A creditor that seeks to collect his or her judgment in Ohio has several remedies, the most common being garnishment of personal earnings or bank accounts, foreclosure on a certificate of judgment lien, and a sheriff’s execution and sale of the judgment debtor’s personal property. But what if a creditor has not yet obtained a judgment, and believes that the debtor will dispose of assets and be “judgment proof” by the time the creditor obtains a judgment?
The Ohio Revised Code (‘R.C.”) does provide creditors with pre-judgment remedies to prevent debtors from disposing of money or other real or personal property before the creditor takes judgment. This article will discuss two of those remedies, “attachment,” which is a Court ordered seizure of the debtor’s property that is in the debtor’s possession, and pre-judgment “garnishment,” which is Court-ordered seizure of the debtor’s property that is in the possession of a person other than the debtor or the creditor.
Generally speaking, “attachment” refers to the seizure of property in the possession of the debtor, while “garnishment” refers to seizure of the debtor’s property that is in the possession of another person.
A judgment creditor’s seizure of the debtor’s property in the possession of a third person, for example, the defendant’s accrued wages in the hands of his or her employer or the debtor’s funds in a bank account, is sometimes referred to as “attachment,” but a better term is “post-judgment garnishment,” to distinguish the remedy from attachment.
Bases for Obtaining an Order of Attachment
(1) The defendant, or one of several defendants in the action, is a foreign corporation, unless the foreign corporation is registered with the Ohio Secretary of State as a foreign corporation or otherwise exempt from attachment under Ohio law;
(2) The defendant is not a resident of Ohio;
(3) The defendant has “absconded with the intent to defraud creditors”;
(4) The defendant has left the county of his or her residence to avoid the service of a summons;
(5) The defendant so conceals himself or herself self that a summons cannot be served upon the defendant;
(6) The defendant is about to remove property, in whole or part, out of the jurisdiction of the court in which the creditor filed its complaint, with the intent to defraud creditors;
(7) The defendant is about to convert property, in whole or part, into money, for the purpose of placing it beyond the reach of creditors;
(8) The defendant has property or causes of action, which the defendant conceals;
(9) The defendant has assigned, removed, disposed of, or is about to dispose of, property, in whole or part, with the intent to defraud creditors;
(10) The defendant has fraudulently or criminally contracted the debt, or incurred the obligations, for which suit is about to be or has been brought;
(11) The claim is for work or labor.
If the only ground for the attachment is that the defendant is a foreign corporation or is not a resident of Ohio, the Court cannot enter an order of attachment unless the plaintiff’s claim is for a debt or demand based on a contract, a judgment, or a decree, or for causing property damage, death, or personal injury by the defendant’s negligent or wrongful act.
Under the following circumstances, a creditor may obtain an order of attachment of property even before the debt is due from the debtor:
(1) the debtor has sold or otherwise transferred or disposed of his property with the fraudulent intent to cheat or defraud his or her creditors, or to hinder or delay them in the collection of their debts;
(2) the debtor is about to make a sale or other transfer or disposition of his or her property with the fraudulent intent to cheat or defraud his or her creditors, or to hinder or delay them in the collection of their debts; or
(3) the debtor is about to remove his or her property, or a material part of it, with the intent or to the effect of cheating or defrauding his or her creditors, or of hindering or delaying them in the collection of their debts.
To obtain an order of attachment before the subject debt is due, the plaintiff creditor must file a complaint, an affidavit, and a motion for attachment, and follow the other procedures for obtaining an order of attachment, all as set forth in Sections 2715.01 to 2715.49 of the Ohio Revised Code, as described below.
Where to File the Complaint
Motion for Attachment and Affidavit
A creditor can file the motion for attachment of property at any time after the creditor/plaintiff files a complaint for a money judgment. The motion must be accompanied by an affidavit, signed by the plaintiff, or the plaintiff’s agent or attorney, setting forth:
(1) the nature and amount of the plaintiff’s claim, and, if the claim is based on a written instrument, for example, a promissory note, the plaintiff must attach a copy of that instrument;
(2) the facts that support at least one of the eleven grounds for attachment set forth in section 2715.01 of the Ohio Revised Code;
(3) a description of the property to be attached and its approximate value, if known;
(4) the location of that property, to the plaintiff’s best knowledge;
(5) the use to which the defendant has put the property, and that the property is not exempt from attachment or execution, to the plaintiff’s best knowledge after reasonable investigation; and
(6) the name of the person in possession of the property, if the property is not in the debtor/defendant’s possession.
Notice to Defendant
Along with filing the complaint, the motion for attachment, and the supporting affidavit, the plaintiff creditor must also file with the clerk of courts a praecipe directing the clerk to serve upon the defendant debtor a notice of the filing of the motion for attachment. The court, however, may issue an order of attachment without notice or a hearing if the plaintiff satisfies the conditions set forth in Section 2715.045 of the Ohio Revised Code (see below).
Upon the filing of the motion for attachment, the clerk will cause a summons (if not previously served on the defendant), a copy of the complaint, duplicate originals of the notice, and a copy of the affidavit, to be served upon the defendant in accordance with the Ohio Rules of Civil Procedure for the service of a summons, but if the plaintiff seeks service by publication under Civ.R. 4.4, the number of weeks for publication (otherwise generally once a week for six consecutive weeks) may be reduced by the court “to the extent appropriate.” The motion for attachment and the accompanying documents must be served on the defendant at least seven (7) business days before the scheduled hearing date, as indicated in the notice of the motion for attachment.
The notice of the filing of the motion for attachment must be substantially in the form set forth in Section 2715.041(A) of the Ohio Revised Code. The notice: (a) informs the defendant of the filing of the motion for attachment; (b) includes the case caption and case number, and the name and address of the plaintiff; (c) lists the property that is exempt from attachment; (d) informs the defendant that wages cannot be attached before judgment; and (e) notifies the defendant that he or she may request a hearing if the defendant disputes the plaintiff’s claim or believes that the property is exempt from attachment.
Deciding the Motion
Hearing on the Motion for Attachment
The notice of the motion also includes the date, time, and place of a scheduled hearing, and informs the defendant that he or she can retain possession of the property, until a final judgment on the plaintiff’s complaint, by posting a bond in the amount specified in the notice.
The clerk of courts must schedule the hearing on the motion for attachment for a date within twenty (20) days following the filing of the motion. If the defendant fails to file a request for a hearing within five (5) business days following service of the motion for attachment, in accordance with Section 2715.04 of the Ohio Revised Code, the court may nevertheless grant the defendant a continuance of the scheduled hearing if the defendant, before the scheduled hearing date, establishes a “reasonable justification” for his or her failure to request a hearing. If the court grants the continuance, the continued hearing on the motion for attachment must be scheduled for a date “as soon as practicable” after the grant of the continuance, but not later than the fifth (5th) business day following the originally-scheduled hearing date, unless the plaintiff consents to a later date.
At the hearing on the attachment motion, the defendant can offer all available defenses to the motion, whether or not the defendant included any defense in the request for hearing. The hearing on the motion for attachment (whether on the originally-scheduled hearing date or on a continued hearing date) is limited to a consideration of whether there is “probable cause to support the motion,” based on the affidavit and any evidence presented at the hearing, and whether any of the defendant’s property is exempt from execution under R.C. Chapter 2329, and therefore also exempt from attachment.
Order of Attachment With Notice But Without a Hearing
If the defendant has not requested a hearing on the motion for attachment within the time set forth in R.C. 2715.041, and the Court has not continued the scheduled hearing date, the Court will cancel the scheduled hearing and grant the plaintiff’s motion for attachment, if the Court finds all of the following:
- The notice, the motion for attachment, and the affidavit were properly served on the defendant;
- The defendant did not request a hearing within the required five (5)-day period following service of the motion and the Court did not grant a continuance of the hearing under R.C. 2715.042(B);
- The defendant (or other person in possession of the property) did not post a bond sufficient to retain possession of the property; and
- On the basis of the affidavit filed by the plaintiff, the Court finds that there is probable cause to support the motion for attachment.
Order of Attachment Without Prior Notice and Without a Hearing
R.C. 2715.045 permits a plaintiff creditor to obtain an order of attachment without prior notice to the defendant and without a hearing. To enter that ex parte order, the court must find, based on the plaintiff’s motion for attachment, the affidavit filed with the motion, and any other relevant evidence that the court might wish to consider, that (A) there is probable cause to support the motion, and (B) the plaintiff will suffer “irreparable injury” if the order is delayed until the defendant has been given the opportunity for a hearing.
To make a finding that the plaintiff will suffer irreparable injury, the court must find the existence of either of the following circumstances:
“(1) There is present danger that the property will be immediately disposed of, concealed, or placed beyond the jurisdiction of the court.
(2) The value of the property will be impaired substantially if the issuance of an order of attachment is delayed.”
If the court issues the order of attachment based on a finding that there is probable cause to support the motion and that the plaintiff will suffer irreparable injury if the order is delayed, the plaintiff must post a bond with the clerk (see below for the requirements with respect to the bond). The court will then issue the order of attachment, directing the levying officer to attach the non-exempt property of the defendant. The levy on the defendant’s property is discussed below.
If successful at the hearing, the plaintiff must also file with the Clerk: (a) the order of attachment, (b) a praecipe instructing the Clerk to issue to the defendant copies of the motion for attachment, the affidavit, and the order of attachment, and a notice that the order of attachment was issued and that the defendant has a right to a hearing on the matter.
The defendant must file the request for hearing within five (5) business days following service of the notice on the defendant. The defendant has the option, but is not required, to state his or her objections to the attachment in the request for hearing. If the defendant requests a hearing within the five (5)-business day period, the hearing will be held within three (3) business days after delivery of the request for hearing to the clerk. The defendant will receive notice of the date, time, and place of the hearing. The notice also states that the defendant can retain possession of the property subject to the attachment order by posting a bond, in the amount stated in the notice, with the clerk by the end of the fifth (5th) business day after the defendant received the notice.
If the defendant requests a hearing to dispute the attachment, the court will conduct the hearing to determine whether there is probable cause to support the motion for attachment. If the court finds that there was not probable cause, the court will order the levying officer to return the property to the defendant without any requirement that the defendant post a bond.
Appeal from an Order Attaching, or Refusing to Attach, the Defendant’s Property
The order granting or overruling a motion for an order of attachment, if entered after a full evidentiary hearing, is a final appealable order, and an aggrieved party can appeal the order to the Ohio court of appeals having review power over the trial court that entered the order. The aggrieved party may file a notice of appeal within thirty (30) days of the entry of the order on the motion for attachment, or within thirty days of the judgment or order that disposed of the complaint and any other claims in the action.
In most cases, even if the plaintiff obtains an order of attachment, the “levying officer” (see below) cannot take possession of the property subject to the order until the plaintiff has posted a bond or deposited other security with the clerk of courts. If the plaintiff posts a bond, the bond must be for twice the approximate value of the property subject to the attachment order.
The purpose of the bond or cash deposit is to ensure that, if the court enters judgment against the plaintiff in the underlying action (1) the plaintiff will return the attached property to the defendant or pay the assessed value of the property, at the defendant’s option, (2) the defendant will recover his or her damages resulting from the taking and detention of the property, or injury to the property, and (3) the costs of the action will be paid.
Rather than post a bond, the plaintiff may deposit with the clerk twice the approximate value of the property subject to the attachment. If the plaintiff does not know the approximate value of the property or does not know the identity of the property, and wishes to deposit cash rather than post a bond, the deposit must be for twice the amount of the plaintiff’s claim.
Interestingly, if the basis for the attachment is that the defendant is a foreign corporation or is not a resident of Ohio, the Court may issue the order of attachment without requiring the plaintiff to post a bond or cash deposit.
The defendant may object to the sufficiency of the surety that supplied the plaintiff’s bond by filing an exception with the court within ten (10) days after the posting of the surety’s bond. The burden of proof then falls on the surety to demonstrate that the surety is sufficient to fulfill the obligations of the bond. While the question of the sufficiency of the surety is before the court, the levying officer may move forward with attaching the defendant’s property under R.C. 2715.09 (see below), but cannot take any further action with respect to the attached property until the Court determines that the Plaintiff’s surety is sufficient or orders the plaintiff to replace the surety.
Before judgment on the complaint in an action in which the court has issued an order of attachment, and after the defendant has given notice to the plaintiff, the defendant may move for additional security to be posted by the plaintiff. Upon the filing of that motion, if the defendant proves that the plaintiff’s surety has removed from Ohio or is not sufficient for the amount required for the bond, the court has the option of vacating the order of attachment and ordering the levying officer to return the attached property to the defendant, unless the plaintiff posts sufficient surety within the time fixed by the court.
Executing the Order of Attachment
Initial Service of the Order of Attachment
An order of attachment is addressed and delivered to the “levying officer.” For purposes of the Ohio attachment statute, “levying officer” means the sheriff, another authorized law enforcement officer, or a bailiff who is ordered by the court to take possession of property under an order of attachment. An order of attachment is comprehensive, and requires the levying officer to attach the
“lands, tenements, goods, chattels, stocks or interest in stocks, rights, credits, money, and effects of the defendant, in such officer’s county, not exempt by law from being applied to the payment of plaintiff’s claim [for example, the defendant’s exempt personal earnings], or so much thereof as will satisfy it, to be stated in the order as in the affidavit, and the costs of the action, not exceeding one hundred dollars.”
Unless the Court issued the order of attachment under R.C. 2715.045 (without prior notice and without a hearing), the levying officer must serve the order of attachment on the defendant in accordance with Civ.R. 5, governing service of pleadings and other papers after the service of the complaint.
Civ.R. 5 requires service of an order, such as an order of attachment, upon the defendant’s attorney if the defendant is already represented in the action, unless the court orders service directly on the defendant. If the defendant is not represented in the action, the levying officer must serve the order of attachment directly on the defendant. Civ.R. 5 allows the levying officer to serve the order of attachment by delivering a copy on the person to be served, transmitting the order to the office of the person to be served by facsimile transmission, mailing the order to the last known address of the person to be served, or, if no address is known, leaving the order of attachment with the clerk of courts.
Attaching the Defendant’s Property
After service of the order of attachment upon the defendant or his or her attorney, as applicable, the levying officer must execute on the order “without delay.” The levying officer must go where the defendant’s property is located, and the levying officer or his agent, for example, an appraiser, must make an inventory and appraisal of all of the defendant’s property. The levying officer or his agent, as applicable, must indicate that inventory and appraisal in an affidavit that the levying officer will file with the court, with the order of attachment.
When attaching the defendant’s real property, the levying officer must leave a copy of the order of attachment with the occupant of the real property or, if there is no occupant, the levying officer must post a copy of the order in a conspicuous place on the property. The levying officer can attach personal property, if reachable, by taking the property into his or her custody and keeping it in a secure place subject to further order of the court. After attaching personal property, the levying officer must deliver a copy of the order of attachment to the defendant or, if the officer cannot find the defendant, the officer must leave a copy of the order of attachment at the place where he or she attached the personal property. On the other hand, if removal of the defendant’s property would be unreasonably expensive, the levying officer can take possession of the property by posting a “notice of possession” conspicuously on that property.
When and how a levying officer may enter a building to take possession of the defendant’s personal property depends on whether the building is an “occupied dwelling unit.” A structure used in whole or in part as a household by one person, or as a common household by two or more persons, qualifies as an “occupied dwelling unit,” but only if a person is present, or is likely to be present, in the structure. A structure is not considered an “occupied dwelling unit” at any time if, after reasonable efforts to personally contact any person who may be present in the structure at that time, the levying officer reasonably believes that no person is present in the structure at that time.
A reasonable reading of the Ohio attachment statute leads to the conclusion that a levying officer is without authority to take into possession personal property at any time that the structure housing the property is an “occupied dwelling unit.” If the defendant’s property is contained in a structure other than an occupied dwelling unit, to take possession of that property, the levying officer must first use reasonable efforts to obtain voluntary admittance to the structure. If those efforts fail, and unless the order of attachment specifies otherwise, the levying office may use any lawful means to enter the structure. If the levying officer entered the building without first getting permission to enter, the levying officer must file with the court, on the next business day after the entry, an affidavit setting forth the circumstances of the entry and the reasons the levying officer was unable to obtain voluntary admittance.
The court, upon the plaintiff’s motion and for good cause shown, may appoint a receiver to take possession and control of attached property until the court renders a judgment on the plaintiff’s complaint. The court-appointed receiver must take an oath and post a bond before taking possession of the attached property. If the Court does not appoint a receiver upon the plaintiff’s motion, the levying officer will have the powers and authority, with respect to the attached property, as if the court had appointed the levying officer as a receiver.
The receiver must take possession of, and collect, all of the defendant’s “notes, due bills, books of account, accounts, and other evidences of debt” that were attached by the levying officer. The receiver’s collection of the indebtedness evidenced by those instruments is subject to defenses available to the obligor on the respective instrument. If any attached property is perishable or expensive to keep and maintain, the court may order the receiver to sell that property through the sheriff at public sale as if upon a writ of execution after judgment. The sheriff then holds the proceeds of the sale until the court renders a final judgment on the plaintiff’s complaint.
Bonding Off or Discharging an Order of Attachment
A defendant whose property is subject to an order of attachment, or another person on the defendant’s behalf, may discharge the attachment and retain or regain possession of that property by posting a bond for twice the approximate value of the attached property or twice the amount of plaintiff’s claim, as applicable. If, on the other hand, the plaintiff’s complaint seeks a judgment based on the defendant’s negligent or wrongful act that caused death or personal injury, the court will set the amount of the defendant’s bond to discharge the attachment.
The surety on the defendant’s bond may execute the bond in the presence of the levying officer before the levying officer has filed the return on the attachment with the clerk of courts. After the levying officer has filed the return, the surety on the defendant’s bond must execute the bond in the presence of the clerk. Either the levying officer, or the clerk, as applicable, must approve the surety as a condition to the discharge of the attachment.
Rather than post a bond to discharge an attachment, a defendant may deposit with the clerk cash in the amount of the approximate value of the attached property, or, if the plaintiff posted a bond, cash in the approximate value of the attached property or the amount of the plaintiff’s bond, whichever is less.
Motion to Discharge the Attachment
Judgment on the Complaint
As mentioned above, if the plaintiff filed a complaint and a motion for attachment seeking to attach the defendant’s property before the debt is due, and the court overrules the motion, the court must dismiss the complaint without prejudice. In all other cases involving a motion for attachment before judgment, the case will proceed to a deposition of the complaint, after the court has determined the motion for attachment, as in any other civil action.
If the court renders judgment for the defendant on the complaint, the court will immediately discharge any order of attachment previously entered in the case. On the other hand, if the court grants a judgment to the plaintiff on the complaint, the judgment is satisfied as follows: (1) the levying officer pays to the plaintiff the proceeds of any sale of perishable property that was already conducted by the levying officer, (2) under a court order, the levying officer sells so much of the personal property, and the real property, subject to the order of attachment, as is necessary to satisfy the judgment, as if upon a writ of execution, and (3) the clerk will issue a writ of execution to the levying officer to satisfy any balance of the judgment from the defendant’s remaining property not exempt from execution.
As mentioned above, if a creditor seeks attachment of the debtor’s property in Ohio before judgment, and the property is in the possession or under the control of a third person, the creditor’s remedy is to obtain an order of attachment directed to the third person, called the “garnishee.” Examples of property subject to pre-judgment garnishment include the debtor’s deposit account with a financial institution, the debtor’s brokerage account, the debtor’s property in a safe deposit account, or any other property for which the defendant could file suit against the garnishee.
On the other hand, the wages of an Ohio debtor are not subject to pre-judgment garnishment, and can be collected by a creditor only through the post-judgment garnishment procedure set forth in R.C. Chapter 2716.
Motion and Order of Attachment Against a Garnishee
Examination of Garnishee
If the court grants the plaintiff’s motion for attachment against a garnishee, the levying officer will then attempt to take possession of the defendant’s property from the garnishee. If the levying officer is unable to do so, he or she must leave a copy of the order of attachment with the garnishee, and a written notice ordering the garnishee to appear in open court and be examined. The order of attachment affects the defendant’s property and credits in the garnishee’s possession or under his or her control, at the time of service of the notice and thereafter.
If the defendant posts a bond or cash in accordance with R.C. 2715.26 (see discussion above), a garnishee holding the defendant’s property is discharged of any obligation to turn over that property to the levying officer. In addition, under R.C. 2715.32, the court that issued an order of attachment against a garnishee may permit the garnishee to retain the defendant’s property, or refrain from paying money into court for a debt that the garnishee owes to the defendant, by executing a bond in favor of the plaintiff. Under that Section, the court has the authority to set the amount of the bond.
Action Against Garnishee
Under R.C. 2715.33, if a court has entered an order of attachment against a garnishee, the plaintiff may bring a separate action against the garnishee, if the garnishee:
(A) failed to appear for an examination under R.C. 2715.29;
(B) appeared for the examination but his or her disclosure was not “satisfactory to the plaintiff”; or
(C) failed to deliver the property, or pay money, in compliance with the order of attachment, without posting a bond under R.C. 2715.32.