Hassan v. Swiftships Shipbuilders L L C et al

Filing 56

MEMORANDUM RULING AND ORDER granting in part and denying in part 51 Motion for Order of Garnishment. IT IS FURTHER ORDERED that oral argument previously set for 8/24/2017 is CANCELLED. A separate order of garnishment shall be issued. Signed by Magistrate Judge Patrick J Hanna on 8/14/2017. (crt,Alexander, E)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION
LUFTI HASSAN

CIVIL ACTION NO. 6:16-MC-00014

VERSUS
SWIFTSHIPS SHIPBUILDERS, LLC

MAGISTRATE JUDGE HANNA

MEMORANDUM RULING AND ORDER
Currently pending before the Court is Plaintiff’s Motion for Order of
Garnishment (Rec. Doc. 51). For the reasons that follow, the motion is GRANTED
in part and DENIED in part.
BACKGROUND FACTS AND PROCEDURAL HISTORY
On December 14, 2015, the plaintiff Lufti Hassan obtained a judgment in the
Eastern District of Louisiana against Swiftships Shipbuilders, LLC, Swift Group,
LLC, Calvin LeLeaux, Shehraze Shah, Khurram Shah, ICS Nett, Inc., and ICS
Marine, Inc. in the amount of $395,000.00, plus pre-and post-judgment interest.
Subsequently, the plaintiff registered the judgment in the Western District of
Louisiana and the Clerk of Court issued a writ of fieri facias against all judgment
debtors. Then, the plaintiff filed a motion for writ of garnishment that requested
Swiftships, LLC (“Swiftships”) be cited as garnishee and served with garnishment

interrogatories. On February 1, 2017, the plaintiff’s motion for writ of garnishment
was granted.
On April 26, 2017, Mr. Hassan filed a motion for judgment pro confesso
alleging that Swiftships had not timely responded to the garnishment interrogatories
and contending that Swiftships’ failure to do so required judgment in Mr. Hassan’s
favor. In response, Swiftships filed a motion to dismiss based on lack of personal
jurisdiction and insufficient service of process.
On May 18, 2017, oral argument was held before the undersigned on the two
related motions and a report and recommendation was issued. In the report and
recommendation, the undersigned denied the plaintiff’s motion for judgment pro
confesso because Swiftships was not properly served and denied Swiftships’ motion
to dismiss as moot because Swiftships indicated that it responded to the plaintiff’s
interrogatories. On June 28, 2017, the report and recommendation was adopted by
Judge Doherty.
On May 12, 2017, Swiftships, LLC answered the plaintiff’s garnishment
interrogatories and admitted that judgment debtor Calvin LeLeaux is engaged as a
consultant to Swiftships, LLC and has an annual payment amount of $175,000. As
a result, the plaintiff filed the present motion seeking an order of garnishment

-2-

directing Swiftships to deliver Calvin LeLeaux’s annual payment of $175,000 to the
plaintiff.
THE CONTENTIONS OF THE PARTIES
Swiftships filed an opposition contending that neither Swiftships nor Calvin
LeLeaux have admitted that the full sum or any part of the sum has been paid or is
due to be paid. Swiftships contends that LeLeaux is paid a bi-weekly salary that is
considered a wage for the purpose of garnishment. Therefore, Swiftships contends
that the maximum amount of garnishment is limited to twenty-five percent of
LeLeaux’s disposable earnings.
In reply, the plaintiff concedes for the purpose of this motion that LeLeaux’s
payment is considered a wage. However, the plaintiff contends that Swiftships does
not have standing to assert the wage exemption on behalf of LeLeaux. In the
alternative, if the court does apply the exemption from seizure, the plaintiff contends
the date Swiftships answered the interrogatories should begin the garnishment of
LeLeaux’s wages and not the date that service of the interrogatories was perfected.
LAW AND ANALYSIS
Rule 69 of the Federal Rules of Civil Procedure provides that a money
judgment is enforced by a writ of execution, unless the court directs otherwise. The
procedure on execution- and in proceedings supplementary to and in aid of judgment
-3-

or execution- must accord with the procedure of the state where the court is located,
but a federal statute governs to the extent it applies.1 Therefore, Louisiana law for the
execution of judgments will be applied.
Under Louisiana law, a judgment creditor may seize property belonging to a
judgment debtor by citing a third party as garnishee to declare under oath what
property he has in his possession or under his control belonging to the judgment
debtor.2 “The seizure shall take effect upon service of the petition, citation,
interrogatories, and a notice of seizure.”3 The Court has previously determined that
the plaintiff’s first attempt at executing service on Swiftships was insufficient because
service was not made on Swiftships’ registered agent. Even though Swiftships
answered the plaintiff’s interrogatories on May 12, 2017, the plaintiff did not
sufficiently serve Swiftships until May 18, 2017. Therefore, this Court finds that the
seizure shall take effect upon May 18, 2017 when Swiftships was sufficiently served.
Furthermore, a garnishment of wages is deemed a continuing seizure.4
However, there are general exemptions from seizure provided in La. R.S. 13:3881,

1

Fed. R. Civ. P. 69(a)(1)

2

La. C.C.P. art. 2411(A)

3

La. C.C.P. art. 2411(B)

4

La. R.S. 13:3912(B)

-4-

which includes the exemption of seventy-five percent of a judgment debtor’s
disposable earnings for any week, but in no case is the exemption less than thirty
times the federal minimum hourly wage. The plaintiff contends that the exemption
should not be applied because LeLeaux did not claim the exemption. However, the
plain language of La. R.S. 13:3881 states,
“A. The following income or property of a debtor is exempt from seizure under
any writ, mandate, or process whatsoever, except as otherwise herein provided:
(1)(a) Seventy-five percent of his disposable earnings for any week, but in no
case shall this exemption be less than an amount in disposable earnings which
is equal to thirty times the federal minimum hourly wage in effect at the time
the earnings are payable or a multiple of fraction thereof, according to whether
the employee’s pay period is greater or less than one week.”
This language merely indicates that an exemption applies and does not specify that
the exemption must be claimed. The Court cannot ignore the evidence presented by
Swiftships that illustrates LeLeaux meets the requisites for this exemption. In their
opposition, Swiftships attached the declaration of their finance director, John
Davidson Jr. According to Mr. Davidson’s declaration, Swiftships pays LeLeux a
fee/salary of approximately $175,000 annually, which is paid on a bi-weekly basis
with deductions for federal income tax, social security, Medicare, and various health
insurance coverages.

-5-

Based on the declaration, this Court finds that LeLeux’s bi-weekly salary is
considered a wage or salary that is subject to the exemption in La. R.S. 13:388. As
a result, only twenty-five percent of LeLeaux’s disposable earnings from his biweekly salary is subject to garnishment. Therefore,
IT IS ORDERED that the plaintiff’s motion for garnishment is GRANTED to
the extent that it seeks an order of garnishment directing Swiftships to deliver twentyfive percent of LeLeaux’s disposable earnings to the plaintiff. The plaintiff’s motion
for garnishment is DENIED to the extent that it seeks to have the seizure effective on
the date Swiftships answered the garnishment interrogatories.
IT IS FURTHER ORDERED that oral argument previously set for August 24,
2017 is CANCELLED.
A separate order of garnishment shall be issued.
Signed at Lafayette, Louisiana on this 14th day of August 2017.

____________________________________
PATRICK J. HANNA
UNITED STATES MAGISTRATE JUDGE

-6-