COMMENTARY: Michigan Supreme Court clarifies rule for recovery of post judgment court costs and procedures for garnishment proceedings

By Michael H.R. Buckles
On September 27, 2017 the Michigan Supreme Court issued Administrative Order 2016?40 amending Michigan Court Rules 2.625 and 3.101 which regulate taxable court costs and garnishment proceedings.i The amendments were submitted to the Court in October, 2016 by the Michigan Creditors Bar Association. 

The amendment to Rule 2.625 adds new section (K)(1) which confirms that judgment creditors may recover from the judgment debtor taxable costs associated with post?judgment actions as allowed by MCL 600.2405. Subsection (K)(2)(a) affords judgment debtors a procedure to obtain an accounting of those post?judgment costs from the judgment creditor, including a right to a hearing and reimbursement for the $20 filing fee if the costs are not allowable. In addition, sub?section(K)(2)(d) provides that any error in adding costs or fees to the judgment balance by the judgment creditor or its attorney is “not actionable” unless there is an affirmative finding by the court that the fees and costs were added “in bad faith.” 

The new changes to MCR 3.101 (D)(2) expressly state that attorneys for judgment creditors “ ... may include the costs associated with the filing of the current writ of garnishment.” This clarification answers the question of whether a judgment creditor’s attorney may include the cost of that garnishment in the field on the form for the writ titled “total amount of post?judgment costs accrued to date.” Moreover, this amendment codifies the practice that members of the State Bar of Michigan have followed for decades.
Rule 3.101(R)(2) was rewritten to establish a clear procedure for backing out garnishment costs if a disclosure (response) from the garnishee states that the judgment debtor is not employed or that the garnishee is not indebted to the debtor. Judgment creditors are required to complete this process within 28 days after the receipt of such disclosure.

The modifications to other sections of MCR 3.101 address the Legislature’s 2015 amendments to MCL 600.4012, a statute that extended the life of periodic garnishments until the balance of the judgment is satisfied. These changes provide that a garnishee shall continue to be obligated to make periodic payments to the judgment creditor until any additional interest and costs which have accrued after the issuance of the writ have been paid. (Those additional post?judgment costs and interest are included in the statement that judgment creditors are obligated by statute to provide to the garnishee and the judgment debtor every six months.) 

The Michigan Creditors Bar Association expresses its gratitude to the Supreme Court for clarifying these two rules so that all members of the bar, the courts and the public have a clear understanding of how and when postjudgment costs may be added to the judgment balance for proper recovery. MCBA also thanks those who actively supported these two amendments, including: 

The Michigan District Judges Association, State Senator Rick Jones, The Michigan Credit Union League, Community Bankers of Michigan, The Michigan Court Officers and Deputy Sheriffs’ Association, the Michigan Bankers Association, MCBA Of Counsel, Douglas W. Van Essen, and the volunteer members of MCBA who helped draft these rule amendments. 
Michael H.R. Buckles is the government affairs director of the Michigan Creditors Bar Association.