Source: https://casetext.com/case/hoult-v-hoult-5
Timestamp: 2019-03-27 01:13:30
Document Index: 680713991

Matched Legal Cases: ['§ 407', '§ 3924', '§ 3924', '§ 1292', '§ 28', '§ 1056', '§ 1056', '§ 1056', '§ 1135', '§ 901', '§ 1056', '§ 231', '§ 231']

Hoult v. Hoult, 373 F.3d 47 | Casetext
373 F.3d 47 (1st Cir. 2004)
Houltv.Hoult
United States Court of Appeals, First CircuitJun 22, 2004
Jordan L. Shapiro, with whom Edward J. Collins, Eric L. Shwartz, and Shapiro Hender were on brief, for appellant.
Laura D'Amato, with whom Adrienne M. Markham, Kevin P. O'Flaherty, Pamela L. Signorello, Ellen C. Meyer, and Goulston Storrs, P.C. were on brief, for appellee.
On July 1, 1993, a federal jury in the district of Massachusetts awarded Jennifer Hoult a $500,000 verdict against her father, David Hoult, for sexually abusing her throughout her childhood. The verdict was affirmed on appeal in Hoult v. Hoult, 57 F.3d 1, 2 (1st Cir. 1995). This case arises from Jennifer's attempt to collect on that judgment, which, almost eleven years later, has still not been paid in full.
On September 7, 1994, Jennifer filed a supplemental complaint against David and his wife for fraudulent conveyance and civil contempt. A five-day bench trial was held on the fraudulent conveyance claims in January 1996.
The court deferred its consideration of the contempt count to a later date and eventually dismissed it.
In November 1996, before judgment had entered in the fraudulent conveyance trial, Jennifer learned that David had retired from his position as a senior research associate at the Massachusetts Institute of Technology (MIT) and had begun receiving approximately $4,800 in ERISA pension benefits from MIT each month. On January 27, 1997, she moved to modify the August 4, 1993 preliminary injunction to require, inter alia, that David deposit his monthly ERISA pension check in a designated bank account and limit his withdrawals from that account to $1,700 per month (which, according to his testimony in the fraudulent conveyance trial, was the amount that he contributed each month to his and his wife's living expenses). Her motion did not mention social security benefits. The district court said that it would allow the motion and requested Jennifer's counsel to file a proposed form of order.
Starting in April 1994, the court had garnished a portion of David's wages each month to pay the judgment, but those payments stopped when David retired in the fall of 1996.
On May 13, 2002, the court entered its findings of fact and conclusions of law as to the fraudulent conveyance claims, finding that David had fraudulently conveyed over $130,000 in assets. Two weeks later, on May 30, 2002, the court inserted the following language into the August 4, 1993 preliminary injunction:
The court entered final judgment to this effect on March 24, 2003.
3. David Hoult shall provide Plaintiff's attorney . . . with (i) the name of the bank and the account number of the Account; (ii) a copy of each check or receipt which documents monies or income he receives; and (iii) a copy of the monthly statement of activity (the "Monthly Statement") relative to the Account.
David did not appeal the May 30 order. Initially, he simply refused to comply with the order and was held in contempt. After he began to comply on July 3, 2002, the court purged him of that contempt. Then, on July 20, 2002, twenty days after the time for filing an interlocutory appeal from the May 30 order had expired, see Fed.R.App.P. 4(a)(1)(A), David filed a motion with the district court to strike social security and ERISA pension benefits from the order. In that motion, he stated, "The instant motion is directed only to social security and pension benefits. Defendant recognizes that the [May 30 order] remains effective with respect to all other `monies, income or funds' he receives from any other source." As to his ERISA benefits, David reiterated his earlier arguments under Florida law and under ERISA's anti-alienation provision. He also argued that, as written, the order violated the anti-alienation provision of the Social Security Act, which provides that "none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law." 42 U.S.C. § 407(a). This was the first time the issue of social security benefits was argued to the court.
David also raised a new argument that Jennifer had taken the position before the bankruptcy court that his ERISA benefits should be excluded from his estate based on ERISA's anti-alienation provision and, hence, that she should be judicially estopped from seeking the order at issue in this case. David's counsel stated in oral argument before us that he has abandoned this argument on appeal.
David does not appeal from the issuance of the May 30, 2002 order but instead from the denial of his motion to strike ERISA and social security benefits from that order. We review the denial of a motion to modify a preliminary injunction for abuse of discretion. See Pub. Serv. Co. of N.H. v. Patch, 202 F.3d 29, 32 (1st Cir. 2000); 16 Wright, Miller Cooper, Federal Practice Procedure § 3924.2 (West 1996). Under that standard, pure issues of law are reviewed de novo, findings of fact for clear error, and judgment calls with considerable deference. See Nieves Marquez v. Puerto Rico, 353 F.3d 108, 120 (1st Cir. 2004).
David argues that the May 30 order is effectively an attempt to execute on the judgment and that, on his reading of Fed.R.Civ.P. 69(a), a writ of execution is required. Fed.R.Civ.P. 4.1 requires such writs to be served within the territorial limits of the state in which the district court sits (here, Massachusetts). David claims that he is a Florida resident and that the district court in Massachusetts therefore does not have authority to execute the judgment against him.
Rule 69(a) provides that "[p]rocess to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise." David argues that the exception for situations in which "the court directs otherwise" applies only when execution is an inadequate remedy and says that no such showing has been made here.
This argument comes too late. On appeal from the denial of a motion to modify an injunction, "review does not extend to the propriety of the original order." 16 Federal Practice Procedure § 3924.2; see also Lichtenberg v. Besicorp Group, Inc., 204 F.3d 397, 401 (2d Cir. 2000). This argument is an attack on the district court's authority to issue the May 30 order (and, indeed, on its power to issue the original August 4, 1993 order), not the court's refusal to strike ERISA and social security benefits from that order. Accordingly, it is beyond the scope of our review. If David wished to make such a challenge, he should have appealed directly from the May 30 order within the thirty-day appeals period. See 28 U.S.C. § 1292(a)(1) (interlocutory appeals may be taken from preliminary injunctions); Fed.R.App.P. 4(a)(1)(A) (allowing thirty days from the entry of the order to file an appeal).
We turn to the court's refusal to strike ERISA benefits from the order. We first clear away the issue of whether state law presents any barrier to the May 30 order. The parties dispute whether the order was issued under Fed.R.Civ.P. 69 (post-judgment executions) or Fed.R.Civ.P. 64 (pre-judgment orders). Under either rule, the order must comport with the law of the state in which the district court is held (here, Massachusetts), except that any federal statute governs to the extent applicable.
David argues that Florida law exempts pension money from all claims of creditors and from all legal process, citing Fla. Stat. chs. 222.21(2)(a), 222.14. But under both Rule 64 and Rule 69, the relevant law is that of Massachusetts, not that of Florida.
David raises a belated argument that the order violates Massachusetts law, which requires that "amounts held by a trustee for a defendant in a pension shall be reserved in the hands of the trustee and shall be exempt from attachment." Mass. Gen. L. ch. 246, § 28 (defining "pension" as including all ERISA pensions). This argument has been waived, as it was made for the first time in David's reply brief. Andresen v. Diorio, 349 F.3d 8, 13 (1st Cir. 2003). Moreover, even were it not waived, the argument fails on the merits. Section 28 is not applicable because the order does not affect amounts held in trust for David by a third-party; the order directs David himself to deposit pension funds in the designated bank account after those funds reach his hands.
Four of the five courts of appeals to consider the question have construed § 1056(d)(1) as applying to benefits only while held by the plan administrator and not after they reach the hands of the beneficiary. Wright v. Riveland, 219 F.3d 905, 919-21 (9th Cir. 2000); Robbins v. DeBuono, 218 F.3d 197, 203 (2d Cir. 2000); Guidry v. Sheet Metal Workers Nat'l Pension Fund, 39 F.3d 1078, 1081-83 (10th Cir. 1994) (en banc); Trucking Employees of North Jersey Welfare Fund, Inc. v. Colville, 16 F.3d 52, 54-56 (3d Cir. 1994). One court has held that § 1056(d)(1) bars alienation of benefits after distribution to the beneficiary if those benefits are post-retirement annuity payments (but not if they are pre-retirement lump sum payments). United States v. Smith, 47 F.3d 681, 682-84 (4th Cir. 1995). We join the majority view.
The regulations promulgated by the Secretary of Treasury, who has the authority to implement § 1056(d) of ERISA, further reinforce our interpretation. Those regulations, which are entitled to deference under Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), define the terms "assignment" and "alienation" to cover:
Congress originally delegated this power to the Secretary of Labor. 29 U.S.C. § 1135 (1974). In 1978, President Carter, pursuant to the Reorganization Act of 1977, 5 U.S.C. §§ 901-12, transferred that authority to the Treasury Secretary, Reorganization Plan No. 4 of 1978, reprinted in 1978 U.S.C.C.A.N. 9814, 9815, and Congress ratified that transfer in 1984, Pub.L. No. 98-532, 98 Stat. 2705 (1984). The Supreme Court has recognized the Treasury regulations as the "applicable administrative regulations" for § 1056(d). Guidry v. Sheet Metal Workers Nat'l Pension Fund, 493 U.S. 365, 371-72, 110 S.Ct. 680, 107 L.Ed.2d 782 (1990).
45 U.S.C. § 231m(a) (emphasis added). In concluding that Congress intended § 231m to reach benefits after distribution, the Supreme Court emphasized the fact that the statute was written broadly to prohibit creditors from subjecting the annuity to any "legal process under any circumstances whatsoever." Hisquierdo, 439 U.S. at 586, 99 S.Ct. 802. No similarly sweeping language exists in ERISA's anti-alienation provision.
Indeed, since Hisquierdo, the Supreme Court has expressly reserved judgment on whether ERISA benefits may be alienated after distribution, see Boggs v. Boggs, 520 U.S. 833, 845, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997), suggesting that the Court itself does not view Hisquierdo as controlling on that issue.
Wash. State Dep't of Soc. Health Servs. v. Estate of Keffeler, 537 U.S. 371, 385, 123 S.Ct. 1017, 154 L.Ed.2d 972 (2003). The question whether the May 30 order "passes control" over David's social security check to the court is a difficult one.