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Baisch & Skinner Inc. v. Bair

Court of Appeals of Missouri, Eastern District, Second Division

December 20, 2016

BAISCH & SKINNER, INC., Respondent,
JEFFREY G. BAIR, D/B/A GRIMM & GORLEY, D/B/A J. SENT INC., Defendant, and FIRST BANK, Appellant.

         Appeal from the Circuit Court of St. Louis County Cause No. 12SL-AC17903-02 Honorable Mary E. Ott.

          Colleen Dolan, Judge.

         I. Introduction

         First Bank (Appellant) appeals the trial court's order and judgment holding that the laws of the State of Missouri applied to the garnishment obtained by Baisch & Skinner, Inc. (Respondent) against the property of Jeffrey G. Bair, Grimm & Gorley, and J. Sent Inc. (Defendant). The parties are familiar with the facts and we will not recite them here. Nonetheless, we will discuss the facts as they relate to the issues on appeal. We affirm the decision of the trial court.

         II. Standard of Review

         In a court-tried garnishment action, the standard of review is controlled by Rule 84.13(d)[1]and Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976) (holding a trial court's judgment will be affirmed unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law); Cox v. Steck, 992 S.W.2d 221, 223-24 (Mo. App. E.D. 1999). Furthermore, the appellate court will sustain the judgment of the trial court if the result was correct on any tenable basis. U.S. v. Brooks, 40 S.W.3d 411, 412 (Mo. App. S.D. 2001).

         As an initial matter, Missouri courts generally apply Missouri law in determining whether a party's debt is properly subject to garnishment actions. State ex rel. Government Employees Ins. v. Lasky, 454 S.W.2d 942, 949-50 (Mo. App. E.D. 1970) (citing § 525.010 RSMo 1959). A garnishment is a statutory remedy which enables a judgment creditor (the garnishor) to collect the amount of the judgment by seizing the judgment debtor's property when it is in the hands of a third party (the garnishee). State ex rel. Eagle Bank & Trust v. Corcoran, 659 S.W.2d 775, 777 (Mo. banc 1983); Grissum v. Soldi, 108 S.W.3d 805, 808 (Mo. App. S.D. 2003).

         In Missouri, garnishment actions are controlled by Chapter 525[2] and Rule 90. Anani v. Griep, 406 S.W.3d 478, 481 (Mo. App. E.D. 2013). Section 525.010 provides that:

All persons shall be subject to garnishment, on attachment or execution, who are named as garnishees in the writ, or have in their possession goods, moneys or effects of the defendant not actually seized by the officer, and all debtors of the defendant, and such others as the plaintiff or his attorney shall direct to be summoned as garnishees.

         Under Rule 90.04 "[t]he service of the writ of garnishment and summons attaches the property subject to garnishment in the garnishee's possession…at the time the writ of garnishment and summons is served[.]" Similarly, § 525.040 provides that:

Notice of garnishment, served as provided in sections 525.010 to 525.480 shall have the effect of attaching all personal property, money, rights, credits, bonds, bills, notes, drafts, checks, or other choses in action of the defendant in the garnishee's possession or charge, or under his control at the time the service of the garnishment, or which may come into his possession or charge, or under his control, or be owing to him, between that time and the time of filing his answer.

         Together these rules "unequivocally provide that it is service of those documents that attaches the subject property, i.e., jurisdiction over the res, and nothing else suffices." Grissum, 108 S.W.3d at 809. "A garnishee is a mere stakeholder in the proceedings." Id. "Whatever a garnishee may do respecting his own rights, he is powerless to do anything which will affect the rights of third persons[.]" Id. (internal quotations omitted). Creditors may reach funds in the bank account of another if the funds actually belong to the debtor. Vaughn v. Spitz, 682 S.W.2d 847, 848 (Mo. App. S.D. 1984) (citing Hilke v. Bank of Washington, 251 S.W.2d 963, 966 (Mo. App. E.D. 1952)). "A valid judgment and a valid execution are indispensable prerequisites to a valid garnishment." Dunn v. Bemor Petroleum, 737 S.W.2d 187, 189 (Mo. banc 1987).

         III. Discussion

         In the present case, Respondent brought a garnishment action against Defendant and properly served notice of this garnishment on Appellant in Missouri. Appellant, or the garnishee, applied the garnishment to the Defendant's account and withheld the amount of funds that were in the account on the day it was served with the garnishment, which was less than the full amount of the judgment owed to Respondent by Defendant. Appellant is licensed to do business in both Missouri and Illinois and is incorporated under the laws of Missouri.[3] Appellant failed to follow the order of the Missouri court, which stated Appellant was to continue to withhold funds from the account for the entire ...

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