Mickler v. Mickler, ___ S.W.3d___(Ky. App.2008)
Husband appealed an order denying his challenge to a garnishment served by his former Wife on several insurance providers who owed money to Husband’s medical practice. Husband argued that the accounts receivable were monies owed for professional services he performed. Therefore, he asserted the funds constituted wages meaning, pursuant to KRS 427.010(2)(a), 75% of those funds were exempt from garnishment.
CA opined that his argument was more appropriately based on KRS 427.005, which defines earnings. The CA held that accounts receivable that are owed due to personal services and labor of the debtor do constitute wages and are 75% exempt from garnishment. However, the CA further reasoned that the TC was correct in its holding that the funds due Husband were not only for his services but were also due for the services of his staff. Further, it was not the TC’s function, as Husband had asserted, to develop a formula for segregating the funds owed to Husband for his services from those owed due to the efforts of his staff. Instead, the burden of proof was on Husband to prove what portion of the accounts receivable were owed solely due to his personal services. Husband failed to meet this burden. Therefore, the TC correctly denied his motion challenging the garnishment.
Digested by Linda Dixon Bullock, Diana L. Skaggs + Associates