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FIRST VIRGINIA BANK v. RANDOLPH

March 28, 1996

FIRST VIRGINIA BANK, Plaintiff,
v.
VERA RANDOLPH, and UNITED STATE OF AMERICA, DEPARTMENT OF STATE, Defendants.



The opinion of the court was delivered by: FRIEDMAN

MEMORANDUM OPINION

 This collection action began in 1982 in the Superior Court of the District of Columbia, where First Virginia Bank obtained a judgment for a commercial debt against Vera Randolph, an employee of the Department of State. At the time, the wages of federal employees were not subject to garnishment for commercial debts. First Virginia made several attempts to execute on the judgment obtained against Ms. Randolph, but was only able to recover a portion of the debt.

 In another attempt to recover the debt from Ms. Randolph, First Virginia revived the judgment by an Order of Revival entered by the Superior Court on February 14, 1994, pursuant to the Hatch Act Reform Amendments of 1993, 5 U.S.C. § 5520a. The Hatch Act Reform Amendments for the first time permitted creditors to obtain garnishment of the wages of federal employees for commercial debts. With the revived judgment in hand, First Virginia filed a Writ of Attachment on the federal government to act as garnishee, and the Department of State began garnishing Ms. Randolph's wages on or about April 1, 1994. First Virginia began to receive bi-weekly payments from the federal government in the amount of $ 200.83.

 On or about November 21, 1994, the federal government received notice from Ms. Randolph that she had filed a Motion to Quash the garnishment of her wages. In response, the Department of State terminated the garnishment by ceasing to withhold sums from Ms. Randolph's wages and halting the biweekly payments to First Virginia. First Virginia Bank received its last payment on December 27, 1994, at which time $ 4,368.25 plus interest remained outstanding on Ms. Randolph's debt.

 Ms. Randolph retired from the Department of State on December 30, 1994. On January 19, 1995, she received a final paycheck for her last forty hours of work, her unused annual leave and an early-out bonus, totaling $ 17,563.50. After that payment, the federal government no longer held any funds belonging to Ms. Randolph and no longer owed her any money. On April 28, 1995, First Virginia filed a Motion for Judgment of Recovery against the government, seeking a portion of the final payment it already had made to Ms. Randolph.

 Subsequent to Ms. Randolph's retirement and the filing of the motion for judgment of recovery against the federal government, Ms. Randolph's Motion to Quash the garnishment was denied as moot. Superior Court Judge Ellen Huvelle reasoned that since Ms. Randolph was retired and the government no longer held any funds owed to her, the Writ of Attachment was no longer in effect. On May 15, 1995, the federal government removed the action for Judgment of Recovery from the Superior Court of the District of Columbia to this Court. *fn1"

 The government filed a motion to dismiss this action pursuant to Rules 12(b)(1) and (6), Fed. R. Civ. P., or, in the alternative, for summary judgment pursuant to Rule 56, Fed. R. Civ. P. First Virginia opposed the government's motion and filed a cross motion for summary judgment. *fn2" The Court grants plaintiff's cross-motion for summary judgment and denies defendant's motion for summary judgment.

 DISCUSSION

 The Hatch Act Reform Amendments of 1993, 5 U.S.C. § 5520a, for the first time, allowed the garnishing of the wages of federal employees to satisfy commercial debts. *fn3" Under the Hatch Act Reform Amendments, state or local law controls the garnishment of wages. 5 U.S.C. § 5520a(a)(3).

 The parties disagree on both the meaning of District of Columbia garnishment law and the meaning of the Hatch Act Reform Amendments. The government argues that when an employer is given notice of a motion to quash a garnishment, District of Columbia garnishment law does not require an employer to continue to withhold sums from its employee's paycheck. Thus, it contends, the employer cannot be held liable for failing to withhold those wages. The government also insists that, even if it has misinterpreted District of Columbia law and a private employer in the District of Columbia would be held liable in such circumstances, the Hatch Act Reform Amendments do not waive sovereign immunity with respect to such claims.

 First Virginia argues that District of Columbia garnishment law requires an employer to continue to withhold percentages from its employee's wages until any pending motion to quash the garnishment is resolved. Thus, the failure to withhold such sums is a breach of a statutory obligation and renders the employer liable for the amount it wrongly failed to withhold. Further, First Virginia claims that the federal government is not exempt from liability since the Hatch Act Reform Amendments provide that the federal government is subject to legal process in the same manner and "to the same extent as if the agency were a private [employer]." 5 U.S.C. § 5520(a)b.

 The resolution of this dispute turns on two questions. First, whether District of Columbia law imposes on a private employer a continuing duty to withhold the appropriate percentages from an employee's garnished wages, notwithstanding notice of a Motion to Quash the garnishment, and, if so, the extent of its liability for failing to withhold the proper amount. Second, assuming such a continuing duty, whether the government has waived sovereign immunity with respect to claims against it for failure to withhold the specified amount.

 A. The Duty to Withhold Wages

 Under District of Columbia law, an employer upon whom a writ of attachment is served shall "withhold and pay " to the judgment creditor the percentages to which it is entitled until the "attachment is wholly satisfied." D.C. Code § 16-573(a) (emphasis added). The next subsection of the Code provides that:

 
upon written notice of any court proceeding attacking the attachment or the judgment on which it is based, the employer shall make no further payments to the judgment creditor or his legal representative until receipt of an order of court terminating the proceedings; except that, in the case of child support judgments, the employer shall continue to withhold the ...

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