The opinion of the court was delivered by: Lefelt
The issue to be decided is whether a bank account levy is automatically released when a turnover motion is not made within one year from issuance of the writ of execution.
On July 23, 1992, plaintiff, Sylvan Equipment Rental Corp., obtained a $685.00 judgment against defendant, C. Washington & Son, Inc. On January 28, 1993, a writ of execution issued, and on January 29, 1993 a Middlesex County constable levied on defendant's bank account in the People's National Bank, which is now National Westminster Bank (NatWest).
On the levy date, NatWest "placed an $822.47 hold" on defendant's account. This amount constituted the full judgment plus costs, attorney's fee, execution fee and constable fee. Also, on January 29, 1993, NatWest notified defendant and the constable by regular mail of the levy amount and the "hold."
The constable, however, did not receive NatWest's notification of the amount of money the bank was holding until June 14, 1993. On that date, he mailed a certification of levy to plaintiff's attorney. The constable, also on June 14, 1993, notified defendant of its right to claim that its bank account was exempt from levy. The constable's notice further informed the defendant that if a claim for exemption was not made within ten days, the property would be subject to further proceedings. No claim for exemption was made by defendant.
Plaintiff's attorney, however, inadvertently misfiled the constable's notice and did not make a motion to turn over the "held" funds until March 21, 1994, approximately one year and two months after the writ of execution had been issued.
On April 8, 1994 a Special Civil Part Judge granted the turnover motion, which was unopposed. On April 18, 1994, the turnover order was served on NatWest. However, by this date NatWest had already released its "hold" on defendant's bank account and the account balance had been reduced below $822.47.
NatWest contends that it had no obligation under the law to maintain the levied funds after January 29, 1994. The bank takes the position that the writ expired on January 29, 1994, and, therefore, moves for reconsideration and vacation of the turnover order.
The bank argues that a motion seeking to have levied bank account funds turned over to plaintiff is not optional but an essential procedural step in the collection process. The bank further claims that turnover motions must be made within one year of the writ of execution. If the motion is not timely made, then the execution expires and any levy is also extinguished, even if the levy had been made within the year. The bank can point to no specific authority supporting its view, except for the New Jersey Practice Series. See 20 New Jersey Practice Skills and Methods § 1871, at 938.
No statute specifically requires a turnover motion when there is a levy or a judgment debtor's bank account. If a bank holding a debtor's bank account can be considered a garnishee owing a "debt due or accruing to the judgment debtor," then N.J.S.A. 2A:17-63 at least contemplates notice to the garnishee before a judgment creditor can levy on the debt due or accruing.
Whether or not a turnover motion is legislatively required when levying on a bank account, there is no question that turnover motions have been a regular part of the practice, at least since 1941 and probably earlier. E.g., Beninati v. Hinchliffe, 126 N.J.L. 587, 20 A.2d 64 (E. & A. 1941). It would seem also that turnover motions are important safeguards for banks which may be responsible for the debt if levied funds are mistakenly returned to a defendant debtor. American Express Co. v. Vella, 92 N.J. Super. 380, 223 A.2d 515 (Law Div. 1966), aff'd, 94 N.J. Super. 258, 227 A.2d 721 (App.Div.1967).
The applicable statute provides:
A writ of execution issued out of the Superior Court, Law Division, Special Civil Part shall remain valid and effective for the purpose of a levy, and shall be operative and effective against any goods and chattels levied upon, for 1 year from the date of its issuance, unless sooner satisfied. Thereafter it shall be void. The officer shall make a return to the clerk of the ...