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United States v. Gutierrez

United States District Court, W.D. Texas, San Antonio Division

July 18, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
(1) STEVE M. GUTIERREZ III, Defendant.

          Honorable Chief United States District Judge Orlando L. Garcia.

          REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          ELIZABETH S. ("BETS Y") CHESTNEY UNITED STATES MAGISTRATE JUDGE.

         This Report and Recommendation arises out of a writ of garnishment issued by this Court to garnish Defendant's wages from his current employer to satisfy the remaining balance of Defendant's restitution debt stemming from criminal proceedings in the Southern District of Texas. Defendant has filed various exemptions to the writ and a request for a hearing, and the District Court referred this matter to a United States Magistrate Judge for consideration and a hearing, if necessary, and for a report and recommendation thereon [#11]. The undersigned has authority to enter this recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). Having reviewed the various filings and the relevant law, the undersigned concludes that a hearing is not necessary and recommends that the Court deny the requested exemptions.

         I. Procedural Background

         On December 15, 2014, Defendant was sentenced by the Southern District to four years of probation and ordered to pay $33, 166.00 in restitution under the Mandatory Victim Restitution Act (“MVRA”), 18 U.S.C. §§ 3663A-3664, after pleading guilty to threatening communications in violation of 18 U.S.C. § 844(e). (Judgment [#1] at 2-5.) A lien in favor of the United States arose upon Defendant's sentence and was automatically and statutorily imposed on all of Defendant's property for collection of the outstanding restitution. See 18 U.S.C. § 3613(c). As of April 16, 2019, the principal balance of Defendant's restitution debt was $30, 911.00.

         Defendant's criminal case was transferred to this Court on November 13, 2017 for purposes of exercising jurisdiction over Defendant's probation or supervised release. The United States thereafter initiated an enforcement proceeding pursuant to the Federal Debt Collection Practices Act (“FDCPA”), 28 U.S.C. §§ 3001-3308, to collect on Defendant's restitution debt by garnishing Defendant's wages from his employer SNS Erectors, Inc. (“the garnishee”). The District Court granted the application for the writ and ordered it served on the garnishee SNS Erectors [#4]. SNS Erectors filed its answer admitting that Defendant was an employee; that he is paid weekly; that his disposable earnings after withholdings for taxes, child support, and union dues are deducted is $1, 350.53; and that the amount to be garnished from his weekly pay is 25% of this disposable income or $337.63 [#7]. Defendant filed a pro se response contesting the garnishment rate, claiming various statutory exemptions, and requesting a hearing [#9]. The United States filed a reply in opposition [#10], asking the Court to reject Defendant's claimed exemptions without a hearing. For the reasons stated herein, the claimed exemptions should be denied.

         II. Analysis

         The United States may enforce a judgment imposing a criminal fine or restitution order “in accordance with the practices and procedures for the enforcement of a civil judgment under Federal law or State law.” 18 U.S.C. § 3613(a) & (f). One such procedure is a writ of garnishment under the FDCPA, 28 U.S.C. §§ 3001-3308. This statute provides, in pertinent part:

A court may issue a writ of garnishment against property (including nonexempt disposable earnings) in which the debtor has a substantial nonexempt interest and which is in the possession, custody or control of a person other than the debtor, in order to satisfy the judgment against the debtor.

Id. § 3205(a). “Nonexempt disposable earnings” means 25 percent of disposable earnings, subject to section 303 of the Consumer Credit Protection Act. 28 U.S.C.A. § 3002(9).

         Certain property is exempt from garnishment. This includes “property exempt from levy for taxes pursuant to section 6334(a)(1), (2), (3), (4), (5), (6), (7), (8), (10) and (12) of the Internal Revenue Code of 1986.” 18 U.S.C. § 3613(a)(1). The party filing an objection based on one of these statutory exemptions has the burden of proving the grounds for any claimed exemption. 28 U.S.C. § 3205(c)(5); see also United States v. Kemp, No. 3-96-CR-300-P, 2002 WL 31548868 at *2 (N.D. Tex. Nov. 12, 2002). Defendant invokes the statutory exemptions listed at (a)(1), (2), (5), and (8) of the Internal Revenue Code and maintains that 25% garnishment of his wages will cause him a financial hardship. (Claim for Exemption Form [#9] at 2-3.) The sections of the Internal Revenue Code invoked by Defendant provide, in pertinent part:

There shall be exempt from levy:

(1) Wearing apparel and school books.-Such items of wearing apparel and such school books as are necessary for the taxpayer or for members of his family;
(2) Fuel, provisions, furniture, and personal effects.-So much of the fuel, provisions, furniture, and personal effects in the taxpayer's household, and of the arms for personal use, livestock, and poultry of ...

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