In a Nassau County (New York) District Court, Midland had obtained a default judgment against the consumer, and attempted to collect on it by freezing the consumer's Sovereign's Bank account. In response, the consumer claimed that the funds in her account were exempt from judgment enforcement pursuant to CPLR 5205(d)(2) (income earned in the last 60 days). She completed and mailed to Midland an Exemption Claims Form, provided for by New York CPLR § 5222-a, part of New York's Exempt Income Protection Act (EIPA).
The consumer was unrepresented throughout.
Midland objected to the consumer's claim of exemption, so the court ordered an evidentiary hearing to determine whether or not the funds were exempt. The court advised the consumer of the date, time and place of the hearing.
The consumer failed to appear at the evidentiary hearing on the first scheduled date, so the court adjourned the hearing for another date, on which the consumer failed to appear again. The consumer had submitted no documents in support of her claim for the earned income exemption (such as bank statements and pay stubs).
In view of the consumer's failure to appear at the evidentiary hearing, and her failure to produce any proof supporting the claimed exemption, said the court, Midland's motion to find that the consumer's funds were not exempt must be granted. As the court stated, "The legislature, when it enacted EIPA, could not possibly have intended to permit a person to obtain an exemption simply by checking a box on the Exemption Claim Form, signing that form and timely mailing it back to the judgment creditor's attorney."
The court also stated that the consumer defaulted or failed to appear on at least four occasions: she failed to appear in the underlying action, allowing Midland to obtain a default judgment; she did not move to vacate the judgment; she did not oppose the motion objecting to her claim of exemption, and she failed to appear at both evidentiary hearings regarding the claimed exemption. "A party to an action should not benefit from its repeated failure to appear when directed to do so by the court."
The case is Midland Funding, LLC d/b/a in New York as Midland Funding of Delaware LLC, v. April Singleton a/k/a April Phillips, CV-013259-10.