This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).







Associated Bank, National Association,

as successor in interest to First Federal Capital Bank,

as successor in interest to First Federal Savings Bank

f/k/a First Federal Savings and Loan Association,





Joel Twaiten a/k/a Joel A. Twaiten,



Filed August 7, 2007

Affirmed in part, remanded in part

Ross, Judge


Houston County District Court

File No. 28-C9-98-000355



Michael C. Glover, Jason E. Engkjer, Kalina, Wills, Gisvold & Clark, 6160 Summit Drive, Suite 560, Minneapolis, MN 55430 (for respondent)


Kenneth R. White, Law Office of Kenneth R. White, 325 South Broad Street, Suite 203, Mankato, MN 56001 (for appellant)



Considered and decided by Shumaker, Presiding Judge; Peterson, Judge; and Ross, Judge.


U N P U B L I S H E D   O P I N I O N

ROSS, Judge

Joel Twaiten appeals from two orders in a garnishment proceeding, arguing that the court erred in its first order by finding that some of his monthly disability income is not exempt from garnishment, and erred in its second order by finding that the first proceeding and order barred his exemption claim.  We affirm the district court’s finding that Twaiten’s second claim was barred, but we remand for additional findings on the amount of income subject to garnishment and Twaiten’s reasonable and necessary needs.


In 1998 Associated Bank, then known as First Federal Savings Bank, filed a complaint against Joel Twaiten, alleging that Twaiten had not satisfied a judgment entered against him in 1989.  The district court found that Twaiten owed the bank approximately $172,824.

In September 2005, Associated Bank sought to enforce the unpaid judgment by garnishing funds in Twaiten’s bank account.  Twaiten objected to the garnishment, claiming that the funds were exempt because the account contained social-security and disability income that he needs to support himself and his wife.  By affidavit, Twaiten stated that his monthly income includes $477 of social-security income and $4,000 of disability income.  His wife also receives $198 of monthly social-security income.  Twaiten averred that he and his wife receive no monthly income other than this $4,675 and own no other assets that could be used for support.  Twaiten also claimed that their reasonable and necessary monthlyexpenses total $4,621.55.  Associated Bank later produced evidence that Twaiten and his wife own multiple parcels of land, have a ten-percent stake in a partnership that owns real property, and hold title to 26 vehicles.  The parties do not dispute that Twaiten’s social-security income is exempt from garnishment.  In February 2006, the district court found that Twaiten failed to establish that he and his wife need the entire $4,000 per month of disability income to meet their reasonable living expenses.  The court held that $2,000 of the monthly income is subject to garnishment.

After the court issued its order, Associated Bank sought to levy the disability policy to collect Twaiten’s monthly payments directly from the insurance company because Twaiten had been removing money from his bank account.  Twaiten again objected, this time claiming that he is a resident of Arizona and an Arizona statute exempts the funds from garnishment.  The court denied the motion in June 2006, finding the claim barred by res judicata.

Twaiten appeals the February and June 2006 orders, arguing that the district court applied the wrong legal standard and made unsupported findings on his reasonable and necessary needs in the first proceeding and that the court erroneously concluded that his claim for an exemption based on Arizona law was barred.



Associated Bank argues that Twaiten’s appeal from the district court’s February 2006 order is untimely because the order is effectively a judgment and therefore subject to the same time limitations for appealing a judgment.  See Minn. R. Civ. App. P. 104.01, subd. 1 (requiring party to appeal judgment within 60 days after its entry).  We have consistently reviewed theappealabilityofordersingarnishmentproceedingsby treating the ordersasorders,and Associated Bank has not provided persuasive legal support for its argument to treat the order as a judgment.  See, e.g., Last v. Last, 428 N.W.2d 483, 484 (Minn. App. 1988); Johnson Motor Co., Inc. v. Cue, 352 N.W.2d 114, 115-16 (Minn. App. 1984), review denied (Minn. Oct. 11, 1984).  The Minnesota Rules of Civil Appellate Procedure designate which orders are appealable.  Minn. R. Civ. App. P. 103.03.  Associated Bank’s argument that a garnishment order should be excepted and considered a judgment because it is a final determination could be applied broadly to many orders, and the exception would swallow much of rule 103.03.  The district court neither entered judgment nor directed the court administrator to enter judgment on the February 2006 order.  That the order is not a judgment, however, does not resolve whether it is appealable.

A party to a garnishment proceeding who is aggrieved by an order or final judgment has a right to appeal.  Minn. Stat. § 571.88 (2006).  A garnishment proceeding is a special proceeding, and the February 2006 order holding that $2,000 is subject to garnishment was a final determination affecting a substantial right.  See Johnson Motor,352 N.W.2d at 115 (stating that garnishment proceeding is special proceeding and order is final when it ends a proceeding “so far as the court making [the decision] is concerned” (quotation omitted)).  The order is therefore appealable under Minn. R. Civ. App. P. 103.03(g), which states that an appeal may be taken “from a final order, decision or judgment affecting a substantial right made in an administrative or other special proceeding.”  A party must appeal from an appealable order within 60 days after being served with written notice that the court filed the order.  Minn. R. Civ. App. P. 104.01, subd. 1.  The district court filed its order on February 16, 2006.  Associated Bank never served Twaiten with written notice of the filing.  Twaiten’s appeal from the order in July 2006 was therefore timely.  We turn to address the amount of the garnishment.


A creditor may seek a garnishment against a third party at any time after entry of a judgment for money in a civil action.  Minn. Stat. § 571.71(3) (2006).  A debtor’s right to certain employee benefits, including proceeds from a disability policy, are exempt from garnishment “to the extent of the debtor’s aggregate interest under all plans and contracts up to a present value of [$57,000] and additional amounts under all the plans and contracts to the extent reasonably necessary for the support of the debtor and any spouse or dependent of the debtor.”  Id. § 550.37, subd. 24(a) (2004); see also id., subd. 4a (2004) (adjusting statutory dollar amounts in accordance with implicit price deflator for gross national product).  The parties do not dispute that Twaiten’s disability income is employment related, and they agree that subdivision 24 applies.  They dispute the amount reasonably necessary to meet Twaiten’s monthly needs.

The amount exempted from garnishment as reasonably necessary is “an amount sufficient to sustain basic needs, not related to [the debtor’s] former status in society or the lifestyle to which he is accustomed.”  In re Schlee, 60 B.R. 524, 528 (Bankr. D. Minn. 1986) (quotation omitted).  The district court must consider the debtor’s present and future needs.  Id.  When evaluating the amount reasonably necessary for support, the court must consider the debtor’s age, employment, and general health.  Id.  Twaiten asserts that our standard of review is de novo.  But garnishment presents questions of both law and fact.  Whether an exemption applies is a question of law, but the district court’s determination of a debtor’s reasonable needs is a question of fact.  We will uphold a district court’s factual findings unless they are clearly erroneous.  Minn. R. Civ. P. 52.01.

The district court found that Twaiten’s disability policy has a current value of $393,728, and it held that $57,000 is exempt under section 550.37, subdivision 24.  The court then looked to the $4,000 a month that Twaiten receives from the policy and found that retaining one-half would enable Twaiten to meet his and his wife’s reasonable needs.  Twaiten raises two challenges to this finding.  He argues first that the court applied the wrong legal standard when evaluating his needs and second that the court’s findings are unsupported by the record.

We first address Twaiten’s challenge to the district court’s legal standard.  He contends that when the debtor is advanced in age, the court must consider his special needs.  We disagree that this is a heightened standard.  A bankruptcy court has commented that, when assessing the amount reasonably necessary for a retired debtor’s support, the court should consider the debtor’s basic needs while accounting for “the special needs that a retired and elderly debtor may claim.”  Schlee, 60 B.R. at 528 (quotation omitted).  But these considerations are in conjunction with other factors like age, health, and employment, that the court must consider as they relate to any debtor.  Caselaw does not suggest that elderly status requires an additional analysis beyond the factors the court typically considers when evaluating whether a debtor can meet his basic needs.  See Westinghouse Credit Corp. v. J. Reiter Sales, Inc., 443 N.W.2d 837, 840-41 (Minn. App. 1989) (evaluating debtor’s assets and alluding to his age only in stating that district court reasonably “conclude[d] that the basic retirement needs of [the debtor] and his wife would be met”).  We emphasize that the district court appears to have appropriately considered Twaiten’s age, as evidenced by its finding that “[a]lthough both [Twaiten] and his wife are older, the [c]ourt does not believe that they need the entire $4,000 each month from the [p]olicy to meet their present and future needs.”

We next turn to the adequacy of the district court’s factual findings.  Twaiten and his wife submitted several affidavits to the court stating that their joint income was $4,675 and that they have no other assets.  Associated Bank submitted evidence that the Twaitens have many assets that they failed to disclose.  The district court found that Twaiten had failed to show “why these significant assets are not available for his and his wife’s continued support.”  The district court further found $3,242.05 of the Twaitens’ claimed monthly living expenses to be reasonable.  The court included a footnote stating that it found several of the Twaitens’ claimed expenses to be excessive, and it deducted $1,379.50 from the amount submitted.  But the court failed to state which expenses it found excessive.

We agree with Twaiten that the court’s findings are inadequate to allow meaningful appellate review, and we therefore remand for additional findings on the reasonableness of Twaiten’s claimed necessary monthly expenses and his available assets.  We are mindful that Twaiten has the burden of establishing his needs and to support his argument with evidence.  See Estate of Jones by Blume v. Kvamme, 510 N.W.2d 6, 12 (Minn. App. 1993) (“The debtor has the burden of establishing that funds are exempt from garnishment and attachment.”), rev’d on other grounds 529 N.W.2d 335 (Minn. 1995).  If the court chooses, it mayhear further argument based on the evidence already submitted.  The district court’s determination of excessiveness may be accurate, and this remand does not suggest an opinion on the merits; but its order lacks sufficient detail to allow this court to review the bases of the determination.  See Edina Cmty. Lutheran Church v. State, 673 N.W.2d 517, 523 (Minn. App. 2004) (remanding for further proceedings when district court failed to make findings permitting meaningful appellate review).  We next consider Twaiten’s challenge to the district court’s application of res judicata.


Twaiten argues that the district court erroneously held that res judicata bars his claim that the proceeds of his disability policy are exempt under Arizona law.  Although the district court relied on res judicata, we find that collateral estoppel is the more appropriate doctrine.  See Hauschildt v. Beckingham, 686 N.W.2d 829, 837 (Minn. 2004) (distinguishing res judicata from collateral estoppel).  Collateral estoppel prevents a party from relitigating an issue and applies when the issue is identical to one previously adjudicated; a final judgment was made on the merits; the estopped party was a party, or in privity with a party to the previous adjudication; and the estopped party had a full and fair opportunity to be heard on the adjudicated issue.  Care Inst., Inc.-Roseville v. County of Ramsey, 612 N.W.2d 443, 448 (Minn. 2000).  Whether collateral estoppel applies is a mixed question of law and fact, which this court reviews de novo.  Crossman v. Lockwood, 713 N.W.2d 58, 61 (Minn. App. 2006).

The district court appropriately found that Twaiten’s second claim for an exemption is barred.  Twaiten argued that he is a resident of Arizona and that an Arizona statute exempts all of the policy proceeds.  He sought to relitigate an issue that had already been adjudicated: whether the income from his disability policy is exempt.  The district court decided this issue in February 2006, after conducting a hearing in which Twaiten was a party represented by counsel and giving Twaiten more time to submit information to the court.  The only difference between Twaiten’s first garnishment objection and his second one is the theory on which he claimed an exemption.  He did not challenge Associated Bank’s authority to collect the income directly from the insurance company, only whether the income is exempt.  By affidavit, Twaiten stated that he has been a resident of Arizona since 1984and has spent his summers in Minnesota since 1996.  Twaiten knew that he was an Arizona resident during the proceedings in 2005 and 2006, but he failed to timely raise the choice-of-law argument.  He had a full and fairopportunity to argue that the income from the disability policy was exempt, but he failed to develop the theory that Arizona law provides a basis for the exemption.  Even if we more narrowly define the issue in question as the choice of law rather than whether disability income is exempt, the result is the same; the issue of whether Minnesota or Arizona law applies was resolved in the first proceeding by the unchallenged application of Minnesota law.

Affirmed in part, remanded in part.