Court Opinion

ID: 5110836
Source: CourtListenerOpinion
Date Created: 2021-10-02 14:48:43.972466+00
Date Added: 2024-06-11T08:21:33.134321
License: Public Domain

THOMPSON, Judge,
Concurring:
Respectfully, I concur with the result reached by the majority but expand on its reasoning.
The Kentucky garnishment statute states in part:
If the court finds that the garnishee was, at the time of service of the order upon him, possessed of any property of the judgment debtor, or was indebted to him, and the property or debt is not exempt from execution, the court shall order the property or the proceeds of the debt applied upon the judgment.
KRS 425.501(5). In this case, the trial court found that the retained fees were no longer the property of the debtor-clients because the “flat fees” were earned immediately upon receipt. I agree and add that it is irrelevant that the fees remained in the Attorney’s trust accounts. Upon the filing of objections to the garnishments, the court properly examined the amount of the fees and the services performed. The rule is stated in K.R. Newell, Annotation, Funds in Hands of His Attorney as Subject of Attachment or Garnishment by Client’s Creditor, 35 A.L.R.3d 1094 (1971).
[I]f services by an attorney have been rendered prior to garnishment, his right of setoff of the amount of such fees against the funds in his hands will protect the funds to that extent from garnishment, since his lien would come into play. And if counsel can show that the entire sum represents fees for services performed and to be performed, and it is evident that the sum is reasonably related to services which obviously require performance, the entire sum will be exempt from attachment. If counsel’s answer should, however, disclose that he holds money to secure payment of services which will be performed, and it appears that the sum held is larger than he could reasonably expect as his fee, or if it appears that evasive tactics are being resorted to, the court will undoubtedly permit garnishment of the funds. [Footnotes omitted].
I also point out that in the case presented, the Attorneys entered into contracts of representation before the judgment was entered against the debtor-clients. An attorney’s fee contract has precedence over a subsequent garnishment. Sharp v. Cubtan, 262 Ky. 84, 89 S.W.2d 869 (1936).
Based on the general authority, upon receipt of a garnishment notice and an objection by the attorney, the trial court must make the relevant findings regarding the amount representing reasonable fees for services performed and to be performed on behalf of the debtor-clients. Of course, I agree that any funds retained for the purpose of avoiding payment to a client’s judgment creditor are subject to garnishment.
In regard to Meade-McKenzie, Kentucky Rules of Civil Procedure (CR) 76.12(8)(c) permits this Court to impose penalties if an appellee fails to file a brief. However, our Supreme Court has held that when a co-appellee preserves the issues presented warranting reversal in favor of a non-filing appellee, penalties are not appropriate. Mastin v. Liberal Markets, 674 S.W.2d 7, 14-15 (Ky.1984). In this case, there were multiple co-appellees’ briefs filed, all of which addressed the question regarding the garnishments of their client trust accounts. I agree with the remand to the trial court for a finding regarding whether there was a “sham” transaction involving Meade-McKenzie. If not, to the extent that any funds represent reasonable attorney’s fees paid by the *571debtor-client, the funds in the trust escrow account are exempt from garnishment.