Filed: April 28, 2010
Opinion by: Durke G. Thompson
Held: A trial court has discretion to allow a judgment creditor holding funds garnished to satisfy a judgment to retain the funds pending a retrial, even though the judgment was vacated on appeal.
Facts: A judgment creditor obtained a large award against a judgment debtor for fees and costs following a trial. The judgment creditor then garnished funds belonging to the judgment debtor while an appeal of the judgment was pending. The Court of Special Appeals subsequently reversed part of the judgment and vacated the award of fees and costs. The Court reasoned that the trial court should re-examine the issue of fees and costs after a trial on the remand issues.
The judgment debtor moved for release of the attached sums. He argued that, with no judgment, the attachments made to satisfy the judgment are void. The judgment debtor also argued that holding the sums would deprive him of property without due process of law.
The judgment creditor argued that the attachments in place could continue as an attachment before judgment on the basis that the judgment debtor was a non-resident and had committed fraud. The judgment creditor also argued that, if the sums were returned, they would never again be available for attachment. The judgment creditor emphasized that it was likely to prevail on the merits in the retrial, and, in any case, the economic consequence of the remanded portion of the case was dwarfed by the already-decided portion of the case. Therefore, the result of the overall case, even if the remaining portion were adjudicated in favor of the judgment debtor, would warrant an award of fees in excess of the amounts attached.
Analysis: The court agreed that the sums, if returned to the judgment debtor, would likely be dissipated. The court also agreed that the judgment creditor was likely to be entitled eventually to collect the sums based on the issues already decided and not appealed.
The court found that the judgment debtor was a non-resident of Maryland. Based on this, the court held that it had discretion to issue an attachment before judgment. The court opined that failing to preserve the status quo would result in harm or the ultimate loss of the monies attached. Because the monies were being held by the judgment creditor in escrow, the court found it "difficult to see why they should be released back to the [judgment debtor] to the presumed prejudice of the [judgment creditor]."
The court acknowledged that the judgment debtor made a powerful argument about due process. Nonetheless, the court opined that the argument did not withstand the foregoing logic and the express language of Maryland Rule 2-643 (c) which states, “Upon motion of the judgment debtor, the court may release some or all of the property from a levy if it finds that (1) the judgment has been vacated. . . ."
The court noted that the quoted language of the rule is discretionary in form and allowed a denial of the motion. The language of the rule drafters implies that an attachment may be maintained even though the underlying judgment is vacated. Gracefully acknowledging the precarious footing afforded by the facts, the court admitted, "It is upon this thin ice of logic and inference that this Court rests its decision and denies the Motion to Release Garnished Funds . . .."
The full opinion is available in PDF.