NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3088-08T13088-08T1

BIG M, INC., T/A ANNIE SEZ,

Plaintiff-Respondent,

vs.

TEXAS ROADHOUSE HOLDING, LLC,

Defendant-Appellant.

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Submitted: December 2, 2009 - Decided:

Before Judges Cuff, Payne and Waugh.

On appeal from the Superior Court of New Jersey, Law Division-Special Civil Part, Mercer County, Docket No. DC-11500-08.

Fisher & Phillips LLP, attorneys for appellant (Jason A. Storipan, of counsel and on the briefs).

Craner, Satkin, Scheer & Schwartz, P.C., attorneys for respondent (John A. Craner, of counsel and on the brief).

The opinion of the court was delivered by

CUFF, P.J.A.D.

Plaintiff Big M, Inc., t/a Annie Sez, the holder of a judgment against Tiffany Kraus in the amount of $672.22, obtained an order to garnish her wages. At the time, Kraus was employed as a waitress by defendant Texas Roadhouse Holding, LLC. When defendant remitted a single payment of $4.21, plaintiff filed a complaint against defendant seeking the balance due on the judgment. Defendant appeals from a judgment entered against it in the amount of $668.01 plus costs and attorneys' fees allowed by statute. We reverse because the judgment is premised on the erroneous holding that tips and gratuities are always subject to garnishment. We remand for further proceedings to develop a factual record to determine whether the tips and gratuities earned by the employee are wages and subject to garnishment.

In its answer and at trial, defendant asserted that it remitted the amount of money allowed by statute. It further asserted that tips and gratuities provided to employees, such as Kraus, were not wages and not subject to garnishment. At trial, Joseph Russo, the managing partner of the restaurant where Kraus was employed, stated that Kraus was paid $2.13 an hour and also received tips and gratuities. The restaurant does not pool tips. Tips placed on credit cards are paid immediately to waiters and waitresses, and tips charged on credit cards and immediately paid to employees are not subject to garnishment pursuant to federal law. In response to a question posed by the trial judge, Russo stated that the employee's W-2 wages included tips and gratuities but reiterated that "bona fide tips are not considered garnishable by law."

The trial judge distinguished tips left on a table in cash from tips charged to a credit card. Stating that he knew of no case that held that tips placed on credit cards are not subject to garnishment, the judge entered a judgment for $668.01 plus costs and statutory attorneys' fees.

We review a legal ruling by the trial judge. Our scope of review is de novo. In re Liquidation of Integrity Ins. Co., 193 N.J. 86, 94 (2007). We owe no deference to the trial judge's legal ruling. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

N.J.S.A. 2A:17-50 subjects "wages, debts, earnings, salary, income from trust funds, or profits of the judgment debtor" to garnishment. Although we have located no case law in this state that addresses the issue of whether tips and gratuities are subject to garnishment, and the legislative history offers little insight, commentators have observed that the execution statutes in this state generally apply when monies due to the judgment debtor are "in the hands of a third-party garnishee" such as a judgment debtor's employer. Pressler, Current N.J. Court Rules, comment 1.6 on R. 4:59-1(a) (2010); see also 3-31 Theodore Eisenberg, Debtor-Creditor Law