Fleet Bank Connecticut, N.A. v. Carillo

• Decision Date: 15 April 1997
• Docket Number: No. 15494,15494
• Court: Connecticut Supreme Court
• Parties: FLEET BANK CONNECTICUT, N.A. v. Charles CARILLO.

Page 1068

691 A.2d 1068

240 Conn. 343

FLEET BANK CONNECTICUT, N.A. v. Charles CARILLO.

No. 15494.

Supreme Court of Connecticut.

Argued Dec. 6, 1996.

Decided April 15, 1997.

John K. Atticks III, Madison, for appellant (intervening defendant).

Paul M. Gaide, Avon, for appellee (plaintiff Cadle Company).

Before CALLAHAN, C.J., and BERDON, NORCOTT, McDONALD and PETERS, JJ.

PETERS, Associate Justice.

The sole issue on this appeal is whether a judgment creditor may enforce a statutory right to a bank execution, pursuant to General Statutes § 52-367b, ¹ against the entire balance of a joint bank account to which both a judgment debtor and his nondebtor spouse have contributed funds. The plaintiff, the Cadle Company, as assignee of a money judgment obtained by Fleet Bank of Connecticut, N.A. (Fleet), ² against Charles Carillo, filed a motion for a turnover order seeking to compel the Collinsville Savings Bank (Collinsville) to relinquish the proceeds of a bank account held jointly by Charles Carillo and his wife, Carol. Carol Carillo, after intervening as a defendant, ³ opposed the motion. The trial court granted the motion over her opposition, and she appealed this judgment to the Appellate Court. We transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c) and now affirm the judgment of the trial court.

The facts are undisputed. In 1992, Fleet obtained a $58,077.20 money judgment against Charles Carillo. It subsequently assigned that judgment to the plaintiff. Pursuant to § 52-367b, which authorizes execution against a bank account held by a natural person, the plaintiff obtained a bank execution against a Collinsville bank account held jointly by Charles Carillo and the defendant. The joint account contained approximately $4500, of which the defendant allegedly contributed 70 percent and Charles Carillo allegedly contributed 30 percent. ⁴ After the defendant warned Collinsville that she would hold it liable for releasing any of the funds in the account, Collinsville refused to comply with the plaintiff's bank execution. To compel compliance, the plaintiff then filed a motion for a turnover order in the Superior Court. See General Statutes §§ 52-356b and 52-356c.

After successfully moving to intervene, the defendant filed an opposition to the plaintiff's motion. She contended that, because she was not the plaintiff's debtor, her co-ownership of the account shielded its proceeds, or at least those proceeds for which she claimed sole responsibility, from the plaintiff's execution. The trial court rejected this argument. It relied on Masotti v. Bristol Savings Bank, 43 Conn.Supp. 360, 653 A.2d 836 (1994), aff'd, 232 Conn. 172, 653 A.2d 179 (1995) (per curiam), and the authorities cited therein for the proposition that each coholder of a joint account may be considered an "owner" of the entire account for purposes of a third party creditor's right to execute against that account in satisfaction of one coholder's debt. The trial court concluded that Charles Carillo's ownership rights in the entire account gave the plaintiff, as his creditor, a coextensive right to execute against the account funds in their entirety.

On appeal, the defendant challenges the trial court's conclusion on three principal grounds. First, she contends that the court's reliance on Masotti resulted in a misapplication of the statute governing joint accounts; General Statutes § 36a-290; ⁵ and conflicted with an earlier opinion construing that statute. See Grodzicki v. Grodzicki, 154 Conn. 456, 226 A.2d 656 (1967). Next, she analogizes to the law of real property, claiming that a joint account, like a joint estate, devolves into a tenancy in common once one coholder's creditor executes a money judgment against the account. Finally, she contends that, in furtherance of principles of fairness and public policy, the trial court should have undertaken an equitable accounting of the funds in the joint account in order to ensure that only those funds that Charles Carillo himself had contributed were subjected to the plaintiff's bank execution. We find these arguments unpersuasive and, accordingly, affirm the judgment of the trial court.

As the plaintiff's right to execute against the Carillos' bank account is statutory in nature, our analysis necessarily begins with the text of the bank execution statute. Section 52-367b authorizes a judgment creditor to execute "against any debts due from any banking institution to a judgment debtor who is a natural person, except to the extent that such debts are protected from execution...." (Emphasis added.) Protection from execution is derived from certain exemption statutes not relevant here. The critical question in this case, therefore, is one of statutory construction, namely, whether the entire balance of the joint account constitutes a "debt due" from Collinsville to Charles Carillo. ⁶

In undertaking this inquiry, we proceed "according to well established principles of statutory construction designed to further our fundamental objective of ascertaining and giving effect to the apparent intent of the legislature.... In seeking to discern that intent, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." (Citation omitted; internal quotation marks omitted.) Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 581, 657 A.2d 212 (1995).

Neither the language of § 52-367b, its legislative history, ⁷ nor the policy or circumstances surrounding its enactment ⁸ reveals whether the entire balance of a joint bank account constitutes a "debt due" to one coholder. Contrary to the plaintiff's contention, the definitional section of the postjudgment procedures statutes is similarly uninstructive. See General Statutes § 52-350a. Although § 52-350a (16) defines "property" broadly to encompass "any real or personal property in which the judgment debtor has an interest which he could assign or transfer, including ... any present or future right or interest, whether or not vested or liquidated [and] any debt, whether due or to become due," it does not specify what constitutes an "interest," "right," or "debt." While it is reasonable to infer from this language the legislature's intent to allow a judgment creditor to execute against all forms of a judgment debtor's assets, it would be unreasonable to infer an intent to encompass property in which a judgment debtor lacks any cognizable interest whatsoever.

Section 36a-290 comes closer to defining the property rights of a coholder in a joint account. That section provides that, when an account is created in the names of two or more people, "such account is deemed a joint account, and any part or all of the balance of such account, including any and all subsequent deposits or additions made thereto, may be paid to any of such persons during the lifetime of all of them...." (Emphasis added.) General Statutes § 36a-290 (a). ⁹ Thus, under this statute, a bank is authorized to release up to the entire balance of a joint account to each and any coholder who so demands. In our view, this authorization not only provides protection for payor banks but also recognizes a sufficient property interest in each coholder to warrant characterizing all such deposits as a "debt due" to each coholder sufficient to trigger a third party creditor's statutory right to execute against the entire balance of the joint account.

Our recent consideration of § 36a-290 in the context of a third party creditor's setoff rights confirms this view. In Masotti v. Bristol Savings Bank, 232 Conn. 172, 653 A.2d 179 (1995), we affirmed, per curiam, a trial court opinion holding that coholders of a joint account have sufficient ownership interests in the account so that a creditor of any one coholder may exercise setoff rights against the account in its entirety. See Masotti v. Bristol Savings Bank, supra, 43 Conn.Supp. 360, 653 A.2d 836. In Masotti, a husband and his nondebtor wife had established joint bank accounts at Bristol Savings Bank (Bristol). Bristol was also the husband's creditor. When the husband defaulted on his debt, Bristol exercised setoff rights against the entire balance of the joint bank accounts, subtracting from the account funds accordingly. Although Bristol eventually renegotiated with the husband and returned the funds, the nondebtor wife sued Bristol for conversion, claiming that her partial interest in the accounts shielded them from the bank's actions.

The trial court in Masotti rejected the nondebtor wife's argument and affirmed Bristol's setoff rights. Citing § 36a-290 (then General Statutes § 36-3), the court held that for purposes of a creditor's setoff rights, "[t]he coholders of a joint account are considered owners of the entire account and either may withdraw." (Emphasis added.) Masotti v. Bristol Savings Bank, supra, 43 Conn. Supp. at 364, 653 A.2d 836. As a result of the husband's property interest in the accounts, the trial court held that Bristol had lawfully exercised its setoff rights against the entire account balances, despite the nondebtor wife's concurrent interest therein. On appeal, we explicitly "adopt[ed] the trial court's well reasoned decision as a statement of the facts and the applicable law on these issues," concluding further that the decision "thoroughly canvassed the applicable legal principles in a manner consistent with the statute governing joint accounts [§ 36a-290]...." Masotti v. Bristol Savings Bank, supra, 232 Conn. at 174-75, 653 A.2d 179; see also United States v. First Bank 737 F.2d 269, 270 n. 2 (2d Cir.1984) ("[u]nder Connecticut law, [coholders] of a joint account are each considered owners of the entire account, with access to the entire...