American Express National Bank v. Susan W. Jackson

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2021-0505, American Express National Bank v.
Susan W. Jackson, the court on February 10, 2023, issued the
following order:

The court has reviewed the written arguments and the record submitted
on appeal, and has determined to resolve the case by way of this order. See
Sup. Ct. R. 20(2). We reverse and remand.

The defendant, Susan Jackson, appeals an order of the Superior Court
(MacLeod, J.) granting the motion of the plaintiff, American Express National
Bank, for periodic payments and requiring her to pay $150.00 per month
toward a judgment of $16,621.86. See RSA 524:6-a (2021) (Periodic Payment
of Judgments).

We review a trial court’s periodic payment order under our unsustainable
exercise of discretion standard. American Express Travel v. Moskoff, 148 N.H.
446, 450 (2002). Under this standard, the defendant must demonstrate that
the court’s ruling was clearly untenable or unreasonable to the prejudice of her
case. State v. Lambert, 147 N.H. 295, 296 (2001). We will affirm the trial
court’s factual findings unless they are unsupported by the evidence and its
legal rulings unless they are erroneous as a matter of law. Kessler v. Gleich, 156 N.H. 488, 491 (2007).

RSA 524:6-a, I, provides, in relevant part:

Whenever judgment is rendered against any person in this state,
the court in which the judgment is rendered shall either at the
time of rendition of the judgment inquire of the defendant as to the
defendant’s ability to pay the judgment in full or, upon petition of
the plaintiff after judgment, order the defendant to appear in court
for such inquiry. The court may at either time order the defendant
to make such periodic payments as the court in its discretion
deems appropriate.

The purpose of the inquiry is “not to deny a debtor the property and income
needed to sustain life or the ability to earn income in the future, but rather to
determine whether a debtor has property or income not needed for the
necessities of life from which a judgment may be paid.” Sheedy v. Merrimack
Cty. Super. Ct., 128 N.H. 51, 55 (1986). Pursuant to Superior Court Rule
51(g):

If the court is satisfied that the debtor has property not exempt
from attachment or execution, the court may order the debtor to
produce it, or so much thereof as may be sufficient, to satisfy the
judgment and cost of the proceedings, so that it may be taken on
execution. If the debtor is able to make weekly payments on the
judgment, the court may, after allowing the debtor an appropriate
amount for his or her support and that of the debtor’s family, if the
debtor has a family, order the debtor to make weekly payments on
the judgment from time to time. The court may also make an
Order combining any of the orders above mentioned.

Super. Ct. R. 51(g).

Following a hearing, the trial court issued an order which states in
relevant part: “Having considered the parties’ pleadings, the defendant’s
financial affidavit, the defendant’s testimony and the arguments presented, the
court holds that the defendant has a present ability to pay the judgment in
monthly installments of $150.00.” The order does not specify what evidence
the trial court relied upon in reaching this conclusion.

We construe the defendant’s brief to argue that the evidence was
insufficient to show that she has the ability to pay the amount ordered. The
defendant argues that the evidence showed that she has income from social
security benefits and a civil service pension, both of which are exempt by
federal statute from a payment order, and there was otherwise insufficient
evidence to support the trial court’s finding that the defendant has a present
ability to pay $150.00 per month. We agree.

The defendant’s affidavit and testimony reflect that the defendant
receives $288.46 in social security benefits and $129.00 from a civil service
pension each week, and that she has approximately $2,850.00 in cash. The
income from social security cannot be used to satisfy the judgment in this
case. See 42 U.S.C. § 407(a) (2018); see also Todd, Ex’r v. Romano, 131 N.H.
96, 97 (1988) (periodic payment order could not require defendant to pay out
his social security benefits in violation of federal statute). The income from the
civil service pension likewise cannot be used to satisfy the judgment in this
case. See 5 U.S.C. § 8346(a) (2018). Accordingly, the $150.00 per month
would have to be paid from other sources of income, and the record does not
support a finding that defendant has other sources of income.

The affidavit and testimony reflect that the defendant resides in a home
in Hebron with an estimated value of $1.13 million, which is encumbered by a

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$773,000.00 mortgage. The defendant testified that the Hebron property is
held by a trust, and that she and her children are co-trustees of a trust or
trusts that own several other properties. There was little evidence presented at
the hearing regarding the nature of the trusts, other than that the defendant
and her late husband created the trusts and transferred the properties into
them, and that the defendant and her children are the co-trustees. In response
to a question by the plaintiff’s attorney about how she pays her bills, given that
her expenses exceed her income, the defendant testified that “[w]henever I sell
a property or my son sells a property we pay things off.” This, in addition to
other testimony, supports the conclusion that when the trust or trusts sold
properties, the defendant used the proceeds to pay outstanding bills. However,
the evidence does not support a finding that the defendant currently receives
any income from the trust or trusts.

The plaintiff asserts that two provisions of the New Hampshire Trust
Code, RSA 564-B:5-504 (Supp. 2022) (Creditor’s Claim Against a Beneficiary of
a Discretionary Trust) and RSA 564-B:5-505A (2019) (Creditors Claim Against
a Settlor of an Irrevocable Trust), “identify trust property and income as
available to satisfy creditors’ claims against settlors and beneficiaries of trusts.”
It is unclear on the record before us whether these statutes are applicable, and
in any event, the plaintiff did not request that the trial court compel a
distribution from the trust or trusts. Rather, the plaintiff requested only that
the court “enter a payment order of at least 200 dollars per month,” and the
trial court entered a payment order of $150.00 per month. In light of the fact
that the record reflects that the defendant’s only income is from sources that
cannot be used to satisfy the judgment in this case, the trial court’s finding
that the defendant has the present ability to pay $150.00 per month was
clearly unreasonable.

Reversed and remanded.

MACDONALD, C.J., and HICKS, BASSETT, and DONOVAN, JJ.,
concurred.

Timothy A. Gudas,
Clerk

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