Court Opinion

ID: 6763105
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:33:33.320543+00
Date Added: 2024-06-11T16:02:39.187517
License: Public Domain

Douglas, J.,
dissenting. I respectfully dissent from the judgment of the majority. I would affirm the well reasoned decision of the court of appeals. While I may have found, if I had been the trial judge, based upon the facts of this case, differently as to the amount of the fine levied against appellant for contempt, that is not the key issue now before us. Further, on this point, it has long been held that the power to punish for contempt is an inherent power of a court and it would be improper and difficult, if not impossible, to second-guess a trial judge and find an abuse of discretion especially when the trial judge has seen the parties, knows the facts, and has dealt with the case on a first person basis.
The more important issue before us is the question of the appellant’s failure to report, as a garnishee, a trust account in its possession. A facial reading of the majority opinion could very well lead a reader to the conclusion that the majority’s decision is correct. However, there are three specific factors, not discussed by the majority in any depth, that lead me to a conclusion contrary to that of the majority.
The majority fails to specifically mention that the exact number of the trust account was provided to appellant-garnishee in the judgment creditor’s affidavit of garnishment. Upon receipt of the affidavit, the garnishee’s employee found the account and saw that it was an account being held on behalf of the judgment debtors. At this point, it was the obligation of the garnishee to report that fact to the court pursuant to R.C. 2716.21.
R.C. 2716.21(B) provides, in pertinent part, that: “* * * [t]he garnishee shall truly disclose the amount owed by him to the judgment debtor whether due or not * * (Emphasis added.) Surely it cannot be argued that the funds in this naked trust were the property of the designated trustees. The funds were the property of the judgment debtors and had the trustees withdrawn the funds for their own use or benefit, that would have been an unlawful act. Just because the funds in the trust were not directly (and presently) due the judgment debtors, without a withdrawal order by the trustees, does not remove the legal and/or beneficial ownership of the funds from the debtors. The statute says that they must be reported whether “due or not.” Further, the lawful status of the funds is a decision for the court — not each garnishee which might take it upon itself (himself or herself) to determine who has the legal right to the funds and whether the funds are due or not. Our decision today encourages the placing, by judgment debtors, of their funds in naked trusts, thereby placing those funds beyond the reach of lawful judgment *200creditors. Our decision also now permits persons or institutions holding such funds under such arrangements to summarily ignore an order of a court to report such holdings by simply saying that the funds are held in trust.
While not directly on point, R.C. 1107.07(A) should also be considered. That section provides that under a trust relationship, such as we have in the case now before us, the funds really are the property of the beneficiary and may be paid directly to the beneficiary upon the death of the “trustee.” This is yet another reason that appellant should have reported to the court the existence of the funds.
Finally, the garnishment notice contained a court order which instructed the appellant-garnishee on how to proceed. Section B of the notice provided, in part:
“ 1. That he has money, property, or credits, other than personal earnings of the indicated judgment debtor under his control and in his possession.

"* * *

“5. If the answer to line 1 is ‘YES’ but the money, property, or credits are of such a nature that they cannot be delivered to the Clerk of this Court, indicate that by placing an ‘X’ in the box provided. Do not dispose of that money, property, or credits or give them to anyone else until further order of the Court.” (Emphasis added.)
It must be noted that the appellant knew that the funds in trust were those of “the indicated judgment debtors]”; that those funds were under the control of appellant; and that appellant was not to give the funds “to anyone else” (not just the judgment debtors) until further order of the court. Notwithstanding these explicit instructions, appellant did not report the existence of the funds. Appellant was clearly on notice concerning these funds because it sought advice from its attorney on whether or not to report them.
One must now wonder how many creditor’s judgments in the past have gone unsatisfied because of similar actions of other garnishees. By today’s majority decision, this safe haven for judgment debtors has now been given the stamp of judicial approval. The learned trial judge and the learned court of appeals (unanimously) saw these problems and their judgments should be upheld.
Sweeney, J., concurs in the foregoing dissenting opinion.