for the remainder of the petitioner’s life to satisfy the insured’s current support obligation. 3 However, the order fails to specify the total amount of the insured’s past due support obligations or the amount SSA is to withhold from his monthly benefits to satisfy these arrearages.4 Therefore, we conclude the order is facially invalid.

If we had determined SSA may enforce the assignment order, although the Montana assignment statute does not refer to any withholding limits, federal withholding laws would limit the amount SSA may withhold from the insured’s monthly benefits. The Consumer Credit Protection Act (CCPA), see 15 U.S.C. § 1673, applies because the order clearly qualifies as a “garnishment” under the CCPA. See Marshall v. District Court, 444 F. Supp. 1110, 1116 (E.D. Mich. 1978). The CCPA would limit withholding to 50% of the insured’s disposable earnings, if he were supporting another spouse or child. If not, the law would limit withholding to 60%, except the limits would be 55% and 65%, respectively, if the insured were more than 12 weeks in arrears. See 15 U.S.C. § 673(b)(2)(B); POMS GN 02410.215(3). The withholding limits under Montana law are identical to the CCPA limits. See Mont. Code Ann. § 25-13-614(4).

To be enforceable, the order must also be properly served on SSA in accordance with the law of the issuing state. See 5 C.F.R. § 581.202; POMS GN 02410.205, 02410.210(A). Federal law permits service of process on the office manager of an SSA Field Office. See 5 C.F.R. Pt. 581, App. A. However, Montana does not permit personal service by a party to the action. See Mont. R. Civ. P. 4(d)(2). Here, the petitioner, a party to the action, personally served the order on the field office. 5 Because the order for assignment is not valid on its face and service on the agency was improper, SSA may not enforce the order and must return amounts withheld pursuant to the order to the insured.

As we previously advised, the divorce decree alone is insufficient to enforce his legal support obligations. See Memorandum, Date of Divorce. Thus, SSA must also return amounts previously withheld pursuant to the divorce decree to the insured.

Conclusion

SSA may not honor the assignment order and must return amounts withheld pursuant to the order to the insured. SSA must also return amounts previously withheld pursuant to the divorce decree to him.


John Jay Lee
Acting Regional Chief Counsel, Region VIII

By: ___________________________
Yvette G. Keesee

Assistant Regional Counsel

B. PR 11-064 - Writ of Garnishment-Montana

DATE: February 23, 2011

1. SYLLABUS

SSA was served a garnishment order for child support on the wage earners Title II disability benefits. Subsequently, we learned that the court quashed the writ. The court also denied the request for repayment of benefits previously paid to the petitioner. Because the original order of garnishment was valid and was properly served, SSA was correct to withhold and release to the petitioner, the full allowable garnishment amount under Montana law for the period of 120 days from the date of the original writ. SSA must return excess benefits withheld to the wage earner.

2. OPINION

Question Presented

You requested a legal opinion on whether the agency may enforce a “Writ of Execution” to withhold a portion of number holder David’s monthly Social Security disability benefits for past due child support. After receiving your request, we learned that on January 25, 2011, the court issued an order quashing the writ and giving it no further force or effect.

Short Answer

Because the writ is valid on its face and was properly served, the agency may release to the Petitioner the maximum withholding permitted by law for 120 days after service of the writ. The order quashing the writ has prospective effect only. Since David’s child support obligation is more than 12 weeks in arrears, the agency is permitted to withhold 55% or 65% of his monthly disposable earnings (discussed below), depending on whether he is supporting another wife or child, for 120 days after service of the writ. The agency may release this sum to the Petitioner but must return excess benefits withheld to David.

Background

On or about March 18, 2010, the Clerk of the Montana Fourteenth Judicial District Court, Musselshell County, issued the writ to collect a judgment against David for back child support obligations. Information that you provided, including documents filed with the court, suggest that the Petitioner’s attorney Katie personally served the writ on the Billings, Montana Filed Office on or about March 19, 2010, although you have not been able to confirm the date and method of service.

The writ provides as follows:

  • on November 28, 2003, the court ordered David to pay child support of $494.00 per month until May 1, 2017;

  • without a court order, he stopped making child support payments after June 1, 2007;

  • this resulted in back child support totaling $16,302.00 as of March 2010;

  • on September 15, 2003, the court ordered David to pay the Veteran’s benefits he received for Petitioner and for their minor child to the Petitioner;

  • on January 1, 2004, he stopped submitting the Veteran’s benefits he received for his daughter to the Petitioner; and

  • this resulted in arrearages totaling $19,662.00, as of March 2010.

On June16, 2010, David, through his attorney, filed a “Motion to Quash Writ of Execution and for Order to Show Cause.” David challenged the writ on numerous grounds, but did not specifically challenge the past due Veteran’s benefits.

On January 25, 2011, the court issued an “Order Granting Motion to Quash Writ of Execution, Denying Motion for Contempt, and Denying Request for Attorney Fees and Costs.” In quashing the writ and determining that it “shall be of no further force or effect,” the court found that David “was not accorded due process with notice and a meaningful opportunity to be heard regarding the seizure of his benefits.” Order, p. 4.

Regarding the child support obligations, the court credited the Social Security benefits paid to David’s minor child toward his monthly child support obligation of $494.00 and deemed his obligation satisfied “from June 2007 to the present and each subsequent month that the child receives such benefits.” See id. at 8. However, the court also determined that David owed the Petitioner “back child support consisting of Veteran’s benefits” that David received, but did not pay to the Petitioner, in the amount of $186 per month since January 1, 2004. The court denied David’s request that the Petitioner be required to return any money already received by the Social Security Administration; rather, the court ordered that monies received by the Petitioner pursuant to the writ shall be credited toward this arrears.

You informed us that David’s monthly disposable earnings total $1,261 (his primary insurance amount of $1,357.80 less his Medicare Part B premium of $96.50). We estimate that as of January 25, 2011, the effective date of the order quashing the writ (discussed below) the agency had withheld $5,674.50 in benefits. We understand that this amount has been withheld from David’s benefits, but has not yet been paid to the Petitioner.

DISCUSSION

The Writ is Valid on Its Face and Was Properly Served

Section 207 of the Social Security Act generally prohibits the assignment or garnishment of Social Security benefits. See 42 U.S.C. § 407(a). In 1975, however, Congress amended the Act and created a narrow exception to the anti-assignment provision by providing that old-age, survivors, and disability insurance benefits may be withheld to enforce an individual’s legal obligation to provide child support or alimony. See 42 U.S.C. § 659; 5 C.F.R. §§ 581.101(a)(1), 581.103(c); POMS GN 02410.200; see also Senate Report No. 93-1356 (1974 U.S.C.C.A.N 8133, 8145-58) (explaining that statutory changes were intended to strengthen enforcement of child support). Under this amendment, SSA is subject to state laws for the enforcement of child support and alimony obligations through withholding, garnishment or other legal process. See 42 U.S.C. § 659(a). The Agency is required to comply with a court order to enforce legal obligations for child support that, on its face, conforms to the laws of the jurisdiction where it was issued. See 5 C.F.R. § 581.305(a)(1). The writ, on its face, conforms to the laws of the state of Montana.

The inquiry into whether an order is valid on its face is an examination of the procedural aspects of the legal process involved, not the substantive issues. Whether a process conforms or is regular “on its face” means just that. Facial validity of a writ need not be determined “upon the basis of scrutiny by a trained legal mind.” Nor is facial validity to be judged in light of facts outside the writ’s provisions that the person executing the writ may know. United States v. Morton, 467 U.S. 822, 828 n.10 (1984) (citing In re M~, 61 Comp.Gen. 229, 230-31 (1982)).

In Montana, a writ of execution must: (a) be issued in the name of the state of Montana, sealed with the seal of the court, and subscribed by the clerk; (b) be directed to the sheriff or levying officer; (c) intelligibly refer to the judgment, stating the court and the county where it was entered and, if it is for money, the amount of money and the amount actually due on the judgment; and (d) require the sheriff or levying officer to act substantially as provided in this part.

Mont. Code Ann. § 25-13-301. The writ meets these requirements.

The writ reflects that Montana Fourteenth Judicial District Court, Musselshell County, issued the writ in the name of the state of Montana. The writ reflects the seal of the court and is signed by the clerk. The writ is directed to the levying officer. The writ intelligibly refers to the judgments for child support. Writ, pp. 1-2. The writ reflects that the Musselshell County District Court issued the September and November 2003 child support orders. See id. The writ states that David owes past due child support totaling $35,964.00 as of March 2010. Id. Lastly, the writ requires the levying officer to act substantially as provided in Part 3 of the statute (Mont. Code Ann. §§ 25-13-301–25-13-308). The writ is generally consistent with the statutory provisions in Part 3. Therefore, we believe the writ is valid on its face.

In addition to being facially valid, the writ must be served in a manner prescribed by Montana state law. See POMS GN 02410.205. Montana permits personal service by a sheriff, deputy sheriff, constable, or any other person over the age of 18 not a party to the action or service by mail, provided the agency consents in writing to service by mail. See Mont. R. Civ. P. 4D; Mont. Code Ann. § 25-13-402(1)(b)(i); see also 5 C.F.R. Pt. 581, App. A (noting that “[f]or the garnishment of benefits under title II of the social Security Act, legal process may be served on the office manager at any Social Security District or Branch Office”). Your opinion request suggests that the petitioner’s attorney (who is not a party to the action) served the writ on the Billings Field office, presumably on a manager. Therefore, we believe the writ was properly served.

Because the Writ is Valid on Its Face and Was Properly Served, the Agency May Release to the Petitioner the Maximum Withholding Permitted under Montana Law

The maximum withholding the laws of any state may authorize is limited by the Consumer Credit Protection Act (CCPA). See 15 U.S.C. § 1673. Like the CCPA, Montana law limits withholding to 50% David’s disposable earnings,6 if he is supporting a spouse and/or child (other than the spouse and/or child whose support has been ordered). If he is not supporting another spouse and/or child, the law limits withholding to 60%, except the limits are 55% and 65% respectively, if he is more than 12 weeks in arrears. The writ reflects (and the court held) that David’s Veteran’s benefits payments for his daughter constituted child support and were more than 12 weeks in arrears. His monthly aggregate disposable earnings (his PIA less withholdings required by law, i.e., his Medicare Part B premium) total approximately $1,261. Therefore, the agency was permitted to withhold and may release to the Petitioner 55% or $693.55 per month for 120 days after service, if he was supporting another wife and/or child, or 65% or $819.65 per month for the same period, if he was not. See Mont. Code Ann. § 25-13-402(6) (“A levy upon the earnings of a judgment debtor continues in effect for 120 days [after service] or until the judgment is satisfied, whichever occurs first.”). Because the writ is only in effect for 120 days, the agency must return excess benefits withheld to David. 7

The Court’s Order Quashing the Writ of Execution Has Only Prospective Effect

In response to David’s motion to quash the writ, the court agreed that the Social Security benefits paid to his minor child satisfied his obligation to pay $494 per month in child support, and thus the court concluded that David owed no arrearage for this portion of his support obligation. However, the court determined that David owed the Petitioner $186 per month since January 1, 2004, representing “back child support consisting of Veteran’s benefits.” 8 Importantly, the court denied David’s request that any payments received under the writ be returned to him; rather, the court ordered that such payments should be credited toward the arrears. Thus, the order quashing the writ has only prospective effect.

Conclusion

The order quashing the writ allowed the Petitioner to keep monies the court presumed she had already received under the writ and credited this amount to back child support consisting of Veterans’ benefits. Since the writ is valid on its face and was properly served, the agency may release to the Petitioner the amount she would have received under the writ, i.e., 55% or 65% of David’s monthly disposable earnings of $1,261, depending on whether he is supporting another wife and/or child, for 120 days after service of the writ. The agency must return excess benefits withheld to David.
John Jay Lee
Acting Regional Chief Counsel, Region VIII

By: ___________________________
Yvette G. Keesee

Assistant Regional Counsel


Footnotes:

[1]

See In re Marriage of M~, 92 P.3d 1148, 1156 (Mont. 2004) (holding that “[a]lthough the District Court did not cite the statute giving it authority to subject [the petitioner’s] income to wage withholding, the court had such authority. Under § 40-4-207, a trial court may order a person paying maintenance to assign part of his or her periodic earnings.”). Moreover, Montana’s income deduction and income withholding statutes are measures to enforce orders for child support only. See Mont. Code Ann. §§ 40-5-301 et. seq., 40-5-401 et. seq.

[2]

The inquiry into whether an order is valid on its face is an examination of the procedural aspects of the legal process involved, not the substantive issues. Whether a process conforms or is regular “on its face” means just that. Facial validity of an order need not be determined “upon the basis of scrutiny by a trained legal mind.” Nor should one judge is facial validity in light of facts outside the order’s provisions that the person executing the writ may know. United States v. Morton, 467 U.S. 822, 828 n.10 (1984) (citing In re M~, 61 Comp.Gen. 229, 230-31 (1982)).

[3]

Unlike a writ of execution under the “garnishment” statute, which stays in effect for 120 days after service or until the judgment is satisfied, whoever occurs first, see Mont. Code Ann. § 25-13-402(6), the assignment statute appears to permit continuous withholding to satisfy current and past due support obligations.

[4]

While no Montana court has addressed the issue, the assignment statute appears to permit withholding to satisfy support arrearages. In In re M~, 92 P.3d at 1156-57, the trial court ordered assignment of the petitioner’s wages to satisfy his “future maintenance payments” and deferred entry of final judgment regarding past due maintenance. The Montana Supreme Court rejected the respondent’s argument that she was not required to “execute on either a judgment or an order before” she could proceed under the garnishment statute at Mont. Code Ann. § 25-13-614. However, the Court did not hold that the trial court could not order assignment to satisfy the petitioner’s maintenance arrearages.

[5]

While her attorney, a nonparty, could have personally served the order on the Billings Field Office Manager (or his/her designee), it appears he faxed the order to the Western Program Service Center. Montana law allows a person authorized to serve an order to receive a copy of it for service via facsimile and to serve it in the same manner as if the copy were the original. However, the law does not permit a person authorized to serve an order to do so via facsimile. See Mont. Code Ann. § 25-3-501(1) (Service of telegraphic or telephonic copy).

[6]

Disposable earnings are that part of the earnings of an individual remaining after the deduction from those earnings of amounts required by law to be withheld. See Mont. Code Ann. § 25-13-614(5) (citing 15 U.S.C. § 1672).

[7]

Although the agency was permitted to withhold a greater amount, David was notified on April 14, 2010, that SSA would withhold $630.50 from each month’s payment.

[8]

Here, the court specifically characterized the Veteran’s benefits at issue as child support, and federal courts have referred to these benefits as “the child support portion of a Veterans’ Administration pension payment.” Moreland v. Sullivan, 765 F. Supp. 970, 973 (C.D. Ill. 1991) (citing Whaley v. Schweiker, 663 F.2d 871, 875 (9th Cir. 1991); Tsosie v. Califano, 651 F.2d 719, 723 (10th 1981)). However, Veteran’s benefits should not necessarily be considered “child support” subject to withholding under 42 U.S.C. § 659. We recommend you seek OGC advice in any case where a writ or garnishment order refers to unpaid Veteran’s benefits, if the court does not make clear that such benefits represent child support.


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PR 04505.029 - Montana - 04/12/2012
Batch run: 04/12/2012
Rev:04/12/2012