Court Opinion

ID: 7844740
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:08:20.686301+00
Date Added: 2024-06-11T16:21:08.801652
License: Public Domain

BERDON, J.,
dissenting. Contrary to the weight of authority, the majority adopts a rule that will deprive innocent persons of their interests in joint bank accounts by making the entire balance in such accounts available for seizure by creditors of a coholder. For example, if a parent and a child maintain a joint savings account wherein all the deposits made to the account belonged to the parent, and the parent making those deposits never intended to make a present gift to the child but merely maintained the joint account for family convenience, the creditors of the child, as a result of the majority’s decision, will have full access to the entire account to satisfy the debts of the child. This rule adopted today by the court not only unjustly favors creditors, but places thousands of joint accounts established for the convenience of the family in jeopardy of being appropriated to pay the debts of a coholder of a joint account who may not have any interest, or less than a whole interest, in the account.
To reach its conclusion, the majority relies upon Masotti v. Bristol Savings Bank, 43 Conn. Sup. 360, 653 A.2d 836 (1994), aff'd, 232 Conn. 172, 653 A.2d 179 (1995) (per curiam), and General Statutes § 36a-290,1 *357both of which, even if generously read, fail to support its position. Masotti involved the bank’s right of setoff with respect to a joint account maintained at that bank, pursuant to a deposit account contract that both depositors signed.2 In stark contrast, the judgment creditor in the present case, the Cadle Company (an assignee of a money judgment obtained by the plaintiff Fleet Bank Connecticut, N.A.), is seeking to levy an execution on the funds in a joint account held by the defendant, Charles Carillo, the judgment debtor, and his wife, the intervening defendant Carol Carillo, at the Collinsville Savings Bank. Here, unlike in Masotti, the nondebtor wife never agreed that the judgment creditor could levy a bank execution on her share of the joint account for the debts of her husband.
*358In Masotti, besides the bank’s contractual right of setoff, the trial court also referred to General Statutes § 36-3 (now § 36a-290),3 which provides in essence that the funds of one joint depositor are to be considered the funds of the other for purposes of withdrawal. Masotti v. Bristol Savings Bank, supra, 43 Conn. Sup. 364. In the present case, however, § 36a-290 does not support the third party judgment creditor’s position.
In Grodzicki v. Grodzicki, 154 Conn. 456, 461, 226 A.2d 656 (1967), almost thirty years ago, this court placed the following gloss on § 36a-290 (then § 36-3): “From the language of the statute, which makes no attempt to define the interest of either party in the account, it is obvious that its purpose was to protect the interests of the banks [at which the accounts are maintained]. A number of states have such statutes, which are referred to as ‘bank protection statutes.’ ” In Grodzicki, the construction placed on subsection (a) of § 36a-290 (then the first sentence of § 36-3 [1]) is that it “permits the payment by the bank to any of the codepositors during the lifetime of all of them or to the survivor or survivors after the death of one or more of them ‘and the receipt or acquittance of the person or persons to whom such payment is made shall be a valid and sufficient release and discharge for all payments so made.’ This portion of the statute is obviously for the protection of the banks. The language of the statute does not determine the respective rights of the parties inter vivos.” Id., 462-63. With respect to subsection (b) of § 36a-290 (then the second sentence of § 36-3 [1]), the court held that “[t]he obvious intent of the legislature is to give to the survivor or survivors an irrebuttable presumption of ownership. . . . The presumption created by [subsection (b)] of the statute has no application to an action between the parties when all of them are alive. In such a case, we must look to our common *359law for a determination of the question presented.” (Citations omitted; internal quotation marks omitted.) Id.4 In sum, Grodzicki held that the statute did not determine the respective interests of the coholders of a joint account.
We have long held that there is a presumption “that the legislature is aware of our interpretation of a statute, and that its subsequent nonaction may be understood as a validation of that interpretation.” Ralston Purina Co. v. Board of Tax Review, 203 Conn. 425, 439, 525 A.2d 91 (1987). Indeed, in the thirty years since the court decided Grodzicki, the legislature has visited § 36a-290 and its predecessor six times, and never took any action to reverse the interpretation placed on it by this court. The majority, however, does that today by making the absurd distinction that Grodzicki applies to the interests between coholders, but not to the interests between the innocent coholder and the judgment creditor of the debtor coholder.
Several other jurisdictions, with similar statutes, have also come to the conclusion that legislation such as § 36a-290 is intended solely to protect banks that hold deposits in joint accounts. See, e.g., Black v. Black, 199 Ark. 609, 617, 135 S.W.2d 837 (1940) (statute giving codepositors equal rights to withdrawal of funds in joint bank deposit was “passed for the protection of the bank in which the deposit was made. It permits the bank to pay out the deposit . . . and protects the bank in doing so ... . The statute effects no investiture of title as *360between the depositors themselves, but only relieves the bank of the responsibility and duty of making inquiry as to the respective interests of the depositors in the deposit . . . .” [Internal quotation marks omitted.]);5 Beacon Milling Co. v. Larose, 138 Vt. 457, 460, 418 A.2d 32 (1980) (“provisions of [the] statute are for the protection of the bank paying money to persons named in deposits made in the manner specified in the statute, and do not change or affect the title to such deposit” [internal quotation marks omitted]); Yakima Adjustment Service, Inc. v. Durand, 28 Wash. App. 180, 184, 622 P.2d 408 (1981) (“[t]here is no doubt that the original and still a primary purpose behind statutes of this nature is to protect the depository institution by insulating it from disputes with depositors”).
“Jurisdictions applying the general rule that joint bank accounts are vulnerable to seizure by the creditor of one depositor usually hold that the creditor’s rights are limited to the amount of the funds in the account equitably owned by the debtor depositor and do not extend to funds equitably owned by the innocent depositor.” Annot., Joint Bank Account as Subject to Attachment, Garnishment, or Execution by Creditor of One *361of the Joint Depositors, 11 A.L.R. 3d 1473 (1967). Indeed, the clear weight of authority counsels that an innocent coholder’s interest in the account should not be subjected to a coholder’s debts. See, e.g., Hayden v. Gardner, 238 Ark. 351, 353-54, 381 S.W.2d 752 (1964) (delineating three different methods of garnishment of joint accounts and adopting view “that the joint account should be gamishable only in proportion to the debtor’s ownership of the funds, as to which parol evidence is admissible to show the respective contributions of each depositor” and remanding case with direction that innocent codepositor be made party [internal quotation marks omitted]); Maloy v. Stuttgart Memorial Hospital, 316 Ark. 447, 450, 872 S.W.2d 401 (1994) (confirming rule in Hayden and characterizing it as majority mle); see also Amarlite Architectural Products, Inc. v. Copeland Glass Co., 601 So. 2d 414, 416 (Ala. 1992) (in jurisdiction with joint bank account statute similar to Connecticut’s, court concluded “that joint accounts are gamishable to the extent of the ownership of the debtor. . . . Furthermore, we agree with the holding in Hayden . . . that there is a rebuttable presumption that the funds in the joint account belong to the debtor. The burden is on the depositors to prove otherwise. . . . We consider this to be the most equitable solution, because it is much easier for the depositors than the creditor to have or obtain proof of the ownership of the commingled funds.” [Citations omitted.]); Traders Travel International, Inc. v. Howser, 69 Haw. 609, 615-16, 753 P.2d 244 (1988) (even with joint bank account statute, stating that “[m]ost courts agree that judgment creditors can garnish the joint bank account of a debtor [although other account holders exist] but have split over the degree of vulnerability. The majority of jurisdictions mle that joint accounts may be garnished only to the extent of the debtor’s equitable interest. . . . We now adopt the majority view that the debtor presump*362tively holds the entire'joint bank account but may disprove this supposition to establish his or her equitable interest. In this way, the debtor, at an evidentiary hearing, may prevent the judgment creditor from seizing more than the debtor’s fair share of the account.” [Citations omitted.]); Miller v. Clayco State Bank, 10 Kan. App. 2d 659, 664, 708 P.2d 997 (1985) (“[cjlearly, in the garnishment of a joint bank account, only the interest actually owned by the garnishment debtor is subject to seizure”); Delta Fertilizer, Inc. v. Weaver, 547 So. 2d 800, 802 (Miss. 1989) (adopting Arkansas Supreme Court’s rule in Hayden as law of Mississippi and also stating that “[i]n the majority of jurisdictions, the entire [joint] account is vulnerable, but evidence is permitted to show the respective ownership of each depositor”); Baker v. Baker, 710 P.2d 129, 132-34 (Okla. App. 1985) (“[M]ost courts agree that a joint tenancy bank account is gamishable by the creditor for a debt incurred only by one of the joint depositors. . . . Allowing the creditor to reach the joint account only to the extent of the debtor’s interest protects innocent parties.”); RepublicBank Dallas v. National Bank, 705 S.W.2d 310, 311 (Tex. App. 1986) (“In most jurisdictions, joint bank accounts are vulnerable to seizure by the creditor of any of the depositors, but the creditor’s right to seize the funds is limited to the funds in the account that are equitably owned by the debtor and does not extend to funds equitably owned by other parties. . . . Texas appears to follow this general rule. . . . Even when garnishment is proper . . . assets owned by two or more persons can be reached by garnishment only to the extent of the judgment debtor’s ownership interest in the jointly owned asset.” [Citations omitted.]); Yakima Adjustment Service, Inc. v. Durand, supra, 28 Wash. App. 184 (“[T]he garnishment of a joint bank account reaches only those funds owned by the debtor. The burden of proving the ownership of the funds rests with the joint depositors. This holding coincides with the majority rule.”).
*363The majority, in its zealousness to protect the interests of creditors, points out that creditors may be misled because the account names the debtor as a joint owner. Of course, the simple answer is that creditors know how to protect themselves before extending credit — that is, by having all of the joint owners pledge their interest. The majority also cites to General Statutes § 36a-291 for the proposition that it authorizes a holder of a joint account to pledge the entire account as security for a loan. Section 36a-291, however, requires delivery of the passbook to the pledgee before the bank is required to transfer such pledged account. There was no such pledge of the joint account in this case.
The majority fails to recognize that joint bank accounts are usually maintained for the convenience of persons of little means or for the benefit of family members. Unlike the financial options available in the world of commerce or among the financially affluent, the joint account may be the only practical option these persons have for handling their finances. It troubles me that the court, in adopting a bright line rule, is motivated by concerns about evidentiary and administrative burdens on the trial courts that would occur if litigants were allowed to resort to the courts for a determination of the respective ownership interests of the coholders of a joint account.6 The courts of this state, however, *364exist not only to litigate the complexities of the Uniform Commercial Code for the banking and the commercial world, but also for the less affluent consumer.
I would reverse the trial court’s judgment and remand the case for a new hearing to determine the equitable interest of Carol Carillo, which interest should be exempt from execution for the judgment debt of Charles Carillo. In accordance with the majority of other jurisdictions, we should hold that there is a rebuttable presumption that the funds in the joint account belong to the debtor coholder, and that the burden is on the coholders to prove otherwise. Therefore, Carol Carillo was entitled to a hearing in order for the court to determine her interest in the account.7
Accordingly, I dissent.8

 General Statutes § 36a-290 provides in relevant part: “(a) When a deposit account has been established at any bank, or a share account has been established at any Connecticut credit union or federal credit union, in the names of two or more natural persons and under such terms as to be paid to any one of them, or to the survivor or survivors of them, such account is deemed a joint account, and any part or all of the balance of such account, including any and all subsequent deposits or additions made thereto, may be paid to any of such persons during the lifetime of all of them or to the *357survivor or any of the survivors of such persons after the death of one or more of them. Any suchpayment constitutes a valid and sufficient release and discharge of such bank, Connecticut credit union or federal credit union, or its successor, as to all payments so made.
“(b) The establishment of a deposit account or share account which is a joint account under subsection (a) of this section is, in the absence of fraud or undue influence, or other clear and convincing evidence to the contrary, prima facie evidence of the intention of all of the named owners thereof to vest title to such account, including all subsequent deposits and additions made thereto, in such survivor or survivors, in any action or proceeding between any two or more of the depositors, respecting the ownership of such account or its proceeds. . . .” (Emphasis added.)

 The deposit account contract that the depositors signed in Masotti provided in pertinent part as follows: “ ‘Unless this right is denied to us by law, we can take any funds in your account to pay any debt you owe us that is in default. This is called the right of set-off and applies to all funds of yours in our possession now or in the future. We can use this right of set-off without going through any legal process or court proceedings. If this is a. joint account, this right of set-off applies to deposits of any of you to pay the debts owed to us by any or all of you.' ” (Emphasis added.) Masotti v. Bristol Savings Bank, supra, 43 Conn. Sup. 363.
Although the majority is correct in pointing out that the trial court in Masotti acknowledged the nondebtor spouse’s claim that she never signed nor received a copy of the deposit contract, the trial court rejected this argument by stating that “[t]he plaintiff is attempting to assert her rights under the contract but is unwilling to acknowledge the rights of the defendant. She cannot have it both ways.” Id., 363-64. Unfortunately, the majority ignores this part of the trial court’s opinion.

 In 1995, § 36-3 was transferred to § 36a-290.

 In Grodzicki, the court noted that “[s]pecial statutes have been enacted in six states. . . . [TJhey specifically recognize the joint account as a method of transfer of funds to the surviving co-depositor. None of these statutes, however, makes any mention of the co-depositors’ inter vivos interests. Thus, although the survivorship question is settled in these jurisdictions, the question of the donee’s inter vivos interests is not answered, and the courts must once again look to their common law.” (Internal quotation marks omitted.) Grodzicki v. Grodzicki, supra, 154 Conn. 462.

 In United States v. National Bank of Commerce, 472 U.S. 713, 105 S. Ct. 2919, 86 L. Ed. 2d 565 (1985), Justice Powell, in his dissent, gleaned this distinction from Arkansas law and stated that “[t]his right [to withdraw from the joint accounts] unquestionably belonged to [the delinquent taxpayer], as it did to each of the other codepositors. They all had the same right to withdraw. But the right to withdraw funds was no more than that. It was a right accorded parties to joint accounts as a matter of mutual convenience and it was independent of any right to or in the property. It encompassed no right of possession, use, or ownership over the funds when withdrawn.” (Emphasis in original.) Id., 741, citing Black v. Black, supra, 199 Ark. 617, and Hayse v. Hayse, 4 Ark. App. 160-B, 160-F, 630 S.W.2d 48 (1982). Indeed, even the majority opinion in National Bank of Commerce recognized this distinction in Arkansas state law regarding creditors’ rights, although it was not dispositive of the issue because the case concerned a federal tax-collection matter and, as such, was governed by federal statute. United States v. National Bank of Commerce, supra, 723 and 726-27.

 The majority, in considering the administrative and evidentiary burdens on the trial courts, lists several issues that the trial courts would have to resolve. See footnote 16 of the majority opinion. Those issues should not preclude an innocent coholder from receiving the benefit of an evidentiary hearing. Like other jurisdictions, we should adopt the rebuttable presumption that the funds belong to the debtor coholder. The innocent coholder, or the debtor, would then bear the burden of proving the respective equitable interests in the joint account. See Traders Travel International, Inc. v. Hawser, supra, 69 Haw. 615-16 (adopting majorityviewthat debtor presumptively owns entire joint account but may, at evidentiary hearing, disprove presumption and establish his or her ownership interest in joint account); Yakima Adjustment Service, Inc. v. Durand, supra, 28 Wash. App. 184 (burden of proving respective interests in funds rests with joint depositors). Any interest not proven to be owned by the innocent coholder would, under *364the presumption, be subject to seizure by the creditors of the debtor coholder.

 See footnote 6 of this dissent.

 I have one final concern with respect to the majority’s decision. The innocent coholder in this case, Carol Carillo, also advances the argument that the public policy of this state, as reflected in our tax succession statute, General Statutes § 12-343, supports her position that at least some fractional portion of the joint account should be recognized as hers and thereby exempt from execution by the creditors of her husband, the debtor coholder. She cogently cites to § 12-343, which provides that “[wjhenever property is held in the joint names of two or more persons and the survivor or survivors of them, the right of the survivor or survivors to the immediate ownership or possession and enjoyment of such property shall be a taxable transfer and the tax shall be computed as though a fractional part of the property, determined by dividing the fair market value of the entire property by the number of persons in whose joint names it was held, belonged absolutely to the deceased person and had been bequeathed or devised by him to the survivor or survivors by will . . . .” (Emphasis added.) In other words, under § 12-343, ownership in a joint account shall be pro rated among the coholders (the survivors and the decedent) for tax computation purposes, in contrast to the conclusive presumption adopted by the majority today with respect to the lifetime interests of coholders, a holding that advances only the interests of the creditors.
Nevertheless, the majority, as it states in footnote 15 of its opinion, will not consider § 12-343 in determining what should be the law of this state, because it was not raised by Carol Carillo before the trial court, and because she has not presented any “textual or historical evidence” to support her *365argument before this court. This is simply incredible and is contrary to our recent case law. In Genovese v. Gallo Wine Merchants, Inc., 226 Conn. 475, 628 A.2d 946 (1993), I pointed out and endorsed the procedure employed by the majority where “[w]e, on our own, raised the applicability of [a statute] and [therefore] decided [the] case on the basis of a claim that was never raised in the trial court and was raised in this court only as a result of our direction.” (Emphasis in original.) Id., 496 (Berdon, J., dissenting and concurring). Furthermore, the logic that we should not consider all relevant law when deciding a case that will determine what our law should be for all other similar cases, eludes me.