By: Edward L. Kelly and Karl R. Gruss
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.
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.