- Garnishment in Florida: Serving Writs of Garnishment on Third Party Bank Accounts
- December 29, 2014 | Authors: Karl R. Gruss; Edward Lee Kelly
- Law Firm: Rogers Towers, P.A. - Jacksonville Office
In a previous article, we provided an overview of the basic procedures judgment creditors must follow when serving writs of garnishment on banks and the obligations of financial institutions that are served with writs. We also suggested that complications may arise when judgment creditors pursue bank accounts that include more than one party as the account holder. A recent case out of Florida’s Fourth District Court of Appeals, Branch Banking and Trust Company v. ARK Development/Oceanview, LLC, makes clear that when a third party named on the account claims ownership of the account’s funds, a judgment creditor’s success hinges on proving that the garnished funds belong solely to the judgment debtor.
Judgment Debtor’s Status on the Account
Creditors may garnish only property owned exclusively by the judgment debtor or debts due exclusively to the debtor. This does not mean that a judgment debtor can shield his assets from garnishment by simply depositing his funds into an account held jointly with another party. Where the debtor and third party maintain a joint account (other than an account held as tenants by the entirety, which is subject to different rules), a creditor may garnish that portion of the account attributable to the debtor. Where the debtor is merely a fiduciary or beneficiary and possesses no present interest in the account, however, the creditor may not access the account’s assets.
Proving Ownership of the Funds
Even if someone other than the debtor claims an interest in an account, a judgment creditor may still garnish the account if it can prove the debtor holds an interest in a portion of the funds. Judgment creditors should pay attention to who is named on the account, as there is a strong presumption that the assets in a bank account belong to the named account holder(s). In ARK Development, the creditor targeted an account that named the debtor as beneficiary and also granted him power of attorney, but the account explicitly self-identified as an individual account in the debtor’s wife’s name. Following procedures set out in Chapter 77, Florida Statutes, the debtor’s wife filed an affidavit claiming that the creditor improperly garnished the account because the funds belonged to her.
Looking at who actually and “in good conscience” owned the funds in the disputed account, the court found that the wife presented sufficient evidence to suggest her debtor-husband did not own any of the funds in his individual capacity. While the creditor alleged the debtor maintained an equitable interest in the account, the creditor failed to present evidence revealing the source of any of the account’s funds or the debtor’s exclusive control over any portion of the account. The court therefore held that the account was immune from the creditor’s writ of garnishment.
Creditors should familiarize themselves with Chapter 77, Florida Statutes, and the duties and obligations that accompany service of writs of garnishment. Check out our previous posts on service requirements in garnishment actions, issues of agency in garnishment procedures, and competing claims over funds subject to garnishment for more information on writs of garnishment in Florida.