Stevenson v. Edgefield Holdings, LLC

• Decision Date: 28 February 2020
• Docket Number: No. 914, Sept. Term, 2018,914, Sept. Term, 2018
• Citation: 225 A.3d 85,244 Md.App. 604
• Parties: Thomas H. STEVENSON v. EDGEFIELD HOLDINGS, LLC.
• Court: Court of Special Appeals of Maryland

244 Md.App. 604

225 A.3d 85

Thomas H. STEVENSON

v.EDGEFIELD HOLDINGS, LLC.

No. 914, Sept. Term, 2018

Court of Special Appeals of Maryland.

February 28, 2020

Argued by: Philip Cronan (Andrew A. Adkins, Hollis, Cronan & Fronk, PA, on the brief), Easton, MD, for Appellant.

Argued by: Richard Fisch (Jerrold M. Maddox, Jones Walker, LLC, on the brief), Washington, D.C., for Appellee.

Arthur, Wells, Gould, JJ.^*

Wells, J. On October 6, 2009, a court in Duval County, Florida, entered a judgment in the amount of $169,550.25, plus post-judgment interest, against appellant, Thomas Stevenson, a guarantor on a business loan held by Atlantic Coast Bank ("Atlantic Coast"). Atlantic Coast sued Mr. Stevenson after a default on the note. Mr. Stevenson's wife, Leslie Stevenson, was not a party to the loan.

On November 22, 2017, Atlantic Coast's successor in interest, appellee, Edgefield Holdings, L.L.C. ("Edgefield"), registered the Florida judgment in Maryland. Edgefield sought to satisfy the debt by garnishing the Stevensons' joint bank accounts which they had opened in Maryland in 2013 and 2016.

Before the Circuit Court for Talbot County, Mr. Stevenson challenged the garnishment, asserting that Maryland Code, Courts and Judicial Proceedings Article ("C & JP") § 11-603 (1974, 2013 Repl. Vol.) prohibits a judgment creditor from garnishing a joint account like the Stevensons' if: (1) one of the joint account holders is not a judgment debtor, and (2) the account "was established as a joint account prior to the date of entry of judgment giving rise to the garnishment." C & JP § 11-603(b). Mr. Stevenson argued that his wife is not a judgment debtor and their bank accounts were established before November 22, 2017, the date that Edgefield registered the judgment in Maryland.

Edgefield argued that the "date of entry of judgment" is the date that its predecessor in interest, Atlantic Coast, obtained the original judgment in Florida: October 6, 2009. The circuit court found for Edgefield and enforced the garnishment.

Mr. Stevenson filed a timely appeal and asks two questions:

1. What is the proper entry date of a foreign judgment filed for recordation in Maryland?

2. Even if the judgment was entered in 2009, did Mrs. Stevenson's exclusive use of the Shore United Bank Accounts render them exempt from garnishment?

For the reasons that follow, we conclude that in interpreting C & JP § 11-603, "the date of entry of judgment giving rise to the garnishment" is the date that the judgment is registered in Maryland. We, therefore, reverse the circuit court. We decline to answer question 2.

FACTUAL AND PROCEDURAL BACKGROUND

Thomas Stevenson was one of several guarantors of a business loan obtained by a third party with Atlantic Coast. When the third party defaulted on the note, Atlantic Coast sued in the Circuit Court for the Fourth Judicial Circuit of Florida to recover the unpaid balance. Atlantic Coast also sued Mr. Stevenson as a guarantor of the note.

On April 16, 2009, the Florida circuit court entered a default judgment against Mr. Stevenson. On October 6, 2009, the court entered a final judgment against Mr. Stevenson, jointly and severally with the original borrower and the other guarantors in the amount of $169,550.25, plus post-judgment interest at the rate of 8% ("the Florida judgment").

Four years later, on June 28, 2013, Mr. and Mrs. Stevenson opened a joint checking account at Shore United Bank ("Shore Bank"), located in Talbot County, Maryland. The Stevensons later opened a money market account on June 9, 2016 at the same bank.

Between the opening of these two accounts, on July 7, 2015, Atlantic Coast assigned the Florida judgment to Edgefield. On November 20, 2017, Edgefield, with a certified copy of the Florida judgment in hand, requested registration of that judgment in the Circuit Court for Talbot County. On November 22, 2017, the circuit court recorded the Florida judgment and notified the parties.

On January 12, 2018, Edgefield sought to satisfy the Florida judgment by requesting a writ of garnishment against the Stevensons' joint accounts at Shore Bank.

Five days later, January 17, 2018, the circuit court issued the writ. Shore Bank filed an answer to the garnishment pursuant to Maryland Rule 2-645(e) stating that,

both accounts are in the name of two (2) or more persons, one (1) or more of whom but fewer than all of whom, are judgment debtors .... pursuant to Md. Code Ann. Cts. & Jud. Proc. Art. § 11-603, Garnishee is holding in said accounts the amounts of $20,279,14 and $39,003.53, respectively, pending further order of the court.

"Garnishee's Confession of Assets of Property Other Than Wages," 1/24/2018.

On January 26, 2018, Mr. Stevenson moved to dismiss, or, in the alternative, vacate the writ of garnishment. In his motion, Mr. Stevenson stated that he did not learn of the garnishment until his accounts at Shore Bank were frozen. Mr. Stevenson argued that C & JP § 11-603(a) prohibited Edgefield from garnishing the joint bank accounts he held with his wife. Accompanying the motion was an affidavit from Leslie Stevenson. She testified that she was Mr. Stevenson's wife. She was not a party or subject to the Florida judgment. She held the funds at Shore Bank jointly with her husband. They opened the accounts before the entry date of the judgment. And, her business and personal affairs would be prejudiced if the writ was not dismissed or vacated. Edgefield responded that, in fact, the Stevensons opened their joint accounts after judgment was entered in Florida.

The Circuit Court for Talbot County held a hearing on the motion for final judgment on June 19, 2018.¹ At the hearing, Mr. Stevenson argued that the court should consider the now-enrolled Florida judgment to be a second, or new judgment in Maryland enforceable from the date it was registered here. Mr. Stevenson also argued that the Florida judgment was not yet enforceable because a Maryland court must first establish personal jurisdiction over him prior to issuing a writ of garnishment. In Mr. Stevenson's opinion, Maryland did not acquire personal jurisdiction over him until after the Florida judgment was registered here.

Edgefield argued that if the court found that the entry date of judgment was the date the judgment was registered in Maryland, such a decision would allow judgment debtors to evade creditors by moving from jurisdiction to jurisdiction. Edgefield asserted that giving full faith and credit to Florida's judgment meant recognizing Florida's date of entry of judgment as the operative date.

At the end of the hearing, in an oral ruling, the court concluded that the Full Faith and Credit Clause of the United States Constitution obligated it to find that the date Florida entered a final judgment, October 6, 2009, was the date on which the judgment became effective. Consequently, the court ruled in Edgefield's favor and enforced the garnishment. Mr. Stevenson appealed.

DISCUSSION

Mr. Stevenson appeals from the circuit court's finding that the "date of entry of judgment giving rise to the garnishment" found in C & JP § 11-603(a) was the date that the judgment was established in Florida, rather than the date that the Florida judgment was registered in Maryland. As the decision here was rendered by a judge and not a jury, Maryland Rule 8-131(c) controls. That rule states:

When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.

The rule permits us to set aside a trial court's factual determinations if they are clearly erroneous. But the rule also requires us to exercise our independent appraisal of the court's application of the law employing the least deferential standard of review. We have consistently held that "we review ... legal conclusions de novo to determine if they were legally correct." Lee v. Lee , 240 Md. App. 47, 70, 201 A.3d 1 (2019) aff'd , 466 Md. 601, 223 A.3d 478, 2020 WL 372734 (2020) (citing Walter v. Gunter , 367 Md. 386, 392, 788 A.2d 609 (2002) ("[W]here the order involves an interpretation and application of Maryland statutory and case law, our Court must determine whether the lower court's conclusions are ‘legally correct’ under a de novo standard of review.").

A. C & JP § 11-603

As has been noted, the relevant statute at issue is C & JP § 11-603(a) which states:

(1) Except as provided in paragraph (2) of this subsection, a garnishment against property held jointly by husband and wife, in a bank, trust company, credit union, savings bank, or savings and loan association or any of their affiliates or subsidiaries is not valid unless both owners of the property are judgment debtors.

(2) Paragraph (1) of this subsection does not apply unless the property is held in an account that was established as a joint account prior to the date of entry of judgment giving rise to the garnishment.

When interpreting the meaning of a statute, the Court of Appeals has instructed that our paramount duty is "to discern and carry out the intent of the Legislature." Blue v. Prince George's County , 434 Md. 681, 689, 76 A.3d 1129 (2013). "The cardinal rule of statutory interpretation is to ascertain and effectuate the intent of the Legislature." Kushell v. Dep't of Natural Resources , 385 Md. 563, 576, 870 A.2d 186 (2005) (citing Collins v. State , 383 Md. 684, 688, 861 A.2d 727 (2004) ). "Statutory construction begins with the plain language of the statute, and ordinary, popular understanding of the English language dictates interpretation of its terminology." Adventist Health Care v. Maryland Health Care Comm'n , 392 Md. 103, 124 n. 13, 896 A.2d 320 (2006) (internal quotation marks and citations omitted). When a statute's language is unambiguous, we need only to apply the statute as written, and our efforts to...