Opinion
No. CR-06-01430-001-TUC-RCC (MSD)
07-18-2019
United States of America, Plaintiff, v. Frank L. Padilla, Defendant.
REPORT AND RECOMMENDATION
Pending before the Court is Defendant Frank L. Padilla's request for a hearing concerning a writ of garnishment. (Doc. 143.) For the following reasons, the Court recommends denying his request.
I. Background
On June 23, 2008, the Clerk of Court entered an Amended Judgment against Defendant. (Doc. 111.) The Amended Judgment provides that Defendant "shall pay to the Clerk the following total criminal monetary penalties: . . . RESTITUTION: $1,109,548.60." (Id. at 1.) The Amended Judgment further provides that "[r]estitution shall . . . . be paid in equal monthly installments of at least $600 beginning 60 days after release from imprisonment. . . . Restitution shall be paid jointly and severally with the other defendant in this case until full restitution is paid." (Id. at 1-2.)
On March 26, 2019, the Government filed an Application for Writ of Garnishment under 28 U.S.C. § 3205, seeking to garnish the wages paid to Defendant by his employer, Alpine Mechanical & Service, Inc. (Doc. 139.) On March 29, the Clerk issued the writ with instructions to Alpine to withhold 25% of Defendant's nonexempt earnings. (Doc. 140.) Notice of the writ was sent to Defendant on April 5. (Doc. 142.)
According to the Government, Defendant resigned from his employment in response to receiving the garnishment papers. (Doc. 144 at 2.)
On April 17, Defendant filed a document titled "Garnishment." (Doc. 143.) In the filing, Defendant requests a hearing "in order to resolve" the writ of garnishment. (Id. at 1.) He states that it is his understanding that he does not owe any restitution, as all of his assets were sold at auction to satisfy "any debt owed by [him] in this case." (Id.) He also states that he believes that "[a]ny unpaid restitution was to be paid by the other codefendants that did not surrender any of their real and personal assets." (Id.) Finally, he states that he has experienced "extreme financial hardship" since his release from prison, and that he cannot afford to have his wages garnished to pay restitution when they are already being garnished to pay child support. (Id. at 2.)
On April 19, the Government filed a Response in opposition. (Doc. 144.) The Government argues that it can permissibly enforce the restitution judgment through the Federal Debt Collection Procedures Act ("FDCPA"), 28 U.S.C. § 3001 et seq., and that Defendant has not articulated one of the statutory reasons mandating a hearing on a writ of garnishment. (Id. at 2-5.)
II. Discussion
The Government is correct that it may enforce the criminal restitution judgment through the FDCPA. See United States v. Gianelli, 543 F.3d 1178, 1182-83 (9th Cir. 2008). A writ of garnishment under 28 U.S.C. § 3205 is one method of debt collection that the Government may utilize under the FDCPA. See United States v. Harris, 854 F.3d 1053, 1055-57 (9th Cir. 2017) (per curiam) (upholding the Government's use of a writ of garnishment under § 3205 to enforce a criminal restitution judgment). "Despite the existence of a payment schedule for restitution in a judgment, the United States may pursue immediate or adjusted enforcement of restitution as long as the judgment contains nothing to the contrary." United States v. Webb, No. CR-10-01071-001-PHX-JAT, 2014 WL 4371276, at *1 (D. Ariz. Sept. 4, 2014) (citations omitted); see United States v. Hayes, 183 F. App'x 683, at *1 (9th Cir. 2006). Here, although the restitution judgment sets forth a payment schedule, it contains no language precluding the Government from utilizing other means of debt collection. (See Doc. 111.) Therefore, the writ of garnishment was valid.
The FDCPA sets forth two circumstances in which the debtor may request a hearing. First, the Court "shall" hold a hearing if, within 20 days after receiving notice of the writ of garnishment, the debtor requests a hearing raising one of the following three issues: (1) whether the debtor has a claim of exemption that is probably valid; (2) whether the Government has complied with the statutory requirements for obtaining a particular post-judgment remedy; or (3) whether, if the judgment is by default, the debt on which the judgment is based is valid and whether there is good cause to set aside the judgment. 28 U.S.C. § 3202(d). Second, the Court "shall" hold a hearing if, within 20 days after the garnishee files an answer to the writ of garnishment, the debtor files an objection to the answer and a request for a hearing. Id. § 3205(c)(5).
Although § 3202(d) does not expressly require that the request for a hearing raise one of the three statutorily specified issues, courts have interpreted the statute to carry that requirement. See United States v. Bruneau, No. CR-09-8098-1-PCT-FJM (LOA), 2013 WL 6409518, at *3 (D. Ariz. Oct. 23, 2013) (collecting cases), report and recommendation adopted by 2013 WL 6409486 (Dec. 9, 2013).
Defendant's reasons for a hearing—i.e., he owes no further restitution and is financially incapable of paying further restitution—have nothing to do with whether his earnings are exempt from garnishment or whether the Government followed the proper procedure for obtaining a writ of garnishment. See id. § 3202(d)(1)-(2). Furthermore, the third reason is not applicable to this case, because the criminal judgment imposing restitution is not a default judgment. See id. § 3202(d)(3). Finally, the garnishee, Alpine, did not file a written answer to the writ of garnishment; therefore, a hearing is not required under § 3205(c)(5). Consequently, Defendant is not entitled to a hearing.
The Court notes that Defendant is incorrect that he owes no further restitution. "If the court finds that more than 1 defendant has contributed to the loss of a victim, the court may make each defendant liable for payment of the full amount of restitution or may apportion liability among the defendants to reflect the level of contribution to the victim's loss . . . ." 18 U.S.C. § 3664(h). Here, the district court exercised its discretion to make Defendant and his codefendant jointly and severally liable; that is, both are "liable for payment of the full amount of restitution," approximately $1.1 million. (Doc. 111 at 1-2.)
Regarding Defendant's claim of financial hardship, the Court notes that the writ of garnishment would have garnished no more than 25% of his earnings. See 28 U.S.C. § 3205(a) (stating that a writ of garnishment applies to "nonexempt disposable earnings"); id. § 3002(9) (defining "nonexempt disposable earnings" as "25 percent of disposable earnings"). Within that 25%, priority would have gone to Defendant's child support payments; Defendant would not have had 25% of his wages garnished in addition to his child support payments. See id. § 3205(c)(8) (stating that "garnishments for the support of a person shall have priority").
Accordingly,
IT IS RECOMMENDED that Defendant's request for a hearing (Doc. 143) be denied.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. The parties shall have fourteen days from the date of service of a copy of this recommendation within which to file specific written objections with the District Court. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6, 72. The parties shall have fourteen days within which to file responses to any objections.
Dated this 18th day of July, 2019.
/s/_________
Maria Davila
United States Magistrate Judge