Anderson Boneless Beef, Inc. v. Sunshine Health Care Center, Inc.

• Decision Date: 22 April 1993
• Docket Number: No. 92CA0393,92CA0393
• Citation: 852 P.2d 1340
• Parties: ANDERSON BONELESS BEEF, INC., a Colorado Corporation, Plaintiff-Appellant, v. SUNSHINE HEALTH CARE CENTER, INC., a Colorado Corporation, Defendant, and Omnibank Denver, Garnishee-Appellee, and Eden Foundation Inc., a Missouri Corporation, Intervenor-Appellee. . IV
• Court: Colorado Court of Appeals

Page 1340

852 P.2d 1340

ANDERSON BONELESS BEEF, INC., a Colorado Corporation Plaintiff-Appellant, v. SUNSHINE HEALTH CARE CENTER, INC., a Colorado Corporation, Defendant and Omnibank Denver, Garnishee-Appellee and Eden Foundation Inc., a Missouri Corporation, Intervenor-Appellee.

No. 92CA0393.

Colorado Court of Appeals,

Div. IV.

April 22, 1993.

Berger & Berger, Nathan M. Berger, Commerce City, for plaintiff-appellant.

No appearance for defendant Sunshine Health Care Center, Inc.

No appearance for garnishee-appellee Omnibank Denver.

Yu, Stromberg, Huotari & Cleveland, P.C., Frederick Y. Yu, Susan B. Levy, Denver, for intervenor-appellee.

Opinion by Judge Marquez.

Plaintiff, Anderson Boneless Beef, Inc. (Anderson), appeals the trial court's judgment discharging its writ of garnishment against Omnibank Denver. We affirm.

On August 1, 1991, Eden Foundation, Inc. (Eden), began operation of Poplar Grove Nursing Home, a facility formerly operated by Sunshine Health Care, Inc., as Sunshine Health Care Center. The record indicates that Eden has no connection to Sunshine.

Eden, on or about July 30, 1991, opened a bank account at Omnibank into which it deposited social security and supplemental security income checks which, according to Eden, represented benefits due the residents of the facility. Some of these checks were payable to "Sunshine Health Care Ctr for [resident]."

On August 7, 1991, Anderson obtained a judgment against Sunshine Health Care Center, Inc., in the amount of $5,082.26 plus interest and costs, for monies owing on products delivered to Sunshine during the period December 1, 1989, through February 19, 1990. On October 23, 1991, Anderson served a writ of garnishment upon Omnibank identifying the judgment debtor as Sunshine Health Care Center, Inc., and seeking to determine whether, on the date and time the writ was served upon Omnibank, Omnibank possessed or controlled any of the judgment debtor's personal property, or whether Omnibank owed any rents, payments, obligations, debts, or moneys to the judgment debtor. On October 24, 1991, Omnibank answered, "No."

In its traverse, Anderson alleged that Omnibank maintained account number 2126737 and that funds payable to Sunshine were being deposited in the account under another name.

Eden moved to intervene, stating that the bank account in question was Eden's property. Eden then moved for release of the writ of garnishment, asserting that the funds in the account which Anderson sought to garnish were not Sunshine's.

At the hearing, the parties stipulated to the admission of a check payable to the order of "Sunshine Healthcare Ctr for [beneficiary]." The check, which was issued by the United States Treasury, contains the following words on the reverse side:

Deposit Only 2126737

CREDIT TO THE ACCOUNT OF

WITHIN NAMED PAYEE

ENDORSEMENT GUARANTEED

OMNIBANK DENVER

DENVER, COLORADO.

While Anderson argued that there is nothing to indicate those funds belong to anybody other than Sunshine Healthcare Center and requested judgment for any check that was made out and deposited in such a form, it presented no witnesses or documentary evidence, other than the foregoing check. Eden presented testimony from the president of Eden and a vice-president of Omnibank.

Anderson concedes that Sunshine was not a customer of Omnibank from July 30 to the date of hearing and that account 2126737 was listed as an account for Eden Foundation, d/b/a Poplar Grove Care Center.

The court ruled that the bank has no obligation to look behind the accounts that it has. It found that the account that the bank had was in the name of Eden Foundation, Inc., and that it had no account in the name of Sunshine Healthcare Center, Inc., a Colorado corporation.

The trial court also ruled that Omnibank had correctly answered that it had no funds payable to Sunshine Health Care, Inc. As to whether Omnibank has some liability for placement of funds in some other account, the court limited its determination under Kelly v. Central Bank & Trust Co., 794 P.2d 1037 (Colo.App.1989), to stating that there was no endorsement and that there is no obligation to look behind the document itself.

It declined to impose liability and discharged the writ of garnishment. In denying Anderson's subsequent motion for reconsideration, the court further found that there was no money due and owing to Sunshine Health Care Center, Inc., as of the date of garnishment.

The record indicates that on December 10, 1991, Anderson obtained a second writ of garnishment naming Sunshine Health Care Center, Inc., as the judgment debtor and specifically identifying account number 2126737. No ruling was made on this writ prior to the time notice of this appeal was filed. While the record indicates the court ultimately discharged the second writ based upon its ruling on the first writ, Anderson asserts no error in the court's ruling on the second writ.

I.

Anderson asserts that the court erred in discharging the writ of garnishment and that Omnibank is liable to the judgment debtor, Sunshine, for checks made payable to the order of Sunshine and deposited in Eden's bank account without endorsement. We conclude that Omnibank properly answered the garnishment and, thus, affirm.

A.

C.R.C.P. 103 § 4(c) states that a judgment creditor may garnish personal property of any description owned by, or owed to, such judgment debtor and in the possession or control of the garnishee. If the debtor could bring an immediate action to recover the debt from the garnishee, then the debt is due and payable within the meaning of the section. Martinez v. Dixon, 710 P.2d 498 (Colo.App.1985).

C.R.C.P. 103 § 8(b)(3) provides in part as follows:

Upon hearing of the traverse, if the court finds the garnishee liable to the judgment debtor ... at the time of service of the writ:

(A) The court shall enter judgment in favor of the judgment debtor ... against the garnishee for the use and benefit of the judgment creditor ... if the garnishee was liable to the judgment debtor....

A garnishee is totally unaffected by any notice which may be served upon him, unless it properly runs with an accurate description against the individual to whom he may be indebted. But, an exception to the requirement of an accurate description occurs if it is shown that the garnishee had actual knowledge of the identity of the debtor and the person named in the process. See German National Bank v. National State Bank, 5 Colo.App. 427, 39 P. 71 (1895) (notice of garnishment against W.J. Motley would not reach moneys due W.G. Motley).

There must be sufficient specificity concerning the identity of the debtor in the writ or in its supporting documents to enable the garnishee to verify its answers to the interrogatories. Berns, Clancy & Associates v. Bank of Boulder, 717 P.2d 1022 (Colo.App.1986).

The answer of the garnishee and the traverse of the plaintiffs make up the issues in garnishment proceedings, Rockey v. McCauley, 148 Colo. 331, 366 P.2d 138 (1961), and the burden of proof is upon the plaintiff in the garnishment proceedings to establish by a preponderance of the evidence all the facts upon which it relies to charge the garnishee. General Accident Fire & Life Assurance Corp. v. Mitchell, 120 Colo. 531, 211 P.2d 551 (1949).

A bank served with a writ of garnishment may rely on its deposit agreements when determining to whom it is indebted. Requiring a garnishee bank to determine true ownership of its deposits...