Marisco garnishment of ASG funds not a done deal yet
The federal court in Honolulu has scheduled for tomorrow, a status conference hearing on American Samoa Government’s objections to the disbursement of more than $800,000 held in an ASG bank account with the Bank of Hawai’i. The garnishment is to pay for a judgement in favor of Honolulu-based shipyard Marisco Ltd.
The hearing before US District Court Judge Leslie E. Kobayashi, is requested by ASG, and follows a court order on June 13 granting Marisco’s request for a Writ of Execution against ASG, who was ordered to pay “$811,631.87, plus interest on that amount at the rate of .43% per year — not compounded — from Sept. 1, 2009 until paid, plus cost of $12,439.28.”
Marisco sued ASG over the defendant’s failure to pay $832,671 in services, repairs and modifications to the tug boat Sailele, as well as services provided for two ASG barges.
Last Monday, Bank of Hawai’i filed its response saying that it has $824,166 in an ASG account held by the bank — which is considered as the garnishee in this case. The bank also stated that a charge of $95 has been assessed for service of legal process, leaving a balance of $824,071.15.
Last Tuesday, Marisco filed a motion with the federal court seeking an order for direct disbursement of these funds at Bank of Hawai’i to the plaintiff.
But on Thursday, SG filed an opposition motion to the disbursement of funds from “garnishee Bank of Hawai’i”
“Such a request is probably valid as against an individual or a corporation. Marisco’s request here, however, involves a governmental entity,” ASG’s defense team pointed out. “As a result, there are numerous legal issues which arise.”
ASG argued that Marisco does not address any of these issues and does not provide any legal authority in support of its request. “At the very least, Marisco should be required to demonstrate to the court its request is legal and permissible.”
The defense’s argument notes in part that there are laws governing the garnishment of ASG funds and points to local law (ASCA ) 43.1803: “[t]he government, and any other public bodies or agencies shall not be garnished without the prior approval of the Governor.”
ASG also cited a provision of a local court ruling which states in part that the Legislature itself has expressly prohibited the attachment of ASG property, which is “generally not amenable to writs of garnishment or attachment.”
According to the defense, American Samoa courts have held that seizing ASG’s money or other property held by a third party is essentially garnishment and is not permitted without the Governor’s approval. ASG also provided for the federal court another provision of local law, that states that appropriation of ASG funds must be approved by the Fono and the Fono shall have full authority and control the request, approval, and disbursement of funds in its budget.
ASG also revealed that it has filed an application for a Temporary Restraining Order and Preliminary Injunction in the High Court of American Samoa against Bank of Hawaii in American Samoa, to prevent the bank from releasing any funds.
“At the very least, there is a conflict of law issue here which has not been addressed by Marisco,” said ASG. (The High Court has scheduled an order to show cause hearing for July 5).
ASG further argued there is also a potential jurisdictional question, saying the bank account that Marisco seeks to garnish is held by Bank of Hawaii in American Samoa. It cites a federal court case which states in part that “bank accounts are domiciled at the location of the creditor only.”
“This means the ASG’s bank account is domiciled in American Samoa,” said ASG. “Marisco has not provided any authority to indicate the United States District Court for the District of Hawaii has jurisdiction over a Bank of Hawaii account domiciled in American Samoa,” said ASG.
ASG’s final argument is that the bank account which Marisco seeks to garnish is a general account which includes, among other things, funds from the U.S. Department of Interior (USDOI) “The funds from the USDOI come with restrictions and limitations on what they can be used for,” said ASG.
Attached to the ASG motion is an affidavit by Matthew Grady, the Comptroller for ASG Department of Treasury, who states that the account Marisco seeks to garnish contains grant monies from USDOI. He explained that these DOI grant monies “are subject to various restrictions and can only be used for limited purposes.”