Unpublished Disposition, 912 F.2d 470 (9th Cir. 1990)

MEMORANDUM^** 

Khosla appeals the district court's denial of her motion to release funds attached by the United States in its action against her former husband. We affirm.

Khosla and her ex-husband were married in 1975. From June, 1982 to May, 1987, while employed as an inspector at a nuclear plant in Richland, Washington, Khosla's ex-husband allegedly submitted false travel expense vouchers totaling over $34,000. Shortly after his scheme was discovered, her husband disappeared and Khosla believes he may be in India. Khosla obtained a final divorce decree in 1988.

During their marriage, the Khoslas accumulated numerous investment accounts. One of these, the Westinghouse Savings and Pension Plan, is the subject of this dispute. It contains approximately $36,000. In October, 1987, after filing a complaint against Khosla's husband, the government attached the fund under Fed. R. Civ. P. 64, following the procedures of the state of Washington, as the rule requires. Khosla intervened in the suit to challenge the attachment. The district court upheld the attachment. Khosla appeals.

We have jurisdiction over this timely appeal under 28 U.S.C. § 1291.¹  We review the district court's interpretation of state law de novo. In re McLinn, 739 F.2d 1395, 1397 (9th Cir. 1984) (en banc).

Khosla argues first that her half of the Westinghouse fund is not subject to attachment because her husband's acts were his separate, intentionally wrongful acts. We disagree.

Under Washington law, a spouse's "separate" tort creates a "separate" liability. A tort committed for the benefit of the marital community, however, results in community liability. de Elche v. Jacobsen, 95 Wash. 2d 237, 245-46, 622 P.2d 835, 840 (1980) (en banc). This rule applies to statutory violations, Beakley v. City of Bremerton, 5 Wash. 2d 670, 677-78, 105 P.2d 40, 43 (1940), overrl'd on other grounds, Kilcup v. McManus, 64 Wash. 2d 771, 394 P.2d 375 (1964) (en banc), and criminal violations. Bergman v. State, 187 Wash. 622, 625-26, 60 P.2d 699, 701 (1936). So long as the community shares the benefit, the community is liable. Kilcup v. McManus, 64 Wash. 2d 771, 780-82, 394 P.2d 375, 381 (1964) (en banc).

Washington courts have consistently held that embezzlement and conversion are "community benefit" torts for which the marital community is liable. See Local 2618 of the Plywood & Veneer Workers v. Taylor, 197 Wash. 515, 523, 85 P.2d 1116, 1119 (1938) (en banc). Similarly, statutory violations resulting in overpayment create community liability. See Beakley, 5 Wash. 2d at 677-78, 105 P.2d at 42-43 (secretarial allowance wrongfully paid to wife); United States v. Elfer, 246 F.2d 941 (9th Cir. 1957) (overpayment of housing allowance). While criminal acts are "separate," money received as a result of a criminal scheme may also create a community liability. See Bergman, 187 Wash. at 627, 60 P.2d at 701. Even if the exact funds cannot be traced, " [i]t would be unrealistic to say that [the] embezzled funds were not used to purchase and improve" other marital property. Webster v. Rodrick, 64 Wash. 2d 814, 819, 394 P.2d 689, 692 (1964).

Here, the marital community received the benefit of the alleged wrongful acts of Khosla's ex-husband, creating community liability. We conclude that under Washington law, attachment of the community fund was proper.

Khosla next argues that she is entitled to a priority lien on her ex-husband's half of the fund. Again we disagree.

The writ of attachment created a superior lien because it was filed before Khosla's decree of dissolution. Wash.Rev.Code Sec. 6.25.130. See Thompson v. DeHart, 84 Wash. 2d 931, 937, 530 P.2d 272, 275-76 (1975) (en banc) (attachment); Swanson v. Graham, 27 Wash. 2d 590, 597, 179 P.2d 288, 292 (1947) (judgment lien). Although Khosla's decree may give rise to an equitable lien, a question we do not decide here, such a lien would not by itself create a priority, because the decree explicitly recognized that the government had attached the fund before the divorce became final. See Northern Commercial Co. v. E.J. Hermann Co., 27 Wash. App. 963, 965-67, 593 P.2d 1332, 1334-35 (1979) (equitable lien for future payments under divorce decree explicitly subject to prior liens). Washington statutes do create a priority lien for mandatory wage assignments imposed to enforce child support orders under Wash.Rev.Code Sec. 26.18.040, see Wash.Rev.Code Sec. 26.18.110(5); but Khosla has not obtained an enforcement order under the statute, nor does she seek a wage assignment. We conclude that Khosla is not entitled to a priority lien resulting from her divorce decree.

The judgment of the district court is

AFFIRMED.