Bryant v. Meade & Associates, Inc. et al

Filing 266

MEMORANDUM AND ORDER OVERRULING LEGALCOLLECTION.COMS OBJECTION TO GARNISHMENT(Doc. 166) AND GRANTING PLAINTIFFS MOTION TO OVERRULE OBJECTIONS AND TO DISBURSE GARNISHED FUNDS (Doc. 215). Signed by District Judge Avern Cohn. (MVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

TERRY BRYANT,
Plaintiff,
vs.

Case No. 15-10199

MEADE & ASSOCIATES, INC.,
LAW OFFICES OF DONALD R.
CONRAD, PLC, DONALD R.
CONRAD, and LEGALCOLLECTIONS.COM
LLC,

HON. AVERN COHN

Defendants.
__________________________________________/
MEMORANDUM AND ORDER
OVERRULING LEGALCOLLECTION.COM’S OBJECTION TO GARNISHMENT
(Doc. 166)
AND
GRANTING PLAINTIFF’S MOTION TO OVERRULE OBJECTIONS AND TO DISBURSE
GARNISHED FUNDS (Doc. 215)
I. Introduction
This is a case under the Fair Debt Collection Practices Act and corresponding state
debt collection statutes. Plaintiff Terry Bryant sued defendants Meade & Associates (Meade),
the Law Offices of Donald R. Conrad, PLC, Donald R. Conrad, and LegalCollections.com,
LLC. Bryant settled with Meade. (Doc. 5). The case then proceeded against the Law Offices
of Donald R. Conrad, PLC, Donald R. Conrad, and LegalCollections.com (collectively, where
appropriate, the Conrad defendants).
Eventually, the Court entered a default judgment against the Conrad defendants for
failure to comply with discovery and Court orders relating to discovery. (Doc. 28). The Court
later granted plaintiff’s motion for damages in the amount of $101,000.00 against the Conrad

defendants, jointly and severally. (Doc. 30).1 Plaintiff then began collection efforts which have
included issuing and serving writs of garnishment. Before the Court is LegalCollection.com’s
objection to a writ of garnishment issued by the Clerk and served on Wells Fargo Bank (Doc.
166) and plaintiff’s motion to overrule the objections and disburse the garnished funds. For
the reasons that follow, LegalCollection.com’s objection will be overruled and plaintiff’s
motion will be granted.
II. Background
On January 7, 2017, a Writ of Garnishment was issued by the Clerk; plaintiff served
that Writ on Wells Fargo Bank. (Doc.139.)
Wells Fargo Bank answered the Writ of Garnishment and stated that it held funds of
the judgment debtor as follows: $11,029.51 (Doc. 165.)
On February 14, 2017, LegalCollections.com filed an objection to garnishment,
asserting that these funds are “earmarked for its clients” and therefore should not be
released.
III. Analysis
As an initial matter, LegalCollections.com did not provide any authority for its position
that because funds are “earmarked for clients” they are exempt from garnishment. Further,
no client or other third party has intervened to claim any funds.

Be that as it may, Under Fed. Civ. P. Rule 64, “every remedy is available that under
the law of the state where the Court is located, provides for seizing...property to secure
1

LegalCollections.com has appealed the Court’s order denying the request to set
aside the default judgment. The appeal is pending. See Bryant v. LegalCollections.com, No.
17-1095 (6th Cir.). According to the Sixth Circuit’s docket sheet, a telephone mediation was
scheduled for March 3, 2017. Notably, the Court has not stayed collection proceedings
pending appeal.

2

satisfaction of the potential judgment.” Fed. Civ. P. Rule 64(a). Michigan garnishment law is
governed by the Michigan Court Rules. M.C.R. 3.101. Garnishment mechanism allows
judgment creditors the right to collect on the judgment. When seeking a garnishment, a
plaintiff as the judgment creditor files a request and writ for garnishment with the Court Clerk.
The Clerk issues a writ of garnishment if the writ appears to be correct and complies with the
Michigan Court Rules and Michigan statutes. M.C.R. 3.101(D). Once issued, plaintiff then
serves the writ on the garnishee, who then must provide a copy to the defendant as the
judgment debtor. M.C.R. 3.101(F). This allows a defendants an opportunity to object based
on defects, such as improper issue or validity. M.C.R. 3.101(K)(2)(f).
M.C.R. 3.101(K) covers objections to garnishment and provides that objections must
be based on one or more of the following: (a) your income is exempt from garnishment by
law, (b) you have a pending bankruptcy proceeding, (c) the maximum withheld exceeds the
amount allowed by law, (d) you have paid the judgment in full, (e) the garnishment was not
properly issued or is otherwise invalid. The rule goes on to state that objections to
garnishment “may only be based on defects in or the invalidity of the garnishment proceeding
itself, and may not be used to challenge the validity of the underlying judgment.” A judgment
debtor that claims exemption from a writ of garnishment bears the burden of proving that they
are entitled to that exemption. United States v. Sawaf, 74 F.3d 119, 122 (6th Cir. 1996).
As noted above, LegalCollections.com objects to the garnishment on grounds that the
funds garnished are “earmarked for clients.” Assuming that LegalCollections.com is
proceeding under (a), “client funds” is not among the examples for exempt income.2
2

Examples listed on the writ are: Individual Retirement Account, Social Security
Benefits, Supplemental Security Income Benefits, Aid to Families with Dependent Children,
General Assistance Benefits, Unemployment Compensation Benefits, Veterans Assistance
Benefits, Workers’ Compensation Benefits, The first $500.00 on deposit in a savings and loan
account, Cash value or proceeds of life insurance or annuity, payable to the spouse or

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Even if LegalCollection.com’s objection was recognized under the law, it does not
provide any proof or support of their position. If the funds are earmarked client monies,
presumably it can produce a client ledger, statement of account, agreement, affidavit of third
parties with an interest in these funds or some other financial records to support its position.
While LegalCollections.com says that it there would be irreparable harm and the public
interest requires that funds belonging to non-parties not be released, it offers no accounting
to support its position. In the absence of evidence that some or all of the funds held by Wells
Fargo do not belong to LegalCollections.com, the Court cannot stop disbursement.
IV. Conclusion
For the reasons stated above, LegalCollection.com’s objection to the garnishment is
OVERRULED. Plaintiff’s motion is GRANTED. Plaintiff’s shall provide a proposed order
directing Wells Fargo to disburse the funds.3
SO ORDERED.
S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE
Dated: March 28, 2017
Detroit, Michigan

children of the insured, Income benefits under the Michigan Civil Service Act, Income benefits
under the Michigan Retirement Act, and U.S. Civil Service Retirement Benefits.
3

Although plaintiff’s motion suggests that a proposed order was attached to the
motion, no proposed order was attached or otherwise submitted to the Court.

4