The Vermont Statutes Online

Title 12: Court Procedure

Chapter 121: Trustee Process

• Subchapter 001: GENERALLY; ACTIONS IN WHICH AVAILABLE; PERSONS AND PROPERTY SUBJECT TO TRUSTEE PROCESS

• § 3011. Actions

  Trustee process may be used in any civil action commenced in a Superior Court except in actions for malicious prosecution, libel, slander, or alienation of affections. (Amended 1971, No. 185 (Adj. Sess.), § 77, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1973, No. 249 (Adj. Sess.), § 19, eff. April 9, 1974; 2009, No. 154 (Adj. Sess.), § 77.)

• § 3012. Tort actions; arrest

  (a) [Repealed.]

  (b) A person against whom an action of tort is commenced by trustee process shall not be arrested or imprisoned on an execution issued on a judgment recovered in such action until final entry has been made with respect to all persons summoned as trustees, and until any judgment entered against any trustee has been satisfied or an execution issued thereon has been returned unsatisfied. However, execution against the body of the principal defendant may be issued within a year and a day after the latest final entry with respect to any person summoned as trustee. (Amended 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.)

• § 3013. Who may be summoned as trustee generally; property subject to process

  A person or corporation, or the State of Vermont by service of process upon the State Treasurer, may be summoned as a trustee of the defendant. The goods, effects, or credits of the defendant which are in the hands of such trustee at the time of the service of the writ upon the trustee, or which come into the trustee’s hands or possession before disclosure, shall thereby be attached and held to respond to final judgment in the cause, except as hereinafter provided. Notwithstanding the foregoing, the State of Vermont may not be summoned as a trustee of the defendant for any tax refunds, credits, or rebates due the defendant under Title 32. (Amended 1991, No. 186 (Adj. Sess.), § 33, eff. May 7, 1992.)

• § 3014. Maker or indorser of negotiable paper; exemptions

  Negotiable paper may be attached by and the same shall be subject to the operation of the trustee process, unless the same had been negotiated and notice thereof given to the maker or indorser before the service of the trustee process on him or her. Negotiable paper, actually assigned, negotiated, and transferred, before it becomes due, to a bank, savings bank, savings institution, trust company, or insurance company, in the State, shall be exempt from attachment by trustee process.

• § 3015. Executor or administrator

  A debt or legacy due from an executor or administrator, and other goods, effects, or credits in his or her hands, may be attached by trustee process.

• § 3016. Nonresidents summoned as trustees

  A person shall not be summoned as a trustee, unless at the time of the service of the writ he or she resides in the State. However, debts due and owing from a person resident outside the State, or from a number of persons, part or all of whom reside outside the State, having an authorized agent resident in the State, may be attached and holden by trustee process. Service of such process upon such agent as provided for in service of writs of summons, shall be sufficient notice to such trustees as reside outside the State.

• § 3017. Foreign railroad corporations as trustees

  A foreign railroad corporation, operating a railroad in whole or in part within this State, may be summoned as a trustee of a person to whom such corporation is indebted, in an action brought to recover a debt contracted within this State. Service of process in such cause may be made as provided in section 3016 of this title.

• § 3018. Debts absolutely due, but not payable

  Any money or other thing due the defendant may be attached by trustee process before it has become payable, provided it is due absolutely and without contingency. The trustee shall not be compelled to pay or deliver it before the time fixed by the contract.

• § 3019. Debts contingent; judgment subject to execution

  A person shall not be adjudged a trustee by reason of any money or other thing due from him or her to the principal defendant, unless it is due absolutely and without contingency at the time of the service of the writ upon him or her, or by reason of a debt due from him on a judgment, so long as he or she is liable to an execution on the judgment.

• § 3020. Exemptions from trustee process generally

  The following named bodies corporate and persons shall not be liable or chargeable on trustee process:

  (1) A fire insurance company on account of a sum due from such company to the defendant in consequence of loss by fire of property exempt from attachment and execution;

  (2) A life insurance company by reason of having in its hands money not exceeding $500.00 due or payable under a policy of life insurance;

  (3) A person having in his or her hands monies due or belonging to the debtor, as his or her debenture as a member or officer of the General Assembly or as a petit or grand juror attending Superior Court;

  (4) A member of the General Assembly or officer of the State required to attend upon the General Assembly or to report thereto, upon a contract, express or implied, for board and lodging furnished to him or her by the principal debtor while attending the session of the General Assembly;

  (5) [Repealed.]

  (6) A person indebted for the services of a minor or married woman in an action against the parent of such minor or the husband of such married woman;

  (7) A corporation by reason of any money due from it to a person residing outside the State for services rendered outside the State, provided a like sum of money so due would be exempt from attachment by trustee process in the state where such person resides.

  (8) A person or corporation having in his, her, or its possession any goods, effects, or credits of a municipality, in any action or suit against such municipality as principal debtor or defendant. (Amended 1966, No. 8 (Sp. Sess.); 1969, No. 87, eff. April 18, 1969; 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• § 3021. Debts reduced by sums owing defendant’s workmen

  In all cases where a principal defendant is indebted to other persons for work done in the performance of a contract out of which the trustee’s indebtedness arises, there shall be exempt from the trustee process, on an action brought for the recovery of debts not incurred as above stated, such sum or sums as may be due from the principal defendant to such other persons for work done in the prosecution of such contract. The principal defendant shall cause to be summoned as claimants before the court in which an action so brought is pending, all such other persons to whom he or she is indebted for work so done.

• § 3022. Assignment of future earnings; validity as against trustee process; recording

  An assignment of future earnings shall not be valid against trustee process unless executed in writing and made to secure a debt of an amount therein stated, contracted prior to or simultaneously with the execution of the assignment, or a debt for necessaries to be thereafter furnished to the debtor to the amount therein stated. The assignment shall not be valid as to the trustee process unless it is recorded, before the service of the writ upon the alleged trustee, as follows:

  (1) In the office of the clerk of the town wherein the assignor resides, if he or she is a resident of this State, otherwise in the office of the clerk of the town wherein the employer of such assignor resides; or

  (2) In the office of the clerk of the town wherein the principal place of business of such employer is located, if such assignor is a nonresident and his or her employer is a resident corporation, partnership, or association; or

  (3) In the office of the Secretary of State, if the assignor is a nonresident and his or her employer is a nonresident individual, corporation, partnership, or association, authorized to do business in this State.

• § 3023. Proceeds of property exempt from attachment

  Except as herein otherwise provided, a person shall not be liable on trustee process on account of a sum due or owing to the principal debtor for property sold or conveyed or delivered by him or her, which was exempt from attachment and execution at the time of the sale. If at the time the trustee process was commenced, the principal debtor was the owner of other property exempt from attachment and execution and of the same kind as that sold by him or her to the trustee, so far as such other property was free from encumbrance for the purchase money, the provisions of this section shall not apply.

• § 3024. Debt for property in part exempt

  When the sum due or owing to the principal debtor is in part for property exempt from attachment and execution and in part for property not so exempt, the sum exempt from attachment by the trustee process shall be the value of the property so exempt from attachment and execution.

• § 3025. Proceeds of exempt property held for taxes

  Sections 3023 and 3024 of this title shall not apply to a trustee process instituted for the collection of taxes.

• Subchapter 002: PROCEDURE ON TRUSTEE PROCESS

• §§ 3051-3059. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• § 3060. Repealed. 1973, No. 249 (Adj. Sess.), § 111, eff. April 9, 1974.

• § 3061. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• § 3062. Default of trustee—Adjudgment as trustee

  When a person summoned as trustee does not serve his or her disclosure within such time as the Supreme Court may by rule provide, he or she shall be defaulted and adjudged a trustee. (Amended 1971, No. 185 (Adj. Sess.), § 79, eff. March 29, 1972.)

• § 3063. Amount of judgment; execution

  When a person is adjudged trustee by default, the judgment shall be for the amount of damages and costs recovered by the plaintiff in the action, and payable in money at the time the judgment is rendered against the principal defendant. Execution therefor may issue directly against the goods, chattels, or estate of the trustee.

• § 3064. Sworn disclosure; general denial; examination; discharge

  When an alleged trustee serves his or her written disclosure under oath declaring that he or she had not at the time of the service of the summons, nor has since had in his or her hands or possession any goods, effects, or credits of the defendant, and submits himself or herself thereupon to examination upon oath, he or she shall be discharged if the plaintiff should decline to examine him or her, or if his or her disclosure appears to be true upon examination and further proceedings. If the plaintiff examines the alleged trustee thereon, he or she shall propose interrogatories in writing, which shall be answered in writing, signed by the trustee, and sworn to by him or her in open court or before a person authorized by law to administer oaths. (Amended 1971, No. 185 (Adj. Sess.), § 80, eff. March 29, 1972.)

• § 3065. Admission; statement of facts

  When an alleged trustee serves his or her written disclosure under oath admitting that he or she has in his or her hands or possession goods, effects, or credits of the defendant, or referring that question to the court upon the facts, his or her disclosure may set forth such facts as he or she deems material, and he or she may submit himself or herself thereupon to a further examination on oath. The plaintiff may propose interrogatories in writing, to be answered as provided in section 3064 of this title. (Amended 1971, No. 185 (Adj. Sess.), § 81, eff. March 29, 1972.)

• § 3066. Answers and statements of trustee not conclusive

  The answers and statements sworn to by a person summoned as trustee shall not be conclusive in deciding how far he or she is chargeable, but either party may allege and prove facts material to that issue.

• § 3067. Trial of issues by jury or court

  Questions of fact arising upon such additional allegations may be tried by the court, or in the discretion of the court, may be submitted to a jury in such manner as the court directs, in cases where a commissioner has not been appointed.

• § 3068. Disclosure before judge in Superior Court action

  A person summoned to appear before the Superior Court as trustee may appear before a Superior judge, competent to try causes between the parties, and with the consent of the parties, certified by such judge, make his or her written disclosure, upon oath. On its being filed with the clerk of the court, such trustee shall not be required to appear before the court, except for the purpose of explaining or correcting his or her disclosure, and the same proceedings shall be had as if taken in Superior Court. (Amended 1965, No. 194, § 10, eff. July 1, 1965, operative Feb. 1, 1967; 1973, No 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1973, No. 249 (Adj. Sess.), § 20, eff. April 9, 1974.)

• § 3069. Corporations summoned as trustees

  A corporation may appear by its cashier, treasurer, clerk, or such officer as it appoints, or as the court requires. The answer, disclosure, and examination on oath of such officers shall be received as the answer, disclosure, and examination of the corporation.

• § 3070. Commissioners—Appointment

  When a person summoned as trustee in Superior Court appears and files a disclosure denying his or her liability, or submits such question to the court upon a statement of facts, the court in its discretion may, or upon application of the plaintiff, trustee, or claimant shall, appoint one or more commissioners, who shall hear the testimony adduced by the parties as to the trustee’s liability or the right of the claimant, determine questions with reference thereto, and report to the court the facts with their decision thereon. (Amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• § 3071. Powers and duties of commissioner

  A commissioner may summon the trustee to appear before him or her and make disclosure; and if, after reasonable notice from the commissioner, he or she does not appear, or, appearing, does not make disclosure, the commissioner shall report the fact to the court. Thereupon, unless cause is shown to the contrary, the court shall render judgment as in case of default against the trustee. When the trustee appears before the commissioner and does not answer the interrogatories proposed by the plaintiff or commissioner, such failure to answer, relative to the particular matter to which such answer is required, shall be taken against him or her.

• § 3072. Taking and return of disclosure

  The commissioner shall take the disclosure of the trustee in writing, and certify and return the same to the court with his or her report.

• § 3073. Judgment on disclosure and commissioner’s report

  When the commissioner has returned to the court the disclosure of the trustee, with the report of the facts and his or her decision thereon, if cause is not shown to the contrary, judgment with costs shall be rendered on such report according to the rights of the parties.

• § 3074. Disclosure not evidence in a prosecution

  The disclosure upon oath of a trustee in any action in which he or she is summoned shall not be used as evidence to prove any fact therein stated, in a prosecution against him or her for a crime or penalty.

• § 3075. Value less than $10.00; discharge of trustee; costs

  When the goods, effects, and credits in the hands of the trustee do not exceed $10.00 in value, the trustee shall be discharged with costs against the plaintiff. The provision of this section shall not affect a trustee process for the collection of taxes.

• § 3076. Trustee liable only for balance due

  A trustee may deduct from the goods, effects, and credits in his or her hands his or her demands against the defendant founded on contract, express or implied, and shall be liable for the balance only after such demands are adjusted.

• § 3077. Payments by trustee after service

  When, after service on the trustee but before he or she has knowledge thereof, he or she, in good faith, makes payment or becomes liable to a third person on account of the goods, effects, or credits in his or her hands or delivers the same to the defendant or to any other person entitled thereto, he or she shall be allowed therefor as if the payment or delivery had been made or the liability incurred, before the service of the process on him or her.

• § 3078. Judgment on money demands—Amount; when payable

  When a person is adjudged trustee on account of money due to the defendant at a future day, the court shall determine the amount which the trustee shall pay on the judgment and the time when the same shall be paid.

• § 3079. Liability of trustee on failure to pay

  When the trustee does not pay such sum by the time specified, when required by the officer serving the execution, he or she shall be liable to the plaintiff for the same with interest in an action of contract on this statute.

• § 3080. Execution against trustee

  When a person is adjudged trustee on account of money due the defendant at the time judgment is rendered, the court shall determine the amount which the trustee shall pay on such judgment, and execution may issue directly against the goods, chattels, or estate of the trustee for the same. When execution issues against the defendant, the amount of the judgment against the trustee shall be certified thereon.

• § 3081. Judgment against trustee; effect on defendant’s demand

  The judgment against a person as trustee shall discharge him or her from demands by the defendant for goods, effects, and credits paid, delivered or accounted for by the trustee, by force of the judgment; and if he or she is afterwards sued therefor by the defendant or his or her representatives, the judgment shall constitute a defense. (Amended 1971, No. 185 (Adj. Sess.), § 82, eff. March 29, 1972.)

• § 3082. Discharge of trustee; effect on defendant’s demand

  When a person summoned as trustee is discharged, the judgment shall not be a bar to an action brought against him or her by the defendant for the same demand.

• § 3083. Costs—Allowed to trustee

  When a person summoned as trustee appears and submits to examination upon oath, he or she shall be allowed his or her costs for travel and attendance, and such further sum as the court deems reasonable for his or her counsel fees and other necessary expenses.

• § 3084. Retention out of funds in trustee’s hands

  When a person is adjudged a trustee, his or her costs and charges shall be retained out of the goods, effects, and credits in his or her hands, and he or she shall be chargeable on execution for the balance.

• § 3085. Retention of property until costs paid

  When a person is adjudged trustee on account of specific articles of personal property, he or she shall not be obliged to deliver the same to the officer serving the execution until his or her costs and charges are fully paid or tendered.

• § 3086. Judgment for costs of discharged trustee

  When the trustee is discharged, he or she shall recover judgment against the plaintiff for his or her costs and charges and have execution therefor.

• § 3087. Repealed. 2023, No. 161 (Adj. Sess.), § 5, eff. June 6, 2024.

  (Amended 1971, No. 185 (Adj. Sess.), § 83, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; No. 249 (Adj. Sess.), § 21, eff. April 9, 1974; 2009, No. 154 (Adj. Sess.), § 78.)

• § 3088. Plaintiff’s costs not to exceed damages

  The plaintiff in a trustee process shall not recover a greater sum for costs, including costs allowed to the trustee, than the amount of damages recovered.

• Subchapter 003: PARTICULAR PROCEEDINGS

• § 3121. Specific property—Delivery to officer; sale; application of proceeds

  When a person is charged as trustee by reason of personal property, other than money, which he or she holds or is bound to deliver to the defendant, he or she shall deliver the same, or so much thereof as is necessary, to the officer who holds the execution, and it shall be sold and the proceeds thereof applied and accounted for as if taken on execution in common form.

• § 3122. Value as between trustee and defendant

  The value of such personal property so delivered shall be ascertained, as between the trustee and defendant, as if it had been delivered to the defendant. Upon the application of either party, the court may determine such value and make an order as to such property and the expense of keeping and delivering the same, proper to protect the rights of the trustee and the defendant.

• § 3123. Contract as to delivery; tender

  A person summoned as trustee, who has contracted to deliver specific personal property to the defendant at a certain time and place, shall not be compelled thereby to deliver it at any other time or place. He or she may tender it at the time and place mentioned in the contract, and shall retain possession thereof, subject to the order of the court in the trustee process, unless he or she has been previously adjudged a trustee on account thereof.

• § 3124. Delivery of tendered property to officer

  The property so tendered shall be held to respond to the judgment in the trustee process as if the same had been attached, and the trustee shall deliver it to the officer holding the execution, on receiving a reasonable compensation for keeping the same after such tender. The tender shall have the same effect as if it had been made to the defendant and he or she had refused to receive the property.

• § 3125. Payment of trustee’s claim by creditor

  When it appears that personal property in the hands of a person summoned as a trustee is mortgaged, pledged, or liable for the payment of a debt due to him or her, the court may allow the attaching creditor to pay or tender the amount due to the trustee, and he or she shall thereupon deliver such property, as provided in this subchapter, to the officer holding the execution. (Amended 2018, No. 8 (Sp. Sess.), § 5, eff. June 28, 2018.)

• § 3126. Performance of contract or condition by creditor

  When such property is held for a purpose other than to secure the payment of money, and the contract, condition, or other thing to be performed is such as can be performed by the attaching creditor without damage to the other parties, the court may order the performance thereof by him or her. Upon such performance or tender thereof, the trustee shall deliver the property, as hereinbefore provided, to the officer holding the execution.

• § 3127. Reimbursement of creditor from proceeds of sale

  Personal property received by the officer under sections 3124-3126 of this title shall be sold as if it had been taken on execution in the common form, except that out of the proceeds of the sale the officer shall repay to the attaching creditor the amount paid by him or her to the trustee for keeping or redeeming the same, with interest thereon, or shall indemnify the creditor for such other act or thing as he or she has done pursuant to the order of the court for the redemption of such property.

• § 3128. Disposal of property by trustee before payment or tender

  The provisions of this chapter shall not prevent the trustee from selling personal property in his or her hands for the payment of the demand for which it is mortgaged, pledged, or otherwise liable, before the amount due him or her is paid or tendered, as before provided, if such sale is authorized by the terms of the contract between him or her and the defendant.

• § 3129. Trustee’s liability on refusal to deliver property

  When a trustee does not deliver personal property in his or her hands, when lawfully required by the officer serving the execution, he or she shall be liable to the plaintiff in the action for the value thereof, after deducting the amount, if any, of his or her lien, to be recovered in an action of tort on this statute.

• § 3130. Trustee not liable for destruction of property without his or her fault

  When a person is adjudged a trustee on account of personal property in his or her hands, and the same is destroyed without his or her negligence or default after the judgment and before demand therefor by the officer holding the execution, the trustee shall be discharged from liability to the plaintiff for not delivering the same. When a suit is commenced against him or her for not delivering the property, the destruction shall constitute a defense. (Amended 1971, No. 185 (Adj. Sess.), § 84, eff. March 29, 1972.)

• § 3131. Defense of trustee sued for not delivering property

  If a trustee is sued for not delivering to the officer personal property in his or her hands, any matter of discharge occurring after he or she was adjudged trustee shall constitute a defense, if that matter would be a good discharge in an action brought against a sheriff if he or she had attached the property. (Amended 1971, No. 185 (Adj. Sess.), § 85, eff. March 29, 1972.)

• § 3132. Claims of third persons—Appearance; notice

  When it appears that goods, effects, or credits in the hands of an alleged trustee are claimed by another person, the court may permit such claimant to appear and maintain his or her right. If he or she does not appear, notice for that purpose may be issued and served on him or her in such manner as the court directs.

• § 3133. Third person as party; recognizance; trial of title

  When the claimant appears, he or she may be admitted as party to the action for the purpose of maintaining his or her title to the goods, effects, or credits in question, and the title shall be tried and determined in the same manner as the liability of the trustee. (Amended 1971, No. 185 (Adj. Sess.), § 86, eff. March 29, 1972.)

• § 3134. Costs

  When such claimant is so admitted, the court, in its discretion, may award costs between such claimant and the attaching creditor and the alleged trustee, or either such creditor or trustee, as justice may require.

• § 3135. Death of trustee—Attachment not discharged; liability of representative

  When a person summoned as trustee in his or her own right dies before the judgment recovered by the plaintiff is satisfied, the goods, effects, and credits in his or her hands at the time of the attachment shall remain bound thereby, and his or her executor or administrator shall be liable therefor, as if the process had been originally served on him or her.

• § 3136. Representative may appear or be cited

  When the person so summoned dies before judgment in the original action, his or her executor or administrator may appear voluntarily or may be cited to appear, and the proceedings shall then be conducted as if the executor or administrator, in that capacity, had been originally summoned as trustee, except that the examination of the deceased, if any had been taken, shall have the same effect as if he or she were living.

• § 3137. Default for nonappearance after notice

  When, after notice, such executor or administrator does not appear, the plaintiff may take judgment against him or her by default, as if he or she had been summoned as trustee by an original process.

• § 3138. Representative to pay on execution if trustee dies after judgment

  When the person originally summoned as trustee dies after judgment in the original action, his or her executor or administrator shall pay on the execution such sum as he or she would have been required to pay, if the amount for which such deceased person was adjudged trustee had been a legal debt against his or her estate.

• § 3139. Plaintiff’s remedy when representative does not pay

  When an executor or administrator does not deliver or pay on execution what he or she is required by the provisions of this chapter to deliver or pay, the plaintiff in the trustee process shall have the same remedy against him or her, or upon his or her administration bond, as the defendant in the trustee process would have had.

• § 3140. Pending action against trustee—Action to proceed; continuance for judgment

  When the defendant is summoned as trustee of the plaintiff, during the pendency of an action, the first action may proceed so far as to ascertain by a verdict, award, or otherwise, what sum is due from the defendant. Such action shall not be delayed by the trustee process unless the court, for cause shown, continues the same for judgment until the termination of such trustee process or until the trustee is discharged.

• § 3141. Application for continuance; effect of denial

  On application of the plaintiff in the trustee process the court may continue the first action on reasonable terms. If such action is not continued and judgment is rendered against the defendant, he or she shall not afterwards be adjudged a trustee on account of the demand so recovered against him or her, while he or she is liable to an execution on such judgment.

• § 3142. Payment made on judgment in trustee action allowed

  When, before final judgment in the first action, the defendant therein is adjudged a trustee in the other and pays thereon the money demanded in the first action, or a part thereof, the fact shall be stated on the record of such action, and judgment shall be rendered thereon for the costs due to the plaintiff, and for such part of the debt or damages as remains due and unpaid.

• § 3143. Fraudulent conveyance and assignment—Trustee with title void as to creditors; examination

  When a person summoned as a trustee has in his or her possession goods, effects, or credits of the defendant, which he or she holds by a conveyance or title void as to the creditors of the defendant, he or she may be adjudged a trustee on account thereof, although the defendant could not have maintained an action therefor against him or her; and, in its discretion, the court may order a person so summoned to appear personally before the court and submit to an oral examination.

• § 3144. Execution against trustee; arrest

  An execution shall issue against the goods, chattels, or estate of the trustee, unless the court, upon motion and hearing, finds that the trustee did not act in good faith in taking the conveyance or title. If the court so finds, a certificate thereof shall be indorsed by the clerk upon the writ of execution, and the writ shall be directed against the body, as well as the goods, chattels, or estate of the trustee. (Amended 1971, No. 185 (Adj. Sess.), § 87, eff. March 29, 1972.)

• § 3145. Validity of sale or assignment may be inquired into

  When it appears that a trustee had been notified of the sale or assignment of a demand for which he or she would otherwise be adjudged trustee, either of the parties to the trustee process may raise the question of the validity of such sale or assignment, and the person giving notice to the trustee may be summoned as a witness and compelled to testify to the consideration upon which such sale or assignment was made. When it is found upon the evidence that such sale or assignment was not made in good faith, the trustee shall be adjudged liable as though the pretended sale or assignment had not been made.

• § 3146. Mortgagor of personal property summoned as trustee of mortgagee—Mortgagee defined

  The word “mortgagee” as used in sections 3147-3152 of this title shall be construed to mean the mortgagee, assignee of the mortgagee, or other person holding his or her interest.

• § 3147. Attachment of mortgagee’s interest

  When a mortgagor of personal property is summoned as trustee of the mortgagee, the plaintiff may direct the officer serving the writ to attach the mortgagee’s interest in such property. The officer when so directed shall attach such interest by leaving a copy of the writ in the town clerk’s office where the mortgage is recorded, with his or her return thereon describing the property and the interest of the mortgagee therein. The town clerk shall enter upon the margin of the record of such mortgage, a statement that the interest of the mortgagee is attached, and make such other record and entry as is required by law to be made where property is attached by copy.

• § 3148. Held to satisfy execution against trustee

  The property so attached shall be holden to satisfy any execution issuing upon or in action on a judgment rendered against the trustee in the original action, in the same manner and to the same extent that property attached as the property of the defendant in an action and taken into the actual possession of the officer making the attachment is held to satisfy an execution against such defendant.

• § 3149. Mortgagee not to sell attached property

  The mortgagee whose interest is so attached shall not sell or dispose of such property while the attachment is in force or while the liability of the trustee is undetermined or continues.

• § 3150. Purchaser’s title in property sold on execution

  Property so attached may be sold upon an execution issuing by reason of a judgment rendered against the trustee, either in the original action or in an action on a judgment rendered in the original action, and the title and interest of the mortgagor, mortgagee, or other person to and in such property shall pass to the purchaser of the property as such sale.

• § 3151. Trustee may file bond and sell property

  When such action is pending in the Supreme or Superior Court, the trustee may sell the property, and the purchaser shall hold the same released from the mortgage and attachment, if such trustee files with the clerk of the court:

  (1) a bond to the plaintiff in a sum equal to the amount for which attachment is directed in the writ, with sufficient sureties, approved by such clerk or judge, conditioned that such trustee will pay the judgment rendered against him or her in the action; and

  (2) a bond to the defendant in a penal sum double the amount of the mortgage debt, with sureties approved as aforesaid, conditioned that he or she will pay the balance due upon the mortgage after paying such judgment and that, if discharged as trustee, he or she will pay the amount secured by the mortgage. (Amended 1965, No. 194, § 10, eff. July 1, 1965, operative Feb. 1, 1967; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 2009, No. 154 (Adj. Sess.), § 79.)

• § 3152. Mortgagee may file bond and release property

  When such action is pending in such a court, the trustees shall be discharged and the attachment dissolved if the mortgagee, in the manner provided in section 3151 of this title, files a bond in a sum equal to the amount for which attachment is directed in the writ, with sufficient sureties approved by such clerk or judge, conditioned that he or she will pay the judgment that may be rendered against him or her.

• § 3153. Action by assignee of negotiable paper after judgment against maker—Pleading judgment in bar; citation of plaintiff in trustee action

  When a person is held as trustee upon a negotiable paper in an action in which a claimant does not appear or is not cited in, and an action is afterwards brought against the trustee upon such paper by an assignee thereof, the trustee may plead the former judgment against himself or herself in bar. The court shall thereupon issue a citation, and such assignee shall cause it to be served on the plaintiff in the trustee process or his or her attorney of record.

• § 3154. Court to decide to whom judgment belongs

  The court shall try the action upon such negotiable paper between the assignee and plaintiff in the trustee process, as though the assignee had been cited to appear as claimant in such process. The judgment in such action against the trustee shall not be conclusive of the rights of the assignee and of such plaintiff, but the court shall decide to which of the parties such judgment belongs.

• § 3155. Proceedings if judgment belongs to assignee

  When the court decides in favor of the assignee, it shall adjudge such judgment against the trustee to be the property of the assignee, and it may be enforced by him or her at his or her expense in the name of the plaintiff in the first action, if it has not been previously paid. When the trustee has paid it in whole or in part to the plaintiff in the trustee process, the assignee shall have judgment against such plaintiff for the sum so paid, and may enforce against the trustee any part of the judgment not paid.

• § 3156. Mode of trial; costs

  Either party may have the facts tried by jury or commissioner, as in other causes. Costs shall be allowed between the parties as the court deems just.

• §§ 3157-3164. Repealed. 1973, No. 249 (Adj. Sess.), § 111, eff. April 9, 1974.

• § 3165. Repealed. 1979, No. 67, § 9, eff. date, see note set out below.

• § 3166. Compensation assignments, employer acceptance required

  (a) If the compensation of a person due him or her for work and labor performed is attached under this chapter, the employer of the person shall, upon the request of the employee, accept a compensation assignment in an amount not in excess of 10 percent of the employee’s compensation, payable to the attaching creditor or his or her agent.

  (b) If the employer fails to accept the assignment within 10 days from the date that it is presented to him or her, he or she shall be liable to the creditor in the same manner as if the assignment had been formally accepted. (Added 1967, No. 323 (Adj. Sess.), § 2, eff. March 22, 1968.)

• § 3167. Enforcement of money judgments; trustee process against earnings

  Trustee process against earnings may not be used in connection with the enforcement of a money judgment in any civil action until the judgment becomes final, and then only in accordance with sections 3168-3171 of this title. (Added 1979, No. 67, § 2, eff. date, see note set out below.)

• § 3168. Motion for issuance of trustee process; scheduling and notice of hearing

  (a) Whenever a judgment debtor has neglected or refused to pay or make reasonable arrangements to pay a money judgment in any civil action, the judgment creditor may move the court which rendered the judgment to issue trustee process against the earnings of the judgment debtor. The motion shall describe in detail the grounds for requesting issuance of trustee process, the amount of judgment alleged to be unpaid, and the source of earnings of the judgment debtor.

  (b) Upon receipt of the motion of the judgment creditor, the court shall give notice thereof to the trustee and to the judgment debtor as provided by Rule 4.2 of the Rules of Civil Procedure and shall hold a hearing on the motion. (Added 1979, No. 67, § 2, eff. date, see note set out below.)

• § 3169. Hearing on motion; findings; order

  (a) At the hearing on the motion the court shall determine on the basis of the motion and any affidavit of the judgment creditor, the record in the civil action and any testimony offered by either party, and by the trustee whether the judgment debtor has neglected or refused to pay or make reasonable arrangements to pay the money judgment in question. If the court so finds, it shall also determine:

  (1) the amount of the judgment unpaid;

  (2) the amount of the judgment debtor’s weekly disposable earnings;

  (3) whether the judgment debtor has been a recipient of assistance from the Vermont Department for Children and Families or the Department of Vermont Health Access within the two months preceding the date of the hearing; and

  (4) the weekly expenses reasonably incurred for maintenance of the debtor and dependents, and it shall enter an order approving the issuance of trustee process against earnings in accordance with, and subject to the provisions of section 3170 of this title.

  (b) For the purposes of sections 3167-3172 of this title:

  (1) The term “earnings” means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program.

  (2) The term “earnings” also means proceeds from the sale of milk with respect to an individual engaged in the occupation of dairy farming.

  (3) The term “disposable earnings” means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld. (Added 1979, No. 67, § 2, eff. date, see note set out below; amended 1981, No. 58; 1999, No. 147 (Adj. Sess.), § 4; 2005, No. 174 (Adj. Sess.), § 17; 2009, No. 156 (Adj. Sess.), § I.16.)

• § 3170. Exemptions; issuance of order

  (a) No order approving the issuance of trustee process against earnings shall be entered against a judgment debtor who was, within the two-month period preceding the hearing provided in section 3169 of this title, a recipient of assistance from the Vermont Department for Children and Families or the Department of Vermont Health Access. The judgment debtor must establish this exemption at the time of hearing.

  (b) The earnings of a judgment debtor shall be exempt as follows:

  (1) 75 percent of the debtor’s weekly disposable earnings, or 30 times the federal minimum hourly wage, whichever is greater; or

  (2) if the judgment debt arose from a consumer credit transaction, as that term is defined by 15 U.S.C. § 1602 and implementing regulations of the Federal Reserve Board, 85 percent of the debtor’s weekly disposable earnings, or 40 times the federal minimum hourly wage, whichever is greater; or

  (3) if the court finds that the weekly expenses reasonably incurred by the debtor for his or her maintenance and that of dependents exceed the amounts exempted by subdivisions (1) and (2) of this subsection, such greater amount of earnings as the court shall order.

  (c) After hearing, the court shall enter an appropriate order, which may provide for repetitive withholding from earnings, and which may, upon motion, be modified from time to time. The order shall state that section 3172 of this title prohibits discharge of the employee subject to the order because of the exercise of trustee process against the employee.

  (d) Any waiver of the provisions of subsection (b) of this section shall be void. (Added 1979, No. 67, § 2, eff. date, see note set out below; amended 1999, No. 147 (Adj. Sess.), § 4; 2005, No. 174 (Adj. Sess.), § 18; 2009, No. 156 (Adj. Sess.), § I.17.)

• § 3171. Service of order; liability of trustee

  (a) The order shall be served on the trustee at the request of the judgment creditor, and shall state the address of the judgment creditor to which amounts withheld are to be delivered, and the following warnings:

  (1) no employee may be discharged from employment on account of trustee process issued against earnings;

  (2) failure to withhold and deliver non-exempt earnings as directed herein may make you liable to the judgment creditor for the amounts you fail to withhold and deliver together with any costs, interest, and reasonable attorneys’ fees incurred in their collection.

  (b) Any employer who fails to honor the order of the court shall be liable to the judgment creditor in the amounts that employer has failed to withhold and deliver together with any costs, interest, and reasonable attorneys’ fees incurred in their collection. The judgment debtor shall have no additional liability for those costs, interest, or attorneys’ fees.

  (c) As soon as reasonably practicable, the trustee shall notify the court and the judgment creditor of termination of the judgment debtor’s employment.

  (d) Upon full satisfaction or payment of the debt upon which the judgment is based, the judgment creditor forthwith shall notify the employer of the judgment debtor, in writing, and the employer shall thereafter cease withholding from the earnings of the judgment debtor. (Added 1979, No. 67, § 2, eff. date, see note set out below.)

• § 3172. Employee protected

  No employee may be discharged from employment on account of trustee process issued to an employer against earnings. Discharge of an employee from employment within 60 days of service of a trustee process summons upon an employer shall be rebuttably presumed to be on account of the issuance of trustee process. Any employee discharged in violation of this section may sue in Superior Court for reinstatement of employment, back wages, and damages and, if that employee prevails, the court shall award costs and may award reasonable attorneys’ fees to the employee. (Added 1979, No. 67, § 2, eff. date, see note set out below.)