Free Report and Recommendation - District Court of Arizona - Arizona

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UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Lawrence J. Warfield, as Receiver, Judgment Creditor, vs. Michael Alaniz; Patrick Wehrly and Andrea Wehrley; et al., Judgment Debtors, No. CV-03-2390-PHX-JAT (LOA) REPORT AND RECOMMENDATION

ING USA Annuity Life and Insurance Co., Garnishee.

This matter arises on Judgment-Creditor Lawrence J. Warfield's Application for Judgment on Garnishment and Notice of Lodging Proposed Judgment on Garnishment, filed on October 15, 2007. (docket # 804) Judgment-Creditor Warfield seeks entry of judgment against Garnishee ING USA Annuity Life and Insurance Co.1 in the sum of $9,929.11 for non-earnings purportedly belonging to Judgment-Debtor Robert Carroll. The Hon. James A. Teilborg, the assigned District Judge, broadly referred this

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case to the undersigned "to resolve any issues regarding the writs of garnishment in this matter." (docket # 761) A review of the file indicates that on July 26, 2007, Amended Judgment was entered against Judgment-Debtor Robert Carroll and "in favor of the Receiver, Lawrence J. Warfield, in the amount of the highest verdict, $37,000, plus post-judgment interest from February 28, 2007 at the rate of 5.05% per annum, together with costs taxed by the Clerk and prejudgment interest of $12,360." (docket # 624 at 2) Although a Notice of Appeal has been filed by, among others, Judgment-Debtor Robert Carroll and the appeal is pending before the Ninth Circuit, no supersedeas bond has been posted and/or order entered staying execution of the Amended Judgment upon the property of

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Judgment-Debtor Robert Carroll. (docket # 588) On August 20, 2007, Judgment-Creditor Warfield requested a writ of garnishment against Garnishee ING USA Annuity Life and Insurance Co., alleging, inter alia, "Judgment Creditor [Warfield] has been awarded a money judgment against

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[Judgment-Debtor] Robert Carroll." (docket # 702 at ¶ 2) A copy of the Application for Writ of Garnishment was electronically mailed to Robert Carroll's agent and counsel of record, Burton M. Bentley, that same day. This Application for Writ of Garnishment indicates that the total amount due to Judgment-Creditor Warfield from Judgment-Debtor Robert Carroll as of August 20, 2007 is $73,061.60. (Id. at 2) On September 14, 2007, Garnishee ING USA Annuity Life and Insurance Co. filed its Answer, indicating, among other things, that on September 13, 2007, it was "indebted to or otherwise in possession of [non-earnings] monies of the judgment debtor [Robert Carroll] at the time the writ was
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served" in the sum of "$9,929.11." (docket # 762 at 1) On October 15, 2007, Judgment-Creditor Warfield filed the subject Application for Judgment on Garnishment, seeking a garnishment judgment for nonearnings against Garnishee ING USA Annuity Life and Insurance Co. for money it has in its possession belonging to Judgment-Debtor Robert Carroll. (docket # 804) The Application indicates that the Answer of Garnishee ING USA Annuity Life and Insurance Co. indicates, inter alia, that at the time the writ was served, Garnishee was "holding a total of $9,929.11 belonging to Robert Carroll, the Judgment Debtor" and that "[a]mong other pleadings, [Garnishee] mailed the answer to the Judgment Debtor" to "Robert Carroll, 8041 Mickelson Way, Hemet, CA 92545" by UPS. (Id. at 2) The docket reflects

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that Robert Carroll is presently represented by Phoenix counsel, Burton M. Bentley, who was electronically endorsed on the Application for the writ itself and electronically mailed a copy of the Judgment-Creditor Warfield's Application for Judgment on Garnishment. (docket # 804 at 3)

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Generally, a federal writ of garnishment is governed by the law of the state in which the district court sits. Fed.Rule Civ.P. 69(a)2; Hilao v. Estate of Marcos, 95 F.3d 848 (9th Cir. 1996). Arizona's statutory scheme regarding garnishment of non-earnings

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Rule 69(a), FED.R.CIV.P., provides in relevant part: In General. Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. The procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution shall be in accordance with the practice and procedure of the state in which the district court is held, existing at the time the remedy is sought,. . . . (emphasis added).

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and garnishment of earnings are located at Arizona Revised Statutes ("A.R.S.") §§ 121571-1597 and §§ 1598-1598.17.3 Under Arizona law, "garnishment reaches only debts existing at the time of the service of the writ." Reeb v. Interchange Resources, Inc. of Phoenix, 106 Ariz. 458, 478 P.2d 82, 83 (Ariz. 1970). "[I]t is well settled in Arizona that the rights of a garnishor-creditor to assets in the hands of a garnishee are no greater than rights of the defendant-debtor to those assets." Mid-State Electric Supply Co. v. Arizona Title Insurance & Trust Co., 123 Ariz. 130, 598 P.2d 108, 110 (Ariz. App. Ct. 1979) (citing Ellery v. Cumming, 40 Ariz. 512, 14 P.2d 709 (Ariz. 1932)). Under Arizona law, a "party who has an objection to the writ of garnishment [of non-earnings], the answer of the garnishee or the amount held by the garnishee or a

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party claiming an exemption from garnishment" may file a "written objection and request a hearing" "not later than ten days after receipt of the answer." A.R.S. § 12-1580(A); 12-1598.07(A) for earnings. "One purpose of [such a] hearing is to determine whether the garnishee was indebted to the judgment debtor when the writ was served." Able

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Distributing Co., Inc. v. James Lampe, General Contractor, 160 Ariz. 399, 403, 773 P.2d 504, 508 (Ariz. App. Ct. 1989). If the answer of the garnishee "shows that the garnishee was indebted to the judgment debtor at the time of service of the writ, and no objection to the writ or answer is timely filed, on application by the judgment creditor the court shall enter judgment on the writ against the garnishee for the amount of the nonexempt monies In 1985, Arizona's post-judgment garnishment procedures were held unconstitutional in Neeley v. Century Fin. Co., 606 F.Supp. 1453, 1469-70 (D. Ariz. 1985). In 1986, the Arizona legislature extensively amended §§ 12-1571 et seq. and added new provisions governing the garnishment of earnings. A.R.S. §§ 12-1598 et seq.; Frazer, Ryan, Goldberg Keyt & Lawless v. Smith, 184 Ariz. 181, 183, 907 P.2d 1384, 1386 (Ariz. App. 1995).
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of the judgment debtor owed or held by the garnishee at the time of service of the writ." A.R.S. § 12- 1584(B). Under Arizona's garnishment statute, a presumption exists "that a document has been received five days after it is mailed." A.R.S. § 12- 1597(A). The Court finds that Judgment-Creditor Warfield has properly complied with Arizona's garnishment statutes regarding the subject writ of garnishment for non-earnings. Judgment-Debtor Robert Carroll presumptively received notice of the Answer of Garnishee and/or the August 20, 2007 Writ of Garnishment and the October 15, 2007 Application for Judgment on Garnishment which were electronically served on Robert Carroll's agent and counsel of record, Burton M. Bentley. A.R.S. § 12- 1597(A). Moreover, the Court finds that such notice was "reasonably calculated under all the

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circumstances to apprise [Judgment-Debtor Robert Carroll] of the pendency of the [garnishment] action and afford [him] an opportunity to present [his] objections." Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1 (1978); Mullane v. Central Hanover Trust Co., 339 U.S. 306, 314 (1950). Neither Judgment-Debtor Robert Carroll

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nor his attorney, Burton M. Bentley, have filed a written objection to this writ of garnishment, Answer of Garnishee or Application for Judgment on Garnishment. The undersigned recommends that Judgment-Creditor Warfield's Application for Judgment on Garnishment be granted and that the proposed Judgment on Garnishment be signed and entered by the Hon. James A. Teilborg, the assigned District Judge. In accordance with the foregoing, IT IS HEREBY RECOMMENDED that Judgment-Creditor Warfield's Application for Judgment on Garnishment, docket # 804, be GRANTED.
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IT IS FURTHER RECOMMENDED that the Hon. James A. Teilborg sign and enter the proposed Judgment on Garnishment against Garnishee ING USA Annuity Life and Insurance Co. in the total sum of $9,929.11. This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the District Court's judgment. The parties shall have ten (10) days from the date of service of a copy of this recommendation within which to file specific written objections with the Court. 28 U.S.C. ' 636(b)(1); Rules 72, 6(a) and (e), Federal Rules of Civil Procedure. Thereafter, the parties have ten (10) days within which to file a response to the objections. Failure to

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timely file objections to this Magistrate Judge's Report and Recommendation may result in the acceptance of this Report and Recommendation by the assigned District Judge without further review. United States v. Reyna- Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003); Thomas v. Arn, 474 U.S. 140, 149 (1985) (district courts are not required to conduct "any
review at all . . . of any issue that is not the subject of an objection."). Failure to timely file

objections to any factual determinations of this Magistrate Judge will be considered a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to the Magistrate Judge's recommendation. Rule 72, Federal Rules of Civil Procedure. Dated this 22nd day of October, 2007.

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