Savig v. First Nat. Bank of Omaha, A09-1221.
| Decision Date | 22 April 2010 |
| Docket Number | No. A09-1221.,A09-1221. |
| Citation | 781 N.W.2d 335 |
| Parties | Mona SAVIG and Robert Savig, Plaintiffs, v. FIRST NATIONAL BANK OF OMAHA and Messerli & Kramer, P.A., Defendants. |
| Court | Minnesota Supreme Court |
Nicholas P. Slade, Barry & Slade, LLC, Minneapolis, Minnesota; and Sam Glover, Samuel J. Glover & Associates, LLC, Minneapolis, Minnesota, for plaintiffs.
David F. Herr, Haley N. Schaffer, Maslon Edelman Borman & Brand, LLP, Minneapolis, Minnesota; and Derrick N. Weber, Truman W. Schabilion, Messerli & Kramer, P.A., Plymouth, Minnesota, for defendants.
Charles F. Webber, Aaron D. Van Oort, Nathaniel J. Zylstra, Faegre & Benson LLP, Minneapolis, Minnesota, for amici curiae National Association of Retail Collection Attorneys and Capitol One Bank (USA), N.A.
Charles E. Lundberg, Michael A. Klutho, Bassford Remele, P.A., Minneapolis, Minnesota, for amicus curiae ACA International.
Teresa E. Rice, Minnesota Bankers Association, Eden Prairie, Minnesota, for amicus curiae Minnesota Bankers Association.
Simone Suri, Minnesota Credit Union Network, St. Paul, Minnesota, for amicus curiae Minnesota Credit Union Network.
Heidi L. Staloch, Michael Johnson, Bridget A. Sullivan, Gurstel, Staloch & Chargo, P.A., Golden Valley, Minnesota, for amicus curiae Gurstel, Staloch & Chargo, P.A.
This case requires us to answer certified questions of law concerning the interplay between Minnesota's garnishment statutes, Minn.Stat. §§ 571.71 to 571.932 (2008), and Minnesota's Multiparty Accounts Act (MPAA), Minn.Stat. §§ 524.6-201 to 524.6-214 (2008), and to determine who has the burden of proving net contributions to a joint checking account during a post-judgment garnishment proceeding.
A default judgment was entered against plaintiff Mona Savig for failure to make credit card payments to defendant First National Bank of Omaha. On First National's behalf, defendant Messerli & Kramer, P.A., served a post-judgment garnishment summons on Mona and Midwest Bank, where Mona had a joint checking and a joint savings account with her husband Robert Savig. Midwest Bank withheld $2,003.78 from the accounts and remitted the funds to Messerli & Kramer. The Savigs filed a complaint in federal district court on January 20, 2009, alleging that $842.37 from the joint checking account belonged to Robert, not Mona, and should not have been garnished. The complaint alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (2006), conversion, wrongful levy, and invasion of privacy.
Defendants First National and Messerli & Kramer filed a motion for judgment on the pleadings, for summary judgment, or for certification of questions of law to us, and for a stay of proceedings pending resolution of the certified questions. The federal district court certified a reformulation of the defendants' questions, and stayed the case pending resolution. We accepted the following certified questions:
Mona Savig was previously married to L.B., and in 2004, they defaulted on a credit card issued by First National, owing $8,132.88. Messerli & Kramer represented First National in Minnesota state district court to collect the unpaid debt. Default judgment was entered against Mona and L.B. on March 24, 2004, in favor of First National. Mona and L.B. divorced in April 2004 and the debt to First National remained unpaid. Mona later married Robert Savig.
To satisfy the judgment against Mona, Messerli & Kramer, representing First National, served a post-judgment garnishment summons on Mona and Midwest Bank on January 2, 2009. In response, Midwest Bank completed the statutory disclosure form, and indicated that it possessed $2,003.78 belonging to Mona. Midwest Bank then retained money from two accounts: $1,438.10 from a checking account that Mona and Robert jointly held, and $565.68 from a jointly held savings account. Mona and Robert allege that $842.37 of the $1,438.10 from the joint checking account was from one of Robert's paychecks, so only $595.73 should have been retained from the joint checking account.1
When Midwest Bank retained the funds, Mona did not claim any exemptions, did not request a hearing, and Robert did not intervene to claim any interest in the funds. Robert alleges that on January 9, 2009, he contacted Messerli & Kramer and informed the firm that when Messerli & Kramer garnished the joint checking account through Midwest Bank, it had illegally seized some of his funds because there was no judgment against Robert; Mona was a debtor, but Robert was a nondebtor. He also contends that at that time, a Messerli & Kramer employee refused to return any funds.2
On January 20, 2009, Mona and Robert filed a complaint against First National and Messerli & Kramer in federal district court, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, conversion, wrongful levy, and invasion of privacy. In their complaint, the Savigs relied on Enright v. Lehmann, 735 N.W.2d 326 (Minn.2007), and argued that pursuant to the MPAA, Minn.Stat. § 524.6-203(a), a creditor is not permitted to garnish a nondebtor's funds in a joint account unless the creditor proves by clear and convincing evidence that the depositing party intended to confer ownership of the funds on the debtor. First National and Messerli & Kramer filed a motion for judgment on the pleadings, summary judgment, or certification of questions of law to this court, and a stay of proceedings pending resolution of the certified questions. They argued, in part, that Enright should not be read so broadly. The federal district court certified a reformulation of First National and Messerli & Kramer's questions because the court determined that no controlling appellate decision, constitutional provision, or statute of Minnesota addresses the questions.3 The court stayed the case pending resolution of these three questions and we accepted the certified questions.
We "may answer a question of law certified ... by a court of the United States ... if the answer may be determinative of an issue in pending litigation in the certifying court and there is no controlling appellate decision, constitutional provision, or statute of this state." Minn. Stat. § 480.065, subd. 3 (2008). The certified questions involve statutory interpretation and identification of the applicable burden and standard of proof, which are questions of law that we review de novo. See C.O. v. Doe, 757 N.W.2d 343, 352 (Minn.2008); Dohney v. Allstate Ins. Co., 632 N.W.2d 598, 600 (Minn.2001).
We first address whether a judgment creditor may serve a garnishment summons on a garnishee, attaching funds in a joint account to satisfy the debt of an account holder, even though not all of the account holders are judgment debtors. The Savigs argue that a creditor may serve a garnishment summons that attaches funds in a joint account only if the creditor first provides clear and convincing evidence of ownership of the funds in the joint account. In contrast, First National argues that a judgment creditor has a statutory right to at least serve a garnishment summons on a financial institution to start the garnishment process, regardless of whether the property is in a joint account.
State statutes authorize and govern garnishment proceedings in Minnesota. See Minn.Stat. §§ 571.71 to 571.932. Garnishment is "an ancillary proceeding to a civil action for the recovery of money." Minn. Stat. § 571.71. The process begins with a creditor4 serving a garnishment summons and disclosure form on a garnishee;5 copies of the summons and disclosure form are also served on the debtor.6 Minn.Stat. § 571.72, subds. 2, 4, 5. If the debtor is a natural person and the funds to be garnished are held on deposit in a financial institution (the garnishee), the creditor must also send an exemption notice with the garnishment summons to the debtor and garnishee.7See Minn. Stat. § 571.72, subds. 4, 8. Within two business days of receiving the summons and exemption notice, the garnishee must serve upon the debtor two copies of the exemption notice so that the debtor may claim an exemption. Minn.Stat. § 571.913. In addition, the garnishee must complete the disclosure form, indicating the garnishee's indebtedness, money, or other property owing to the debtor, and serve the written disclosure upon the creditor and the debtor. Minn.Stat. §§ 571.72, subd. 2(3); 571.75, subd. 1. The garnishee must also retain the amount it has on deposit owing to the debtor, but not more than 110 percent of the creditor's claim. Minn.Stat. § 571.911.
The Savigs do not dispute that First National complied with the statutory requirements in serving the summons on Mona and Midwest Bank (e.g., serving the correct type and number of forms); rather, they dispute whether First National was permitted to serve the summons in the first place.
Minnesota Statutes § 571.71 gives broad authority to a creditor to begin the garnishment process by issuing a garnishment summons: "A creditor may issue a garnishment summons as provided in this chapter against any third party ... at any time after entry of a money judgment in the civil action." There are no restrictions in Minn.Stat. § 571.71 concerning the type of property that a creditor may seek to garnish when serving a summons.
Because Minn.Stat. § 571.71 does not restrict a creditor from serving a summons based on the type of property ultimately reached by garnishment, First National argues that there is nothing to prevent a creditor from at least...
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