Monday, October 19, 2015

Post-garnishment residual wages -- Certified to Connecticut Supreme Court

The Second Circuit has certified the following question to the Connecticut Supreme Court:

Do Conn. Gen. Stat. sections 52-361a and 52-367b, read together, exempt post-garnishment residual wages held in a third-party's bank account from further execution, so that the become freely transferable under the Connecticut Uniform Fraudulent Transfer Act, Conn. Gen. Stat. section 52-552a et seq.?

This question arose under the following facts:

The Appellants owes more than $3,000,000 to the Appellee with respect to two state court judgments.  The Appellant transferred to his wife (also an appellant) more than $300,000 by depositing his wages into her bank account.  During part of this period, the appellee and another judgment creditor garnished appellee's wages.

The Appellee sued the Appellants to recover those transfers.  Both parties moved for summary judgment and the District Court ruled in favor of the Appellee, answering the above-cited question in the negative..  The Appellants appealed.

The Second Circuit stated: "Although [the District Court's" well-reasoned opinion accords with an earlier District of Connecticut decision and one Superior Court opinion, the weight of state authority -- including two Superior Court cases, an opinion of the state Attorney General, and a Judicial Branch form -- has adopted the contrary view."

Because the uncertainty of the state law, the Second Circuit certified the question to the Connecicut Supreme Court.

The decision in The Cadle Co. v. Fletcher can be found here.