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United States v. Graham

United States District Court, D. Idaho

March 12, 2018



          B. Lynn Winmill Chief U.S. District Court Judge


         Pending before the Court is Defendant David Reed Graham's Claim of Exemption and Request for Hearing, which seeks to partially exempt property under Idaho law that is sought by the Government. (Dkt.25). The Government objects to both the exemption and the hearing. (Dkt. 26). For the reasons explained below, the Court will deny the claim of exemption and the request for a hearing.


         The Court entered a Criminal Judgment against Graham on June 14, 2004, finding him guilty of Bank Larceny. Judgment at 1, Dkt. 11. The Court sentenced Graham to five years of probation and ordered him to pay $69, 621.66 in restitution. Id. at 2. The Court ordered Graham to pay the full amount of the restitution immediately, and any amount not paid immediately was to be paid in monthly installments as established by the probation officer. Id. at 5. As of September 15, 2017, Graham has an outstanding balance of $41, 741.47.

         On September 15, 2017, and pursuant to 28 U.S.C. § 3205(b)(1) of the criminal judgment entered against Graham, the Government filed an Application for Writ of Garnishment directed to the Idaho Transportation Department (“ITD”), seeking to recover a surcharge of 10% of the amount of the current outstanding debt. Motion for Order for Writ of Continuing Garnishment at 2, Dkt. 19. The writ was filed because “[t]he Garnishee owes money or property to the Defendant. Further, the Garnishee possesses or will possess property in which the Defendant has a substantial, nonexempt interest.” Id.

         On November 2, 2017, the Court ordered a Writ of Continuing Garnishment. Writ of Continuing Garnishment at 1, Dkt. 20. On November 7, 2017, the Clerk of Court issued a Writ of Continuing Garnishment and notified ITD of the writ with instructions that ITD must answer the writ. Clerk's Notice and Instructions at 1-4, Dkt. 21. On the same day, the Court also sent Graham notice of the writ's issuance along with instructions for filing objections, requesting a hearing, and requesting a transfer to the district of his residence. See id. On November 15, 2017, Graham received the writ, the Clerk's notice, and other listed documents. Plaintiff's Certification of Service at 2, Dkt. 24.

         On December 4, 2017, the Garnishee, ITD, filed an answer, indicating it held property (wages) in which Graham has an interest. See Answer of Garnishee at 1, Dkt. 23. The Garnishee states that Graham is an employee of the State of Idaho and paid biweekly. See id. The current pay period began on November 19, 2017 and ended December 2, 2017. See id. The gross pay amounted to $2, 037.60. Id. The total of the tax withholdings (Federal Income Tax, F.I.C.A. Income Tax, and State Income Tax) amounted to $309.83. Id. ITD deducted an additional $138.35 for “retirement req. by law.” Id. This additional deduction means the net wages amounted to $1589.42 for the biweekly pay period. Id. ITD anticipated making future payments to Graham on December 15, 2017, December 29, 2017, January 12, 2018, and January 26, 2018, noting however that “wages are paid bi-weekly for various amounts.” Id. at 3.

         On December 5, 2017, Graham filed the Claim of Exemptions and Request for Hearing alleging a portion of the wages at issue are exempt under Idaho Code § 11-605(11). Claim of Exemption and Request for Hearing, at 1, Dkt. 25. Graham also alleges that his wages were calculated wrong and requests a hearing on both issues. Id. On December 13, 2017, the Government filed a Response to Graham's Claim of Exemptions and Request for Hearing and argues Idaho Code § 11-605(11) does not apply, and that a hearing should be denied. Response at 1, Dkt. 26.


         As an initial matter, the Court notes that there is no precedent directly on point in the Ninth Circuit - likely because these types of issues are rarely appealed. However, there are a few district court cases that address this issue in a manner with which this Court agrees. Therefore, the Court will reference those cases where appropriate.

         The Federal Debt Collection Procedures Act of 1990 (“FDCPA”) “provides the exclusive civil procedure for the United States to recover on a debt.” 28 U.S.C. § 3001; see also United States v. Webb, 2014 WL 2153954 at *3 (D. Ariz. May 15, 2014). The FDCPA defines “debt” to include “[a]n amount that is owing to the United States on account of … restitution….” 28 U.S.C. § 3002(3)(B); see also United States v. Mays, 430 F.3d 963, 965 (9th Cir. 2005). The FDCPA further clarifies that it “shall preempt State law to the extent such law is inconsistent.” 28 U.S.C. § 3003(d).

         The procedures the United States must follow to collect a judgment by garnishment are provided by 28 U.S.C. § 3205. Under the FDCPA, the judgment-debtor must be given notice of the commencement and served a copy of the writ of garnishment. 28 U.S.C. § 3202(b). The United States must also serve the garnishee with a copy of the writ. 28 U.S.C. § 3205(c)(3). The copy served to the garnishee “shall be accompanied by- (A) an instruction explaining the requirement that the garnishee submit a written answer to the writ.” Id. The copy of the writ served to the judgment debtor “shall be accompanied by- (B) instructions to the judgment debtor for objecting to the answer of the garnishee and for obtaining a hearing on the objections.” Id. “Within 20 days after receipt of the answer, the judgment debtor…may file a written objection to the answer and request a hearing.” Id. The party objecting bears the burden of proof. Id.

         If a garnishment hearing is held, the issues that may be properly considered at the hearing are limited as a matter of law. United States v. Pugh, 75 Fed.App'x 546, 547 (8th Cir. 2003) (a hearing concerning the enforcement of a judgment is limited to circumstances where the debtor has claimed a probable validity of an exemption, challenged compliance with statutory ...

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