BLACH v. DIAZ-VERSON
Filing
174
Certified Question to the Supreme Court of Georgia. Ordered by US DISTRICT JUDGE CLAY D. LAND on 4/18/2017(tlf).
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
HAROLD BLACH,
*
Plaintiff,
*
ROBERT FREY,
*
Third Party Claimant,
*
vs.
*
AFLAC, INC.,
*
Garnishee,
CASE NO. 4:15-MC-5
*
SAL DIAZ-VERSON,
*
Defendant.
*
CERTIFIED QUESTION TO THE SUPREME COURT OF GEORGIA
The Georgia garnishment statute was amended during the 2016
session of the General Assembly, apparently in response to a
ruling by United States District Judge Marvin Shoob who held the
Georgia post-judgment garnishment statute, O.C.G.A. § 18-4-60 et
seq.,
found
unconstitutional
that
the
on
statute
due
process
violated
grounds.
due
process
Judge
Shoob
because
it
(1) failed to require notice of exemptions, (2) failed to inform
debtors of procedures for claiming an exemption, and (3) failed
to provide a prompt procedure for resolving exemption claims.
Strickland v. Alexander (“Strickland I”), 153 F. Supp. 3d 1397,
1416 (N.D. Ga. Sept. 8, 2015).
Shortly after entering this
order, Judge Shoob limited his holding “to garnishment actions
filed
against
debtor’s
a
property
financial
under
a
institution
deposit
holding
agreement
a
judgment
or
account.”
Strickland v. Alexander (“Strickland II”), 154 F. Supp. 3d 1347,
1351 (N.D Ga. Oct. 5, 2015) (emphasis omitted).
Then, the State
of Georgia asked Judge Shoob to alter his previous rulings and
declare that Georgia law provides timely procedures for debtors
to claim exemptions in post-judgment garnishment actions.
refused.
He
Strickland v. Alexander (“Strickland III”), 162 F.
Supp. 3d 1302, 1303 (N.D. Ga. Nov. 10, 2015).
At the next session of the General Assembly, the Georgia
legislature enacted the new garnishment statute “to modernize,
reorganize,
and
provide
constitutional
protections
in
garnishment proceedings,” and “to provide for procedures only
applicable to financial institutions.”
2016
Ga.
Laws
8,
8
(codified
at
Act of April 12, 2016,
O.C.G.A.
§ 18-4-1
et
seq.)
Relevant here, the Georgia legislature substantially shortened
the
garnishment
institution.”
period
The
for
former
garnishments
statute
against
provided
for
a
“financial
a
thirty
forty-five day garnishment period for all garnishments.1
1
to
The new
Prior to May 12, 2016, the garnishment period was based on when the
garnishee filed an answer.
See O.C.G.A. § 18-4-20(b)(2015) (“All
debts owed by the garnishee to the defendant at the time of the
service of the summons of garnishment upon the garnishee and all debts
accruing from the garnishee to the defendant from the date of service
to the date of the garnishee’s answer shall be subject to the process
of garnishment . . . .”).
The garnishee was required to file an
2
statute
provides
that
garnishments
against
“financial
institutions” shall only last for a five day garnishment period.
O.C.G.A. § 18-4-4(c)(2).
nonfinancial
period.
All other regular garnishments against
institutions
O.C.G.A.
have
a
§ 18-4-4(c)(4).
twenty-nine
The
new
day
garnishment
statute
provides
separate forms for summonses of garnishment against “financial
institutions,”
see
institutions,” see
garnishment periods.
The
shortened
O.C.G.A.
§ 18-4-76,
and
“nonfinancial
O.C.G.A. § 18-4-74, listing the respective
The statute became effective May 12, 2016.
financial
institution
garnishment
period
addresses the issue raised by Judge Shoob’s ruling; it limits
the garnishment period for an account holder’s deposit account
at a financial institution.
Thus, the account holder does not
have to wait thirty to forty-five days to raise an exemption.
But the statute arguably does more than shorten the garnishment
period for financial institution account holders. Although Judge
Shoob’s final order did not apply to the garnishment of employee
wages and earnings, one interpretation of the amended statute is
that the shortened garnishment period applies to any garnishment
action against a financial institution regardless of whether the
garnishment
action
is
filed
to
recover
from
a
financial
answer “not sooner than 30 days and not later than forty-five days
after the service of the summons.” O.C.G.A. § 18-4-61(a)(2015).
3
institution’s
account
holder
or
a
financial
institution’s
employee.
The
issue
garnishment
of
whether
statute
institution
owes
the
apply
to
an
to
employee
amendments
earnings
or
to
the
that
retiree
a
is
Georgia
financial
presented
by
motions to dismiss several garnishments pending in this Court.
Those motions maintain that an insurance company is a financial
institution
shortened
under
the
garnishment
new
garnishment
period
applies
statute
to
the
and
that
the
garnishment
of
earnings that a financial institution/insurance company owes to
its employees and retirees, thus prohibiting the garnishment of
such
funds
for
a
period
beyond
five
days.
Under
this
interpretation of the statute, a judgment creditor who seeks to
garnish the earnings of the employee of a financial institution,
including an insurance company, would be required to file
a
garnishment action against the employer every five days.
The
interpret
statute.
Georgia
these
courts
provisions
have
of
not
the
had
new
an
opportunity
Georgia
to
garnishment
Thus, there is no clear controlling precedent from the
Supreme Court of Georgia on this determinative issue.
Because
the resolution of these pending motions to dismiss involves an
issue of first impression under Georgia law, the Court certifies
the following issue to the Supreme Court of Georgia pursuant to
O.C.G.A. § 15-2-9:
4
Whether
an
insurance
company
is
a
“financial
institution” under the Georgia garnishment statute
when the insurance company is garnished based on
earnings that it owes the defendant as the defendant’s
former employer.
BACKGROUND
Plaintiff
Harold
Blach
filed
this
garnishment
action
against Garnishee AFLAC to collect a $158,343.40 judgment that
Blach obtained against Defendant Sal Diaz-Verson and registered
in this Court.
AFLAC is Diaz-Verson’s former employer.
Based
on this former employment, AFLAC makes bi-monthly payments to
Diaz-Verson.
The Court has held that twenty-five percent of
these payments is subject to garnishment.
See AFLAC, Inc. v.
Diaz-Verson, No. 4:11-CV-81 (CDL), 2012 WL 1903904, *7 (M.D. Ga.
May 25, 2012).
Since December 2015, Blach has regularly filed
summonses of garnishment against AFLAC, and AFLAC has deposited
over
$140,000.00
into
the
Court’s
registry
pursuant
to
the
the
new
garnishments.2
Following
May
12,
2016,
the
effective
date
of
Georgia garnishment statute, separate forms were available for
garnishments
that
involved
financial
institutions
garnishments that involved nonfinancial institutions.
financial
institution
garnishment
period
forms
while
provided
the
2
for
financial
a
The non-
twenty-nine
institution
The Court previously consolidated all of Blach’s
garnishments in this action under case number 4-15-MC-5.
Deny. Mot. to Dismiss and Consolidating Cases, ECF No.
Consolidating Cases, ECF No. 69.
5
and
day
forms
recurring
See Order
46; Order
provided for the shortened five day period.
date
for
the
new
statute,
Blach
institution” garnishment form.
After the effective
used
the
“nonfinancial
AFLAC followed the instructions
on the form and garnished payments to Diaz-Verson for twentynine,
not
five,
days
after
receiving
each
summons
of
garnishment.
Diaz-Verson
filed
supplemental
motions
to
dismiss
all
garnishments filed after May 12, 2016 (ECF Nos. 127, 128, 161, &
165).
Diaz-Verson argues that after this date Blach used the
wrong form for his summonses of garnishment against AFLAC, and
AFLAC garnished payments that it owes Diaz-Verson for a period
that extended beyond the five day garnishment period authorized
under the amendments to the statute.
If Diaz-Verson is correct,
a portion of the funds in the Court’s registry must be released
to Diaz-Verson.
See O.C.G.A. § 18-4-7(d) (“When a plaintiff
uses the incorrect form for a summons of garnishment of any
type, the garnishment shall not be valid . . . .”).
If Diaz-Verson is not entitled to the funds, Third Party
Claimant Robert Frey claims that he holds a judgment against
Diaz-Verson that is superior to Blach’s judgment.
He therefore
maintains that he is entitled to the garnished funds in the
Court’s registry.
But before the Court decides
Blach’s
and
Frey’s dueling motions for disbursement of the funds (ECF Nos.
34, 37, 75, 76, 77, 78, 82, 103, 120, 134, 135, 136, & 154), the
6
Court
must
determine
whether
all
garnishments
filed
after
May 12, 2016 must be dismissed and the funds returned to DiazVerson.3
This
determination
turns
on
an
issue
of
first
impression under Georgia law.
DISCUSSION
Diaz-Verson argues that all of Blach’s garnishments filed
after May 12, 2016 must be dismissed and the funds returned to
him because Blach should have used the “financial institution”
garnishment form, providing only a five day garnishment period.
Diaz-Verson’s argument depends on whether AFLAC is a “financial
institution” under the Georgia statute.
The statute defines “financial institution” as:
[E]very federal or state chartered commercial or
savings bank, including savings and loan associations
and cooperative banks, federal or state chartered
credit
unions,
benefit
associations,
insurance
companies, safe-deposit companies, trust companies,
any money market mutual fund, or other organization
held out to the public as a place of deposit of funds
or medium of savings or collective investment.
O.C.G.A. § 18-4-1(4) (emphasis added).
company.
companies
statute.
And
are
the
statute
financial
clearly
institutions
AFLAC is an insurance
states
for
that
purposes
insurance
of
the
Thus applying the fundamental principle of statutory
3
The Georgia garnishment statute allows the defendant to file a claim
challenging the garnishment “at any time before a judgment is entered
or before money or other property subject to garnishment is
distributed.”
O.C.G.A. § 18-4-15(a).
Thus, the Court rejects any
argument that Diaz-Verson’s supplemental motions to dismiss are not
properly before the Court.
7
construction that the legislature is deemed to have meant what
it
said
in
the
this
unambiguous,
statute
Court
when
that
would
be
language
inclined
is
to
clear
hold
that
and
an
insurance company is a financial institution for purposes of the
Georgia garnishment statute and that the garnishment period for
any garnishment action against it is five days and not twentynine.
Notwithstanding
prudent
and
the
consistent
Court’s
with
inclination,
comity
it
principles
to
finds
give
it
the
Georgia Supreme Court the opportunity to determine what this
Georgia
statute
argument
can
interpretation
actually
be
made
cannot
be
means,
that
what
particularly
this
the
Court’s
General
given
plain
Assembly
that
an
meaning
intended.
AFLAC is not being garnished based on an insurance policy that
Diaz-Verson maintains with AFLAC or based on property it holds
under
some
type
of
deposit
agreement.
Rather,
AFLAC
is
garnished based on “earnings” that it owes Diaz-Verson as his
former employer.
to
“includ[e]
See O.C.G.A. § 18-4-1(2) (defining “earnings”
recurring
retirement plans”).
periodic
payments
from
pensions
or
If AFLAC is indeed a financial institution
for garnishment purposes regardless of the capacity in which it
holds a person’s property, then any garnishments against AFLAC
or
any
other
insurance
company
8
(or
any
other
financial
institution) relating to wages owed to employees are limited by
this five day garnishment period.
The Court observes that nothing in the text of O.C.G.A.
§ 18-4-1(4)
entities
limits
the
constitute
circumstances
“financial
under
which
the
institutions.”
listed
Thus,
in
isolation, the plain text of O.C.G.A. § 18-4-1(4) dictates that
AFLAC is a financial institution regardless of whether it is
garnished based on an insurance policy that the defendant holds
with
AFLAC
current
or
or
former
limitation
exist.
1284
earnings
into
that
AFLAC
employer.
the
And
statutory
owes
the
the
Court
definition
defendant
where
one
a
write
cannot
as
a
does
not
See T-Mobile S., LLC, v. City of Milton, 728 F.3d 1274,
(11th
Cir.
2013)
(“Our
duty
is
to
say
what
statutory
language means, not what it should mean, and not what it would
mean if we had drafted it.”).
Depending on how far the Georgia Supreme Court finds it
appropriate to drift from the text of the statute, evidence of
legislative
intent
can
be
found
to
support
alternative interpretation of the statute.
the
last
catchall
institution
financial
places
phrase
a
institutions
in
the
limitation
that
on
precede
a
One could argue that
definition
the
it.
non-frivolous
of
specific
That
financial
types
final
of
phrase
defines financial institution to include any “other organization
held out to the public as a place of deposit of funds or medium
9
of
savings
legislature
or
collective
intended
for
investment.”
the
Thus,
garnishment
perhaps
amendments
to
the
apply
only to a certain class of financial institutions—those which
hold deposits for their customers.
But that phrase is separated
by the disjunctive “or,” generally suggesting that it may be
intended to stand alone, in which case it would be in addition
to
the
preceding
types
of
financial
functional limitation on them.
institutions
and
not
a
Moreover, the definition does
not limit the nature of the garnishment action to which the
amendments
apply.
If
the
garnishee
is
a
“financial
institution,” nothing in the amendments expressly distinguishes
between garnishments directed at financial institution account
holders and financial institution employees.
Thus, even if one
concluded
restricted
that
a
financial
institution
is
to
an
organization that accepts deposits for its account holders, that
does not necessarily mean that the changes to the garnishment
statute do not apply to garnishment of its employees’ earnings.
Should
definitional
one
wish
text
and
to
look
travel
at
the
even
farther
statute
as
a
from
the
whole,
some
evidence can be found that the legislature perhaps intended for
the amendments only to apply to the garnishment of customer
deposit accounts.
281,
291
statute,
(1988)
the
Cf. K Mart Corp. v. Cartier, Inc., 486 U.S.
(“In
court
ascertaining
must
look
10
to
the
the
plain
meaning
particular
of
the
statutory
language at issue, as well as the language and design of the
statute
as
a
whole.”).
Most
notably,
O.C.G.A.
§
18-4-7
instructs that:
A summons of garnishment on a financial institution,
or
an
attachment
thereto,
shall
state
with
particularity the defendant's account, identification,
or tracking numbers known to the plaintiff used by the
garnishee in the identification or administration of
the defendant's funds or property . . . .
O.C.G.A. § 18-4-7(b)(2).
If the plaintiff does not provide the
financial institution with this information, the entity may be
relieved
from
garnishment.
liability
for
a
failure
to
respond
to
the
See O.C.G.A. § 18-4-23(a).
Requiring the plaintiff to provide a financial institution
with an account number for the defendant’s funds or property
suggests that a “financial institution” is an entity garnished
based on funds or property that it holds for the defendant in
some type of account.
In the present case, AFLAC is not being
garnished because it holds Diaz-Verson’s “funds or property” in
a
deposit
account.
Instead,
it
owes
Diaz-Verson
retirement
earnings that it is obligated to pay on a regular schedule.
Thus, requiring Blach to provide the “account, identification,
or tracking number[]” used to identify such “funds or property”
could be deemed irrelevant.
But the Court must concede that a
requirement by the legislature regarding the identification of
regular
earnings
payments
by
an
11
account
number
would
not
necessarily rise to the level of being absurd.
Cf. Johnson v.
State, 475 S.E.2d 595, 596 (Ga. 1996) (“[T]he literal meaning of
the statute prevails unless such a construction would produce
unreasonable
or
absurd
consequences
not
contemplated
by
the
legislature.”).
Most financial institutions likely have payroll
“accounts”
their
for
employees
just
as
they
have
deposit
“accounts” for their customers.
It is difficult, however, to reconcile the application of
the shortened garnishment period for financial institutions with
those
provisions
in
the
statute
regarding
continuing
garnishments and continuing garnishments for support.
Under the
statute, “a summons of garnishment on a financial institution
shall not be used for a continuing garnishment or continuing
garnishment for support.”
entities
listed
in
O.C.G.A. § 18-4-7(c).
O.C.G.A.
§ 18-4-1(4)
Thus, if the
constitute
financial
institutions under all circumstances, a plaintiff arguably could
not
bring
a
continuing
garnishment
against
the
wages
of
a
defendant employed by a bank, insurance company, or any other
entity
listed
interpretation
in
of
the
O.C.G.A.
§ 18-4-1(4).
amendments
requires
Diaz-Verson’s
one
to
reach
the
difficult to understand conclusion that the Georgia legislature
meant to exempt all such employees from continuing garnishments
when
it
drafted
the
statute.
Such
a
conclusion
also
seems
contrary to other continuing garnishment provisions that allow
12
for a continuing garnishment or a continuing garnishment for
support
“against
defendant.”
any
garnishee
who
is
an
employer
of
the
See O.C.G.A. §§ 18-4-40; 18-4-51 (emphasis added).
But the legislature is authorized to do things that are hard to
understand.
The Court knows of no reason why it could not
exempt financial institutions from continuing wage garnishments
if it chose to do so.
The question is what did it do, not the
wisdom of doing it.
Diaz-Verson notes that AFLAC is his former employer, and
thus, the Court does not have to resolve whether an insurance
company is a “financial institution” when it is garnished based
on wages that it owes a current employee.
But the Court does
have to decide whether an insurance company is a “financial
institution” when it is garnished based on the regular earnings
paid to a former employee who has a contractual right to receive
those payments as a retiree.
the
distinction
compared
to
between
those
owed
The Court does not comprehend how
earnings
to
a
owed
to
current
a
retired
employee
employee
makes
any
difference in the interpretation of the statute.
Judge
Shoob
intended
to
treat
the
constitutional
infirmities of the former Georgia garnishment statute associated
with “garnishment actions filed against a financial institution
holding a judgment debtor’s property under a deposit agreement
or account.”
Strickland II, 154 F. Supp. 3d at 1351 (emphasis
13
partially
omitted).
The
Georgia
General
Assembly,
although
obviously motivated by his ruling, arguably found a cure that
was more expansive than the disease Judge Shoob had diagnosed.
By placing no explicit restriction in the actual language of
O.C.G.A. § 18-4-1(4), the legislature did not clearly limit the
application of the shortened garnishment period to garnishment
actions filed against financial institutions holding a judgment
debtor’s property under a deposit agreement.
whether
the
Supreme
Court
of
Georgia,
The question is
using
interpretative
canons recognized under Georgia law, nevertheless is able to
find such a limitation notwithstanding its opaqueness to the
undersigned.
CONCLUSION
The newly enacted Georgia garnishment statute substantially
shortens the garnishment period for garnishment actions filed
against financial institutions.
Whether the shortened period
applies
actions
to
all
garnishment
against
financial
institutions or only those relating to property held by the
financial institution pursuant to a deposit or account agreement
is an issue of first impression.
has
significant
implications
The resolution of that issue
for
financial
institutions,
employees of financial institutions, and garnishment creditors
of
employees
of
financial
institutions.
Moreover,
its
resolution is determinative of the motions to dismiss pending in
14
this present action.
Court
to
seek
Prudence and comity concerns lead this
guidance
from
the
Georgia
Supreme
Court.
Accordingly, the Court certifies the following question to the
Supreme Court of Georgia:
Whether
an
insurance
company
is
a
“financial
institution” under the Georgia garnishment statute
when the insurance company is garnished based on
earnings that it owes the defendant as the defendant’s
former employer.
The Court does not intend for the phrasing of this question to
limit the Supreme Court of Georgia in its consideration of the
issues in this case.
The Clerk of the Middle District of Georgia is directed to
transmit this Order, which includes the certified question, to
the Supreme Court of Georgia pursuant to Rule 47 of the Rules of
the Supreme Court of Georgia.
IT IS SO ORDERED, this 18th day of April, 2017.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA
15
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?