EMPLOYERS IGNORE WAGE EXECUTIONS AT THEIR PERIL
The New Jersey Appellate Division recently issued an unpublished decision which should remind employers of the need to honor wage execution orders. In Renaissance Towers Condominium Association Inc. v. Davis, the plaintiff obtained a $30,000 money judgment and secured a wage execution order as well as a writ against defendant Davis, an employee of New Jersey Transit. The sheriff served New Jersey Transit with the writ of wage execution, but the letter accompanying the writ contained an incorrect Social Security number for Davis. Relying solely on the fact that the Social Security number did not match its records, New Jersey Transit advised the sheriff that it had no employee by that name. Eight months later, Davis filed for bankruptcy protection, resulting in the judgment becoming uncollectable. A review of Davis’ bankruptcy schedules confirmed his employment with New Jersey Transit.
Plaintiff moved to hold New Jersey Transit liable for sums that it should have received from New Jersey Transit had it honored the wage execution. The applicable statute, N.J.S.A. 2A:17-54, provides that an employer’s “failure or refusal to make the payments required [by the wage execution] shall render such person, agent or officer so failing or refusing liable to an action therefor by the judgment creditor named in the execution.”
The trial court denied plaintiff’s application, reasoning that the incorrect Social Security number provided to New Jersey Transit absolved it of liability. The Appellate Division reversed and remanded, noting that New Jersey Transit “was served with a writ of wage execution directing it to garnish the wages of ‘Keith Davis’” and stating that it “was not at liberty to disobey the writ because it questioned whether employee Davis was the same person as the defendant in the writ.” The Appellate Division concluded that “the writ was clear and [New Jersey Transit] was compelled to honor it” and it remanded the case to the trial court to determine the appropriate remedy. At oral argument on the appeal, plaintiff conceded that the fact that Davis had filed for bankruptcy protection meant that it could not recover the entire debt from New Jersey Transit, only that portion of the debt which it could have collected before it became uncollectible.
The Appellate Division noted that the employer was obligated in the order to provide a copy of the writ to its employee, Davis, and that the writ specifically notified Davis that he had the opportunity to contest the wage execution. The Appellate Division concluded that the procedures in place provided the necessary protections against an attempt to garnish the wages of another employee with a similar name.
The lessons of the Renaissance Towers case for employers are clear. Employers must honor wage executions and should not interject themselves in determining whether a wage garnishment is improper regarding one its employees. Second, while the statute speaks in terms of “an action” against an employer, the court in Renaissance Towers, and the Appellate Division in a prior published opinion, endorsed a summary proceeding against an employer without the institution of a new lawsuit. Finally, while the debt becoming uncollectible in the Renaissance Towers case will likely limit the employer’s liability, employers cannot assume that will always be the case. Employers would be well served to review any wage execution or other court process with counsel and not disregard any order or writ issued by a court, even if they are not a party to the case where the order or writ was issued.
By: Joseph Garemore, Esquire
Partner at Brown & Connery, LLP