Ruby v. Ryan

          ORDER ADOPTING IN PART REPORT AND RECOMMENDATION DENYING MOTION FOR ORDER DETERMINING CLAIM OF EXEMPTION AND MOTION TO QUASH GARNISHMENT [ECF NO. 33.] [ECF NO. 17.]

          Hon. Gonzalo P. Curiel United States District Judge

         INTRODUCTION

         On August 12, 2013, the United States District Court for the Eastern District of Virginia entered a default judgment in favor of David Ruby (“Plaintiff” or “Judgment Creditor”), Chapter 7 Trustee, in the amount of $34, 093.08 against Helen Ryan and John Ryan, Jr. (“Judgment Debtors”), jointly and severally, and in the amount of $318, 431.23 against Helen E. Ryan, individually. (ECF No. 1 at 1-2; ECF No. 2 at 1; see also ECF No. 27 at 1.) On September 16, 2015, Judgment Debtor registered the judgment in this district and subsequently sought to execute on the judgment. (ECF Nos. 1, 6, 7, 8, 9.) On November 3, 2015, Helen Ryan and Mykal Ryan, acting as Special Administrator for the Estate of John Ryan (“Mykal Ryan, Special Administrator”), proceeding pro se, submitted a claim of exemption. (ECF No. 17-2, Ex. 2 at 2-3.) On November 5, 2015, Helen Ryan and Mykal Ryan, Special Administrator, filed a Motion to Quash Garnishment/Execution and Claim Exemption (“Motion to Quash”). (ECF No. 17.) On March 21, 2016, the Magistrate Judge filed a Report and Recommendation denying relief sought by Judgment Debtors. (ECF No. 33.)

         Upon review of the moving papers, the Magistrate Judge’s Report and Recommendation, the papers filed in response to the Report and Recommendation, and the applicable law, this Court ADOPTS in part the recommendation of the Magistrate Judge and DENIES Helen Ryan’s claim of exemption, (ECF No. 17-2, Ex. 2 at 3), DENIES Mykal Ryan, Special Administrator’s, Motion to Quash, and GRANTS in part and DENIES in part Helen Ryan’s Motion to Quash. (ECF No. 17).

         PROCEDURAL HISTORY

         I. Writ of Execution Against Judgment Debtors Helen Ryan and John Ryan

         On September 29, 2015, and October 2, 2015, Judgment Creditor requested abstracts of judgment, which the Court subsequently entered against Judgment Debtors. (ECF Nos. 4, 5, 8, 9.) On September 29, 2015, and October 2, 2015, Judgment Creditor filed writs of execution against Judgment Debtor Helen Ryan. (ECF Nos. 3, 7.) On October 28, 2015, Judgment Creditor filed a notice of levy for “[a]ll bank accounts owned by Helen E. Ryan and/or John J. Ryan, Jr.” (ECF No. 17-2, Ex. 1 at 2.)

         On November 3, 2015, Helen Ryan and Mykal Ryan, Special Administrator, proceeding pro se, submitted a claim of exemption. (ECF No. 17-2, Ex. 2 at 2-3.) On November 4, 2015, U.S. Bank levied $99, 622.73, as well as a $100.00 garnishment fee, from Helen Ryan’s U.S. Bank account ending in 4226 (“U.S. Bank account x4226”). (ECF No. 25; ECF No. 27, Ex. 4 at 50; see also id., Ex. 4, Decl. of Helen Ryan I at 8-10; id., Ex. 5, Decl. of Helen Ryan II at 53.) On November 5, 2015, Mykal Ryan, Special Administrator, and Helen Ryan filed a Motion to Quash. (ECF No. 17.) On November 9, 2015, Helen Ryan submitted an amended claim of exemption. (ECF No. 27, Ex. 5.)

         On November 16, 2015, Judgment Creditor filed a “Response in Opposition Re: Objection to Claim of Exemption, ” (ECF No. 21), and on November 17, 2015, a “Response in Opposition Re: Motion to Quash Garnishment/Execution, ” (ECF No. 23). On November 20, 2015, Judgment Creditor filed a “Memorandum of Points and Authorities in Opposition to Claim of Exemption Re: U.S. Bank Funds.” (ECF No. 26.) On November 30, 2015, Helen Ryan filed a “Reply in Response to the Motion to Quash; Opposition to Garnishment of Money from Other than the Judgment Debtor.” (ECF No. 27.) On December 4, 2015, a “Memorandum of Garnishee” was filed with this Court, detailing that “no funds were available” in the levied Bank of America account, Helen Ryan’s Bank of America account ending in x0912 (“Bank of America account x0912”). (ECF No. 30.) On February 5, 2016, Helen Ryan filed an “Opposition to Garnishment of Money from Other than the Judgment Debtor.” (ECF No. 32.)

         On March 21, 2016, the Magistrate Judge filed a Report and Recommendation denying relief sought by Judgment Debtors. (ECF No. 33.) The Magistrate Judge recommends that this Court enter an Order: (1) approving and adopting the Report and Recommendation; and (2) denying the movants’ requests to (a) release the funds levied from Helen Ryan’s U.S. Bank account x4226; (b) reimburse the $100.00 garnishment fee to Helen Ryan’s U.S. Bank account x4226; and (c) quash Judgment Creditor’s garnishment actions against Helen Ryan and the Estate of John Ryan. (Id. at 20.)

         On May 27, 2016, now with counsel, Helen Ryan filed an Objection to Report and Recommendation. (ECF No. 38.) Mykal Ryan, Special Administrator, did not file an Objection. In her Objection, Helen Ryan objects to two specific actions: (1) she contends that “allowing [Judgment Creditor] to retain the funds levied from [U.S Bank account] ¶ 4226 would improperly allow Judgment Creditor a greater right to the property than Judgment Debtor”; and (2) that “the funds in Helen Ryan’s Bank of America [] account x0912 have been and will remain exempt from creditors.” (Id. at 4-5.)

         On that same day, May 27, 2016, Mykal Ryan, now with counsel, filed a Third Party Motion for a Third Party Claim of Exemption (“Third Party Motion”) as to funds levied from U.S. Bank account x4226. (ECF No. 39.) Mykal Ryan’s Third Party Motion endeavors to correct the deficiencies noted by the Magistrate Judge in Helen Ryan’s improper claim of exemption regarding U.S. Bank account x4226.

         The Magistrate Judge recommends that this Court deny Judgment Debtor Helen Ryan’s claim of exemption regarding U.S. Bank account x4226 because it constitutes an improper third party claim.^[1] Helen Ryan asserts that “[a]ll the money deposited” to U.S. Bank account x4226 “belongs to [] Mykal (aka) Michael Ryan, ” “the judgment is not against Mykal, ” and “[a]ll the deposits were federal benefits paid to Mykal.” (ECF No. 27, Ex. 5 at 54; see also Id. at 52.)

         Because Judgment Debtors concede that Helen Ryan’s claim of exemption is improper, demonstrated by Mykal Ryan’s filing of a Third Party Claim of Exemption concerning the same account (U.S. Bank account x4226), the Court ADOPTS the Magistrate Judge’s Report and Recommendation denying Helen Ryan’s claim ...