Opinion ID: 1058572
Heading Depth: 2
Heading Rank: 2

Heading: Scope of the Garnishment Summons

Text: Garnishment is the process by which a judgment creditor may enforce the lien of his writ of fieri facias against any debt or property due his judgment debtor that is held by a third party, the garnishee. Lynch v. Johnson, 196 Va. 516, 520, 84 S.E.2d 419, 421 (1954); Code § 8.01-511. The creditor can assert no greater rights against the garnishee than the judgment debtor, himself, possesses. Network Solutions, Inc. v. Umbro International, Inc., 259 Va. 759, 768, 529 S.E.2d 80, 85 (2000). A garnishment summons does not create a lien itself, but, instead, is `a means of enforcing the lien of an execution placed in the hands of an officer to be levied.' Id. at 768-769, 529 S.E.2d at 85 (quoting Knight v. The Peoples Nat'l Bank of Lynchburg, 182 Va. 380, 392, 29 S.E.2d 364, 370 (1944)). Under Virginia law, a garnishment proceeding is a separate proceeding in which the judgment creditor enforces the `lien of his execution' against property or contractual rights of the judgment debtor which are in the hands of a third person, the garnishee. The summons issued in a garnishment proceeding `warns' the garnishee not to pay the judgment debtor's money to the judgment debtor, with the sanction that if the garnishee were to do so, it would become personally liable for the amount paid. United States ex rel. Global Bldg. Supply, Inc. v. Harkins Builders, Inc., 45 F.3d 830, 833 (4th Cir.1995) (quoting Lynch, 196 Va. at 520, 84 S.E.2d at 421) (internal citations omitted). The Firms contend the circuit court erred by permitting Wu's garnishment to, in effect, reach the respective trust accounts for any amounts disbursed after the writ of fieri facias was issued to the sheriff and served upon them, but before there was service upon Tseng. In part, the Firms argue their position is correct because a garnishment could only reach their contractual indebtedness to Tseng and they held no property Tseng owned. We have just rejected that argument because Tseng had equitable ownership of the funds deposited in the trust accounts and possessed more than a mere contract right. The Firms also appear to argue that a garnishment can only reach a debt the garnishee owes a judgment debtor, but no other property interest of that judgment debtor that the garnishee may hold. The Firms misapprehend the law of garnishment. Our precedent reflects that a garnishment reaches any intangible property interest of a debtor and that property interest is not constricted to a narrow category of a debtor-creditor obligation. We succinctly explained the scope of garnishment in Lynch. If it appear upon proof or upon confession of the garnishee that he owes the judgment debtor any debt or property, the court may give judgment against him. . . . The court cannot, [however], enter any order or judgment against the garnishee unless he is found either to be indebted to the judgment debtor, or to have possession of property of such debtor for which debt or property the judgment debtor himself could maintain an action at law. 196 Va. at 520, 84 S.E.2d at 422 (citing Levine's Loan Office, Inc. v. Starke, 140 Va. 712, 125 S.E. 683 (1924); Freitas v. Griffith, 112 Va. 343, 71 S.E. 531 (1911)) (emphasis added). Thus, it is the debtor's intangible property interest that the garnishee may hold, not just an indebtedness from the garnishee, that is properly subject to garnishment. Network Solutions, Inc., 259 Va. at 768, 529 S.E.2d at 85. The Firms, as garnishees, held the intangible equitable property interest of Tseng in their trust accounts and were under a fiduciary duty not only to hold that interest but return the property to Tseng when the trust obligation ends. As such, Tseng's property interest in the trust accounts could be attached in garnishment by Wu as the judgment creditor [who] enforces the `lien of his execution' against property . . . of the judgment debtor [Tseng] in the hands of a third person, the garnishee, the Firms. Harkins Builders, 45 F.3d at 833 (quoting Lynch, 196 Va. at 520, 84 S.E.2d at 421). [5]