United States District Court, M.D. Georgia, Columbus Division
CERTIFIED QUESTION TO THE SUPREME COURT OF
D. LAND CHIEF U.S. DISTRICT COURT JUDGE MIDDLE DISTRICT OF
Georgia garnishment statute was amended during the 2016
session of the General Assembly, apparently in response to a
ruling by United States District Judge Marvin Shoob who held
the Georgia post-judgment garnishment statute, O.C.G.A.
§ 18-4-60 et seq., unconstitutional on due
process grounds. Judge Shoob found that the statute violated
due process because it (1) failed to require notice of
exemptions, (2) failed to inform debtors of procedures for
claiming an exemption, and (3) failed to provide a prompt
procedure for resolving exemption claims. Strickland v.
Alexander (“Strickland I”), 153
F.Supp.3d 1397, 1416 (N.D.Ga. Sept. 8, 2015). Shortly after
entering this order, Judge Shoob limited his holding
“to garnishment actions filed against a financial
institution holding a judgment debtor's property under a
deposit agreement or account.” Strickland v.
Alexander (“Strickland II”), 154
F.Supp.3d 1347, 1351 (N.D Ga. Oct. 5, 2015) (emphasis
omitted). Then, the State of Georgia asked Judge Shoob to
alter his previous rulings and declare that Georgia law
provides timely procedures for debtors to claim exemptions in
post-judgment garnishment actions. He refused. Strickland
v. Alexander (“Strickland III”),
162 F.Supp.3d 1302, 1303 (N.D.Ga. Nov. 10, 2015).
next session of the General Assembly, the Georgia legislature
enacted the new garnishment statute “to modernize,
reorganize, and provide constitutional protections in
garnishment proceedings, ” and “to provide for
procedures only applicable to financial institutions.”
Act of April 12, 2016, 2016 Ga. Laws 8, 8 (codified at
O.C.G.A. § 18-4-1 et seq.) Relevant here, the
Georgia legislature substantially shortened the garnishment
period for garnishments against a “financial
institution.” The former statute provided for a thirty
to forty-five day garnishment period for all
garnishments. The new statute provides that garnishments
against “financial institutions” shall only last
for a five day garnishment period. O.C.G.A. §
18-4-4(c)(2). All other regular garnishments against
nonfinancial institutions have a twenty-nine day garnishment
period. O.C.G.A. § 18-4-4(c)(4). The new statute
provides separate forms for summonses of garnishment against
“financial institutions, ” see O.C.G.A.
§ 18-4-76, and “nonfinancial institutions, ”
see O.C.G.A. § 18-4-74, listing the respective
garnishment periods. The statute became effective May 12,
shortened financial institution garnishment period addresses
the issue raised by Judge Shoob's ruling; it limits the
garnishment period for an account holder's deposit
account at a financial institution. Thus, the account holder
does not have to wait thirty to forty-five days to raise an
exemption. But the statute arguably does more than shorten
the garnishment period for financial institution account
holders. Although Judge Shoob's final order did not apply
to the garnishment of employee wages and earnings, one
interpretation of the amended statute is that the shortened
garnishment period applies to any garnishment action against
a financial institution regardless of whether the garnishment
action is filed to recover from a financial institution's
account holder or a financial institution's employee.
issue of whether the amendments to the Georgia garnishment
statute apply to earnings that a financial institution owes
to an employee or retiree is presented by motions to dismiss
several garnishments pending in this Court. Those motions
maintain that an insurance company is a financial institution
under the new garnishment statute and that the shortened
garnishment period applies to the garnishment of earnings
that a financial institution/insurance company owes to its
employees and retirees, thus prohibiting the garnishment of
such funds for a period beyond five days. Under this
interpretation of the statute, a judgment creditor who seeks
to garnish the earnings of the employee of a financial
institution, including an insurance company, would be
required to file a garnishment action against the employer
every five days.
Georgia courts have not had an opportunity to interpret these
provisions of the new Georgia garnishment statute. Thus,
there is no clear controlling precedent from the Supreme
Court of Georgia on this determinative issue. Because the
resolution of these pending motions to dismiss involves an
issue of first impression under Georgia law, the Court
certifies the following issue to the Supreme Court of Georgia
pursuant to O.C.G.A. § 15-2-9:
Whether an insurance company is a “financial
institution” under the Georgia garnishment statute when
the insurance company is garnished based on earnings that it
owes the defendant as the defendant's former employer.
Harold Blach filed this garnishment action against Garnishee
AFLAC to collect a $158, 343.40 judgment that Blach obtained
against Defendant Sal Diaz-Verson and registered in this
Court. AFLAC is Diaz-Verson's former employer. Based on
this former employment, AFLAC makes bi-monthly payments to
Diaz-Verson. The Court has held that twenty-five percent of
these payments is subject to garnishment. See AFLAC, Inc.
v. Diaz-Verson, No. 4:11-CV-81 (CDL), 2012 WL 1903904,
*7 (M.D. Ga. May 25, 2012). Since December 2015, Blach has
regularly filed summonses of garnishment against AFLAC, and
AFLAC has deposited over $140, 000.00 into the Court's
registry pursuant to the garnishments.
May 12, 2016, the effective date of the new Georgia
garnishment statute, separate forms were available for
garnishments that involved financial institutions and
garnishments that involved nonfinancial institutions. The
non-financial institution forms provided for a twenty-nine
day garnishment period while the financial institution forms
provided for the shortened five day period. After the
effective date for the new statute, Blach used the
“nonfinancial institution” garnishment form.
AFLAC followed the instructions on the form and garnished
payments to Diaz-Verson for twenty-nine, not five, days after
receiving each summons of garnishment.
filed supplemental motions to dismiss all garnishments filed
after May 12, 2016 (ECF Nos. 127, 128, 161, & 165).
Diaz-Verson argues that after this date Blach used the wrong
form for his summonses of garnishment against AFLAC, and
AFLAC garnished payments that it owes Diaz-Verson for a
period that extended beyond the five day garnishment period
authorized under the amendments to the statute. If
Diaz-Verson is correct, a portion of the funds in the
Court's registry must be released to Diaz-Verson.
See O.C.G.A. § 18-4-7(d) (“When a
plaintiff uses the incorrect form for a summons of
garnishment of any type, the garnishment shall not be valid .
. . .”).
Diaz-Verson is not entitled to the funds, Third Party
Claimant Robert Frey claims that he holds a judgment against
Diaz-Verson that is superior to Blach's judgment. He
therefore maintains that he is entitled to the garnished
funds in the Court's registry. But before the Court
decides Blach's and Frey's dueling motions for
disbursement of the funds (ECF Nos. 34, 37, 75, 76, 77, 78,
82, 103, 120, 134, 135, 136, & 154), the Court must
determine whether all garnishments filed after May 12, 2016
must be dismissed and the funds returned to
Diaz-Verson. This determination turns on an issue of
first impression under Georgia law.
argues that all of Blach's garnishments filed after May
12, 2016 must be dismissed and the funds returned to him
because Blach should have used the “financial
institution” garnishment form, providing only a five
day garnishment period. Diaz-Verson's argument depends ...