Jensen et al v. Rollinger et al

Filing 56

ORDER DENYING 12 Motion to Vacate Writs of Attachment. Signed by Judge David A. Ezra. (aej)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

PREBEN V. JENSEN and MARY J.
JENSEN,

§
§
§
Plaintiffs,
§
§
vs.
§
§
JUDY ROLLINGER and RICK
§
KNIGHT, UNITED STATES COAST §
GUARD,
§
§
Defendants.
§

No. SA:13-CV-1095-DAE

ORDER DENYING MOTION TO VACATE WRITS OF ATTACHMENT
On September 10, 2014, the Court heard argument on the Motion to
Vacate Writs of Attachment (“Motion to Vacate,” Dkt. # 12) filed by Defendants
Judy Rollinger and Rick Knight (“Defendants”). Phillip Christian Snyder, Esq.,
appeared on behalf of Defendants and Todd Lochner, Esq., appeared on behalf of
Plaintiffs. Michael W. Kerns, Esq., also appeared on behalf of Defendant United
States Coast Guard. After careful consideration of the memoranda in support of
and in opposition to the Motion, and in light of the parties’ arguments presented at
the hearing, the Court, for the reasons that follow, DENIES Defendants’ Motion.
BACKGROUND
Supplemental Admiralty Rule B provides that:
1

With respect to any admiralty or maritime claim in personam a
verified complaint may contain a prayer for process to attach the
defendant's goods . . . if the defendant shall not be found within the
district.
Fed. R. Civ. P. Supp. R. B(1)(a). Thus, Rule B “allows a district court to take
jurisdiction over a defendant in an admiralty or maritime action by attaching
property of the defendant,” if the defendant is not found within the district.
ProShipLine, Inc. v. M/V Beluga Revolution, No. H-07-4170, 2008 WL 447707, at
*2 (S.D. Tex. Feb. 19, 2008) (citing Submersible Systems, Inc. v. Perforadora
Central, S.A. de C.V., 249 F.3d 413, 421 (5th Cir. 2001)); see Sembawang
Shipyard, Ltd. v. Charger, Inc., 955 F.2d 983, 987 (5th Cir. 1992) (“Rule B is an
adjunct to a claim in personam. When the defendant cannot be ‘found within the
district,’ the plaintiff may ‘attach the defendant’s goods and chattles.’”). In such
cases, “the plaintiff’s claim is against the person, not the thing, but if the person
cannot be found in the district, the plaintiff is protected by the ability to proceed
against the thing.” Sembawang, 995 F.2d at 987.
In the December 10, 2013 Order Granting Request for Issue of Writ of
Maritime Attachment, this Court, determining that the conditions of Rule B appear
to exist, authorized process of attachment and garnishment, and ordered the Clerk
of the Court to immediately issue a process of Maritime Attachment and
Garnishment for Defendant’s tangible or intangible property as described in the

2

complaint up to the amount sued upon in the verified complaint—$96,000. (Dkt. #
3.)
Garnishees Edward D. Jones & Co., L.P., and Bank of America, N.A.,
both filed answers to the writs of garnishment. (Dkt. ## 5, 6.) Garnishee Edward
D. Jones & Co., L.P., responded that it is in the possession of four accounts: (1) a
Single Brokerage Account held for the benefit of Judy Rollinger, with a total
account value of $11,081.13, all in cash; (2) a Traditional Individual Retirement
Account (IRA) held for the benefit of Judy Rollinger, with an estimated market
value of $54,584.49 comprised of shares of two mutual funds and $270.89 in cash;
(3) a Traditional Individual Retirement Account (IRA) held for the benefit of Judy
Rollinger, with an estimated market value of $369,793.59 comprised of shares of
one mutual fund, shares of two unit trusts, and $6,238.13 in cash; and (4) a Roth
Individual Retirement Account (IRA) held for the benefit of Judy Rollinger, with
an estimated market value of $12,590.47 comprised of shares of three mutual funds
and #$308.13 in cash. (Dkt. # 5.) Following a reasonable search, Garnishee
Edward D. Jones & Co., L.P., did not locate any accounts for Rick Knight. (Id.)
Garnishee Bank of America, N.A., responded that it is in possession
of safe deposit boxes belonging to Judy Rollinger and it is “aware that Bank of
America, N.A.,” is indebted to Rick Knight, but is not aware of any other entity
possessing effects belonging to Rick Knight. (Dkt. # 6.)
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Defendants have now filed the instant Motion to Vacate Writs of
Attachment (Dkt. # 12). Pursuant to Supplement Rule E of the Federal Rules of
Civil Procedure:
Whenever property is arrested or attached, any person claiming an
interest in it shall be entitled to a prompt hearing at which the plaintiff
shall be required to show why the arrest or attachment should not be
vacated or other relief granted consistent with these rules.
Fed. R. Civ. P. Supp. R. E(4)(f).
In their Motion, Defendants argue that the writs must be vacated
because (1) Plaintiffs have no prima facie admiralty claim against the Defendants
and (2) Chapter 42 of the Texas Property Code bars the Plaintiffs’ garnishment of
certain accounts. (Id. ¶ 2.2.) Therefore, Defendants request that this Court vacate
the writs of attachment and garnishment of Defendants’ accounts. (Id. at 11.)
ANALYSIS
A.

Valid Prima Facie Admiralty Claim
The plaintiff bears the burden of establishing a right to attachment.

Icon Amazing L.L.C. v. Amazing Shipping, Ltd., 951 F. Supp. 2d 909 at 915 (S.D.
Tex. 2013). To meet this burden, the plaintiff must show: (1) a valid prima facie
admiralty claim against the defendant; (2) the defendant cannot be found in the
district; (3) the defendant’s property is within the district; and (4) there is no legal
bar to attachment—either statutory or maritime in nature. Id.

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Here, Defendants argue that Plaintiffs have not established a valid
prima facie admiralty claim and, thus, the writs of attachment must be vacated.
Specifically, Defendants argue that the document memorializing the sale of the
vessel is not a preferred ship mortgage, and therefore Plaintiffs have not stated a
valid prima facie admiralty claim against Defendants.
Prior to the enactment of the Ship Mortgage Act of 1920 (“SMA”), a
ship mortgage was not considered a maritime contract and, therefore, did not fall
within the purview of a federal court's admiralty jurisdiction. See The Thomas
Barlum, 293 U.S. 21, 32 (1934). As such, “mortgage security on ships was
practically worthless.” Id. at 39 (internal quotation marks and citations omitted).
“The Ship Mortgage Act was intended to remedy this problem.” Governor and Co.
of Bank of Scotland v. Sabay, 211 F.3d 261, 270 (5th Cir. 2000). In sum, the SMA
expanded the admiralty jurisdiction of the federal courts, but only with respect to
“preferred mortgages.” See The Thomas Barlum, 293 U.S. at 33 (“The grant is thus
one of exclusive jurisdiction to enforce the lien of a ‘preferred mortgage.’ If the
mortgage is a preferred mortgage within the definition of the [SMA], jurisdiction is
granted; otherwise not.”); McCorkle v. First Penn. Banking & Trust Co., 459 F.2d
243, 248 (4th Cir.1972) (“Thus, notwithstanding the 1920 extension of admiralty
jurisdiction to preferred maritime mortgages, courts continue to recognize the
vitality of the pre-1920 rule with respect to non-preferred ship mortgages.”); R.C.
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Craig Ltd. v. Ships of the Sea Inc., 401 F. Supp. 1051, 1056 (S.D. Ga.1975) (“A
common-law mortgage on a vessel confers no right of cases to the admiralty courts
of the United States. Such an instrument does not constitute a maritime contract
. . . . The only mortgage on a ship which may invoke the admiralty jurisdiction . . .
is one executed in accordance with the [SMA].”).
In order for a mortgage on a ship to qualify as a “preferred mortgage”
under the Commercial Instruments and Maritime Lien Act (“CIMLA”), it must
meet several statutory requirements. See 46 U.S.C. §§ 31301, 31322. Specifically,
the mortgage must, among other things, be filed in substantial compliance with 46
U.S.C. § 31321, which provides, in relevant part, as follows:
(a)(1) A bill of sale, conveyance, mortgage, assignment, or related
instrument, whenever made, that includes any part of a documented
vessel or a vessel for which an application for documentation is filed,
must be filed with the Secretary of Transportation to be valid . . .
....
(b) To be filed, a bill of sale, conveyance, mortgage, assignment, or
related instrument must –
(1) identify the vessel;
(2) state the name and address of each party to the instrument;
(3) state, if a mortgage, the amount of the direct or contingent
obligations (in one or more units of account as agreed to by the
parties) that is or may become secured by the mortgage,
excluding interest, expenses, and fees;

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(4) state the interest of the grantor, mortgagor, or assignor in the
vessel;
(5) state the interest sold, conveyed, mortgaged, or assigned;
and
(6) be signed and acknowledged.
46 U.S.C. § 31321(a)(1).
Rule E(4)(f) provides the procedures for release from arrest or
attachment. Fed. R. Civ. P. Supp. R. E(4)(f). On motions to vacate writs of
attachment or arrest, courts within the Fifth Circuit have maintained that “[a] Rule
E(4)(f) hearing, . . . is not intended to definitively resolve the dispute between the
parties; instead, the district court makes a preliminary determination of whether
reasonable grounds exist for the arrest.” Austral Asia Pte., Ltd. v. SE Shipping
Lines Pte. Ltd., No. 12-1600, 2012 WL 2567149, at *2 (E.D. La. July 2, 2012)
(citing Naftomar Shipping & Trading Co., Ltd. v. KMA Int’l S.A., No. V-11-2,
2011 WL 888951 (S.D Tex. Mar. 10, 2011)); see also Vinmar Intern. Ltd. v. M/T
Clipper MAKISHIO, No. H-09-3829, 2009 WL 6567104, at *1 (S.D. Tex. Dec. 9,
2009) (“Although [Plaintiff] bears the burden of showing why the arrest should not
be vacated, the procedure ‘is not intended to resolve definitely the dispute between
the parties, but only to make a preliminary determination whether there were
reasonable grounds for issuing the arrest warrant.’” (quoting Salazar v. Atlantic
Sun, 881 F.2d 73 (3d Cir. 1989))). Thus, in Rule E(4)(f) hearings, courts do not
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make binding determinations of fact, but rather are “merely holding that it is likely
that alleged facts are true.” Naftomar, 2011 WL 888951, at *3 (quoting Walijam
Exports Pte. Ltd. v. ATL Shipping Ltd., 475 F. Supp. 2d 275 (S.D. N.Y. 2006)).
In their Motion to Vacate, Defendants make several arguments for
why Plaintiff’s document for sale of the vessel does not meet the requirements of a
preferred ship mortgage, thus defeating Plaintiffs’ prima facie case in admiralty
against Defendants in this Court. However, given the foregoing standards, the
Court declines to address whether Plaintiff’s promissory note for sale of the vessel,
in fact, meets the standards for a preferred ship mortgage. 1
As discussed at length in the Court’s Order Denying the Coast
Guard’s Motion to Dismiss (Dkt. # 45), Plaintiffs have amended their complaint,
adding the United States Coast Guard as a Defendant and asserting a claim for
judicial review pursuant to the Administrative Procedures Act (“APA”). The

1

At the hearing, Plaintiff called Mr. Thomas Willis, the former director of the
Coast Guard’s National Vessel Documentation Center. Mr. Willis was called as an
expert on whether Plaintiffs’ Preferred Ship Mortgage Application substantially
complied with the Coast Guard requirements for filing in the event the Court
wanted testimony on whether the document filed by Plaintiffs was, in fact, a
Preferred Ship Mortgage. However, because Rule E(4)(f) hearings are not for
purposes of “mak[ing] binding determinations of fact,” but rather are for “merely
holding that it is likely that alleged facts are true,” Naftomar, 2011 WL 888951,
at *3, the Court will not decide today whether the document filed by Plaintiffs was,
in fact, a Preferred Ship Mortgage. See Vinmar, 2009 WL 6567104, at *1 (“[The
Rule E] procedure ‘is not intended to resolve definitely the dispute between the
parties, but only to make a preliminary determination whether there were
reasonable grounds for issuing the [attachment writ].’”).
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Court has concluded that this Court has jurisdiction to hear Plaintiffs’ claim; thus,
the Court will at some future point in this case review the Coast Guard’s
determination as to whether Plaintiffs’ mortgage agreement meets the requirements
for filing as a preferred ship mortgage. If the Coast Guard’s determination that the
document does not meet the requirements for filing as a preferred ship mortgage is
correct, then Plaintiffs do not have a preferred ship mortgage and admiralty
jurisdiction will therefore be defeated.
In the instant Motion, Defendants essentially ask that this Court
decide whether Plaintiffs indeed have a preferred ship mortgage, as that relates to
their prima facie case for a claim in admiralty. Keeping the aforementioned
standards in mind, however, the Court declines to “to resolve definitely the dispute
between the parties,” but, at this stage of the proceedings, will only “make a
preliminary determination whether there were reasonable grounds for issuing” the
writs of garnishment. See Vinmar, 2009 WL 6567104, at *1.
Therefore, at this juncture, the Court concludes that Plaintiffs have
alleged a prima facie case in admiralty against Defendants, and the Court DENIES
Defendants’ Motion to Vacate on that basis.
II.

Chapter 42 as a Bar to Attachment
Next, Defendants argue that even assuming Plaintiffs have stated a

valid prima facie case in admiralty, the writs of attachment must be vacated
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pursuant to Chapter 42 of the Texas Property Code. (Dkt. # 12 ¶ 2.13.)
Specifically, Defendants argue that Chapter 42 bars the garnishment of Rollinger’s
retirement accounts held by Edward D. Jones & Co., L.P. (Id.)
Section 42.0021(a) provides:
[A] person’s right to the assets held in or to receive payments,
whether vested or not, under any stock bonus, pension, annuity,
deferred compensation, profit-sharing, or similar plan, including a
retirement plan for self-employed individuals, or a simplified
employee pension plan, an individual retirement account or individual
retirement annuity, including an inherited individual retirement
account, individual retirement annuity, Roth IRA, or inherited Roth
IRA . . . is exempt from attachment, execution, and seizure for the
satisfaction of debts to the extent the plan, contract, annuity, or
account is exempt from federal income tax, or to the extent federal
income tax on the person’s interest is deferred until actual payment of
benefits to the person . . . .
Tex. Prop. Code § 42.0021(a) (emphases added).
Defendants argue that pursuant to § 42.0021(a), the retirement
accounts held by Rollinger “are all specifically exempt from attachment,
execution, and seizure for the satisfaction of any debts, including those alleged by
Plaintiffs.” (Dkt. # 12 ¶ 2.14.) In response, Plaintiffs point out that Defendants
fail to cite any authority that state law exemptions such are Chapter 42 are
applicable to Rule B maritime attachments.
First, Defendants cite an unpublished bankruptcy case in support of
the proposition that federal courts apply the Texas Property Code Chapter 42
exemption to bar the garnishment of retirement accounts for the purpose of
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satisfying debts. (See Dkt # 12 ¶ 2.13 (citing In re Friedheim, No.
3:07-CV-0181-G, 2007 WL 2325613 (N.D. Tex. Aug. 14, 2007)). However,
unlike Supplemental Rule B, the bankruptcy statutes specifically provide that a
debtor may claim as exempt any property that is exempt under federal, state, or
local law. 11 U.S.C. § 522(b). In In re Friedheim, the court cited 11 U.S.C.
§ 522(b) in concluding that the Bankruptcy Code specifically authorizes a debtor to
rely on state law exemptions such as Chapter 42. Id. at *2. Defendants have not
cited to any similar statute applying state law exemptions to Supplemental Rule B
attachments and the Court has found none.
Defendants also cite Janvey v. Alguire, 647 F.3d 585 (5th Cir. 2011),
for the proposition that federal courts apply the Chapter 42 exemption of
retirement accounts. However, this case is also distinguishable. In Janvey, the
SEC brought suit against an investment company and related entities for allegedly
perpetrating a massive Ponzi scheme. Before the court was an appeal of a motion
for preliminary injunction that was granted in favor of the court-appointed receiver
for the investment company, freezing accounts (including retirement accounts) of
the individual defendants pending outcome of the trial. The defendants appealed,
arguing that any frozen IRA account is exempt from the receiver’s claim. Id. at
601. The Fifth Circuit held that despite Chapter 42, the district court did not err in
keeping the IRA accounts frozen under the preliminary injunction because the
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defendants did not meet their burden of establishing that they had a legal right to
the funds in the IRA to be entitled to the exemption. Id. Thus, this case does not
support Defendants’ argument that Chapter 42 always acts as a bar to attachment
of any IRA account; and, in any event, while Janvey discussed Chapter 42 in the
context of a preliminary injunction and what accounts could be frozen pending
trial, again, this does not support Defendants’ proposition that Chapter 42 applies
in the maritime Supplemental Rule B attachment context.
Moreover, the Second Circuit’s opinion in Aurora Maritime Co. v.
Abdullah Mohamed Fahem & Co., 85 F.3d 44 (2d Cir. 1996), 2 supports the
Plaintiffs’ argument that Chapter 42 may not apply in the Rule B maritime
attachment context. In Aurora, the appellate court affirmed the district court’s
holding that, as a matter of statutory construction, a state statute regarding lien
priority did not apply to a federal attachment under Rule B. Id. at 46. In so
concluding, the district court had acknowledged that no federal court had decided
the issue, but concluded that because the plaintiff obtained Rule B attachments
before the defendant exercised its set-off rights under the state statute, the plaintiff

2

Courts within the Fifth Circuit have noted the long history of maritime
attachments in the Second Circuit. Eitzen Bulk A/S v. Capex Indus., Ltd., CIV.A.
10-395, 2010 WL 5141257 (E.D. La. Dec. 13, 2010) (“This Court notes the long
history of maritime attachments in the Second Circuit . . .”).
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gained a limited property interest under federal law that could not be defeated by a
subsequently executed state law set-off right. Id.
At issue in Aurora was Section 151 of the New York Debtors and
Creditors Law, which permitted debtors “to set off and apply against any
indebtedness, whether matured or unmatured, of [a] creditor to [the] debtor, any
amount owing from such debtor to such creditor, at or at any time after [the
issuance of the warrant of attachment].” Aurora, 85 F.3d at 46 (citing N.Y. Debt.
& Cred. Law § 151). The defendant-bank filed a motion to vacate attachment,
asserting that its state law set-off right pursuant § 151 should vacate the Rule B
attachment. After the district court denied the bank’s motion to vacate Rule B
attachments, the court sua sponte certified its order for immediate interlocutory
appeal.
Although the appellate court did not agree with the district court’s
first-in-time conclusion that set-off rights under § 151 and the plaintiff’s Rule B
attachments did not conflict, the court nonetheless affirmed, concluding that § 151
was, in fact, preempted by Rule B. The Aurora court decided the preemption issue
based on the Supreme Court’s holding in American Dredging Co. v. Miller, 510
U.S. 443 (1994).
In American Dredging, the Supreme Court held that the prohibition
against a state attempting to make changes in substantive maritime law is violated
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when a state remedy works material prejudice to the characteristic features of
general maritime law or interferes with proper harmony and uniformity of that law
in its international and interstate relations. Id. at 447. The issue in American
Dredging was whether the doctrine of forum non conveniens is either a
“characteristic feature” of admiralty or a doctrine whose uniform application is
necessary to maintain the “proper harmony” of maritime law. Id. Ultimately, the
Court concluded that the doctrine of forum non conveniens was neither. However,
the Court noted that “forum non conveniens does not bear upon the substantive
right to recover, and is not a rule upon which maritime actors rely in making
decisions about primary conduct.” Id. at 454.
The Aurora court held that maritime attachment is a “characteristic
feature of the general maritime” law within the meaning of American Dredging.
Aurora, 85 F.3d at 48. The court also held that § 151 materially interferes with
important purposes, and reduces the effectiveness, of maritime law. Id. The court
noted that the rationale underlying maritime attachment is twofold: First,
attachment provides a means to assure satisfaction if a suit is successful. Second,
an additional purpose of maritime attachment is to insure a defendant’s appearance
in the action. Id. at 48; see also Swift & Co. Packers v. Compania Colombiana Del
Caribe, S.A., 339 U.S. 684, 693, 70 S. Ct. 861, 867, 94 L. Ed. 1206 (1950) (“The
process of foreign attachment is known of old in admiralty. It has two purposes: to
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secure a respondent's appearance and to assure satisfaction in case the suit is
successful.”).
With these two purposes of maritime attachment in mind, the Aurora
court held that § 151 “threatens to undermine the power of federal admiralty courts
sitting in New York to enforce substantive admiralty law” because, “[i]n effect, an
admiralty defendant with a New York bank account may enjoy the beneficial use
of its account by borrowing from the bank without fear of the account serving as a
vehicle for enforcement of maritime rights against it.” Id. Finally, the court noted
that “given the importance of maritime attachment in light of the reasons discussed
above, leaving the functional usefulness of Rule B attachments to the vagaries of
the laws of fifty states would create a measure of anarchy in a federal scheme
designed to insure that maritime actors may be sued where their property is found.”
Id. at 49. Because “[s]uch anarchy would be inconsistent with an ancient purpose
of admiralty law in providing convenient fora for those who want to enforce rights
under maritime law against hard-to-catch defendants,” and would also “be
detrimental to international commerce,” the court ultimately concluded that the
state law set-off rights under § 151 were preempted by Rule B attachments. Id.
Here, while it is unlikely that Chapter 42 prohibiting the garnishment
of retirement accounts would have such sweeping ramifications as § 151 in the

15

maritime context,3 the court’s holding in Aurora is instructive in the instant case.
Without the attachment of the accounts owned by Defendants here in the Western
District of Texas, this Court lacks jurisdiction to hear Plaintiffs’ claim. Plaintiffs
are in a unique situation in that these accounts are the only property they have
located belonging to Defendants who, meanwhile, have apparently set off to
Panama on the very vessel that Plaintiffs sold them and seek to recover money
owed to them per the terms of the agreement for sale of the vessel. Without
attachment, this Court lacks quasi in rem jurisdiction, and Plaintiffs are without the
ability to pursue their claim against Defendants who are conveniently somewhere
in South America and unable to be located. 4 Considering the purposes of maritime
attachment as a means to assure satisfaction if a suit is successful and to insure a
defendant’s appearance in the action, Aurora, 85 F.3d at 48, the Court could
envision a scenario when Chapter 42 may “threaten[] to undermine the power of
federal admiralty courts sitting in [Texas] to enforce substantive admiralty law” as
did § 151 in Aurora.

3

Due to the somewhat complex facts of this case, and the apparent lack of
authority on the attachment of retirement accounts, the Court does not envision
many cases where, as here, the maritime attachment of a defendant’s retirement
accounts is at issue.
4

Rollinger was in fact located in Panama and served. She did not answer, and a
clerk’s default judgment has been entered against her. (Dkt. # 44.) Knight, to
date, has not been located.
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In LaBanca v. Ostermuncher, 664 F.2d 65 (5th Cir. 1981), the Fifth
Circuit reversed the district court’s grant of a motion to quash service of maritime
attachment and garnishment. In reversing, the court held that defendants could not
be “found within the district” where defendants, who were citizens of Venezuela,
had no representative in the Middle District of Florida, even though they could
have been served with process in the Northern District. Id. The court noted that
[t]he facts of this case are exactly the situation for which the process
of maritime attachment was originally created. Maritime attachment
has two purposes: First, to secure a defendant’s appearance; second, to
assure satisfaction in case the plaintiff is successful. Without a
maritime attachment, Mr. LaBanca would have little hope of securing
the appearance of, or satisfying a judgment against, Venezuela
citizens.
Id. at 68 n.4. Similarly, although Defendants here are citizens of the United States,
without maritime attachment, Plaintiffs would have little hope of securing their
appearance or satisfying a judgment against them. Despite searching, Plaintiffs
have been unable to find any other property belonging to them here in the Western
District of Texas.
With regard to the application of state law in the maritime context,
“[w]hether a state law may provide a rule of decision in an admiralty case depends
on whether the state rule ‘conflicts’ with the substantive principles of federal
admiralty law.” Calhoun v. Yamaha Motor Corp., U.S.A., 40 F.3d 622, 627 (3d
Cir. 1994) aff'd, 516 U.S. 199 (1996). “[S]tate law may supplement maritime law
17

when maritime law is silent or where a local matter is at issue, but state law may
not be applied where it would conflict with [federal] maritime law.” Id. Similarly,
in the Fifth Circuit, the Court maintains that
Although state law may occasionally be utilized to fill the gaps in an
incomplete and less than perfect maritime system it cannot be
employed to contravene an act of Congress, to prejudice the
characteristic features of the maritime law or to disrupt the harmony it
strives to bring to international and interstate relations.
J. Ray McDermott & Co. v. Vessel Morning Star, 457 F.2d 815 (5th Cir. 1972).
Here, the application of Chapter 42, in this particular instance,
conflicts with federal maritime law. First, as noted above, there is no statute such
as the statute in the Bankruptcy Code that specifically provides that a debtor may
claim as exempt any property that is exempt under federal, state, or local law. 11
U.S.C. § 522(b). On the contrary, Supplemental Rule B vaguely provides that “a
verified complaint may contain a prayer for process to attach the defendant’s
tangible or intangible personal property—up to the amount sued for—in the hands
of garnishees named in the process.” Fed. R. Civ. P. Supp. R. B (emphasis added).
Supplement Rule B does not specify the types of property that may be attached or
exclude certain types of tangible or intangible property. Further, also as discussed
above, considering the purposes of maritime attachment and the principle of
admiralty law “in providing convenient fora for those who want to enforce rights
under maritime law against hard-to-catch defendants,” Aurora at 85 F.3d at 49;
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Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527, 539 (4th Cir. 2013) (the use
of Supplemental Rule B purpose is “to permit the attachments of assets wherever
they can be found and not to require the plaintiff to scour the globe to find a proper
forum for suit or property of the defendant sufficient to satisfy a judgment”), the
Court concludes that Chapter 42 should not, in this circumstance, render the
attachments vacated.
Plaintiffs also argue that even assuming § 42.0021, a state law, takes
precedent over Rule B, federal law, “[a] party claiming an exemption under section
42.001 bears the burden of proving that he or she is entitled to it.” (Dkt. # 14 at 16
(citing Jones v. Am. Airlines, Inc., 131 S.W.3d 261, 270 (Tex. App. 2004).) Thus,
Plaintiffs argue, Defendants have not met their burden of proving that the funds in
the IRAs are exempt under § 42.0021. (Id.)
Indeed, the party claiming the exemption must establish that she has a
legal right to the funds in the IRA to be entitled to the exemption. Jones, 131
S.W.3d at 270. “Because ‘[a]n exemption is a right given by law to a debtor to
retain a portion of his [or her] property free from the claims of creditors,’ we hold
that Appellant cannot claim as exempt the portion of benefits to which she has no
legal right.” Id. (quoting Pickens v. Pickens, 83 S.W.2d 951, 954 (Tex. 1935)).
As Plaintiffs point out, Defendants have only alleged in their Motion
to Vacate that the funds in the IRA accounts were “earned by Rollinger” and that
19

her contribution did not exceed “the amounts deductible under the applicable
provisions of the Internal Revenue Code.” (Dkt. # 12 ¶ 2.14.) Defendants, in their
Reply (Dkt. # 17), did not even address Plaintiffs’ arguments that Defendants have
failed to meet their burden of proving exemption—in fact, Defendants did not
discuss Chapter 42 whatsoever in their Reply.
Considering that “[a] party claiming an exemption under section
42.0021 bears the burden of proving that he or she is entitled to it,” the Court
concludes that these bare allegations do not meet the burden. Accordingly, even if
Chapter 42 were to apply in the maritime attachment context, Defendants have not
established their right to the exemptions provided under Chapter 42. Thus, the
Court DENIES Defendants’ Motion to Vacate on this basis.
CONCLUSION
Based on the foregoing, the Court DENIES Defendants’ Motion to
Vacate Writs of Attachment. (Dkt. # 12.)
IT IS SO ORDERED.
DATED: San Antonio, Texas, September 11, 2014.

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