Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_03-cv-02390/USCOURTS-azd-2_03-cv-02390-9/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:77 Securities Fraud

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UNITED STATES DISTRICT COURT 

DISTRICT OF ARIZONA 

Lawrence J. Warfield, as Receiver,

Judgment Creditor,

vs.

Michael Alaniz; Charles Davis; et al.,

Judgment Debtors,

No. CV-03-2390-PHX-JAT (LOA)

REPORT AND RECOMMENDATION

Midland National Life Insurance Co.,

Garnishee.

This matter arises on Judgment-Creditor Lawrence J. Warfield's Amended

Application for Judgment on Garnishment and Notice of Lodging Proposed Judgment on

Garnishment, filed on December 18, 2007. (docket # 825) Judgment-Creditor Warfield

seeks entry of Judgment against Garnishee Midland National Life Insurance Co. in the

sum of $1,439.53 of non-earnings purportedly belonging to Judgment-Debtor Charles

Davis. The Hon. James A. Teilborg, the assigned District Judge, broadly referred this

case to the undersigned “to resolve any issues regarding the writs of garnishment in this

matter.” (docket # 761 and # 785)

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A review of the file indicates that on July 26, 2007, Amended Judgment

was entered against Judgment-Debtor Charles Davis and “in favor of the Receiver,

Lawrence J. Warfield, in the amount of the highest verdict, $109,900, plus post-judgment

interest from February 28, 2007 at the rate of 5.05% per annum, together with costs taxed

by the Clerk and prejudgment interest of $39,305.” (docket # 624 at 2) Although a

Notice of Appeal has been filed by, among others, Judgment-Debtor Charles Davis and

the appeal is pending before the Ninth Circuit, no supersedeas bond has been posted

and/or order entered staying execution of the Amended Judgment upon the property of

Judgment-Debtor Charles Davis. (docket # 588) 

On August 19, 2007, Judgment-Creditor Warfield requested a writ of

garnishment against Garnishee Midland National Life Insurance Co., alleging, inter alia,

“the Garnishee is believed to be an employer of the Judgment-Debtor [Charles Davis] or

otherwise owes or will owe to the Judgment-Debtor disposable earnings.” (docket # 654 at

¶ 4) This writ indicates that the total amount due to Judgment-Creditor Warfield from

Judgment-Debtor Charles Davis as of August 20, 2007 is $174,652.17. (Id. at 2) 

On December 18, 2007, Judgment-Creditor Warfield filed the subject

Amended Application, seeking a Judgment on Garnishment for non-earnings against

Garnishee Midland National Life Insurance Co. stating Judgment-Creditor Warfield

mailed, among other pleadings, the Garnishee’s Answer to the Judgment-Debtor and

Judgment-Creditor. (docket #820 at d) The filed but unverified Answer of Garnishee

Midland National Life Insurance Co. attaches Garnishee’s Nonexempt Earnings Statement

indicating, inter alia, that at the time the writ was served, Garnishee was indebted to “the

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1The Garnishee’s Answer does not specifically identify the “judgment debtor” but the

December 18, 2007 Proposed Judgment on Garnishment indicates the judgment-debtor is

Defendant Charles Davis. (docket # 825 at 5)

2 Rule 69(a), FED.R.CIV.P., provides in relevant part: 

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judgment debtor”1 in the total sum of $1,439.53 [for non-earnings] and that copies of the

Garnishee’s Answer, Nonexempt Earnings Statement, Request for Hearing on Nonexempt

Earnings Statement, Writ of Garnishment and Summons, Application for Writ of

Garnishment, underlying Judgment, Taxation of Costs Order were mailed to JudgmentDebtor Charles Davis on November 16, 2007. (Id. at 1-3)

Further, Judgment Creditor’s Amended Application for Judgment on

Garnishment (docket #825) states at least ten days has passed since the Garnishee’s

Answer was filed and Judgment-Creditor has not yet received an objection to the Answer. 

Accordingly, Judgment-Creditor requests the Court to enter a Judgment on Garnishment. 

A copy of the proposed Judgment on Garnishment is attached to Judgment-Creditor’s

Amended Application as Exhibit 1.

On December 20, 2007, Judgment-Creditor Lawrence J. Warfield filed a

Certificate of Mailing, docket #826, indicating that on December 20, 2007 a true and

correct copy of the Amended Application for Judgment on Garnishment and Notice of

Lodging Proposed Judgment on Garnishment, dated December 18, 2007, was mailed to

Judgment-Debtor Charles Davis.

Generally, a federal writ of garnishment is governed by the law of the state

in which the district court sits. Fed.Rule Civ.P. 69(a)2

; Hilao v. Estate of Marcos, 95 F.3d

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 In General. Process to enforce a judgment for the payment of money shall

be a writ of execution, unless the court directs otherwise. The procedure on

execution, in proceedings supplementary to and in aid of a judgment, and in

proceedings on and in aid of execution shall be in accordance with the

practice and procedure of the state in which the district court is held,

existing at the time the remedy is sought,. . . . (emphasis added).

3 In 1985, Arizona’s post-judgment garnishment procedures were held unconstitutional

in Neeley v. Century Fin. Co., 606 F.Supp. 1453, 1469-70 (D. Ariz. 1985). In 1986, the

Arizona legislature extensively amended §§ 12-1571 et seq. and added new provisions

governing the garnishment of earnings. A.R.S. §§ 12-1598 et seq.; Frazer, Ryan, Goldberg

Keyt & Lawless v. Smith, 184 Ariz. 181, 183, 907 P.2d 1384, 1386 (Ariz. App. 1995).

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848 (9th Cir. 1996). Arizona’s statutory scheme regarding garnishment of non-earnings

and garnishment of earnings are located at Arizona Revised Statutes (“A.R.S.”) §§ 12-

1571-1597 and §§ 1598-1598.17.3

 Under Arizona law, “garnishment reaches only debts

existing at the time of the service of the writ.” Reeb v. Interchange Resources, Inc. of

Phoenix, 106 Ariz. 458, 478 P.2d 82, 83 (Ariz. 1970). “[I]t is well settled in Arizona that

the rights of a garnishor-creditor to assets in the hands of a garnishee are no greater than

rights of the defendant-debtor to those assets.” Mid-State Electric Supply Co. v. Arizona

Title Insurance & Trust Co., 123 Ariz. 130, 598 P.2d 108, 110 (Ariz. App. Ct. 1979)

(citing Ellery v. Cumming, 40 Ariz. 512, 14 P.2d 709 (Ariz. 1932)). 

Under Arizona law, a “party who has an objection to the writ of garnishment

[of non-earnings], the answer of the garnishee or the amount held by the garnishee or a

party claiming an exemption from garnishment” may file a “written objection and request

a hearing” “not later than ten days after receipt of the answer.” A.R.S. § 12-1580(A);

12-1598.07(A) for earnings. “One purpose of [such a] hearing is to determine whether the

garnishee was indebted to the judgment debtor when the writ was served.” Able

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Distributing Co., Inc. v. James Lampe, General Contractor, 160 Ariz. 399, 403, 773 P.2d

504, 508 (Ariz. App. Ct. 1989). If the answer of the garnishee “shows that the garnishee

was indebted to the judgment debtor at the time of service of the writ, and no objection to

the writ or answer is timely filed, on application by the judgment creditor the court shall

enter judgment on the writ against the garnishee for the amount of the nonexempt monies

of the judgment debtor owed or held by the garnishee at the time of service of the writ.”

A.R.S. § 12- 1584(B). Under Arizona’s garnishment statute, a presumption exists “that a

document has been received five days after it is mailed.” A.R.S. § 12- 1597(A).

The Court finds that Judgment-Creditor Warfield has properly complied with

Arizona’s garnishment statutes regarding the subject Writ of Garnishment for nonearnings. Judgment-Debtor Charles Davis presumptively received notice of the Writ of

Garnishment and the Application for Judgment on Garnishment as Judgment Debtor

Davis’ counsel was also endorsed on the District Court’s filings. A.R.S. § 12- 1597(A). 

Moreover, the Court finds that such notice is “reasonably calculated under all the

circumstances to apprise [Judgment-Debtor Charles Davis] of the pendency of the

[garnishment] action and afford [him] an opportunity to present [his] objections.” 

Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1 (1978); Mullane v. Central

Hanover Trust Co., 339 U.S. 306, 314 (1950). Judgment-Debtor Charles Davis has not

filed an objection to this writ of garnishment or Application for Judgment on Garnishment,

much less a timely one. The undersigned recommends that Judgment-Creditor Warfield’s 

/ / /

/ / /

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Application for Judgment on Garnishment be granted and that the proposed Judgment on

Garnishment be signed and entered by the Hon. James A. Teilborg, the assigned District

Judge.

In accordance with the foregoing,

IT IS HEREBY RECOMMENDED that Judgment-Creditor Warfield’s

Amended Application for Judgment on Garnishment, docket # 825, against Garnishee

Midland National Life Insurance Co. be GRANTED.

IT IS FURTHER RECOMMENDED that the Hon. James A. Teilborg sign

and enter the proposed Judgment on Garnishment against Garnishee Midland National

Life Insurance Co. in the total sum of $1,439.53.

This recommendation is not an order that is immediately appealable to the

Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal

Rules of Appellate Procedure, should not be filed until entry of the District Court’s

judgment. The parties shall have ten (10) days from the date of service of a copy of this

recommendation within which to file specific written objections with the Court. 28 U.S.C.

' 636(b)(1); Rules 72, 6(a) and (e), Federal Rules of Civil Procedure. Thereafter, the

parties have ten (10) days within which to file a response to the objections. Failure to

timely file objections to this Magistrate Judge’s Report and Recommendation may result

in the acceptance of this Report and Recommendation by the assigned District Judge

without further review. United States v. Reyna- Tapia, 328 F.3d 1114, 1121 (9th Cir.

2003); Thomas v. Arn, 474 U.S. 140, 149 (1985) (district courts are not required to conduct “any

review at all . . . of any issue that is not the subject of an objection.”). Failure to timely file

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objections to any factual determinations of this Magistrate Judge will be considered a

waiver of a party’s right to appellate review of the findings of fact in an order or judgment

entered pursuant to the Magistrate Judge’s recommendation. Rule 72, Federal Rules of

Civil Procedure.

DATED this 25th day of January, 2008.

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