Wrongful Garnishment of Wages & the Florida Consumer Credit Protection Act

One of the ways a creditor can collect on a judgment it has obtained against a debtor is by garnishing the debtors wages.  This process involves moving the court for entry of a judgment of garnishment directing the debtors employer to pay directly to the creditor a portion of the debtor’s pay for each pay period.  The debtor has various bases on which to avoid this garnishment of wages.  The most common is asserting that the Debtor is the head of household.

As will be discussed below, it is important that if a person is served with notice that a motion for a writ of garnishment has been filed against them that they respond promptly and assert their exemption.  Failure to do so will result in the court approving garnishment of the debtor’s wages.  And, while the exemption can be asserted at a later time, it will only exempt the debtor from future garnishment.  The funds already garnished will not be able to be recovered.

In LAMB v. HOUSEHOLD FINANCE CORPORATION III, 409 B.R. 534 (N.D. Fla. 2009), the debtor’s wages were garnished eventhough she was head of household because she did not timely assert her right to the exemption as head of household.  She attempted to recover the amounts previously garnished by suing the Creditor and Debt Collector for Wrongful Garnishment and violation of the Florida Consumer Credit Protection Act (FCCPA).  The basis for both the allegation of Wrongful Granishment and violation of the FCCPA for attempting to collect a debt known not to be due was that as part of the original action, resulting in the judgment that is now the basis of the garnishment, the Debtor filed a document indicating that she was a single mother with kids.  It was the Debtors position that this put the Creditor on notice that the debtor was head of household.

Wrongful Garnishment

The element of a cause of action for Wrongful Garnishment are (1) commencement or continuance of a garnishment proceeding, (2) the commencement of the garnishment action by the defendant in the subject action, (3) the bona fide termination of the garnishment action in favor of the debtor, (4) the absence of probable cause for a writ of garnishment, (5) presence of legal malice, and (6) injury to the debtor. LAMB, 409 B.R. 534, 539 (N.D. Fla. 2009).  All of these factors must be shown to prevent the dismissal of a complaint for Wrongful Garnishment.

The LAMB court discusses the effect of the debtor filing a response in the original action indicating that she is a “single mother with kids”, and the debtors assertion that this filing resulted in the creditor not having propable cause to institute the garnishment action (element no. 4 above).  Section 77.01, Florida Statutues, entitles, “[e]very person who has…recovered a judgment in any court against any person or entity has a right to a writ of garnishment…”, and the statute does not require the party seeking garnishment to affirmatively negate the debtor’s entitlement to claim an exemption.  Thus, the fact that the debtor filed a letter in response to the original complaint indicating she was a “single mother with kids” did not prevent the creditor from seeking garnishment.

Florida Consumer Credit Protection Act

The debtor also claims that the garnishment action violated the FCCPA by attmepting to enforce a debt when the creditor knew the debt was not legitimate.  The debtor asserted that the creditor seeking the garnishment knew that the garnishment was not legitimate because of the response letter filed indicating that the debtor was a single mother with kids.

The LAMB court rejects this assertion on two grounds.  First, the assertion of being a single mother with kids does not establish all requirements of the head of household exemption, namely that she also provides more than half of the financial support for the kids.  Second, the court returns to its discussion of Chapter 77, Florida Statutes, which does not require the creditor to affirmatively negate the debtors right to a claim of exemption.  The Court notes, “[Chapter 77] provides no procedure for the prior determination of head of family before the issuance of a writ of garnishment”.  The court continues, “…the responsibility of claiming an exemption from garnishment is on the Defendant, and a garnishment plaintiff’s mere knowledge of the garnishment defendant’s potential ability to claim an exemption, does not make its pursuit of the garnishment the knowing pursuit of an illigitimate debt or the knowing assertion of a right that does not exist”.

The result reached in this case demonstrates the court’s position that eventhough the debtor had previously informed the creditor and the court of her status as head of household, it was still her burden to properly assert this exemption at the proper time in the garnishment procedings, and failure to do so resulted in her wages being garnished.

Collection Phone Call Frequency / Florida Consumer Credit Protection Act

Florida’s Consumer Credit Protection Act (FCCPA), like the Federal Fair Debt Collection Practices Act (FDCPA), protects consumers from abusive conduct by creditors attempting to collect a debt.  This post discusses the frequency of telephone calls from creditors, and how many is too many.  This discussion focuses on frequency of phone calls and not abusive conduct during a phone call.  Abusive language or threats during a phone call is governed by a separate section of the FCCPA and can result in one call violating the law.

An important distinction between the FDCPA and the FCCPA is that the FDCPA does not apply to creditors seeking to collect their own debts but the FCCPA does.  Therefore, if a creditor subjects a consumer to harrasing conduct the consumers avenue for redress is through the FCCPA not the FDCPA.

Section 559.72(7) Florida Statutes, the FCCPA, states as follows:

In collecting consumer debts, no person shall:

(7) Willfully communicate with the debtor or any member of the her or his family with such frequency as can reasonably be expected to harass the debtor or her or his family, or willfully engage in other conduct which can reasonably be expected to abuse or harass the debtor or any member of her or his family[.]

In Story v. J.M. Fields, Inc., 343 So. 2d 675 (Fla. 1st DCA 1977), the Court discussed the standard to be applied in determining if telephone calls have been abusive.  In addressing the statute, the Court stated that proof of numerous calls does not necessarily show harassment.  The court acknowledged legitimate reasons for a creditor or debt collector  to make contact with a consumer, which are to inform or remind the consumer of the existence of the debt, to determine the reasons for non-payment, or to negotiate or persuade the debtor to pay.  Phone calls are considered harassment if they continue after the above legitmate purpose for contact have been exhausted, because the only purpose for continued contact would be to “exhaust the resisting debtor’s will”.

In Scott v. Florida Health Siences Center, Inc., 8:08-cv-1270-T-24-EAJ (M.D. Fla. 2008), the Court further expounded on what consititutes harassment under the FCCPA.  The Court said:

Whether collection behavior is abusive or harassing is not a formulaic determination, but demands consideration of the frequency and tone of the contacts, “the legitimacy of the creditor’s claim, the plausibility of the debtor’s excuse…and all other circumstances that color the transaction.”  Story, 343 So. 2d at 676-77.  Where the nature of the collection attempts is ambiguous, evaluating the factual circumstances and determining whether they consitutue harassment or abuse becomes a question of fact…

In Story the consumer alleged that he received at least 100 calls over a period of five months.  None of the calls were threatening.  No phone calls were received after the consumer informed the creditor that he had a lawyer.  However, in spite of the lack of overt abuse or harassment (the Court did not consider 100 calls by itself to be harassment) the Court determined that the creditor lacked a legitimate purpose to make this many phone calls and, therefore, decided that the facts alleged could show harassment under the FCCPA.  The case was remanded to the trial court for this factual determination to be submitted to the jury.

In Scott the creditor contacted the consumer by phone seventeen times over eight months attempting to collect a debt.  The telephone calls were made inspite of prior settlement of the debt by the consumers health insurance provider, and continued in spite of the fact that the consumer and the insurer repeatedly informing the creditor of the prior settlement.  Several of the final communications threatened to report the failure to pay to credit bureaus.  In this case it was determined that ninteen telephone calls over eight months (2-3 calls per month)  states a legal claim for harassment, because the consumer clearly informed the creditor that the debt has been settled and to contact her insurer regarding the dispute.  The lower Court’s Order dismissing the claim was reversed.

Story demonstrates that while the numer of calls made by a creditor in and of itself will not show harassment (100 in that case), continuing to call when there is no legitmate purpose for the calls tends to  show the purpose of the calls was to harass the consumer.  Along the same line Scott shows that as little as nineteen calls over eight months can constitute harassment when the consumer clearly indicates her position that debt has been paid and directs the creditor to take the issue up with her insurer.  Following the reasoning in Story, once it was determined that the consumer believed that she paid and did not owe the claimed debt, the only reason for the creditor to continue to call was to harass in hopes of compelling payment.

If you believe you are being harassed by a creditor seeking to collect a debt, it may not be adequate to merely maintaion a log of call frequency (unless you are receiving numerous calls in the same day).  It is important to document the content of the conservations to demonstrate that there is no purpose for the creditor to contact you other than to “exhaust your will”.  When speaking to a creditor, once you have explained your reasons for non-payment, indicated that you do not intend to negotiate the debt, and that you do not intend to pay the debt, any future phone calls may be found by the Court to be harassment no matter how polite the caller is or how often he has called.