United States District Court, W.D. Missouri, St. Joseph Division
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
garnishment action arises from a $1.6 million dollar jury
verdict against Hanzada for Import & Export Company, Ltd.
for breach of contract. Plaintiff Hassanin Aly seeks to
partially satisfy this judgment through a writ of garnishment
filed against National Beef Packing Company, LLC. Now before
the Court is Aly's motion for summary judgment (Doc.
233). Because there is a genuine dispute of material fact as
to whether National Beef held money or credits belonging and
due absolutely to Hanzada, the Court DENIES Aly's motion.
and Material Facts
Court entered a $1, 591, 286.60 judgment against Hanzada in
April 2016. Aly seeks to satisfy a portion of the judgment
through garnishing two payments Hanzada made to National Beef
later that year. The payments arose in connection with
National Beef distributing beef product to Egypt. National
Beef initially sold its product directly to Hanzada, an
Egyptian import and export company. In October 2015, National
Beef transitioned to selling to ESCO International Trading
LLC instead. ESCO is a third-party distributor that resells
and exports National Beef's product to other purchasers,
including Hanzada. National Beef states that it did not fully
transition to selling only to ESCO until April 2016, due to
communication issues and the time required to develop new
shipping labels. National Beef claims that that was the last
month it did business directly with Hanzada.
Hanzada transferred $310, 000 to National Beef on August 5,
2016, and $370, 000 on August 11. Because National Beef no
longer sold directly to Hanzada, the company was not
expecting the payments and was unsure why Hanzada made them.
National Beef credited both payments to Hanzada's
standing but inactive account. Hence, on August 12 Aly's
account showed a balance of $680, 046.50, comprising the two
August payments and a leftover credit of approximately $47.
Later that day, National Beef debited the $680, 046.50 from
Hanzada's account and credited it to ESCO's. ESCO had
pending orders with National Beef and had informed the
Missouri company to soon expect payment. National Beef
applied Hanzada's payments to ESCO's orders and
shipped ESCO's product in mid-to-late August.
served National Beef with a writ of garnishment on August 10,
two days before National Beef debited Hanzada's account.
National Beef answered that it possessed no garnishable
property, and Aly took exception to this answer on the basis
of the August payments. National Beef responded that Hanzada
made the payments on ESCO's behalf for product sold and
shipped to ESCO. Aly moved for judgment on the pleadings,
asking the Court to find the August payments garnishable. The
Court denied Aly's motion (Doc. 227). Now, having
conducted discovery, Aly moves for summary judgment in his
favor in the amount of $680, 046.50.
judgment is appropriate when the movant shows that
“there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a); Bedford v. Doe, 880
F.3d 993, 996 (8th Cir. 2018). “A dispute is genuine if
the evidence is such that it could cause a reasonable jury to
return a verdict for either party; a fact is material if its
resolution affects the outcome of the case.” Rakes
v. Life Invs. Ins. Co. of Am., 585 F.3d 886, 893 (8th
Cir. 2009) (citing Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986)). A court views the evidence in the
light most favorable to the nonmoving party and draws all
reasonable inferences in that party's favor.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 588-89 (1986). To survive a motion for summary
judgment, the nonmovant must “substantiate his
allegations with sufficient probative evidence [that] would
permit a finding in [his] favor based on more than mere
speculation, conjecture, or fantasy.” Mann v.
Yarnell, 497 F.3d 822, 825 (8th Cir. 2007) (internal
quotations and citation omitted).
in aid of execution of a judgment “must accord with the
procedure of the state where the court is located.”
Fed.R.Civ.P. 69. Missouri's garnishment laws thus apply.
Garnishment “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).” Baisch &
Skinner, Inc. v. Bair, 507 S.W.3d 627, 629 (Mo.Ct.App.
2016) (citing State ex rel. Eagle Bank & Trust v.
Corcoran, 659 S.W.2d 775, 777 (Mo. 1983)). Garnishment
“freezes the mutual debts and credits of the garnishee
and the judgment debtor at a point in time.”
Wenneker v. Phys. Multispecialty Grp., Inc., 814
S.W.2d 294, 296 (Mo. 1991).
property includes all money, rights, and credits belonging to
the judgment debtor that the garnishee possesses or controls
between service of the writ of garnishment and the
garnishee's answer. Mo. Rev. Stat. § 525.040. To be
subject to garnishment, money must be due to the judgment
debtor absolutely, “unaffected by liens, prior
incumbrances, or conditions of contract.” Heege v.
Fruin, 18 Mo.App. 139, 142 (1885). The garnishor bears
the burden of establishing that the garnishee holds money or
credits belonging to the judgment debtor. Bunker v.
Hibler, 49 Mo.App. 536, 545-46 (1892); see also
Cusick v. Cusick, 201 S.W.2d 437, 440 (Mo.Ct.App. 1947).
Critically, the garnishor “can claim no right where the
debtor himself could not maintain an action against the
garnishee.” State ex rel. Kennedy v. Harris,
69 S.W.2d 307, 310 (Mo.Ct.App. 1934).
the evidence in the light most favorable to National Beef,
the Court cannot conclude as a matter of law that Hanzada-and
therefore Aly-had an absolute right to the $680, 046.50
account balance. The parties agree that National Beef
received the August 2016 payments from Hanzada and credited
them, at least initially, to Hanzada's account. But
National Beef disputes that the funds belonged and were owed
to Hanzada. It argues instead that Hanzada loaned ESCO the
money and made the payments on ESCO's behalf for product
prepared and shipped to ESCO. Per this argument, National
Beef's obligations never ran to Hanzada. National Beef
states that it should have earlier closed Hanzada's
account, and that it credited the payments thereto in error.
parties offer no law pertaining to the garnishment of money
paid or held on another's behalf. The Court questions
whether Hanzada could have recovered the funds if, as
National Beef claims, they immediately became tied up in
preexisting contractual obligations running between National
Beef and ESCO, as well as between ESCO and Hanzada. See
Balt. & O.R. Co. v. Wheeler, 18 Md. 372, 379 (1862)
(“[G]arnishment cannot have the effect of changing the
nature of a contract between the garnishee and the defendant,
or of preventing the garnishee from performing a contract
with a third person.”); Wheeler v. Thomas, 31
F.Supp. 702, 702-03 (D.D.C. 1940) (holding that earnest money
paid by the debtor under a contract was ungarnishable). Aly
does briefly assert that the August payments created a
bailment, but he has not shown how. See May v.
Williams, 531 S.W.3d 576, 582 n.5 (Mo.Ct.App. 2017)
(defining and discussing bailments); see also Fred
Harvey, Inc. v. Crooks, 39 F.2d 466, 467-68 (W.D. Mo.
payments did constitute an express or implied
to ESCO, they would not be subject to Aly's writ. See
In re Southwestern Glass Co., 332 F.3d 513, 518 (8th
Cir. 2003) (“[The loan proceeds] became money or
credits belonging to [the lendee].); United States v.
Kristofic, 847 F.2d 1295, 1296 (7th Cir. 1988)
(“As a matter of basic principles, loan proceeds do not
remain the property of the lender.”); see also
Bunker, 49 Mo.App. at 539 (involving the garnishment of
money loaned to the judgment debtor). The circumstantial
evidence of a loan here lifts, however slightly, National
Beef's argument above mere speculation. Thus, the Court
rejects Aly's ...