Gilyard v. White

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
VALRICA GILYARD,
Plaintiff,
v.
WILLIAM DOUGLAS WHITE,
Defendant.
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Misc. No. 07-20001
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION AND ORDER RE WRIT OF ATTACHMENT
This addresses a writ of garnishment on funds held by the
trustee in a chapter 7 case in this court, In re Russell C.
Hughes, Case No. 07-20001.
I
In 2005, Russell C. Hughes, as debtor, commenced Case No.
05-00276 by filing a voluntary petition under chapter 11 of the
Bankruptcy Code, but the case was later converted to a case under
chapter 7 of the Bankruptcy Code. 	William Douglas White was
appointed the chapter 7 trustee. 	White has sold various
properties in this case in which both Russell C. Hughes and his
wife, Marie Hughes, had an interest.
The Memorandum Decision and Order below is hereby
signed. Daed: October 3, 2008.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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1 	No signed request for issuance of the Writ is in the
court’s file.
2
White has reported to the court that Valrica Gilyard has
recovered a judgment against Marie Hughes in some other court.
Someone (presumably Gilyard’s attorney) 1 filed with the clerk on
February 22, 2007, a proposed Writ of Attachment On Judgment
Other Than On Wages, Salary and Commissions Owed by an Employer
(the “Writ”). 	The Writ bore Case No. 05-00276 (but listed as the
debtor Marie Hughes instead of Russell C. Hughes), and was
directed to William Douglas White as garnishee. 	The Writ recites
that a judgment against Marie Hughes was entered in favor of
Valrica Gilyard on May 24, 1996, in the amount of $325,000.00,
and directed White to answer attached interrogatories regarding
any amounts he owed to Marie Hughes and any property held by him
belonging to Marie Hughes. 	No such judgment was ever entered
against Marie Hughes in In re Russell C. Hughes, Case No. 05-
00276, and no such judgment has ever been registered in this
court pursuant to 28 U.S.C. § 1963. 	Accordingly, there was no
judgment pending in this court pursuant to which a writ could be
issued.
The clerk’s office docketed the Writ as Miscellaneous
Proceeding No. 07-20001, and on the docket assigned it a caption
of Valrica Gilyard, Plaintiff v. William Douglas White, Defendant
even though the Writ itself bore no such caption. 	The Writ was
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3
never signed by the clerk, and thus was a nullity.
Nevertheless, on March 6, 2007, White filed answers to the
interrogatories that had been attached to the Writ. 	There the
matter sat until, recently, more than a year later, an attorney
inquired of the clerk whether the parties needed to do anything
on the matter.
II
Because the Writ is a nullity, and cannot properly be issued
by the clerk, I will direct that this miscellaneous proceeding be
closed, and the Writ will be dismissed.
III
Additionally, the Writ provided that if Gilyard, as the
judgment creditor, failed to file a motion for judgment:
• 	within 28 days after you have timely filed and
served answers to the interrogatories; or
• 	within such later time as may be authorized by the
court upon a motion made within the applicable
period
then the garnishment and attachment shall stand dismissed,
within 28 days after answers to interrogatories were
filed,unless a judgment has already been entered within the
time provided above.
For this additional reason, the Writ must be dismissed, as
Gilyard never filed a motion for entry of a judgment.
IV
To the extent that Gilyard had recorded her judgment, so
that it became a lien upon any real properties owned by Marie
Hughes, that lien may have attached to the proceeds of sales of
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2 	If Gilyard’s judgment was entered in a jurisdiction
other than the District of Columbia, it might be necessary for
Gilyard to first register her judgment in the District of
Columbia before she could serve a writ of garnishment on the
trustee. 	See In re Infiltrator Systems, Inc., 251 B.R. 773
(Bankr. D. Conn. 2000).
4
property in which Marie Hughes had an interest. 	The trustee
contends that this would not be the case if the property was held
by Marie Hughes and Russell C. Hughes as tenants by the entirety,
but if he has any uncertainty in that regard, he could file an
interpleader action against Gilyard and Marie Hughes to obtain a
ruling from the court as to the proper recipient of any proceeds
in which Marie Hughes has an interest.
If Gilyard’s judgment never attached as a lien upon
properties in which Marie Hughes has an interest, Gilyard would
be entitled under non-bankruptcy law to execute by way of a writ
of garnishment to reach any proceeds of sales of properties in
which Marie Hughes has an interest. 2 	By having answered the
interrogatories served with the Writ, White does not appear to
view a writ of garnishment as creating problems for him as
trustee, but he might not react the same way to a writ issued by
the Superior Court of the District of Columbia. 	The modern trend
is to permit a judgment lien creditor to execute upon trustees in
bankruptcy with respect to amounts owed to a creditor of the
estate. 	Brickell v. Dunn (In re Brickell), 2005 WL 1684935 (11th
Cir. July 20, 2005), aff’g 292 B.R. 705 (Bankr. S.D. Fla. 	2003)
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3 	Similarly, numerous decisions uphold the effectiveness of
the Internal Revenue Service’s serving a levy on a trustee
holding amounts owed to a delinquent taxpayer who is a creditor
of the estate or otherwise owed amounts by the trustee. 	See Beam
v. IRS (In re Beam), 192 F.3d 941 (9th Cir. 1999); United States
v. Ruff, 99 F.3d 1559 (11th Cir. 1996); United States v. Hemmen,
51 F.3d 883 (9th Cir. 1995); B & G Ltd. v. Levin (In re Meter
Maid Indus., Inc.), 462 F.2d 436 (5th Cir. 1972) (Bankruptcy Act
case); In re Quakertown Shopping Center, Inc., 366 F.2d 95 (3d
Cir. 1966) (Bankruptcy Act case).
4 	The trustee might seek to have the court decree that
permission to serve a writ does not include permitting
proceedings in the Superior Court to enforce the writ, and
staying such enforcement, unless otherwise ordered by this court.
That would permit Gilyard to obtain a garnishment lien, but would
permit the trustee to decide where to litigate any dispute
between Gilyard and Marie Hughes as to who is entitled to the
funds.
5
(permitting post-judgment garnishment by a judgment creditor of a
claimant entitled to a distribution of estate funds). 3 	Here, the
funds in which Marie Hughes has an interest are not even estate
funds, and so this is an even stronger case for permitting her
creditors to execute on the trustee. 	But Gilyard’s safer course
would be to obtain White’s consent ahead of time to being served
with a writ of garnishment from the Superior Court or to file a
motion with this court permitting her to serve a Superior Court
writ of garnishment on the trustee. 4
Once such a writ is served, White could file an action in
this court (assuming it has jurisdiction) to determine the entity
entitled to the funds or file an interpleader action in a
tribunal of appropriate jurisdiction to obtain an adjudication of
the entity entitled to the funds, and to wash himself of any
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6	O:\TEEL\Judge Temp Docs\Hughes (In re R.) - Gilyard Writ Served on White.wpd
further responsibility regarding the funds. 	One might think that
this court would have subject matter jurisdiction over such an
action as it goes to the issue of administering the res in the
trustee’s hands-–whether the owner be the estate, the debtor, or
someone else--but some decisions suggest otherwise. 	See Menotte
v. United States (In re Garcia), 2002 WL 31409580 (S.D. Fla.
Sept. 6, 2002) (bankruptcy court lacked jurisdiction to
adjudicate whether debtor or IRS that levied on trustee for taxes
owed by debtor was entitled to funds exempted by the debtor and
held by the trustee), citing In re Wesche, 178 B.R. 542 (Bankr.
M.D. Fla. 1995); In re Graziadei, 32 F.3d 1408 (9th Cir. 1994);
Novak v. O'Neal, 201 F.2d 227, 231 (5th Cir. 1953) (Bankruptcy
Act). 	But see 	Ralph Brubaker, On the Nature of Federal
Bankruptcy Jurisdiction: A General Statutory and Constitutional
Theory, 41 Wm. & Mary L. Rev. 743, 892-903 (2000) (criticizing
such decisions).
V
Based on the foregoing, it is
ORDERED that the writ filed in this Miscellaneous Proceeding
is stricken and dismissed without prejudice, and this
Miscellaneous Proceeding is closed.
[Signed and dated above.]
Copies to: Debtor; William Douglas White, Esq.; Richard Gins,
Esq.; Benjamin Saulter, Esq.; Office of United States Trustee;
and Marie Hughes, 1420 Madison Street, NW, Washington, DC 20011.
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