UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

PRIME RATE PREMIUM 

FINANCE CORPORATION, INC., 

 Plaintiff, Civil Action No. 14-12397 

 Honorable David M. Lawson 

v. Magistrate Judge David R. Grand 

 

KAREN E. LARSON, Individually and as 

Personal Representative of the Estate of 

KEITH A. LARSON, Deceased, and 

ADRIAN LEE CARRANZA, 

 

 Defendants. 

and 

BRANDON LARSON, GP INSURANCE 

AGENCY, INC., and INSUREPLEX 

MARKET SOLUTIONS, INC., 

 

 Garnishee-Defendants. 

__________________________________/ 

REPORT AND RECOMMENDATION TO 

OVERRULE OBJECTION TO GARNISHMENT [652] 

Before the Court is an Objection to Garnishment filed on July 11, 2019, by 

Garnishee-Defendant GP Insurance Agency, Inc. (“GP”). ECF No. 652, PageID.5500. 

Plaintiff Prime Rate Premium Finance Corporation, Inc. (“Prime Rate”) filed a response to 

GP’s objection, along with a supporting affidavit. ECF No. 655, PageID.5526; ECF No. 

656, PageID.5550. An Order of Reference was entered on July 15, 2019, referring this 

matter to the undersigned for a report and recommendation pursuant to 28 U.S.C. § 

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636(b)(1)(B). ECF No. 654, PageID.5524. The Court heard oral argument on September 

18, 2019. For the reasons set forth below and on the record during the hearing, the Court 

RECOMMENDS that GP’s objection be OVERRULED. 

I. REPORT

A. Background 

On February 28, 2019, Prime Rate obtained a Default Judgment against GP in the 

amount of $300,000. ECF No. 365, PageID.4358. On May 6, 2019, Prime Rate obtained 

a Writ of Garnishment (the “Initial Writ”) for service against Flagstar Bank (“Flagstar”). 

ECF No. 497, PageID.5205. On May 20, 2019, Flagstar filed a Garnishee Disclosure, 

indicating that it was not indebted to GP pursuant to the Initial Writ because it had “No 

Account on File.” ECF No. 496, PageID.5203. 

Because Prime Rate continued to believe that GP had at least one bank account at 

Flagstar, despite receipt of Flagstar’s Garnishee Disclosure, it obtained a new Writ of 

Garnishment (the “Second Writ”) directed to Flagstar on June 14, 2019. ECF No. 648, 

PageID.5494. On June 21, 2019, Flagstar served Prime Rate and GP with a Garnishee 

Disclosure in response to the Second Writ, indicating that Flagstar was holding $23,067.651

from accounts owned by GP. ECF No. 655, PageID.5543. Subsequently, Flagstar served 

an Amended Garnishee Disclosure, acknowledging that it was indebted to GP at the time 

of service of the Initial Writ because it had GP’s “Money – Checking Accts[.]” ECF No. 

 

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 Subsequently, Prime Rate’s counsel was advised that Flagstar was holding an additional 

$2,633.38 from accounts owned by GP (for a total of $25,701.03). 

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655, PageID.5545.2 On July 11, 2019, GP filed the instant objection, stating that it “objects 

to the Request and Writ for Garnishment, Garnishee, Flagstar Bank, as it [i.e., the bank 

account in question] is a client trust account and not GP Insurance’s money.” ECF No. 

652, PageID.5501. 

B. Analysis 

M.C.R. 3.101(K)(2) addresses objections to garnishments, and provides, in relevant 

part, that objections must be based on one or more of the following: (a) the funds or 

property are exempt from garnishment by law; (b) garnishment is precluded by the 

pendency of bankruptcy proceedings; (c) garnishment is barred by an installment 

payment order; (d) garnishment is precluded because the maximum amount permitted 

by law is being withheld pursuant to a higher priority garnishment or order; (e) the 

judgment has been paid; or (f) the garnishment was not properly issued or is otherwise 

invalid. 

As noted above, GP does not articulate the specific basis for its objection to the 

garnishment under M.C.R. 3.101(K)(2); rather, it simply asserts that the garnishment is 

improper because its Flagstar bank account is a “client trust account and not GP 

Insurance’s money.” ECF No. 652, PageID.5501. Even if such an objection was 

recognized under the law, however, the only “evidence” GP provided in support of this 

assertion is highly suspect, at best. Specifically, GP provided Prime Rate’s counsel with a 

 

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 At the hearing on this matter, Prime Rate’s counsel advised that the reason for Flagstar’s error 

was that it initially searched for “G P” (with a space between the two letters) when the entity’s 

actual name begins “GP” (without a space). 

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purported (and unauthenticated) copy of a Flagstar bank account signature card, which 

indicates – in the top right corner – “CLIENT TRUST ACCOUNT.” ECF No. 655, 

PageID.5547. 

But, Prime Rate has submitted a sworn affidavit from Amy Hollifield, a Flagstar 

bank representative, who indicates that (a) Flagstar has specific procedures in place for the 

establishment of trust accounts; (b) trust accounts are designated as such within Flagstar’s 

system; and (c) signature cards for trust accounts at Flagstar also reflect when accounts are 

established as trust accounts. ECF No. 656, PageID.5554. Ms. Hollifield further avers 

that, according to Flagstar’s records, none of GP’s accounts at Flagstar were set up as trust 

accounts, and none of the signature cards for GP’s accounts reflect that they are trust 

accounts. Id. Thus, it certainly appears that the signature card provided by GP was 

modified to add the words “CLIENT TRUST ACCOUNT,” as the copy provided by 

Flagstar for the same account contains no such designation. Compare ECF No. 655, 

PageID.5547 with ECF No. 656, PageID.5559. 

Given these facts, GP has not established that the funds at issue are held in a “client 

trust account” or are otherwise exempt from garnishment. Indeed, the only properly 

authenticated evidence before the Court demonstrates that the bank account in question is 

a simple checking account in GP’s name. GP has made no evidentiary showing whatsoever 

that all or even some of the funds in its Flagstar checking account are actually monies it is 

holding in a fiduciary capacity. Therefore, GP’s objection should be overruled, and 

Flagstar should be ordered to release funds pursuant to both the Initial Writ and the Second 

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Writ, in the total amount of $25,701.03.3

II. CONCLUSION AND RECOMMENDATION 

For the reasons set forth above, as well as those set forth on the record at the hearing, 

IT IS RECOMMENDED that GP’s Objection to Garnishment [652] be OVERRULED. 

Dated: September 20, 2019 s/David R. Grand 

Ann Arbor, Michigan DAVID R. GRAND 

 United States Magistrate Judge 

NOTICE TO THE PARTIES REGARDING OBJECTIONS 

The parties to this action may object to and seek review of this Report and 

Recommendation but are required to act within fourteen (14) days of service of a copy 

hereof as provided for in 28 U.S.C. § 636(b)(1) and Fed. R. Civ. P. 72(b)(2). Failure to 

file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 

474 U.S. 140 (1985); Howard v. Secretary of HHS, 932 F.2d 505, 508 (6th Cir.1991); 

United States v. Walters, 638 F.2d 947, 949–50 (6th Cir.1981). The filing of objections 

which raise some issues, but fail to raise others with specificity, will not preserve all the 

objections a party might have to this Report and Recommendation. Willis v. Secretary of 

 

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 At the conclusion of the hearing in this matter, counsel for Prime Rate also requested – for the 

first time – an award of attorney’s fees and costs. Although the Court is troubled by the 

discrepancy between the signature cards submitted by GP and Flagstar, it is not persuaded that an 

award of sanctions is appropriate. GP’s counsel explained at the hearing that GP’s business 

involves collecting premiums from clients on behalf of large insurers and remitting some 

significant percentage of those premiums to the insurer. In this sense, at any point in time, the 

account could potentially contain monies that GP subjectively considers to be held for its clients 

and their insurers. At the same time, GP failed to provide any evidence to establish such an 

arrangement, or that the account is utilized exclusively for this purpose, rather than as a regular 

business checking account that receives and/or holds monies from other sources. Based on the 

foregoing, the Court declines to recommend awarding sanctions against GP. 

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HHS, 931 F.2d 390, 401 (6th Cir.1991); Smith v. Detroit Fed’n of Teachers Local 231, 829 

F.2d 1370, 1373 (6th Cir.1987). Pursuant to E.D. Mich. L.R. 72.1(d)(2), a copy of any 

objections is to be served upon this magistrate judge. A party may respond to another 

party’s objections within 14 days after being served with a copy. See Fed. R. Civ. P. 

72(b)(2); 28 U.S.C. §636(b)(1). Any such response should be concise, and should address 

specifically, and in the same order raised, each issue presented in the objections.

CERTIFICATE OF SERVICE

 The undersigned certifies that the foregoing document was served upon counsel of 

record and any unrepresented parties via the Court’s ECF System to their respective email 

or First Class U.S. mail addresses disclosed on the Notice of Electronic Filing on 

September 20, 2019. 

 s/Eddrey O. Butts 

 EDDREY O. BUTTS 

 Case Manager 

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