United States District Court, M.D. Georgia, Columbus Division
D. LAND CHIEF U.S. DISTRICT COURT JUDGE.
Harold Blach holds a $158, 343.40 Alabama judgment against
Defendant Sal Diaz-Verson. Garnishee AFLAC is
Diaz-Verson's former employer. AFLAC makes bimonthly
payments to Diaz-Verson, twenty-five percent of which is
subject to garnishment. On October 6, 2015, Blach registered
his judgment in this Court and began filing garnishment
actions against AFLAC to collect on the judgment. AFLAC has
deposited over $150, 000.00 into the Court's registry
pursuant to the garnishments. Third Party Claimant Robert
Frey claims that he holds a $219, 982.78 judgment against
Diaz-Verson that is superior to Blach's judgment. Blach
and Frey filed dueling motions for disbursement of the
garnished funds (ECF Nos. 34, 37, 75, 76, 77, 78, 82, 103,
120, 134, 135, 136, 154, & 175).At the hearing on those
motions, Diaz-Verson claimed that he is entitled to have all
funds garnished pursuant to garnishments filed after May 12,
2016 returned to him because Blach failed to meet the
requirements in the new Georgia garnishment statute for
garnishments against a “financial institution.”
See O.C.G.A. § 18-4-4. The Court certified that
question to the Supreme Court of Georgia pursuant to O.C.G.A.
§ 15-2-9 (ECF No. 174). The Court cannot grant
Blach's or Frey's motions for disbursement as to
garnishments filed after May 12, 2016 until the Georgia
Supreme Court responds to the certified question.
pendency of this certified question, however, does not affect
the disbursement of funds garnished pursuant to garnishments
filed before May 12, 2016. And the Court has previously
rejected Diaz-Verson's objections to garnishments filed
before May 12, 2016. Thus, the issue of whether Frey or Blach
is entitled to disbursement of the funds deposited into the
registry of the Court pursuant to pre-May 12, 2016
garnishments is ripe for decision. Consequently, the Court
grants Frey's motion asking the Court to make that
determination now (ECF No. 177).
Court understands how the arrangement between Diaz-Verson and
his former counsel, Frey, regarding the use of a partially
satisfied judgment to secure a debt for attorney's fees
could raise suspicion. But legal decisions cannot be based on
suspicion. Based on the present record, the Court finds that
Frey holds a legitimate, unsatisfied judgment against
Diaz-Verson that is superior to Blach's judgment. Frey is
therefore entitled to disbursement of the funds garnished
pursuant to garnishments filed before May 12, 2016, and his
motions are granted as to those funds. Frey's motions for
disbursement remain pending as to garnishments filed after
May 12, 2016 (ECF Nos. 37, 75, 76, 77, 78, 82, 134, 135, 136,
142, 154, & 175). As of the January 18, 2017 hearing in
this case, the unpaid balance of Frey's judgment plus
interest was $299, 354.69. Frey Aff. at 2 (Jan. 2, 2017), ECF
funds in the Court's registry do not satisfy the full
amount of Frey's judgment, and Blach cannot collect on
his judgment until Frey's judgment is satisfied. Thus,
regardless of the pendency of the certified question to the
Supreme Court of Georgia, Blach is not entitled to any of the
funds in the Court's registry at this time. Accordingly,
the Court denies Blach's motions for disbursement in full
(ECF Nos. 34, 120, & 138).
the Court denies Diaz-Verson's motion to stay all
garnishments until the Supreme Court of Georgia responds to
the certified question (ECF No. 178). The Court may consider
whether disbursement pursuant to today's Order should be
stayed if any party files a notice of appeal challenging
following facts are relevant to whether Frey holds a
legitimate judgment against Diaz-Verson.
Diaz-Verson's former attorney. He represented Diaz-Verson
in various matters between 2009 and 2014, including
Diaz-Verson's disputes with non-party Porter Bridge Loan
Company (“Porter Bridge”). In 2009, Porter Bridge
obtained a $397, 386.87 Florida judgment against Diaz-Verson.
Frey's Third Party Claim ¶ 1, ECF No. 32. Porter
Bridge domesticated the judgment in Georgia on June 23, 2010,
id., and filed several state court garnishment
actions against the same bimonthly AFLAC payments at issue in
this case. Frey represented Diaz-Verson in the domestication
and garnishment actions. Frey also unsuccessfully defended
Diaz-Verson in a declaratory judgment/interpleader action in
this Court. In that case, this Court held that twenty-five
percent of each AFLAC payment is subject to garnishment.
AFLAC v. Diaz-Verson, No. 4-11-CV-81 (CDL), 2012 WL
1903904, at *6-*7 (M.D. Ga. May 25, 2012).
hired additional counsel and appealed. While the appeal was
pending, Diaz-Verson and Porter Bridge mediated and settled
the case in a Confidential Settlement Agreement. The
Agreement provided that Diaz-Verson would pay Porter Bridge
$275, 000.00 and dismiss his appeal. Confidential Settlement
Agreement ¶ 4, ECF No. 59 (“Agreement”). It
also provided that Porter Bridge would:
[F]orever discharge Diaz-Verson . . . of and from all manner
of actions, causes of action, suits at law or equity,
asserted or unasserted claims, future claims which may
hereafter arise, judgments, costs, demands, damages, debts,
attorneys' fees, liens, losses, injuries, or any
liabilities or obligations whatsoever . . . that Porter
Bridge ever had, are now existing or that Porter Bridge may
hereafter have against Diaz-Verson . . . that arise, grow out
of, relate to or are in any way whatsoever incident to or
connected with the Florida Action, [and] the Florida Judgment
. . . .
Id. ¶ 1. Porter Bridge also promised that:
Within five (5) business days of the receipt of the
Settlement Amount, Porter Bridge shall transfer and assign
Robert J. Frey, Esq. the Florida Judgment . . . .
Id. ¶ 5.
paid Porter Bridge $275, 000.00, and Porter Bridge assigned
the Florida judgment to Frey. Def.'s Mot. to Dismiss Ex.
16, Assignment of J., ECF No. 5-17. On February 11, 2013,
Frey recorded the assignment. Id. At the time of the
settlement, Diaz-Verson owed Frey $361, 433.93 in legal fees.
Frey's Reply Ex. 1, Billing Records, ECF No. 35-1. The
judgment was meant to secure Frey's right to collect
$219, 982.78 of the unpaid legal fees-the balance of the
judgment after Diaz-Verson paid $275, 000.00 to Porter
Bridge. Pl.'s Renewed Mot. for Disbursement
Ex. 1, Frey Aff. at 2 (Feb. 19, 2016), ECF No. 34-2. This
left $141, 451.15 of Frey's unpaid legal fees unsecured.
Additionally, after the assignment, Diaz-Verson incurred
another $20, 569.00 in unsecured debt to Frey. Id.
has never sued Diaz-Verson to recover the unsecured legal
fees. Nor did Frey seek to garnish Diaz-Verson's payments
to satisfy the Florida judgment until Blach filed a
garnishment action against AFLAC. Prior to Blach's
garnishments, Frey allowed Diaz-Verson to make
“unstructured, ” voluntary payments “from
time to time” to pay off his debt. Frey Aff. at 2 (Feb.
19, 2016). Frey applied the voluntary payments against the
balance of unsecured legal fees before applying any payments
against the Florida judgment. The payments have not satisfied
the amount of unsecured legal fees, and therefore, the
balance of the Florida judgment remains unsatisfied.
Blach began filing garnishment actions against AFLAC,
Diaz-Verson's disposable earnings decreased, and he
became unable to make voluntary payments to Frey.
Id. In order to protect his right to collect his
judgment, Frey intervened in this action, claiming that his
judgment against Diaz-Verson is superior to ...