MEDICAL MUTUAL LIABILITY INS. SOCIETY. v. Davis

Decision Date15 September 2005
Docket NumberNo. 84,84
Citation883 A.2d 158,389 Md. 95
PartiesMEDICAL MUTUAL LIABILITY INSURANCE SOCIETY OF MARYLAND v. Williette DAVIS, et al.
CourtMaryland Court of Appeals

Albert D. Breault (Joan F. Brault, Brault, Graham, Scott & Brault, LLC, Rockville, on brief), for appellant.

Robert G. Samet (Ashcraft & Gerel, LLP, Rockville, on brief), for appellees.

Argued before BELL, C.J., ELDRIDGE,1 RAKER, WILNER, CATHELL, HARRELL and BATTAGLIA, JJ.

BELL, C.J.

The issue we are required in this case to decide is whether a judgment creditor, indisputably entitled to post-judgment interest on its judgment, who accepts a remittitur, may receive interest on that portion of the post-judgment interest paid pursuant to a court order, entered in a writ of garnishment proceeding, determining that post-judgment interest begins to run when the judgment is entered, rather than when the remittitur is accepted, where, prior to the initiation of the garnishment proceedings, the judgment debtor's insured had paid into the court the judgment debtor's policy limits and the post-judgment interest at issue accrued after the judgment creditor's acceptance of the remittitur. The Circuit Court for Prince George's County concluded that Williette Davis and Massaquai Kamara, the appellees, were entitled to the post-judgment interest they sought from Medical Mutual Liability Insurance Society of Maryland, the appellant, reasoning that a money judgment had been entered in the garnishment proceedings they initiated. This Court, on its own initiative, granted the appellant's petition for writ of certiorari before the Court of Special Appeals acted. Medical Mutual Liability Insurance Society of Maryland v. Davis, 371 Md. 613, 810 A.2d 961 (2002). We shall reverse the judgment of the Circuit Court.

I.

This is the second time this case has reached this Court. On the first, the issue we addressed was when post-judgment interest began to accrue on a money judgment returned by a jury, where the jury's verdict is subsequently reduced by the trial court, pursuant to a remittitur. Medical Mutual Liability Insurance Society of Maryland v. Davis, 365 Md. 477, 478, 781 A.2d 781, 781 (2001).2 This Court affirmed the judgment of the Circuit Court. Id. at 487, 781 A.2d at 787. Applying Maryland Rule 2-604(b),3 "in accordance with the purpose of post-judgment interest and the considerable case-law governing the running of post-judgment interest,"4id. at 484, 781 A.2d at 785, we held that the appellees "were entitled to the loss of income on the $2,350,000.00 [the amount of the remitted judgment] from November 13, 1996," observing: "Presumably, Medical Mutual earned interest on that sum during the ten-month period from November 1996 to September 1997." Id. at 485, 781 A.2d at 785. The appellant paid the post-judgment interest in the amount ordered.5 Its effort to have the appellees' judgment entered on the docket as fully paid and satisfied met with opposition from the appellees, however, whereupon it filed a Motion To Enter Judgment As Fully Paid And Satisfied.6 The appellees claimed that additional post-judgment interest on the judgment had become due during the litigation and, what's more, has remained unpaid. The Circuit Court held a hearing on the appellant's motion, after which, agreeing with the appellees, it ordered that the appellant pay interest on the post-judgment interest it had previously paid. At issue on this appeal, therefore, is the propriety of the order entered by the Circuit Court that "assess[ed] judgment interest on the judgment of garnishment... from January 29, 1999 to the present and continuing."

II.

Garnishment is a form of attachment, Fico, Inc. v. Ghingher, 287 Md. 150, 158-59, 411 A.2d 430, 436 (1980); Catholic University of America v. Bragunier Masonry Contractors, Inc., 139 Md.App. 277, 293, 775 A.2d 458, 467 (2001),aff'd, 368 Md. 608, 796 A.2d 744 (2002), and method of execution. Northwestern Nat'l. Ins. v. William G. Wetherall, Inc., 267 Md. 378, 384, 298 A.2d 1, 5 (1972). See Parkville Fed. Sav. Bank v. Maryland Nat'l Bank, 343 Md. 412, 418, 681 A.2d 521 (1996) ("A writ of garnishment is a means of enforcing a judgment."). As such, it is derived from a "special and limited statutory power." Belcher v. Government Employees' Ins. Co., 282 Md. 718, 720, 387 A.2d 770, 772 (1978), quoting Cole v. Randall Park Holding Co., 201 Md. 616, 623, 95 A.2d 273, 277 (1953); see Killen v. American Casualty, 231 Md. 105, 108, 189 A.2d 103, 105-06 (1963); Coward v. Dillinger, 56 Md. 59, 60-61 (1881).

Proceedings via writ of garnishment permit the attachment of the property of the judgment debtor in the possession of third parties and, when the writ has been issued and served, require the garnishee, the third party possessor, to keep safe the property in his possession or that may come into possession. Parkville, 343 Md. at 419, 681 A.2d at 524; Fico, 287 Md. at 162, 411 A.2d at 437. See also Bragunier Masonry, 139 Md.App. at 293, 775 A.2d at 467-68. In that way, such proceedings enable the judgment creditor to enforce its judgment against the judgment debtor even though the judgment debtor is not in possession of the property. Parkville, 343 Md. at 418, 681 A.2d at 524 ("[A writ of garnishment] allows a judgment creditor to recover property owned by the debtor but held by a third party.") See PAUL V. NIEMEYER AND LINDA M. SCHUETT, MARYLAND RULES COMMENTARY at 518 (2nd ed.1992).

This Court has characterized, at length, the nature and function of a garnishment proceeding. E.g., Bragunier Masonry Contractors, Inc. v. Catholic University of America, 368 Md. 608, 621-24, 796 A.2d 744, 751-53 (2002); Parkville, 343 Md. at 418, 681 A.2d at 524; Fico, 287 Md. at 158-59, 411 A.2d at 436, and cases therein cited, concluding and emphasizing "the principle growing out of the nature and function of a garnishment proceeding, that the creditor merely steps into the shoes of the debtor and can only recover to the same extent as could the debtor." Bragunier Masonry, 368 Md. at 623, 796 A.2d at 752. Fico is illustrative. There, we commented:

"A garnishment proceeding is, in essence, an action by the judgment debtor for the benefit of the judgment creditor which is brought against a third party, the garnishee, who holds the assets of the judgment debtor. Northwestern Nat'l Ins. Co. v. William G. Wetherall, Inc., 272 Md. 642, 652, 325 A.2d 869, 874 (1974); Messall v. Suburban Trust Co., 244 Md. 502, 506, 224 A.2d 419, 421 (1966). An attaching judgment creditor is subrogated to the rights of the judgment debtor and can recover only by the same right and to the same extent that the judgment debtor might recover. Northwestern Nat'l Ins. Co., 272 Md. at 650-51, 325 A.2d at 874; Myer v. Liverpool, London & Globe Ins. Co., 40 Md. 595, 600 (1874). The judgment itself is conclusive proof of the judgment debtor's obligation to the judgment creditor. The sole purpose of the garnishment proceeding therefore is to determine whether the garnishee has any funds, property or credits which belong to the judgment debtor. Northwestern Nat'l Ins. Co. v. William G. Wetherall, Inc., 267 Md. 378, 384, 298 A.2d 1, 5 (1972)."

287 Md. at 159, 411 A.2d at 436. See also Peninsula Ins. Co. v. Houser, 248 Md. 714, 717, 238 A.2d 95, 97 (1968); Cole v. Randall Park Holding Co., 201 Md. 616, 623-24, 95 A.2d 273, 277 (1953).

From this principle, it follows, and is well settled, moreover, that garnishment proceedings are not designed or intended "`to place the garnishee in a worse position, in reference to the rights and credits attached, than if he had been sued by the defendant [judgment debtor].'" Bragunier Masonry, 368 Md. at 624,796 A.2d at 753, quoting Farmers' & Merchants' Bank of Baltimore v. Franklin Bank of Baltimore, 31 Md. 404, 412, 1869 WL 2863, *5 (1869). See Employers' Liability Assur. Corp. v. Perkins, 169 Md. 269, 284, 181 A. 436, 443 (1935); Farley v. Colver, 113 Md. 379, 385, 77 A. 589, 591-92 (1910). Thus, we have explained:

"The attaching creditor seeks to have himself substituted to the rights of his debtor as against the garnishee, and by laying his attachment, he acquires no superior right to that of his debtor. The right of condemnation must, therefore, be subject to any such right of set-off or discharge existing at the time of garnishment, as would be available to the garnishee if he were sued by the defendant. Any other rule would, in many cases, work gross injustice, and might, moreover, be subject to great abuse."

Farmers' & Merchants' Bank, 31 Md. at 412, 1869 WL at *5. Similarly, in Perkins, we said:

"The plaintiffs in the attachment proceedings have no right superior to that of the assured. They stand in his place, and the same defenses which the insurance carrier had against the right of action on the part of the assured on the policy of insurance are available to the assurer as the garnishee of the plaintiffs. So, the assured's breach of a condition precedent with which the assurer may bar a recovery by the assured is equally a bar to an attachment laid in the hands of the assurer by a creditor of the assured. The law does not permit the garnishee to be put in a worse position by the issue of a writ of attachment."

169 Md. at 284, 181 A. at 443, citing Hodge and McLane on Attachments, § 148; 76 A.L.R. pp. 235, 236.

The provisions of the pertinent sections of Maryland Rule 2-645, the Rule "govern[ing] garnishment of any property of the judgment debtor, other than wages subject to Rule 2-646 and a partnership interest subject to a charging order, in the hands of a third person for the purpose of satisfying a money judgment," subsection (a), are consistent. Rule 2-645(a) defines the property to which it is applicable as including "any debt to the judgment debtor, whether immediately payable or unmatured." Subsection (b) prescribes the process for obtaining issuance of a writ of garnishment. It requires that a request for writ of...

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