Lanier Collection Agency & Service, Inc. v. Mackey, MOR-WOO

• Court: Supreme Court of Georgia
• Writing for the Court: HUNT
• Citation: 256 Ga. 499,350 S.E.2d 439
• Parties: , 8 Employee Benefits Cas. 1925 LANIER COLLECTION AGENCY & SERVICE, INC. v. MACKEY.v. SAVANNAH BANK AND TRUST COMPANY.
• Docket Number: Nos. 43435,43466,MOR-WOO,INC,s. 43435
• Decision Date: 02 December 1986

Page 439

350 S.E.2d 439 256 Ga. 499, 8 Employee Benefits Cas. 1925 LANIER COLLECTION AGENCY & SERVICE, INC.
v.
MACKEY.
MOR-WOOD, INC.
v.
SAVANNAH BANK AND TRUST COMPANY. Nos. 43435, 43466. Supreme Court of Georgia. Dec. 2, 1986.

Page 440

[256 Ga. 502] Carl S. Pedigo, Jr., David H. Johnson, McCorkle, Pedigo & Hunter, Savannah, for Lanier Collection Agency & Service, Inc.

Charles R. Goldburg, New York City, Louisa Abbot, Farrington & Abbot, Savannah, for John H. Mackey.

Ronald C. Crawford, Savannah, for Mor-Wood, Inc.

John H. MacLean, Marvin A. Fentress, Savannah, for Savannah Bank and Trust Co.

[256 Ga. 499] HUNT, Justice.

We granted certiorari in two cases to consider the issue of federal preemption of a state garnishment law by the Employee Retirement Act of 1974 (ERISA). In the unreported case of Mor-wood v. Savannah Bank & Trust Co., (Case No. 71977, decided April 7, 1986), the Court of Appeals held that an Individual Retirement Account (IRA) was not subject to garnishment under either ERISA, 29 U.S.C.A., § 1001 et seq., or the Georgia law, OCGA § 18-4-22.1, while in Mackey v. Lanier Collection Agency & Services, Inc., 178 Ga.App. 467, 343 S.E.2d 492 (1986), it held that a longshoremen's employee vacation and holiday fund, although garnishable under ERISA, was not so under Georgia law. Both garnishors appeal.

OCGA § 18-4-22.1 provides: "Funds or benefits of a pension, retirement, or employee benefit plan or program subject to the provisions of the Federal Employees Retirement Act of 1974, as amended, shall not be subject to the process of garnishment (1) until such funds or benefits are currently due and payable or transferable to a member of such plan or program or to a beneficiary thereof and (2) unless such garnishment is based upon a judgment for alimony or child support, in which event such funds or benefits shall then be subject to the process of garnishment to the extent provided in subsection (d) of Code Section 18-4-20." (Emphasis supplied.) Thus, our state statute clearly exempts all ERISA funds and benefits from garnishment except for alimony or child support judgments.

Under ERISA provisions, "employee pension benefit plans"--i.e., those providing income deferral or retirement income, 29 U.S.C.A. § [256 Ga. 500] 1002(2)(A)--are specifically protected from garnishment except for alimony and child support. 29 U.S.C.A. § 1056(d). However, "employee welfare

Page 441

benefit plans"--i.e., those providing medical; sickness, accident and disability; death or unemployment; vacation training, day care, scholarship, or prepaid legal services benefits, 29 U.S.C.A. § 1002(1)--are not protected. 29 U.S.C.A. § 1051(1).

1. As pointed out by the Court of Appeals in Mor-wood, supra, both federal and state law protect a retirement plan from garnishment except for alimony and child support. Mor-wood seeks to reach funds in an IRA and urges us to distinguish between the corpus and the benefits in making the corpus reachable by garnishment. Both the federal and state law clearly protect these funds as well as the benefits. Citizens Bank of Ashburn v. Shingler, 173 Ga.App. 511, 326 S.E.2d 861 (1985). See Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 101 S.Ct. 1895, 68 L.Ed.2d 402 (1981). Therefore, the Court of Appeals correctly affirmed the judgment of the trial court disallowing garnishment in Case No. 43466.

2. Case No. 43435, however, presents a more difficult proposition. Here Lanier seeks to reach its debtor's interest in a longshoremen's vacation and holiday fund, of which Mackey is the trustee. While this fund is subject to garnishment under ERISA, it is nevertheless protected by the Georgia statute.

On its face, OCGA § 18-4-22.1, quoted above, makes no distinction between types of benefit plans. It unambiguously states that "funds or benefits of a pension, retirement or employee benefit plan or program" under ERISA shall not be subject to garnishment. ¹ Therefore, we must conclude that OCGA § 18-4-22.1 purports to protect such funds from garnishment (except as provided otherwise in the statute).

3. The issue then, as Lanier...