SYED BASHIR AHMED SHAH, an individual, Plaintiff/Judgment Creditor/Appellant,
ABDUL J. BALOCH aka ZAHID BHURGI, an individual, Defendant/Judgment Debtor/Appellee, WELLS FARGO BANK, N.A., Garnishee/Appellee.
from the Superior Court in Maricopa County No. CV2010-013396
The Honorable Michael L. Barth, Judge Pro Tempore
Windtberg & Zdancewicz, PLC, Tempe By Michael J.
Zdancewicz, Marc Windtberg Counsel for Plaintiff/Judgment
Collins Law Firm, PLLC, Mesa By Ernest Collins, Jr. Counsel
for Defendant/Judgment Debtor/Appellee
& Wilmer, LLP, Phoenix By Rebekah Elliott, Carlie Tovrea
Counsel for Garnishee/Appellee
Presiding Judge Diane M. Johnsen delivered the opinion of the
Court, in which Judge Margaret H. Downie and Judge John C.
Gemmill joined. 
Syed Bashir Ahmed Shah appeals the superior court's order
quashing garnishment of funds Shah alleges a debtor
fraudulently transferred into a retirement plan. Because
Shah's claim does not fall within the limited exceptions
to the federal law barring recovery from a qualified
retirement plan, we affirm.
AND PROCEDURAL BACKGROUND
Shah sued Abdul J. Baloch for breach of contract and fraud
and obtained a judgment in 2009 for $411, 505. Attempting to
collect on the judgment, Shah served a writ of garnishment on
Wells Fargo Bank, N.A., as the trustee of Baloch's 401(k)
account. According to the record, Baloch's
401(k) account balance is nearly $50, 000; Shah alleged
Baloch fraudulently transferred several thousand dollars into
the account after entry of Shah's judgment against him.
Wells Fargo objected to the garnishment and the superior
court quashed the writ, finding the funds in Baloch's
401(k) account exempt from garnishment under the Employee
Retirement Income Security Act ("ERISA").
Shah timely appealed the superior court's order. We have
jurisdiction pursuant to Article 6, Section 9, of the Arizona
Constitution and Arizona Revised Statutes
("A.R.S.") sections 12-2101(A)(4) and (5)(c) (2017)
and 12-120.21(A) (2017).
Under Arizona's version of the Uniform Fraudulent
Transfer Act, a creditor may garnish a transfer made with
"actual intent to hinder, delay or defraud" the
creditor. A.R.S. §§ 44-1004(A) (2017), -1007(A)(1)
(2017); see Sackin v. Kersting, 105 Ariz. 464, 465
(1970). Baloch, however, argues state law prohibits a
judgment creditor from executing on or attaching a judgment
debtor's retirement account. See A.R.S. §
33-1126(B) (2017) (exempting from attachment "money or
other assets payable to a participant in or beneficiary of,
or any interest of any participant or beneficiary in, a
retirement plan [qualified under federal law]"). But
with few exceptions, none of which apply here, ERISA preempts
state laws that "relate to any employee benefit
plan." 29 U.S.C. § 1144(a) (2017). Thus, ERISA
preempts A.R.S. § 33-1126(B) as applied to a qualified
pension plan. In re Hirsch, 98 B.R. 1, 2 (Bankr. D.
Ariz. 1988) ("A.R.S. § 33-1126(B) would undoubtedly
be pre-empted in a state court proceeding wherein creditors
seek to enforce their claims against an ERISA pension
plan."), aff'd sub nom In re Siegel, 105
B.R. 556 (D. Ariz. 1989); see Mackey v. Lanier Collection
Agency & Serv., Inc., 486 U.S. 825, 829-30 (1988)
(state garnishment provision pertaining to employee pension
plan preempted by ERISA).
ERISA grants comprehensive protections to qualified pension
plan participants and beneficiaries. At issue in this case is a
rule that, to qualify, a pension plan must "provide that
benefits provided under the plan may not be assigned or
alienated." 29 U.S.C. § 1056(d)(1) (2017). The
corresponding Treasury Regulation defines
"assignment" and "alienation" to include
"[a]ny direct or indirect arrangement . . . whereby a
party acquires from a participant or beneficiary a right or
interest enforceable against the plan in, or to, all or any
part of a plan benefit payment which is, or may become,
payable to the participant or beneficiary." Treas. Reg.
§ 1.401(a)-13(c)(1)(ii) (2017); see Hoult v.
Hoult, 373 F.3d 47, 54-55 (1st Cir. 2004)
(anti-alienation regulation entitled to deference under
Chevron, U.S.A., Inc. v. Nat. Res. Def. Council
Inc., 467 U.S. 837, 844 (1984)). Baloch's retirement
plan undisputedly is a qualified plan under 26 U.S.C. §
401(k) (2017) and contains the required anti-alienation
ERISA's anti-alienation bar generally prohibits a
creditor from garnishing a qualified plan to collect on a
judgment against a plan participant. In Guidry v. Sheet
Metal Workers Nat'l Pension Fund,493 U.S. 365, 367
(1990), a labor union sought a constructive trust on the
pension benefits of an official who had embezzled from the
union. The Supreme Court likened a constructive trust to a
garnishment, and noted that the anti-alienation provision
"erects a general bar to the garnishment of pension
benefits from plans covered by" ERISA. Id. at
371. As Wells Fargo argues, under ...