Home COMMONWEALTH CAREGIVERS, INC. v. MAUREEN MCCARTHY and another [Note 1]

2017 Mass. App. Div. 21

June 3, 2016 - January 26, 2017

Appellate Division Northern District

Court Below: District Court, Newton Division

Present: Coven, P.J., Crane & Flynn, JJ.

Neil E. Roberts for the plaintiff.

Meredith Freed and Thomas A. Mullen for the defendant.


FLYNN, J. This case raises the question whether the trustee-appellee, The Savings Bank ("Bank"), erred in applying the statutory exemptions applicable to trustee process attachments when attaching funds held by the defendant, Maureen McCarthy ("McCarthy"), in two joint accounts with her brother.

Course of proceedings. The plaintiff-appellant, Commonwealth Caregivers, Inc. ("Commonwealth"), is a Massachusetts corporation in the business of providing home health care services. Defendant McCarthy is an individual who received services from Commonwealth. In January, 2013, Commonwealth sued McCarthy in the Newton District Court claiming an amount owed of $7,502. During the proceedings, Commonwealth was granted, ex parte, a motion for trustee process to attach funds in the amount of $7,502 belonging to McCarthy allegedly on deposit with the Bank. The Bank answered the trustee summons, stating under oath that it did, in fact, have two accounts for McCarthy in the total amount of $1,973.14. The Bank further noted that upon applying the $2,500 statutory exemptions of G.L.c. 246, §28A, there were no excess funds available for attachment. Subsequently, the Bank further answered on March 7, 2013, that McCarthy maintained the two depository accounts, both of which included her brother, Edward McCarthy, as a joint account holder. Edward McCarthy is not a defendant in the litigation.

On August 13, 2013, judgment entered in the litigation in favor of Commonwealth, awarding a judgment in the amount of $8,851.37 against McCarthy. Execution in the amount of $9,675.49 was issued on May 23, 2014. Months later, on July 30, 2014, within the same action in the Newton District Court, a new attachment by trustee process against funds held by McCarthy in the Bank was allowed in the amount of $9,675.49. [Note 2]

On August 7, 2014, the Bank answered under oath that the total of McCarthy's funds on deposit with the Bank was $5,272.44. Applying a statutory exemption for the defendant in the amount of $2,500 and a statutory exemption for the joint account holder, a natural person, of an additional $2,500, the Bank reported nonexempt funds available for attachment in the amount of $272.44.

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Commonwealth subsequently filed a motion to charge the Bank as trustee, not only as trustee of the $272.44 balance, but also advocated that the Bank should be charged as trustee for an additional $2,500, arguing that the joint account holder, Edward McCarthy, despite being undisputedly a natural person, was not entitled to a separate $2,500 exemption. Commonwealth argues simply that the exemption is available only to the defendant debtor and not to all other natural person account holders.

Discussion. From 1975 to 2011, the statute setting forth the exemption from trustee process for funds of a natural person held in a bank account read as follows:

"Five hundred dollars of any natural person in any account or accounts in a trust company, savings bank, cooperative bank, credit union, national banking association or any other banking institution doing business in the commonwealth shall be exempt from attachment by trustee process. A joint account shall be treated for the purposes of this section as if each depositor owned one half of the amount thereof. Every trustee summons served on such an institution shall describe such exemption with reference to this section. Upon service of such a summons the trustee shall answer as subject to attachment only so much money of the defendant as exceeds five hundred dollars.

"No business, trust or organization shall be entitled to the exemption hereunder, and no natural person shall be entitled to more than a five hundred dollar exemption at any one time. In any action the plaintiff may apply to the court for further attachments upon proof by certified records of the trustee or trustees that the defendant has received an exemption not authorized hereunder or that the five hundred dollar exemption of the defendant has been in whole or in part exhausted or exceeded."

G.L.c. 246, §28A, as amended through St. 1975, c. 377, §133.

In 2011, the said statute was amended to increase the amount of the exemption from $500 to $2,500 and to eliminate the sentence concerning ownership within joint accounts. As a result, the statute has read as follows since April 7, 2011:

"Twenty-five hundred dollars of any natural person in an account in a trust company, savings bank, cooperative bank, credit union, national banking association or other banking institution doing business in the commonwealth shall be exempt from attachment by trustee process. A trustee summons served on any such institution shall describe the exemption with reference to this section. Upon service of a trustee summons, the trustee shall answer as subject to attachment only so much money of the defendant that exceeds $2,500.

"No business, trust or organization shall be entitled to the exemption in this section and no natural person shall be entitled to more than a $2,500 exemption at any one time. In any action, the plaintiff may apply to the court for further attachments upon proof by certified records of a trustee that the defendant has received an exemption not authorized under this section or that the $2,500 exemption of the defendant has been in whole or in part exhausted or exceeded."

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G.L.c. 246, §28A, as amended by St. 2010, c. 431, §6.

This case turns on a question of statutory interpretation and discernment of legislative intent if possible.

In construing a statute, all words are to be given meaning and no text is to be treated as mere surplusage. See International Org. of Masters v. Woods Hole, Martha's Vineyard & Nantucket S.S. Auth., 392 Mass. 811 , 813 (1984) ("Whenever possible, we give meaning to each word in the legislation; no word in a statute should be considered superfluous."); Bolster v. Commissioner of Corps. & Taxation, 319 Mass. 81 , 84-85 (1946) ("None of the words of a statute is to be regarded as superfluous, but each is to be given its ordinary meaning without overemphasizing its effect upon other terms appearing in the statute, so that the enactment considered as a whole shall constitute a consistent and harmonious statutory provision capable of effectuating the presumed intention of the Legislature."). See also Civitarese v. Town of Middleborough, 412 Mass. 695 , 700 (1992) (We will construe a statute according to the plain and ordinary meaning of its language. (Citation omitted.) We will not read into the plain words of a statute a legislative intent that is not expressed by those words."); O'Brien v. Massachusetts Bay Transp. Auth., 405 Mass. 439 ,443-444 (1989), quoting Commonwealth v. Vickey, 381 Mass. 762 , 767 (1980) ("[A] basic tenet of statutory construction is to give the words their plain meaning in light of the aim of the Legislature, and when the statute appears not to provide for an eventuality, there is no justification for judicial legislation."); Zimmerling v. Affinity Fin. Corp., 86 Mass. App. Ct. 136 , 139 (2014) ("In interpreting the meaning of a statute, we look first to the plain statutory language. ... "All the words of a statute are to be given their ordinary and usual meaning, and each clause or phrase is to be construed with reference to every other clause or phrase without giving undue emphasis to any one group of words, so that, if reasonably possible, all parts shall be construed as consistent with each other so as to form a harmonious enactment effectual to accomplish its manifest purpose."' Worcester v. College Hill Properties, LLC, 465 Mass. 134 , 138 (2013), quoting from Selectmen of Topsfield v. State Racing Commn., 324 Mass. 309 , 312-313 (1949).").

A review of the legislative history does not provide any insight into any reasoning as to why the Legislature changed the language in this particular section. The language was included in series of amendments that appear to have the general intent to increase the amounts of statutory exemptions, which had the overall effect of providing greater protection to debtors both in prejudgment attachments as well as post judgment executions. [Note 3] St. 2010, c. 431.

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In this case, Commonwealth suggests essentially that the first paragraph of the amended statute refers to only a single exemption for a defendant only in the amount of $2,500, and that the language specifically providing for a $2,500 exemption of any natural person is simply in place to reinforce that for the defendant to be afforded any exemption, he or she must be a natural person. Such an interpretation would require a reader to ignore the first sentence of that paragraph as unnecessary, because the second full paragraph makes it clear that the defendant must be a natural person to get any exemption. Put another way, striking the first full sentence of the first paragraph of the statutory exemption would clearly produce the result Commonwealth seeks, making that initial language surplusage.

Commonwealth's argument also does not give credit to the history available in the prior construction. Prior to the current amendment, this same statute always gave an exemption, by way of presumption of ownership, to a nondebtor account holder. To suggest that the current statute has wiped out any exemptions in favor of a nondebtor account holder cuts against the plain reading of the prior statute and historical practice.

A fair reading of the statute seems to continue the practice of the Legislature to afford some protection to a nondebtor account holder, albeit, changing the methodology for doing so.

Accordingly, in light of the foregoing, the allowance of the motion to charge trustee in the amount of $272.44 is affirmed.


FOOTNOTES

[Note 1] The Savings Bank, Trustee.

[Note 2] There is some question regarding the authority of the District Court to grant post judgment attachments. See M.G. Perlin & J.M. Connors, Civil Procedure in Massachusetts District Court §5.30, at 152 (4th ed. 2009).

[Note 3] Prior to the amendment of the statute, when an institution such as a bank received a trustee summons with respect to a joint account, half the balance of the account was treated as automatically exempt on the statutory presumption that it belonged to the nondebtor, and the $500 exemption was applied only to the other half, which was presumed to belong to the debtor, if a natural person. After the amendment, a bank, arguably, would no longer automatically exempt half the account as presumptively the property of the nondebtor joint owner, but would treat joint owners of the account, if natural persons, as entitled to the newly increased exemption of $2,500.

Take the hypothetical example of a bank receiving a trustee process attachment on a joint account containing $12,000. Before the amendment, the bank would have automatically exempted one half of the account ($6,000) on the ground that it was presumed to belong to the nondebtor joint owner, and then would have applied the $500 individual exemption available to the debtor only to the remaining half presumed'sulk to belong to the debtor. The result would have been that $5,500 of the account would be attached. After the amendment, the bank would not automatically exempt half the account, but would apply with respect to both account holders the $2,500 exemption that the statute guarantees for all natural persons whose names are on the account. Thus, $5,000 would be exempted (i.e., $2,500 x 2), and the Bank would report the remaining $7,000 as attached.