Iowa Supreme Court rules in favor of the City of Mt. Union

The Iowa Supreme Court, in a ruling issued today (Jan. 29), agreed with the City of Mt. Union in an appeal of a June 18, 2014, district court decision concerning a lawsuit between Mt. Union and the Regional Utility Service Systems (RUSS).

The district court entered a judgment for $27,862.10 on June 18, 2014, against the City of Mt. Union in a breach of contract action brought by RUSS. The breach of contract concerned unpaid sewer bills.

On Sept. 3, 2014, the city field a motion to quash the garnishment, claiming the garnished funds were exempt from execution under Iowa Code 627.18.

Iowa Code 627.18 states: ?Public buildings, owned by the state, or any county, city, school district, or other municipal corporation, or any other public property which is necessary and proper for carrying out the general purpose for which such corporation is organized, are exempt from execution.?

Based on that code section, the City of Mt. Union claimed that money in the city?s general fund (which were taken through the garnishment) were essential to the operation of city services.

Justice David Wiggins wrote the opinion for the Iowa Supreme Court.

In his opinion, Wiggins said, ?A judgment creditor garnished a city?s bank account when the city failed to pay a judgment. The city moved to quash the garnishment on the grounds the bank account was exempt from execution under Iowa Code section 627.18.

?The (district) court denied the motion and found the bank account was not exempt. The city appeals. On appeal, we find the bank account was exempt from execution. Therefore, we reverse the judgment of the district court and remand the case for further proceedings consistent with this opinion.?

In conclusion, the Iowa Supreme Court ruled that the City of Mt. Union?s general fund was exempt from garnishment under the aforementioned code section.