Marine Midland Bank v. Surfbelt, Inc., Misc. No. 8536

• Decision Date: 16 February 1982
• Docket Number: Misc. No. 8536,Sur. Civ. A. No. 79-1808.
• Citation: 532 F. Supp. 728
• Parties: MARINE MIDLAND BANK, Plaintiff, v. SURFBELT, INC., Techni/Lease Financial, Inc. and John H. Miller, Defendants, and McKeesport National Bank and Pittsburgh National Bank, Garnishees.
• Court: U.S. District Court — Eastern District of Pennsylvania

532 F. Supp. 728

MARINE MIDLAND BANK, Plaintiff, v. SURFBELT, INC., Techni/Lease Financial, Inc. and John H. Miller, Defendants and McKeesport National Bank and Pittsburgh National Bank, Garnishees.

Misc. No. 8536, Sur. Civ. A. No. 79-1808.

United States District Court, W. D. Pennsylvania.

February 16, 1982.

Robert O. Lampl, Pittsburgh, Pa., for Techni/Lease Financial, Inc. and John H. Miller.

Charles P. Falk, Baskin & Sears, P. C., Pittsburgh, Pa., for Bank.

MEMORANDUM OPINION

TEITELBAUM, District Judge.

Marine Midland Bank (Bank) recovered a judgment against John H. Miller and others and commenced these execution proceedings. The Bank has garnished Miller's IRA account at the McKeesport National Bank. Miller claims this account is exempt from execution under 42 Pa.C.S.A. § 8124(b) (1)(viii). The Bank opposes Miller's claim contending this exemption cannot be asserted in these proceedings and, in the alternative, if the exemption may be claimed, Miller fails to qualify for the exemption.

The Bank first contends this exemption may not be asserted in these proceedings because the underlying guaranty agreement upon which Miller's liability is premised contained a choice of law provision to the effect that the rights and obligations of the parties were governed by New York law and that New York law provides no exemption for individual retirement funds comparable to 42 Pa.C.S.A. § 8124(b)(1)(viii).

As a general rule exemption laws pertain to the remedy only and the law of the forum governs questions of exemption. Chicago, Rock Island, & Pacific Railway Co. v. Sturm, 174 U.S. 710, 19 S.Ct. 797, 43 L.Ed. 1144 (1899); Massachusetts Mutual Life Insurance Co. v. Central-Penn National Bank, 300 F.Supp. 1217 (E.D.Pa.1969); Caddie Homes, Inc. v. Falic, 211 Pa.Super. 333, 235 A.2d 437 (1967). The record before this Court is devoid of any evidence that it was the intent of the parties in choosing New York law for their contract that New York law would also govern questions arising in the satisfaction of a judgment. Therefore this Court concludes Pennsylvania law governs these proceedings.

The Bank next contends Pennsylvania's prior exemption law, which did not exempt individual retirement funds, applies to these proceedings. The amendment adding the exemption in question was enacted April 28, 1978 to be effective June 27, 1978. In the interim between enactment and the effective date the Bank and Miller entered into the guaranty. The Bank contends Miller's exemptions should be determined by reference to the law in effect when the guaranty agreement was executed rather than the law in effect when the exemption was claimed.

Consideration of the nature of exemption law as relating to the remedy as distinct from the underlying obligation and the principle that exemption laws are to be liberally construed to effectuate their beneficent purposes suggests that the date of the claim should determine the law to be applied. However the Bank argues that focusing on the date of the claim would give the new exemption a proscribed retroactive effect undermining the Bank's reliance on law in effect at...