United States v. Cunningham

866 F. Supp. 2d 1050, 2012 U.S. Dist. LEXIS 80091, 2012 WL 2086561
CourtDistrict Court, S.D. Iowa
DecidedJune 11, 2012
DocketNo. 4:07-cr-08
StatusPublished
Cited by6 cases

This text of 866 F. Supp. 2d 1050 (United States v. Cunningham) is published on Counsel Stack Legal Research, covering District Court, S.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Cunningham, 866 F. Supp. 2d 1050, 2012 U.S. Dist. LEXIS 80091, 2012 WL 2086561 (S.D. Iowa 2012).

Opinion

ORDER

ROBERT W. PRATT, District Judge.

Before the Court is a Motion to Quash Writ of Garnishment, filed by Ramona Cunningham (“Defendant”) on March 3, 2012. Clerk’s No. 320. This motion was filed in conjunction with Defendant’s Objections to Garnishment of IPERS Benefits.1 Clerk’s No. 319-1. The Government filed a Resistance to the motion on March 15, 2012. Clerk’s No. 324. On March 27, 2012, the Court held a hearing on the motion. Clerk’s No. 326. The matter is fully submitted.

I. FACTUAL AND PROCEDURAL HISTORY

Iowa Public Employees’ Retirement System (“IPERS”) is a public pension system that provides retirement benefits to various categories of covered Iowa state employees. See Hr’g Tr.2 at 3-4. Both employers and employees fund the program by making regular contributions in accordance with a statutorily devised payment schedule. Id. at 6. As a state of Iowa employee, Defendant participated in IPERS between 1984 and 2006. See id. at 10. In July 2008, the Social Security Administration determined that Defendant was disabled and awarded her social security disability benefits. See id. at 20-21. This determination triggered Defendant’s eligibility for IPERS disability retirement benefits. See id. at 16. Accordingly, since March 2009, Defendant has been receiving [1054]*1054monthly IPERS payments of $2,701.92.3 See id. at 17. She will continue to receive monthly payments for the remainder of her life but will not receive any residual payment upon her death. See id.

On June 30, 2008, Defendant pled guilty to six counts of fraud relating to the misapplication of funds provided under the Federal Workforce Investment Act. See Clerk’s No. 211. On December 15, 2008, Defendant was sentenced to 84 months incarceration and was later ordered to pay $1,799,066.00 in restitution. See Clerk’s Nos. 239, 290. This amount is to be paid jointly and severally with her co-defendants. To date, $1,651,09.00 of the restitution is unpaid. Resistance at 1. Individually, Defendant has contributed $1,111.00 towards the restitution. Id.

On February 6, 2012, the Clerk of Court, pursuant to 28 U.S.C. § 3205(a), issued a Writ of Continuing Garnishment (hereinafter the “Writ”) requiring IPERS to provide a description of any of Defendant’s property in its possession, the amount of any payments it anticipated owing Defendant in the future, and directing IPERS to immediately withhold and retain, pending further order of Court, any property in which Defendant has a nonexempt interest for which IPERS is or could become indebted to her. See Clerk’s No. 310. IPERS indicated that it anticipated paying Defendant $2,701.92 per month for the remainder of her life. See Clerk’s No. 313. Defendant now seeks to quash this Writ. Clerk’s No. 319, 320.

II. APPLICABLE LAW AND ANALYSIS

This case requires the Court “to find a correct path through the labyrinth of federal execution statutes.” Paul Revere Ins. Group v. United States, 500 F.3d 957, 961 (9th Cir.2007). Generally, the Government may enforce a restitution judgment using the same procedures that are available to enforce a civil judgment. See 18 U.S.C. § 3613(a). One such enforcement mechanism is garnishment. “A court may issue a writ of garnishment against property (including nonexempt disposable earnings) in which the debtor has a substantial nonexempt interest and which- is in the possession, custody, or control of a person other than the debtor, in order to satisfy the judgment against the debtor.” 28 U.S.C. § 3205(a). A garnishment order may only be terminated by satisfaction of the debt, exhaustion of the garnished property, or a court order quashing the writ of garnishment. See id. § 3205(c)(10).

Defendant raises five arguments for quashing the Writ. Specifically, Defendant claims that: (1) the Writ was issued in violation of § 3205(b)(1)(B) because the Government did not make a written demand on the debtor for payment of the debt more than thirty days prior to moving for garnishment; (2) Defendant’s IPERS benefits are not subject to garnishment because both Iowa and federal law contain anti-alienation provisions applicable to pension plans; (3) failing to allow Defendant to exempt her IPERS benefits from garnishment, pursuant to 28 U.S.C. §§ 3001 and 3014, violates Defendant’s Fifth Amendment right to equal protection; (4) failing to allow Defendant to exempt her IPERS benefits from garnishment as a pension payment, when other types of pension payments are exempt under 26 U.S.C. § 6334(a)(6), violates Defendant’s Fifth Amendment right to equal protection;4 and (5) her monthly IPERS [1055]*1055payments qualify as earnings and, as such, pursuant to 15 U.S.C. § 1673(a), the Government may only garnish twenty-five percent of those payments.5 The Court will address each argument in turn.

A. Thirty Day Notice Period

Defendant first argues that the Government failed to comply with the statutory mandate that it make a written demand for payment of the debt at least thirty days prior to applying for a writ of garnishment. See 28 U.S.C. § 3205(b)(1)(B) (requiring that the United States include in its application for a writ of garnishment “the facts that not less than thirty days has elapsed since demand on the debtor for payment of the debt was made and the judgment debtor has not paid the amount due”). However, the Government provided evidence that on July 29, 2010, and again on August 9, 2010, the Department of Justice sent notices to Defendant requesting payment of her restitution in full. See Ex. 1 (Clerk’s No. 324-1). Both of these requests were made more than thirty days prior to January 27, 2012, the date that application for the Writ was made. Further, the Government’s application for the Writ noted that a demand had been made for payment of the debt not less than thirty days from the date of the application and that the amount had not been paid. See Clerk’s No. 309 at 1. Thus, the Writ was not issued in violation of § 3205(b)(1)(B).

B. Anti-Alienation Clauses

Defendant next argues that the Government is prohibited from garnishing her IPERS benefits because of anti-alienation clauses in both state and federal statutes that pertain to pension plans such as IPERS. Defendant specifically cites Iowa Code § 97B.39

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Bluebook (online)
866 F. Supp. 2d 1050, 2012 U.S. Dist. LEXIS 80091, 2012 WL 2086561, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-cunningham-iasd-2012.