Aly v. Hanzada for Import & Export Company, LTD
ORDER denying 222 motion for judgment on the pleadings. Signed on 9/15/17 by Chief District Judge Greg Kays. (Strodtman, Tracy)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
ST. JOSEPH DIVISION
HANZADA for IMPORT & EXPORT
NATIONAL BEEF PACKING COMPANY,
ORDER DENYING JUDGMENT ON THE PLEADINGS
This is a garnishment action arising from a $1.6 million dollar jury verdict against
Defendant Hanzada for Import & Export Company, Ltd. (“Hanzada”) for breach of contract.
Plaintiff Hassanin Aly (“Aly”) seeks to satisfy his judgment against Hanzada through writs of
garnishment filed with National Beef Packing Company, LLC (“National Beef”).
Now before the Court is Aly’s Motion for Judgment on the Pleadings (Doc. 223).
Because there are several disputes of material fact here, the motion is DENIED WITHOUT
Background and Undisputed Facts1
In April 2016 Aly was awarded a $1,591,286.60 judgment against Hanzada after a jury
trial. Aly has sought to satisfy his judgment by filing garnishment writs against a third party,
National Beef, who he believes holds property belonging to Hanzada.
Prior to October 2015, National Beef sold beef product directly to Hanzada. Beginning
in October 2015, National Beef began transitioning away from doing business directly with
Hanzada, and by April 2016, Hanzada no longer purchased product directly from National Beef.
Instead, National Beef began selling its product to a third-party distributor, ESCO International
Trading LLC (“ESCO”).
ESCO, then in turn, resells product to various beef purchasers
including Hanzada. See Aff. of Jay Nielsen ¶ 6, 9, 10 (Doc. 224-1).
Sometime early in its relationship with National Beef, ESCO encountered difficulties in
obtaining a line of credit that it needed to facilitate product purchases from National Beef.
National Beef speculates that in order to avoid delays in delivering product to ESCO, Hanzada
made payments to National Beef on behalf of ESCO. Aff. of Jay Nielsen ¶ 18 (Doc. 207-1)
(incorporated by reference in Doc. 224-1). National Beef also speculates that Hanzada wanted to
avoid any delays because it intended to purchase this product from ESCO. Id. National Beef
accepted two payments in August 2016 from Hanzada totaling $680,000 (the “August
On July 19, 2016, Aly filed a request for a garnishment summons and the Court issued a
writ with a return date of October 17, 2016 (Doc. 189). National Beef sought to quash the
garnishment, but the Court denied the motion (Doc. 211).
The facts are derived from the parties’ briefs (Docs. 223, 224, 225), National Beef’s answers to interrogatories
(Doc. 215), Aly’s exceptions to National Beef’s answers (Doc. 217), and National Beef’s response to Aly’s
exceptions (Doc. 218). Court excluded asserted facts that were immaterial to the resolution of the pending motion,
legal conclusions, and argument presented as an assertion of fact.
Aly’s garnishment writ attached to property held by National Beef but belonging to
Hanzada between August 10, 2016, the date the writ was served, and October 17, 2016, the
return date of the writ.
National Beef answered the interrogatories, denying it had any
garnishable property (Doc. 215). Aly filed exceptions to those answers (Doc. 217) pointing to
the August Payments, and National Beef responded (Doc. 218).
Now Aly seeks judgment on the pleadings asking the Court to find, based on the
pleadings, the August Payments were garnishable property.
Applicable Substantive Law
Proceedings in aid of execution of a judgment “must accord with the procedure of the
state where the court is located.” Fed. R. Civ. P. 69. The parties do not dispute Missouri law
applies in this case. In applying Missouri law, district courts are bound by the decisions of the
Supreme Court of Missouri. Lancaster v. Am. & Foreign Ins. Co., 272 F.3d 1059, 1062 (8th Cir.
2001). If the Supreme Court of Missouri has not addressed an issue, the court must determine
how the Supreme Court would decide the case. Id. Decisions by intermediate appellate courts
provide persuasive authority and they can be followed “when they are the best evidence of state
“A motion for judgment on the pleadings should be granted when, accepting all facts pled
by the nonmoving party as true and drawing all reasonable inferences from the facts in favor of
the nonmoving party, the movant has clearly established that no material issue of fact remains
and that the movant is entitled to judgment as a matter of law.” Schnuck Mkts., Inc. v. First Data
Merch. Servs. Corp., 852 F.3d 732, 737 (8th Cir. 2017). Although the Court must ignore most
materials outside the pleadings, it may consider “materials that are necessarily embraced by the
pleadings.” Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).
In a garnishment action, the garnishor’s exceptions to the garnishee’s answers to
interrogatories is treated as a complaint and the garnishee’s response to those exceptions is
treated as an answer. See Monroe v. Roedder, 253 F.R.D. 466, 468 (E.D. Mo. 2008) (“Thus,
under Missouri law, the pleadings that would join issue in Missouri garnishment proceedings,
such as this one, are the garnishor’s denial(s) or exception(s) to the interrogatory answer(s) of the
garnishee and the garnishee’s reply or response thereto.”); see also Mo. Sup. Ct. R. 90.07(c), (d);
90.10(b); Mo. Rev. Stat. § 525.190.
For purposes of this motion, Aly’s exceptions to National Beef’s answers serves as the
complaint and National Beef’s response to Aly’s exceptions is treated as the answer.
The service of a writ of garnishment and summons:
shall have the effect of attaching all personal property, money,
rights, credits, bonds, bills, notes, drafts, checks or other choses in
action of the defendant in the garnishee’s possession or charge, or
under his or her control at the time of the service of the
garnishment, or which may come into his or her possession or
charge, or under his or her control, or be owing by him or her,
between that time and the time of filing his or her answer
Mo. Rev. Stat. § 525.040. To be subject to garnishment, money must be due absolutely,
“unaffected by liens, prior incumbrances, or conditions of contract.” Heege v. Fruin, 18 Mo.
App. 139, 142 (1885).
Aly makes two arguments that the August Payments are garnishable property: (1) the
payments were money, credit, or other property belonging to Hanzada; and (2) the payments
indebted National Beef to Hanzada. The Court finds the facts, viewed in light most favorable to
Hanzada, do not support either theory.
There is a dispute of material fact as to the ownership of the August
Aly first argues the August Payments were Hanzada’s property and when National Beef
received the payments, the effect of the garnishment attached to those monies immediately, even
if they were later applied to ESCO’s account. National Beef claims the August Payments were
ESCO’s property because they were loan proceeds from a loan between Hanzada and ESCO,
paid on ESCO’s behalf, and on ESCO’s account.
Viewing the facts most favorable to National Beef, the Court finds there is a dispute of
material fact as to the ownership of the August Payments. Neither party cites any law that
supports their theory. Without more to demonstrate the ownership of the August Payments, the
Court cannot hold as a matter of law the August Payments were property of Hanzada.
There is a dispute of material fact as to whether the August Payments
created an indebtedness between National Beef and Hanzada.
It is well established that in order for a plaintiff to recover against a garnishee, the
plaintiff has the burden to show the garnishee is indebted to the defendant. Cusick v. Cusick, 201
S.W.2d 437, 440 (Mo. Ct. App. 1947). The plaintiff must show “‘facts which would enable the
defendant debtor to maintain a suit against the garnishee.’” Id. (quoting S. Cent. Sec. Co. v.
Vernon, 54 S.W.2d 416, 420 (Mo. Ct. App. 1932)). A garnishee may be compelled to payout to
a creditor the monies and assets of a judgment debtor only to the extent the garnishee is indebted
to the judgment debtor. Max Stovall Constr. Co. v. Villager Homes, Inc., 684 S.W.2d 562, 564–
65 (Mo. Ct. App. 1984). In other words, if the garnishee does not owe anything to the judgment
debtor at the time of the garnishment, then there is nothing for the creditor to attach by
garnishment. United States v. Among Others, An Article of Drug for Veterinary Use, 780 F.
Supp. 666, 667–68 (W.D. Mo. 1992); Stevenson v. McFarland, 62 S.W. 695, 697 (Mo. 1901)
(holding if the garnishee owes the defendant nothing, then the garnishee is not liable to the
Under Aly’s indebtedness theory, once National Beef accepted the August Payments,
National Beef was obligated to either ship product to ESCO or return the payments to Hanzada.
National Beef counters that if it did not ship the product to ESCO it would have returned the
funds to ESCO and thus, National Beef was never indebted to Hanzada.
The Court finds there is a dispute as to whether National Beef was indebted to Hanzada
for the August Payments. Aly has not carried his burden to show that Hanzada could maintain
an action against National Beef for the August Payments. Without more demonstrating National
Beef owed Hanzada the August Payment monies, the Court cannot find the payments gave rise to
an indebtedness by which garnishment could have attached. See Cusick, 201 S.W.2d at 440
(holding the trial court erred by finding that the garnishee held money belonging to the defendant
because that finding was not supported by the evidence and could not be deduced through any
justifiable inference drawn from the evidence).
Accordingly, the motion for judgment on the pleadings is DENIED WITHOUT
IT IS SO ORDERED.
Date: September 15, 2017
/s/ Greg Kays
GREG KAYS, CHIEF JUDGE
UNITED STATES DISTRICT COURT
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