United States of America v. Samuel

Filing 19

ORDER signed by Magistrate Judge Kendall J. Newman on 03/03/16 ORDERING that Mr. Samuel's 18 Motion for Reconsideration is DENIED. No further motions for reconsideration will be entertained. (Benson, A)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,

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Plaintiff,
v.

No. 2:15-mc-0016-JAM-KJN
No. 2:15-mc-0017-JAM-KJN
No. 2:15-mc-0099-JAM-KJN

HODA SAMUEL,
Defendant.

ORDER

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In a comprehensive order dated February 17, 2016, which was cross-docketed in each of

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the above-captioned miscellaneous actions, the court authorized garnishment of multiple accounts

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related to defendant and judgment debtor Hoda Samuel. On February 29, 2016, defendant’s

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spouse, Aiad Samuel, filed a motion for reconsideration of that order in each of the miscellaneous

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actions. After carefully considering the briefing submitted by Mr. Samuel and the court’s record,

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the court DENIES the motion for reconsideration.

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Federal Rule of Civil Procedure 60(b) provides that:
On motion and just terms, the court may relieve a party or its legal
representative from a final judgment, order, or proceeding for the
following reasons: (1) mistake, inadvertence, surprise, or excusable
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neglect; (2) newly discovered evidence that, with reasonable
diligence, could not have been discovered in time to move for a
new trial under Rule 59(b); (3) fraud (whether previously called
intrinsic or extrinsic), misrepresentation, or misconduct by an
opposing party; (4) the judgment is void; (5) the judgment has been
satisfied, released or discharged; it is based on an earlier judgment
that has been reversed or vacated; or applying it prospectively is no
longer equitable; or (6) any other reason that justifies relief.

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Fed. R. Civ. P. 60(b).

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As the court’s February 17, 2016 observed, although Mr. Samuel had been provided with

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notice of each of the writs of garnishment and his right to file objections or claims of exemption,

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as documented by the certificates of service filed with the court, Mr. Samuel ultimately failed to

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file objections or claims of exemption in any of the above-captioned miscellaneous actions. In

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his motion for reconsideration, Mr. Samuel now claims that he has in fact opposed the writs of

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garnishment, but that he filed such opposition and objections in another miscellaneous action

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pending before Judge Claire, 2:15-mc-131-KJM-AC, which the United States commenced to

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obtain a third party examination of Mr. Samuel in aid of collection of the criminal judgment

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entered against his spouse. Mr. Samuel asserts that he filed his opposition and objections in the

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action before Judge Claire, because he believed that that action had been related and consolidated

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with these actions. For the reasons discussed below, Mr. Samuel’s arguments lack merit and do

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not warrant reconsideration.

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As an initial matter, the third party examination action pending before Judge Claire has

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not been related to these garnishment actions. Contrary to Mr. Samuel’s argument, the United

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States had never moved to relate the third party examination action to the garnishment actions—it

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only filed a notice of related case with respect to the underlying criminal case. (See 2:15-mc-131-

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KJM-AC, ECF No. 2.) Therefore, there is nothing on the docket of the third party examination

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action that could have reasonably confused Mr. Samuel in that regard. Indeed, there is evidence

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to the contrary. The court notes that Mr. Samuel specifically appeared in another related

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garnishment action, 2:15-mc-94-JAM-KJN, and filed objections to garnishment of the account at

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issue there.1 That appearance and filing of objections further belie Mr. Samuel’s assertion that he

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The writ of garnishment at issue in that action was subsequently terminated upon request by the
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was unaware that he needed to file objections in the individual garnishment actions.
Furthermore, even assuming that the court found Mr. Samuel’s alleged mistake to be

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excusable, the court notes that Mr. Samuel first appeared in the third party examination action

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before Judge Claire on December 8, 2015, when he filed a motion to vacate the order to appear

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for a third party examination. That motion raised, among other arguments, Mr. Samuel’s general

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objections to the propriety of the United States’ freezing and garnishment of his alleged personal

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and business accounts. However, even if those objections are deemed to have been filed in these

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miscellaneous actions, they are clearly untimely, given that Mr. Samuel was served with notice of

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the writs of garnishment and his right to object months earlier.

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Finally, even if the objections were now considered on their merits, they do not support

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reconsideration. Mr. Samuel asserts that the United States is improperly garnishing his personal

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funds and funds related to his business, which he claims have no relationship to his wife or his

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marriage, and which he has set aside to pay certain real estate taxes. Mr. Samuel further argues

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that he and his wife have always kept their business affairs separate, and that he has been unfairly

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targeted by the United States even though he had nothing to do with the underlying crime. The

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court is not unsympathetic to the plight of an innocent spouse like Mr. Samuel. Nevertheless, as

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the court explained in its previous February 17, 2016 order, community property assets, even

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those assets primarily managed by the innocent spouse, are properly subject to garnishment, and

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all property and funds acquired during marriage are presumed to be community property, even if

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they derive from the innocent spouse’s own business or other endeavors. Mr. Samuel has the

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burden of overcoming that presumption and showing that a particular asset or account can be

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traced to a separate property source for purposes of California community property laws. Mr.

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Samuel’s untimely objections merely assert, in conclusory fashion, that the accounts subject to

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garnishment are his personal or business accounts, but Mr. Samuel’s subjective characterization

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of the accounts is not determinative. Additionally, the fact that Mr. Samuel has the funds

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earmarked for a particular purpose, i.e., the payment of real estate taxes, is also of no

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United States.
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consequence to the characterization of the property at issue. Thus, even if the untimely objections

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were considered on their merits, they do not even remotely discharge Mr. Samuel’s burden of

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overcoming the community property presumption. The garnishments are proper and may

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proceed.

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Accordingly, Mr. Samuel’s motion for reconsideration is DENIED. No further motions
for reconsideration will be entertained.
IT IS SO ORDERED.
Dated: March 3, 2016

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