SENATE, No. 1464

STATE OF NEW JERSEY

INTRODUCED SEPTEMBER 19, 1996

By Senator BYRANT

An Act concerning child support judgements, supplementing Title 2A of the New Jersey Statutes and repealing P.L.1995, c.334.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. a. A judgement for child support entered pursuant to P.L.1988, c.111 (C.2A:17-56.23a) and docketed with the Clerk of the Superior Court shall be a lien against the net proceeds of any settlement negotiated prior or subsequent to the filing of a lawsuit, civil judgement, civil arbitration award or worker's compensation award and shall have priority over all other civil judgements unless otherwise provided by law. The lien shall stay the distribution of the net proceeds to the prevailing party until the child support judgement is satisfied. As used in this act "net proceeds" means any amount of money, in excess of $2,000, payable to the prevailing party after attorney fees, witness fees, court costs, fees for health care providers and other costs related to the lawsuit or settlement are deducted from the award and "prevailing party" shall not include a partnership, corporation, government entity or minor child.

    b. Before distributing any net proceeds of a settlement, judgement or award to the prevailing party, the attorney representing the prevailing party shall initiate a search of child support judgements, through a private judgement search company that maintains information on child support judgements, to determine if the prevailing party is a child support judgement debtor. If the prevailing party is not represented by an attorney, the judgement search shall be initiated by the opposing attorney or an insurance company before the proceeds are distributed to the prevailing party. The judgement search company shall provide a certification to the attorney, insurance company or party initiating the lawsuit identifying whether or not the prevailing party is a child support judgement debtor.

    If there are no attorneys representing either party in a civil lawsuit, the party bringing the lawsuit shall initiate the judgement search and shall be required to file the certification with the court at least 10 working days prior to the trial or with the stipulation that the certification shall be filed at the time of the settlement or dismissal of

 the lawsuit.

    For monies deposited with the court, no distribution of funds shall be made until the attorney or prevailing party provides the Clerk of the Superior Court with a copy of the certification showing that the prevailing party is not a child support judgement debtor.

    The fee for a judgement search is chargeable against the net proceeds as a cost of the settlement, judgement or award.

    c. If the certification shows that the prevailing party is not a child support judgement debtor, the net proceeds may be paid to the prevailing party immediately. If the certification shows that the prevailing party is a child support judgement debtor, the attorney or insurance company that initiated the search shall contact the Probation Division of the Superior Court to arrange for the satisfaction of the child support judgement. The attorney or insurance company shall notify the prevailing party of the intent to satisfy the child support judgement prior to the disbursement of any funds to the prevailing party. Upon receipt of a Warrant of Satisfaction for the child support judgement, the attorney or insurance company shall pay the balance of the settlement, judgement or award to the prevailing party. If the net proceeds are less than the amount of the child support judgement, the entire amount of the net proceeds shall be paid to the Probation Division as partial satisfaction of the judgement.

    If there are no attorneys representing either party in a civil lawsuit and the certification filed with the court shows that the prevailing party is a child support judgement debtor, the court shall order that the opposing party pay the amount of the child support judgement to the Probation Division before any funds are paid to the prevailing party. The opposing party shall also insure that any judgement related to the lawsuit docketed with the Clerk of the Superior Court reflect the Probation Division's superior claim to such funds.

    d.    An attorney who, in accordance with this act, satisfies a child support judgement from the net proceeds of a settlement, judgement or award, shall not be liable for payments which otherwise would have been made pursuant to subsection a. of this section which were not so identified to the attorney at the time of satisfaction.

    e. An attorney who, or insurance company that, in accordance with this act, satisfies a child support judgement from the net proceeds of a settlement, judgement or award, shall not be liable to the prevailing party or to the prevailing party's creditors.

    f. An attorney shall not be required to challenge a child support judgement unless retained by the prevailing party to do so.

    2. The Supreme Court may promulgate rules to effectuate the purposes of this act.

    3. P.L.1995, c.334 (C.2A:17-56.37 et seq.) is repealed.

    4. This act shall take effect immediately.

STATEMENT

    This bill requires that upon the resolution of a lawsuit, civil judgement, arbitration or worker's compensation case where a party is entitled to receive a settlement, judgement or award, a lien be placed on the net proceeds payable to the prevailing party, if the party is found to be a child support judgement debtor.

    Under the provisions of the bill, an attorney, insurance company, or in the case of a civil lawsuit where neither party is represented by an attorney, the party bringing the lawsuit, would be required to initiate a child support judgement search using a private judgement search company. The search would be used to determine whether or not the prevailing party is a child support judgement debtor. The private judgement search company would provide the attorney, insurance company or party bringing the lawsuit with a certification of the results of the search. In the case of a civil lawsuit, the party bringing the lawsuit would be required to provide the court with a certification 10 working days prior to the trial or at the time of the settlement or dismissal of the lawsuit.

    If a child support judgement is not found, the net proceeds of the settlement, judgement or award would be distributed to the prevailing party immediately. If a child support judgement against the prevailing party is found, an attorney or insurance company would be required to contact the Probation Division of the Superior Court and arrange for the satisfaction of the judgement prior to the disbursement of any funds. In the case of a civil lawsuit where there are no attorneys involved and it is determined that the prevailing party is a child support judgement debtor, the party bringing the lawsuit would be required to satisfy the judgement with the Probation Division. The opposing party would also ensure that any judgement related to the lawsuit reflect the Probation Division's claim to the funds.

    The bill also limits the liability of an attorney or insurance company when satisfying a judgement from the net proceeds of a settlement, judgement or award. Also under the provisions of the bill, an attorney would not be required to challenge a child support judgement unless retained by the prevailing party to do so.

    The bill provides the Supreme Court with rule-making authority in promulgating rules to effectuate the purposes of the bill.

    Finally, the bill repeals P.L. 1995 c. 334 (C.2A:17-56.37 et seq.) which provides for the withholding of awards in civil lawsuits to pay

past due child support amounts. The provisions of that law are obviated by this bill.

Provides for the establishment of liens on net proceeds of settlements, judgements or awards to pay for child support judgements.