MYRON H. THOMPSON, District Judge.
Relying on diversity-of-citizenship jurisdiction, 28 U.S.C. § 1332, plaintiff Universal Safety Response, Inc. (USR) has filed this lawsuit against defendants Government Technical Services, LLC (GTS), ServisFirst Bank, Inc., Aaron Terry, Joseph Terry, and Michelle Vandergrift, asserting the following claims and theories based on Alabama law: breach of contract, open account, promissory fraud, and equitable lien. This case is now before the court on USR's motion, filed on February 22, 2011, for a pre-hearing writ of seizure pursuant to Federal Rule of Civil Procedure 64 and Alabama Rule of Civil Procedure 64. Upon consideration of the entire record, the court is of the opinion that USR's request for immediate relief should be granted.
When addressing a motion for a writ of seizure, Federal Rule of Civil Procedure 64 directs federal district courts to look to state substantive and procedural law. As a preliminary matter, it is not immediately clear whether USR properly filed a motion for a writ of seizure or whether it should have filed a motion for a writ of attachment, as it seeks only money from defendant GTS and not personal property or chattels. Writs of attachment are subject to the provisions of Rule 64 as well. See Ex parte Boykin, 568 So.2d 1243, 1244 (Ala.Civ.App.1990) ("[W]e also find that Rule 64 of the Alabama Rules of Civil Procedure is applicable to the issuance of prejudgment attachments"). However, the requirements of Ala. R. Civ. P. 64 are superimposed upon the statutory requirements for prejudgment remedies, including those for attachment. Ala. R. Civ. P. 64 committee comments on 1973 adoption; Ex parte Boykin, 568 So.2d at 1244. In Alabama, these requirements include
The money USR seeks is held by ServisFirst Bank in an escrow account. The question for the court, therefore, is whether an escrow account, although consisting of money, is still the type of property that should be subject to a seizure writ. Alabama courts have addressed, in another context, the question of if and when `money' may be treated as `property.' They have held that, while money generally may not be the subject of an action for conversion of property, there is an exception "if the cash at issue is specific money capable of identification." Covington v. Exxon Co., U.S.A., 551 So.2d 935, 938 (Ala.1989) (internal quotation marks and citation omitted). See also U.S. Fidelity and Guaranty Co. v. Bass, 619 F.2d 1057, 1060 (5th Cir.1980).
Here, the federal government deposited payments on a contract with GTS into an escrow account, and that money was then to be disbursed to the entities performing work on the contract, including subcontractors such as USR. The court finds that the money in the escrow account was therefore "specific money capable of identification." Covington, 551 So.2d at 938. As such, the court will treat this money as `property,' and allow USR's motion to be treated as a motion for a writ of seizure as labeled, such that USR need not fulfill the additional statutory requirements for a writ of attachment.
The relevant portion of the Alabama Rules of Civil Procedure governing motions for writ of seizure requires USR to file an affidavit based on personal knowledge setting forth four points of information: (1) a description of the property involved; (2) a statement of USR's title or right to the property; (3) a statement explaining the defendant's alleged wrongful detention of the property; and (4) a statement alleging specific facts in support of the contention, if any, "that there is a risk of concealment, transfer or other disposition of or damage to the property to the injury of the plaintiff." Ala. R. Civ. P. 64(b)(1)(D).
Rule 64(b)(2)(A) then prescribes that, "The court, without delay, shall examine the complaint, the application and supporting affidavit and its attachments and any further showing offered by the plaintiff in support of the plaintiff's right to the immediate possession of the property." The
As required by Rule 64(b)(1), USR has, in support of its motion, filed an affidavit from its Executive Vice President, Wesley Foss. Foss adequately describes the funds to be seized—contract payments made by the federal government "as payment for the work performed under Prime Contract W912DY-05-D-0020, awarded to defendant [Government Technical Services] by the United States Army Engineering and Support Center of the Corps of Engineers to perform various construction work at Fort Rucker." Foss Aff. ¶ 2 (Doc. No. 2-1). Foss also avers that USR is due these funds because it has completed work for GTS as a subcontractor on the W912DY-05-D-0020 contract, but has not received full payment for its work and materials. The complaint and invoices submitted by USR confirm that it has completed work for GTS in the amount of $ 3,194,088.36 and is still owed $ 624,576.81. Foss states that GTS, through ServisFirst Bank, the trustee for the escrow account holding the federal contract funds, has wrongfully detained the monies owed USR.
Finally, and most importantly for the court's consideration of this matter, USR alleges that there is "a risk of concealment, transfer, or other disposition" of the funds, as required by Rule 64. Foss states that, "There is a very real risk that if the funds are distributed to GTS, USR will go unpaid for the material and labor it supplied for the Project." Foss Aff. ¶ 5 (Doc. No. 2-1). To support this contention, he notes that "GTS has repeatedly and falsely represented to USR that it would be paid the outstanding balance for its work." Id. The sum of $ 237,014.00 of the outstanding payments USR claims was invoiced prior to the creation of the escrow account, such that GTS should have already received those funds from the federal government. The remaining $ 387,562.81 owed USR is for labor and materials USR has provided since the escrow account was created. While the escrow account is under the trusteeship of a third party, such that those funds may appear to be more secure, USR alleges that it has received no payments from that account, although it submitted invoices to GTS months ago. It believes those funds are at risk of "concealment, transfer or other disposition" because "USR has no assurance that GST [sic] is providing accurate information or invoices to ServisFirst Bank for proper distribution from the escrow account." Id. Consequently, while GTS is not in direct control of the escrow funds, based on the declaration of Foss, it still has ultimate control over who receives payments from that account and in what amount. GTS has the ability to withhold payments due USR by not submitting invoices to Servis-First, and to choose to pay the monies owing to USR to other subcontractors or to itself. This presents a risk that the money needed to pay USR could be distributed before this case is resolved.
Rule 64(b)(2)(B) further provides that the court shall provide the following language in its seizure order:
This order will therefore include this language.
It is therefore the ORDER, JUDGMENT and DECREE of the court as follows:
DEFENDANTS GOVERNMENT TECHNICAL SERVICES, LLC, SERVISFIRST BANK, INC., AARON TERRY, JOSEPH TERRY, AND MICHELLE VANDERGRIFT ARE "ENTITLED, AS A MATTER OF RIGHT, TO A PRE-JUDGMENT HEARING ON THE ISSUE OF DISSOLUTION OF THE WRIT IF A WRITTEN REQUEST FOR HEARING IS SERVED ON COUNSEL FOR THE PLAINTIFF WITHIN FIVE (5) DAYS FROM THE DATE OF SEIZURE OF