BLACH v. DIAZ-VERSON

Filing 308

ORDER denying 127 Motion to Dismiss; denying 128 Motion to Dismiss; denying 148 Motion to Dismiss; denying 161 Amended Motion; denying 165 Motion to Dismiss; denying 173 Motion to Dismiss; denyin g 192 Motion to Dismiss; denying 193 Motion to Dismiss; denying 207 Motion to Dismiss; denying 208 Motion to Dismiss; denying 218 Motion to Dismiss; denying 219 Motion to Dismiss; denying 247 Motion to Dismiss; denying 264 Mot ion to Dismiss; denying 265 Motion to Dismiss; denying 279 Motion to Dismiss; denying 295 Motion to Dismiss; ordering supplemental briefing on 303 Motion for Disbursement of Funds; ordering supplemental briefing on 304 Motion for Disbursement of Funds; ordering supplemental briefing on 305 Motion for Disbursement of Funds. Ordered by US DISTRICT JUDGE CLAY D LAND on 02/09/2018 (CCL)

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.

*
O R D E R

This

garnishment

garnishments

filed

garnishee.

The

action

by

Harold

action

has

is

a

consolidation

Blach
been

against

stayed

of

AFLAC,

pending

question submitted to the Georgia Supreme Court.

a

numerous
Inc.,

as

certified

That question

has now been answered and is dispositive of motions to dismiss
several of the garnishments filed by Sal Diaz-Verson, whose funds
owed to him by AFLAC are being garnished.

Based on the Supreme

Court’s answer to the certified question, those motions are denied
as explained below.

This Order also charts a path forward for the

process of determining how the garnished funds, which were paid
into the registry of this Court, shall be disbursed.

BACKGROUND
Plaintiff Harold Blach holds a judgment against Defendant Sal
Diaz-Verson.

In 2015, Blach registered his judgment in this Court

and began filing garnishment actions against Diaz-Verson’s former
employer, AFLAC Inc., to collect on his judgment.

Over Diaz-

Verson’s objection, the Court concluded that twenty-five percent
of each bimonthly payment AFLAC makes to Diaz-Verson is subject to
garnishment.

Diaz-Verson’s

former

attorney,

Robert

Frey,

intervened in this action claiming he holds a judgment against
Diaz-Verson that is superior to Blach’s.
The Court consolidated all of the pending garnishment actions
and ordered that any future filings be filed in this action.

So,

about once a month, Blach files an application for a writ of
garnishment; the clerk issues a summons of garnishment to AFLAC;
Diaz-Verson files a traverse and motion to dismiss the new writ of
garnishment;1 AFLAC answers the writ of garnishment and deposits
funds into the registry of the Court; and Frey files a motion for
disbursement of the funds.

To date, AFLAC has paid more than

$250,000 into the registry of the Court.

The Court found that

Frey’s judgment is superior to Blach’s and ordered that the funds
1

Before January of 2017, Diaz-Verson’s traverses and motions to dismiss
were based solely on the same arguments he raised in his first motion to
dismiss, which the Court rejected. See, e.g., Traverse & Mot. to Dismiss
(Sept. 7, 2016), ECF No. 65 (relying on arguments raised in ECF Nos. 5 &
11, acknowledging that the Court had previously ruled against him on
these grounds, and stating that the new motion to dismiss is simply “to
preserve his defenses and rights on appeal”); see also Order Den. Mot. to
Dismiss, ECF No. 13.

2

garnished pursuant to garnishments that were filed before May 12,
2016 be disbursed to Frey.

Order, May 8, 2017, ECF No. 179.
DISCUSSION

I.

Diaz-Verson’s Motion to Dismiss (ECF No. 127)
Diaz-Verson

filed

a

motion

to

dismiss

of

all

garnishments filed after May 12, 2016 (ECF No. 127).

of

Blach’s

According to

Diaz-Verson, under Georgia’s new garnishment statute that became
effective on May 12, 2016, AFLAC is a financial institution even
when it is garnished based on earnings it owes to an employee as
its employer.

Thus, Diaz-Verson argued, Blach was required to use

a

institution

financial

garnishment

period),

not

garnishment
the

form

general

(with

garnishment

a

five-day

form

Blach

actually used (with a twenty-nine-day garnishment period).
Court

The

found no controlling Georgia precedent on the issue and

certified

the

meantime,

the

question
Court

to

the

declined

Georgia
to

order

Supreme

Court.

disbursement

In
of

the

funds

garnished pursuant to garnishments that were filed after May 12,
2016.

The Court did not, however, stay further garnishments.
The Georgia Supreme Court answered the certified question on

February

5,

2018:

an

‘financial institution’

insurance

company

like

AFLAC

“is

not

a

for purposes of O.C.G.A. § 18-4-4(c)(2)

when the insurance company is garnished based on the earnings that
it owes the defendant as the defendant’s employer.”

Blach v.

Diaz-Verson, No. S17Q1508, 2018 WL 700024, at *3 (Ga. Feb. 5,

3

2018).
based

Thus, the garnishments in this case need not be dismissed
on

Blach’s

Verson’s

motion

therefore

use
to

of

the

dismiss

DENIED.2

The

general
on

funds

garnishment

this
held

ground
by

the

form.

(ECF

No.

Court

Diaz127)

may

is

now

be

disbursed to the superior judgment holder.
II.

Motions for Disbursement of Funds
The

Court

recently

terminated

all

of

the

motions

for

disbursement that were pending in this case and noted that the
parties would need to file consolidated motions for disbursement
if the Georgia Supreme Court concluded that an insurance company
is

not

a

“financial

institution”

within

the

meaning

of

the

garnishment statute based on earnings that it owes an employee as
its employer.

Frey filed three motions for disbursement shortly

after the Georgia Supreme Court answered the certified question:
Robert

Frey’s

motion

for

disbursement

of

funds

paid

into

the

registry of the Court on or before June 19, 2017 (ECF No. 303),
Regency Realty, LLC’s motion for disbursement of funds paid into
the registry of the Court between July 12, 2017 and December 14,
2017 (ECF No. 304), and Robert J. Frey as Trustee’s motion for
disbursement of funds paid into the registry of the Court so far

2

The Court likewise denies Diaz-Verson’s subsequent motions to dismiss
on this ground and on those grounds previously rejected by the Court.
See Order Den. Mot. to Dismiss, ECF No. 13. Those motions are: ECF Nos.
128, 148, 161, 165, 173, 192, 193, 207, 208, 218, 219, 247, 264, 265,
279, and 295.

4

this year (ECF No. 305).3

No certified copies of the assignments

have been filed with the Court.
disbursement

do

not

state

Frey/Regency/Trustee
Trustee)

asserted

the

seek

in

to

a

In addition, the motions for
unpaid

collect

recent

balance
on,

affidavit

of

the

although
that

the

judgment
Frey

(as

outstanding

amount of the judgment due to him as Trustee is $318,182.12—which
includes “additional interest and costs of collection.”

Frey Aff.

(Jan. 30, 2018), ECF No. 302.
Blach objects to any disbursement of funds to Frey, and he
asks that the Court reconsider its prior ruling that Frey holds a
superior judgment.4

In the alternative, Blach asks the Court to

find that the current amount Diaz-Verson owes to Frey based on the
judgment he holds was $254,135.04 as of February 7, 2018.
Within seven days of today’s Order, Frey shall supplement his
three motions for disbursement with evidence of (1) the current
outstanding principal amount of the judgment he (and Regency and
3

Frey asserts that the judgment on which he sought to collect was
assigned to Regency Realty, LLC on June 1, 2017. Third Party Claim by
Regency Realty, LLC, ECF No. 212. Frey further asserts that the judgment
was later assigned to Robert J. Frey as trustee for the Robert J. Frey
Living Trust. Third Party Claim by Robert J. Frey, Trustee, ECF No. 268.
4
In his response to Frey’s most recent motions for disbursement, Blach
references actions taken by Frey in this action and in various state
court garnishment actions.
It appears that Blach is now arguing that
Frey’s behavior since the Court ordered disbursement of funds to Frey
last year suggests that the Court should reconsider its finding that Frey
holds a legitimate, unsatisfied judgment against Diaz-Verson that is
superior to Blach’s judgment. If that is the case, Blach should include
in his response to Frey’s supplemental motions for disbursement an
enumerated list of facts, in chronological order, that supports his
argument, including citations to evidence. If the supporting evidence is
already in the record, Blach should point the Court to the docket number;
if the evidence is not yet in the record, Blach should submit it.

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Frey as Trustee) seeks to collect on, (2) the applicable interest
rate and the amount of accrued interest, including an explanation
of how Frey calculates accrued interest, (3) how the disbursements
made

by

this

Court

and

any

other

court

were

outstanding balance, and (4) the assignments.

applied

to

the

The Court notes

that Frey/Regency/Trustee sought to collect costs of collection;
if such costs are still sought, Frey shall provide an itemized
list of the costs, including an explanation of when and why each
cost was incurred.

Any responses to the motions for disbursement

shall be due fourteen days after Frey supplements the motions for
disbursement.
CONCLUSION
For

the

reasons

set

forth

above,

the

Court

denies

Diaz-

Verson’s motions to dismiss (ECF Nos. 127, 128, 148, 161, 165,
173, 192, 193, 207, 208, 218, 219, 247, 264, 265, 279, and 295).
The Court orders supplemental briefing on the pending motions for
disbursement (ECF Nos. 303, 304 & 305).
IT IS SO ORDERED, this 9th day of February, 2018.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA

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