Dixie National Bank v. Chase
11 Fla. L. Weekly 765, 1986 Fla. App. LEXIS 7052, 485 So. 2d 1353 (1986)
Rule of Law:
A garnishee bank is liable to a garnishor creditor for all funds deposited in an omitted bank account from the time a writ of garnishment is served until the time the bank files a complete amended answer disclosing the existence of the omitted account.
Facts:
- Stephen W. Chase II obtained a final judgment of $48,473.50 against Jim Gore.
- Jim Gore maintained two bank accounts at Dixie National Bank of Dade County: one in the name of 'Jimmy Gore' and another titled 'Diamond M,' with Jim Gore as the sole signator for both.
- On July 15, 1983, a writ of garnishment was served on Dixie National Bank, directing it to disclose all property and debts owed to Jim Gore.
- On July 20, 1983, Dixie National Bank filed an answer disclosing only the 'Jimmy Gore' account, which contained $32.86, and failed to disclose the 'Diamond M' account due to a record search error.
- Dixie National Bank garnished the disclosed 'Jimmy Gore' account but did not garnish the omitted 'Diamond M' account.
- Between July 15, 1983, and April 13, 1984, Jim Gore deposited a total of $13,870.61 into the 'Diamond M' account and subsequently withdrew most of it.
- On April 13, 1984, Dixie National Bank filed an amended answer, disclosing the 'Diamond M' account for the first time, at which point it contained only $65.63.
Procedural Posture:
- Stephen W. Chase II obtained a final judgment against Jim Gore in the Circuit Court for the Eleventh Judicial Circuit in and for Dade County, Florida.
- Stephen W. Chase II filed a motion for a writ of garnishment against Jim Gore, directed to Dixie National Bank of Dade County, in the Circuit Court.
- A writ of garnishment was issued by the clerk of the circuit court and served on Dixie National Bank.
- Dixie National Bank served and filed an initial incomplete answer to the first writ of garnishment in the Circuit Court.
- A second, identical writ of garnishment was issued and served on Dixie National Bank, which again filed an incomplete answer in the Circuit Court.
- Dixie National Bank subsequently filed an amended answer to both writs in the Circuit Court, disclosing the previously omitted account.
- The cause was tried as a non-jury matter in the Circuit Court.
- The Circuit Court entered a final judgment in garnishment in favor of Stephen W. Chase II and against Dixie National Bank in the amount of $13,870.61.
- Dixie National Bank appealed this final judgment to the District Court of Appeal of Florida, Third District.
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Issue:
Does a garnishee bank's liability to a garnishor creditor for an omitted bank account extend to all funds deposited between the service of the writ of garnishment and the filing of a complete amended answer disclosing the account?
Opinions:
Majority - Hubbart, Judge
Yes, a garnishee bank's liability to a garnishor creditor for an omitted bank account extends to all funds deposited between the service of the writ of garnishment and the filing of a complete amended answer disclosing the account. The court interpreted Section 77.06(1), Florida Statutes (1983), which holds a garnishee liable for debts owed to the defendant at the time of the writ's service or any time between service and the time of its 'answer.' The court reasoned that 'answer' in this context means a complete answer that fully discloses all debts owed by the garnishee to the defendant debtor. This interpretation is necessary to align with the statutory scheme's purpose: ensuring full disclosure, immediate garnishment, and protection of the garnishor creditor. Allowing incomplete answers would disincentivize full disclosure, allowing undisclosed funds to be spirited away by the debtor, thereby frustrating the statute's intent. The court cited Central Plaza Bank & Trust Co. v. Parker, which implicitly supported this interpretation by denying a garnishee bank the right to recover from the defendant debtor monies it was required to pay to the garnishor creditor for omitting an account in its answer. Therefore, Dixie National Bank was liable for all funds deposited into the omitted 'Diamond M' account from the date of the first writ's service until the amended answer was served, as this constituted the first complete disclosure.
Analysis:
This case clarifies the scope of a garnishee's liability under Florida's garnishment statute, emphasizing the requirement for complete and accurate disclosure. It establishes that a garnishee cannot limit its liability by providing an incomplete initial answer, even if the omission was an error. The ruling incentivizes garnishees, particularly financial institutions, to implement robust record search and disclosure procedures to avoid significant financial penalties. This decision underscores the severe consequences of failing to diligently identify and freeze a debtor's assets, serving as a critical warning to all garnishees regarding their obligations in garnishment proceedings.
