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Writ of Garnishment

Originally printed in the Dallas Bar Association Headnotes publication by author Peter Chen

Does your company hold a judgment against one of its ex-customers?

If so, Bailey & Galyen can help you collect the judgment in a number of different ways.  One way is through a writ of garnishment.

Pursuant to CPRC §63.001(3), a post-judgment writ of garnishment is available if ”a plaintiff has a valid, subsisting judgment and makes an affidavit stating that, within the plaintiff’s knowledge, the defendant does not possess property in Texas subject to execution sufficient to satisfy the judgment.” In light of what appear to be relatively simple requirements, Texas courts have long held that garnishment is a summary and harsh remedy, requiring strict compliance with the statutory provisions and related rules.

Unlike a writ of execution, a post – judgment writ of garnishment may be applied for and issued immediately after entry of a final judgment. TRCP 657. Thus, post – judgment garnishment actions are often quick-strike opportunities, as a debtor will likely withdraw assets from any suspected target of collection actions. Accordingly, it is vitally important that a post-judgment garnishor gets it right the first time around. The following are five common, though not exclusive, errors to be avoided:

  1. Affidavits that merely regurgitate the statutory language are insufficient. The rules require that the affidavit be either based on personal knowledge, “set[ting] forth such facts as would be admissible in evidence,” or based on information and belief, provided “the grounds of such belief are specifically stated.”
  2. In cases where the underlying judgment is against multiple defendants, an affidavit that addresses only one defendant is insufficient.
  3. A writ of garnishment that does not issue from the court that issued the underlying judgment is defective.  Note that when instituting garnishment proceedings that arise from a judgment rendered in another state, this requirement necessitates domestication of the foreign judgment under the Uniform Enforcement of Foreign Judgments Act, CPRC chapter 35.
  4. A writ served on the garnishee by a private process server cannot be sustained. TRCP 663 makes explicitly clear that only a sheriff or constable may serve the writ of garnishment on the garnishee.
  5. Without service on the debtor, a garnishment cannot be sustained. The rules require that a copy of the writ be served on the judgment debtor ”as soon as practicable following the service of the writ.” Although this rule does not provide an explicit deadline, a 15-day delay before serving the debtor has been held to be too long, according to Texas courts.  In contrast to the requirements for service on the garnishee, the rules allow for service on the debtor as provided in TRCP 21a. And, it is worth noting that ”[a]ctual knowledge or a voluntary appearance by the debtor is insufficient and does not waive rule 663’s requirement of service.”

If you or your company has any “bad debts,” feel free to contact the attorneys at Bailey & Galyen to see if we can help turn those bad debts into good money.

Clearing Your Record

By John Robinson

Anytime a person is arrested and booked into jail, a record is created.  This record quickly proliferates through many databases and is easily accessible to the public. In fact, many counties in the Dallas-Fort Worth area have booking photos of each person arrested available online at no cost.  Even if the case is ultimately dismissed, there is a not guilty finding or community supervision is successfully completed, the stigma of arrest remains for all the public to see.  Further, the reality is that the arrest record alone is effectively as harmful as being found guilty is to most prospective employers.

In Texas there are two main avenues used to limit an arrest and case record from public view: expunction and nondisclosure.  An expunction is the complete erasure of the arrest and case record from government databases and down-line reporting companies. This expunction does not include stories that end up on sites like Yahoo! or Google. For example, even though O.J. Simpson would be eligible for an expunction had his case tried been in Texas, expunction would have been pointless because all the news stories about his case, both online and in print, do not fall under the Texas statute requiring removal of the record.  An expunction is only available if a person is acquitted of the charge, the charge is dismissed (but not dismissed through a deferred adjudication) and the statute of limitations has run out, or the charge was pardoned by the governor’s office.  There are also other factors, such as other felonies, that limit a person’s eligibility for an expunction.

Nondisclosure is a partial erasure of the record.  It prohibits arrest and case information from being made available to the public but allows law enforcement and most state agencies to access it.  Nondisclosure is only applicable to offenses where deferred adjudication community supervision (probation) was granted and the case was dismissed after its successful completion.  After the case is dismissed, there is a five year wait for all felonies and a two-year wait for some misdemeanors, during which time the accused must not have any new convictions or probations, before a nondisclosure can be filed.  Further, certain offenses, for example cases involving family violence, kidnapping or stalking, or cases that require sex offender registration, are not eligible for nondisclosure.  Finally, nondisclosure is discretionary to the court where the original case was filed.  Unlike with expunction where you either qualify or you don’t, there is no right to a nondisclosure.  If the district attorney agrees, most judges will grant the nondisclosure.  If the district attorney doesn’t agree, however, then it is up to the petitioner to prove that it is in the best interests of justice to grant the nondisclosure.

A person’s background check can be the difference between getting a job and not getting a job.  It can affect many other things in one’s daily life.  If you have been arrested for an offense and fall into one of the above categories, you should definitely take action to clear your record.

Arcadia Petroleum Futures Trading Investigation

by John Fabry

Bailey & Galyen is investigating potential claims on behalf of investors in light sweet crude oil futures or options contracts in early 2008. According to a complaint filed by the Commodity Futures Trading Commission (CFTC), traders at Arcadia Petroleum Ltd., a Swiss commodity-trading firm, manipulated the price of oil at America’s central oil hub in Cushing, Oklahoma, in January and February of 2008. The oil traders, Nicholas Wildgoose and James Dyer, are alleged to have entered into forward contracts to buy 4.6 million barrels of oil for physical delivery in February, an amount that represented 66 percent of their beginning-of-month estimate of the total physical Cushing market. Between January 3 and January 16, the pair is alleged to have also bought approximately 13,600 February futures contracts (equivalent to 13.6 million barrels of oil) and sold the same number of March futures contracts. They allegedly did so to manipulate the price of derivatives tied to the value of oil prices at that hub. More specifically, it is alleged that by creating the appearance of temporarily tighter conditions in the physical market, the February futures price would rise relative to the March and the traders would profit as they closed out their futures positions between January 16 and January 22.

If you would like to discuss your rights and interests as an investor, or have information relating to this investigation, please contact John Fabry at Bailey & Galyen’s Houston office at 381-335-7744 or by e-mail at jfabry@galyen.com.

Business Litigation and Corporate Law

By Michael R. Cramer

Did you know that Bailey & Galyen also has a department dedicated to meeting your needs as a business owner? Bailey & Galyen is uniquely positioned to assist any size company, from mom-and-pop businesses to the largest corporation, with its legal issues.

Our firm can assist with your company’s very beginning by advising you of whether you need a partnership, joint venture, corporation, limited liability company (LLC), professional association or any other type of legal entity. Once your company is formed, we can assist in negotiating and drafting your office lease, employment contracts and sales or service contracts to use with your customers. Our firm is also able to collect your past due accounts receivable from your delinquent clients.

Finally, in the unfortunate circumstance that litigation arises, Bailey & Galyen can handle any size lawsuit, from small-claims court cases and evictions to conflicts in Federal District Court. Our firm has defended hundreds of companies and can also file suit on your behalf when someone fails to honor their obligations to you or your company.

If you are even thinking about starting a new business entity in Texas, call any of our 15 offices and speak to an attorney in the Business Litigation and Corporate Law department.

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