Kelly v. Montgomery County Office of Child Support Enforcement

KEHOE, J. Maryland law authorizes a judgment creditor to- attach assets of the debtor to satisfy the judgment. Our attachment law has a number of exemptions. In this case, we must decide whether one such exemption is available in child support enforcement actions. The chain of events giving rise to this appeal began in 2014 when the Montgomery County Office of Child Support Enforcement (the “Office”) sought to collect a judgment of $9,866.80 against Byron Alexander Kelly for unpaid child ¹⁰⁸ support.

At the request of the Office, the Circuit Court for Montgomery County issued a writ of garnishment against Capital One Bank, N.A. There were two accounts in Kelly’s name at the bank with a combined balance of $2,705.05. The bank reported this information to the court and suspended activity in the accounts pending a court order. Kelly then filed a motion to release the two accounts from the levy. 1 He based his motion on Courts and Judicial Proceedings Article (“CJP”) § 11 — 504(b)(5), which permits a judgment debtor under certain circumstances to elect to exempt up to $6,000 in cash or other property from a levy to satisfy a money judgment. After an evidentiary hearing, the Circuit Court for Montgomery County denied Kelly’s motion and separately ordered Capital One to pay the account proceeds to the Office.

Kelly has appealed both orders and presents four questions to us. We have consolidated and reworded them as follows: (1) Did the trial court correctly interpret the exemption contained in CJP § ll-504(b)(5) to be inapplicable in actions to collect child support arrears? (2) Were the trial court’s findings as to the source of the funds in the accounts clearly erroneous? We will affirm the trial court’s judgment.

Analysis 1. Were the account proceeds exempt from garnishment? 1.1. The Applicable Rules of Statutory Construction In resolving the issues in this appeal, we will pay heed to the following guidelines of statutory interpretation: ¹⁰⁹ (1) Our purpose is to “ascertain and effectuate the real and actual intent of the Legislature.” Employees’ Ret. Sys. of City of Baltimore v. Dorsey, 430 Md. 100, 112 [ 59 A.3d 990 ] (2013); (2) In this context, “intent” means “the legislative purpose, [that is] the ends to be accomplished, or the evils to be remedied” by the statute in question, id.; (3) We usually identify the legislative purpose by considering the plain language of the statute “within the context of the statutory scheme to which it belongs, considering the purpose, aim, or policy of the Legislature in enacting the statute.” State v. Johnson, 415 Md. 413, 421-22 [ 2 A.3d 368 ] (2010); and (4) In the process of discerning the “statutory scheme” to which a particular statute belongs, we bear in mind that, laws passed by the General Assembly are usually written so that no provision of any statute is superfluous or meaningless.

Moore v. State, 424 Md. 118, 127 [ 34 A.3d 513 ] (2011). Finally, “[an] examination of interpretive consequences, either as a comparison of the results of each proffered construction, or as a principle of avoidance of an absurd or unreasonable reading, grounds the court’s interpretation in reality.” Town of Oxford v. Koste, 204 Md.App. 578, 586 , 42 A.3d 637 (2012), aff'd, 431 Md. 14 , 63 A.3d 582 (2013). 1.2. Two Statutes and Two Statutory Schemes The question before us is how to reconcile two apparently conflicting statutes. The first is CJP § ll-504(b)(5). 2 The ¹¹⁰ “statutory scheme” which contains § 11-504 sets out means by which judgments can be enforced by judgment creditors.

Section 11 — 504(b) lists various exemptions that judgment debtors may exercise to shelter assets from being seized to pay the judgment. Section 11 — 504(b)(5) states (emphasis added): The following items are exempt from execution on a judgment: (5) Cash or property of any kind equivalent in value to $6,000 is exempt, if within 30 days from the date of the attachment or the levy by the sheriff, the debtor elects to exempt cash or selected items of property in an amount not to exceed a cumulative value of $6,000. The second statute is Family Law Article (“FL”) § 10-108.3(b)(1). It provides in pertinent part (emphasis added): ¹¹¹ If an obligor [who is more than $500 in arrears in child support payments] has not paid child support for more than 60 days, the Administration may institute an action to attach and seize the amount of the arrearage in one or more of the accounts of the obligor with a financial institution to satisfy the amount of arrearage owed by the obligor.[ 3 ] Additionally, and of significance to this appeal, FL § 10-108.3(h)(4) permits an obligor to “challenge the [collection] actions of the [Office] based on an exemption in [CJP] § 11— 504 ... or for any other good cause[.]” Section 10-108.3 inhabits a “statutory scheme” which establishes the Child Support Enforcement Administration and grants to that agency broad powers to collect overdue child support payments.

Among other things, Subtitle 10 of the Family Law Article authorizes the Motor Vehicle Administration to suspend the driver’s license of persons who are 60 days or more behind in their support obligation (FL § 10-119); authorizes other licensing agencies to suspend licenses for professional occupations for individuals who are 120 days behind in child support payments (FL § 10-119.3); grants the Child Support Enforcement Administration, and its local surrogates such as the Office, the authority to obtain orders withholding up to 25% of salaries and wages in order to satisfy unpaid child support obligations (FL §§ 10-120-138); and criminalizes the wilful failure to pay child support (FL § 10-203). Read together, the provisions of Title 10 of the Family Law Article demonstrate a strong public policy to provide multiple enforcement tools by which child support orders can be enforced. These orders are enforced to “preserve and promote the best interests of the child” for whom support is to be paid (FL § 10-118). 1.3. The Parties’ Contentions Kelly’s argument is quite simple: he concedes that the Office has the authority to garnish bank accounts but, pointing ¹¹² to FL § 10-108.3(h)(4), he asserts that he is entitled to exempt up to $6,000 of personal property pursuant to CJP § ll-504(b)(5).

However, we conclude that the exemption in CJP § 11 — 504(b)(5) does not apply to efforts to collect unpaid child support payments. Our conclusion is based on a subtle, but very significant, difference in terminology between CJP § 11-504 and FL § 10 — 108.3(b)(1). CJP § ll-504(b) permits a “debtor” to claim an exemption of up to $6,000. In contrast, FL § 10— 108.3 authorizes the Child Support Enforcement Administration to collect unpaid child support from “obligors.” In the purview of FL § 10-108.3, Kelly is certainly an “obligor.” Does this make him a “debtor” for the purposes of CJP § 11— 504?

The answer to the question is “no.” Maryland courts have long distinguished between a “debtor,” that is, someone who simply owes money to another, and an “obligor” who must pay money arising out of a separate, and separately enforceable, legal duty. This principle was first applied in Maryland in Safe Deposit & Trust Co. v. Robertson, 192 Md. 653, 662-63 , 65 A.2d 292 (1949). At issue in that case was whether income generated by a spendthrift trust could be attached to collect unpaid alimony. The Court recognized that income from a spendthrift trust was not subject to attachment for the beneficiary’s debts, but the Court drew a distinction between the obligation to pay a debt and the obligation to support a spouse or minor child.

The latter obligation “is a duty, not a debt .... We think the rule that gives legal effect to spendthrift provisions as against contract creditors should not be extended to claims for support or alimony.” Id. (Emphasis added.) The distinction between an individual’s debts — owed to third parties — and his or her duty to support dependent children and spouses has been repeatedly recognized in different legal and factual contexts by the Court of Appeals. See United States v. Williams, 279 Md. 673, 678 , 370 A.2d 1134 (1977) (Military retirement pay is not subject to attachment for payment of a debt but is subject to attachment for unpaid ¹¹³ alimony because “the underlying obligation is for intra-familial support and the very purpose of the statutory exemptions is to protect a family from being deprived of all support by attachment proceedings brought by an outsider.”) (citing Md.Code Ann. (1975, 2013 Repl.) § 15-602 of the Commercial Law Article); Pope v. Pope, 283 Md. 531, 537 , 390 A.2d 1128 (1978) (Unemployment benefits are not subject to attachment for payment of a debt but are attachable for payment of alimony because “the legislative purpose underlying such statutes [prohibiting attachment of various benefits] is the protection of the various types of benefits involved from the claims of creditors not from the claim of a former wife for alimony, which often, as in Maryland, is not considered a debt.”) (citing what was then Md.Code (1957, 1969 Repl.), Art. 95A, s 16(c); substantively recodified as Md.Code Ann. (1991, 2008 Repl.) § 8-106 of the Labor and Employment Article). 4 The outcome of most of these cases turned upon the Court’s interpretation of statutes authorizing or limiting the enforcement of various types of monetary obligations. 5 In each case, the Court of Appeals distinguished between “debtors” and “obligors” in the process of construing the statute in question.

These decisions lead us to conclude that, when the General Assembly used the term “debtor” in CJP § 10-504(b)(4), the Legislature did not intend to permit persons who were obli ¹¹⁴ gated to pay child support to escape their legal duty. See Pye v. State, 397 Md. 626, 635 , 919 A.2d 632 (2007) (“The General Assembly is presumed to be aware of this Court’s interpretation of its enactments and, if such interpretation is not legislatively overturned, to have acquiesced in that interpretation.”) (internal quotation marks and citation omitted.) Our interpretation of the subsection is consistent with other provisions of CJP § ll-504(b), which extend protections not only to the debtor but the debtor’s family as well. For example, § ll-504(b)(3) (emphasis added) exempts “[pjrofessionally prescribed health aids for the debtor or any dependent of the debtor[;]” (b)(4)