Court Opinion

ID: 4301556
Source: CourtListenerOpinion
Date Created: 2018-08-07 16:00:34.223446+00
Date Added: 2024-06-11T14:29:00.943096
License: Public Domain

FILED
                                                                        United States Court of Appeals
                                         PUBLISH                                Tenth Circuit

                          UNITED STATES COURT OF APPEALS                      August 7, 2018

                                                                            Elisabeth A. Shumaker
                                 FOR THE TENTH CIRCUIT                          Clerk of Court
                             _________________________________

UNITED STATES OF AMERICA,

       Plaintiff–Appellee,

v.                                                            No. 17-6226

RICKY C. WILLIAMS,

       Defendant–Appellant.

------------------------------

USAA FEDERAL SAVINGS BANK, and
its successors or assigns,

       Garnishee.
                             _________________________________

                         Appeal from the United States District Court
                            for the Western District of Oklahoma
                                (D.C. No. 5:15-CR-00196-M-1)
                           _________________________________

Submitted on the briefs:*

Ricky C. Williams, pro se.

Mark A. Yancey, United States Attorney, and Kay Sewell, Assistant United States
Attorney, Oklahoma City, Oklahoma, for Plaintiff–Appellee.
                      _________________________________

        *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2)(C); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Before PHILLIPS, McKAY, and O’BRIEN, Circuit Judges.
                   _________________________________

McKAY, Circuit Judge.
                        _________________________________

      In February 2016, Defendant Ricky Williams pled guilty to tax fraud relating

to his preparation of federal income-tax returns for third-party clients for the 2010

and 2011 tax years. In his plea agreement, he “agree[d] to pay restitution by making

an immediate payment in full on or before the date set for sentencing” and “agree[d]

to make payments as ordered by the Court” if he lacked the resources to make an

immediate payment in full. (R. Vol. I at 27.) After pleading guilty, he was initially

released on bond pending sentencing. However, his release was revoked after the

court discovered that he had been violating the terms of his release by again engaging

in tax preparation activities for someone other than himself or his spouse. The

probation officer who prepared his Presentence Investigation Report “determined that

the defendant lied about his income, assets, and liabilities” to the probation officer.

(R. Vol. II at 33.) Among other things, the probation officer discovered several

undisclosed financial transactions that Defendant had conducted with someone else’s

social security number; for instance, Defendant opened a credit card account using

another person’s Social Security number in March 2016, shortly after being released

on bond. In discussing Defendant’s dishonest post-plea conduct, the probation

officer noted that Defendant had a bank “account containing approximately $37,000

that had been frozen due to the IRS investigation.” (Id. at 18.) The probation officer

reported that Defendant had contacted the bank about a month after he entered his

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guilty plea and “asked the bank to unfreeze the account by falsely representing to the

bank that he was no longer under investigation.” (Id.) The bank contacted the IRS

and learned that Defendant had pled guilty to the charge. The bank then “advised the

IRS they would keep the account frozen.” (Id.)

       The district court sentenced Defendant to thirty months of imprisonment and

ordered him to pay $240,361 in restitution to the IRS. Defendant was also ordered to

pay a $100 special assessment. The court’s Schedule of Payments provided in

pertinent part:

       A Lump sum payment of $240,461.00 ($240,361.00/restitution;
       $100.00/special assessment) due immediately, balance due . . . in
       accordance with . . . F below . . . .
       F Special instructions regarding the payment of criminal monetary
       penalties:
       If restitution is not paid immediately, the defendant shall make payments of
       10% of the defendant’s quarterly earnings during the term of imprisonment;
       and
       If restitution is not paid in full at the time of release from confinement, the
       defendant shall make payments the greater of $100.00 per month or not less
       than 10% of the defendant’s gross monthly income, as directed by the
       probation officer. . . .
(R. Vol. I at 57.)

       A few months after Defendant’s sentencing, the government filed an

application for post-judgment writ of garnishment against the frozen bank account.

The bank objected on the grounds that the account was subject to “a prior internal

USAA Federal Savings Bank hold from its Fraud Department for the amount of

$37,542.02.” (Id. at 66.) The bank stated: “This account has been under this hold

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from May 29, 2012 and continues at the present time. Therefore, it is not subject to

this garnishment.” (Id.)

      The magistrate judge concluded that there was no need to address the bank’s

objection because the government could not seek garnishment in any event;

according to the magistrate judge’s interpretation of the Schedule of Payments, if

Defendant did not immediately pay restitution, then the government could not collect

any restitution above the 10% of quarterly earnings provided for in the Schedule.

The magistrate judge thus recommended denial of the government’s application for

garnishment.

      The district court declined to accept the magistrate judge’s recommendation.

The court held that because its sentencing order made a lump-sum payment of the

total amount “due immediately,” “the total amount of restitution is currently due and

. . . the government can enforce the restitution order by way of the instant application

for post-judgment writ of garnishment.” (Id. at 132.) For support, the district court

cited to United States v. Behrens, 656 F. App’x 789, 790 (8th Cir. 2016), and United

States v. Shusterman, 331 F. App’x 994, 996–97 (3d Cir. 2009), both of which held

that a payment schedule set forth in the judgment did not preclude garnishment as an

additional means to collect the restitution judgment where the judgment specified

that the amount owed was due in full immediately. The court thus granted the

government’s application for a writ of garnishment. In so doing, the district court did

not address the bank’s objection to the writ of garnishment. Defendant then filed this

appeal.

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       As the magistrate judge’s and district court’s contrasting holdings show, the

restitution order in this case is subject to two different interpretations. First, the

order could be interpreted as the magistrate judge interpreted it, with the schedule of

payments in Provision F effectively and impliedly modifying Provision A’s

requirement of an immediate lump-sum payment of $240,461, making this provision

null and void if it was not immediately and fully complied with. Second, the order

could be interpreted as the district court interpreted it, with the schedule of payments

in Provision F providing a back-up schedule for the payment of whatever amounts

are not paid in accordance with Provision A, but with Provision A’s requirement of

immediate payment of the total sum of restitution remaining in effect and controlling

to the extent that funds are available to satisfy this payment requirement.

       “We give deference to the district court’s interpretation of its own order.”

Auto-Owners Ins. Co. v. Summit Park Townhome Ass’n, 886 F.3d 863, 872 (10th Cir.

2018). We are persuaded that the district court’s interpretation of its own prior

restitution order in this case is reasonable, and we accordingly defer to this

interpretation. Therefore, like the district court, we interpret the restitution order to

mean that the total amount of restitution remains currently due under Provision A,

with Provision F providing only a secondary, back-up system for payments that

cannot be made now in accordance with Provision A.

       Under this interpretation of the restitution order, we see no error in the court’s

conclusion that the government was entitled to garnish Defendant’s bank account to

obtain partial payment of the amount currently due in restitution. Garnishment is

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improper where the government is seeking payment of an amount that is not currently

due. In United States v. Martinez, for instance, we held that the government could

not garnish a defendant’s retirement accounts to “enforce payments that are not yet

due under [the defendant’s] court-ordered payment schedule.” 812 F.3d 1200, 1201

(10th Cir. 2015). But the reason the payments were not yet due in that case is that

the district court had expressly declined to make the total amount of restitution due in

full immediately, but had instead only required “$300 immediately,” with the

“balance due” in accordance with the schedule of payments. Id. at 1203–04. Courts

have almost uniformly recognized a “crucial distinction” between cases like

Martinez, in which the court orders the defendant to pay only through a payment

schedule with no requirement of immediate payment in full, and cases like Behrens

and Shusterman, in which the judgment specifies that the amount owed is due in full

on the date of judgment, regardless of whether the judgment includes a back-up

schedule of payments to cover any unpaid amounts. See United States v. Daniels,

2017 WL 1538457, at *3 (N.D. Okla. 2017); see also, e.g., United States v. Kay,

2017 WL 875784 (D. Minn. 2017); but see United States v. Villongco, 2016 WL
3747508 (D.D.C. 2016). Defendant’s “debt is payable in full now, as [he] agreed.”

United States v. Fariduddin, 469 F.3d 1111, 1113 (7th Cir. 2006).

      We agree with the courts that have recognized this distinction and thus

AFFIRM the district court’s conclusion that the government may seek garnishment

of Defendant’s bank account because the total amount of restitution was ordered “due

immediately” at the time of judgment. We note, however, that the district court

                                           6
failed to consider the bank’s objection to the writ of garnishment, and we suggest that

the district court address the bank’s objection before ordering the release of funds to

the government.

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