Opinion
Case No. CR-16-075-D
09-18-2019
UNITED STATES OF AMERICA, Plaintiff, v. CODY BOMHAK, Defendant.
REPORT AND RECOMMENDATION
Chief United States District Judge Timothy D. DeGiusti referred Defendant's Claim of Exemption and Request for Hearing [Doc. No. 45] for appropriate action consistent with 28 U.S.C. § 636(b)(3). [Doc. No. 46]. The Government has responded [Doc. No. 47]. Defendant did not file a court-ordered reply. For the reasons set forth below, it is recommended that Defendant's Claim of Exemption and Request for Hearing be STRICKEN. In the alternative, it is recommended that Defendant's Claim of Exemption and Request for Hearing be DENIED. It is further recommended that the Garnishee, Rock Island Credit Union, be ordered to disburse all nonexempt monies and property of Defendant withheld since the date of service of the Writ, and make all future payments and monies withheld under the continuing writ payable to the Clerk of Court, United States District Court for the Western District of Oklahoma, 200 NW Fourth Street, Suite 1210, Oklahoma City, Oklahoma 73102.
I. Procedural History
On July 1, 2019, the Honorable Timothy D. DeGiusti issued a Post-Judgment Continuing Writ of Garnishment to Garnishee, Rock Island Credit Union, against the Defendant, Cody Bomhak. [Doc. No. 42]. Rock Island Credit Union responded on July 15, 2019, stating that it is in the possession, custody, or control of $165.31 in a savings and checking account, of which Defendant has an interest. [Doc. No. 44].
A Claim of Exemption and Request for Hearing was filed on July 25, 2019. [Doc. No. 45]. This court filing was not signed by Defendant, instead it was signed by June Bomhak, who purports to have a power of attorney. Id. at 3. June Bomhak did not provide a return address on the filing.
On July 31, 2019, the Government filed a Brief in Response to the Claim of Exemption and Request for Hearing [Doc. No. 47]. The Government argues that the exemptions relied on by Defendant are not applicable. Id. at 3-4. Specifically, the Government contends that the exclusions apply to personal property or payments which do not apply to the bank account at issue. Id.
On August 13, 2019, the Court entered an order requiring Defendant file a reply in response to the Government's brief by September 3, 2019. [Doc. No. 48]. Defendant did not comply with the Court's order.
II. Analysis
A. June Bomhak Does Not Have Standing to Object on Defendant's Behalf
The Claim of Exemption and Request for Hearing was signed by June Bomhak as "POA." Claim of Exemption 3. It appears the document was completed by Ms. Bomhak as well, as she writes that "Defendant is currently incarcerated at above address, and would recommend any hearing be pre arranged with his counsel or via phone." Id. Ms. Bomhak has not entered an appearance as an attorney in this matter and she does not purport to be a licensed attorney in the court filing.
Ms. Bomhak's attempt to assert an exemption on behalf of Defendant should be stricken because she has "has no standing to represent the defendant in this court proceeding." United States v. Renneisen, No. 07-10180-02-WEB, 2010 WL 1758246, at *2 (D. Kan. Apr. 30, 2010) (where an individual had a power of attorney objected to a garnishment on behalf of the defendant); see also 29 U.S.C. § 1654 ("In all courts of the United States the parties may plead and conduct their own cases personally or by counsel . . . ."). Although Ms. Bomhak appears to assert she has a power of attorney, "such a power may only be exercised in a court proceeding through representation by a licensed attorney." Id.; see also Dorsey v. McKune, No. 07-3204-SAC, 2007 WL 4557677, at *1 (D. Kan. Dec. 20, 2007) ("A power of attorney may not be used to circumvent prohibitions on the unauthorized practice of law."); Kapp v. Booker, No. CIV.A. 05-402-JMH, 2006 WL 385306, at *3 (E.D. Ky. Feb. 16, 2006) ("While the power of attorney gives Ms. Kapp legal standing to assert claims owned by her husband on his behalf, it does not authorize her to practice law by representing another person, her husband, in a lawsuit: that must still be done by a licensed attorney.").
Ms. Bomhak does not attach a power of attorney or describe the breadth of such power.
Because Ms. Bomhak does not have standing to represent Defendant, the Claim of Exemption and Request for Hearing should be stricken.
B. Alternatively, the Claim of Exemption and Request for Hearing Should Be Denied
Even if the Claim of Exemption and Request for Hearing is not stricken, the Court should, in the alternative, deny the request. The Mandatory Victims Restitution Act permits the United States to enforce a judgment imposing a fine against all property or rights to property of the person fined, with certain exceptions. 18 U.S.C. § 3613(a). The Claim for Exemption asserts that the following exemptions from enforcement apply in this case:
• Wearing apparel and school books;
• Fuel, provisions, furniture, and personal effects;
• Books and tools of a trade, business, or profession;
• Unemployment benefits;Claim of Exemption 1-2. These categories of property are exempt from enforcement. See 18 U.S.C. § 3613(a)(1); 26 U.S.C. § 6334(a)(1), (2), (3), (4), (5), (6), (7). The claimed exemptions, however, do not apply to the property the government seeks to enforce the judgment—$165.31 in a Rock Island Credit Union savings and checking account.
• Undelivered mail;
• Certain annuity and pension payments; and
• Workmen's Compensation.
Some categories of exemption claimed are inapplicable because they apply to physical property. The wearing apparel and school books exemption applies to "such items of wearing apparel and such school books as are necessary for the taxpayer or for members of his family." 26 U.S.C. § 6334(a)(1). The fuel, provisions, furniture, and personal effects exemption includes "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 the taxpayer, as does not exceed $6,250 in value." Id. at § 6334(a)(2). The exemption for books and tools of a trade, business, or profession covers "so many of the books and tools necessary for the trade, business, or profession of the taxpayer as do not exceed in the aggregate $3,125 in value." Id. at § 6334(a)(3). Finally, the undelivered mail exemption includes "mail, addressed to any person, which has not been delivered to the addressee." 26 U.S.C. § 6334(a)(5). The money contained in the Rock Island Credit Union is not the type of physical property described by these exemptions, and therefore the exemptions do not apply.
Other exemptions describe amounts "payable," which does not apply to funds in a bank account. The unemployment benefits exemption covers "any amount payable to an individual with respect to his unemployment (including any portion thereof payable with respect to dependents) under an unemployment compensation law of the United States, of any State, or of the District of Columbia or of the Commonwealth of Puerto Rico." 26 U.S.C. § 6334(a)(4). The workmen's compensation exemption covers "any amount payable to an individual as workmen's compensation (including any portion thereof payable with respect to dependents) under a workmen's compensation law of the United States, any State, the District of Columbia, or the Commonwealth of Puerto Rico." 26 U.S.C. § 6334(a)(7). Other district courts have found that amounts "payable" do not apply to funds already in a bank account. See Maehr v. Koskinen, No. 16-CV-00512-PAB-MJW, 2018 WL 1750476, at *5 (D. Colo. Feb. 20, 2018) (finding amounts already paid were not exempted with regard to the service-connected disability payments exemption because it only covered amounts "payable"), report and recommendation adopted, No. 16-CV-00512-PAB-MJW, 2018 WL 1406877 (D. Colo. Mar. 21, 2018); United States v. Coker, 9 F. Supp. 3d 1300, 1302 (S.D. Ala. 2014) (finding workmen's compensation exemption did not apply to funds that were paid in settlement of a worker's compensation claim) Fredyma v. U.S., Dep't of Treasury, No. 96-477-SD, 1998 WL 77993, at *4 (D.N.H. Jan. 9, 1998) (finding the workmen's compensation exemption did not apply to money in a bank account because "payable does not include money that has already been paid"), aff'd sub nom. Fredyma v. Lake Sunapee Bank, 181 F.3d 79 (1st Cir. 1998). The Court finds these decisions persuasive and finds that even if the funds at issue were originally unemployment benefits or workmen's compensation benefits, the funds would have ceased being covered by the exemption once they were deposited into the bank account.
Finally, the annuity and pension payments exemption includes "annuity or pension payments under the Railroad Retirement Act, benefits under the Railroad Unemployment Insurance Act, special pension payments received by a person whose name has been entered on the Army, Navy, Air Force, and Coast Guard Medal of Honor roll (38 U.S.C. 1562), and annuities based on retired or retainer pay under chapter 73 of title 10 of the United States Code." 26 U.S.C. § 6334(a)(6). The exemption is limited to the specific pension plans listed in the statute. See United States v. Schubert, No. CR-05-78-HE, 2006 WL 1804556, at *3 (W.D. Okla. June 28, 2006) ("[T]o the extent said monies and properties might be exempt under state and other federal law as a private employment retirement plan, Congress chose not to exempt said funds from garnishment proceedings to collect federal criminal fines and restitution."). Although it is within the realm of possibility that the bank account contains payments received from the limited sources delineated in the statute, the way the form was completed and Defendant's inaction in responding to the Court's order suggest otherwise. The form contained seven checked boxes—four of which were clearly inapplicable as the funds in a bank account are not physical property. Claim of Exemption 1-2. Further, when ordered to explain in writing regarding the source of funds in his bank account, Defendant failed to do so. As such, the Court finds that Defendant does not qualify for this exemption.
A judgment debtor may object to a garnishment and bears the burden of proving the grounds for objection. 28 U.S.C. § 3205(c)(5). Although the statute contemplates that a hearing be held, a court can deny a hearing when appropriate. See United States v. Cooke, No. 99-CR-50089, 2017 WL 4172630, at *4, n.1 (W.D. La. Aug. 31, 2017) ("The court is not obligated to hold a hearing when there are no potentially valid exemptions or objections raised."), report and recommendation adopted, No. 99-CR-50089, 2017 WL 4171389 (W.D. La. Sept. 19, 2017). Here, it is appropriate to deny Defendant's request for a hearing because of the unlikely nature of any claimed exemption applying to the funds held in the bank account. Further guiding this recommendation is that, the Court ordered Defendant to reply in writing to the Government's objections, in part because a hearing would be logistically challenging because the objection was filed without counsel, the Defendant is incarcerated in another state, and because Defendant failed to file a reply as ordered.
The denial of a hearing request is reviewed for abuse of discretion. See United States v. Wilson, 710 F. App'x 209, 2010 (5th Cir. 2018) (unpublished).
RECOMMENDATION
For the reasons discussed above, it is recommended that Defendant's Claim of Exemption and Request for Hearing [Doc. 45] be STRICKEN. In the alternative, it is recommended that Defendant's Claim of Exemption be DENIED. It is further recommended that the Garnishee, Rock Island Credit Union, be ordered to disburse all nonexempt monies and property of Defendant withheld since the date of service of the Writ, and make all future payments and monies withheld under the continuing writ payable to the Clerk of Court, United States District Court for the Western District of Oklahoma, 200 NW Fourth Street, Suite 1210, Oklahoma City, Oklahoma 73102.
NOTICE OF RIGHT TO OBJECT
The parties are advised of their rights to object to this Report and Recommendation. See 28 U.S.C. § 636. Any objection must be filed with the Clerk of the District Court by October 9, 2019. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(2). Failure to make timely objection to this Report and Recommendation waives the right to appellate review of the factual and legal issues addressed herein. See Moore v. United States, 950 F.2d 656 (10th Cir. 1991).
STATUS OF REFERRAL
This Report and Recommendation terminates the referral by the Chief District Judge in this matter.
ENTERED this 18th day of September, 2019.
/s/_________
BERNARD M. JONES
UNITED STATES MAGISTRATE JUDGE