Steven W. Shaw, Las Vegas, Nevada, for Appellants.
Gordon Silver and Erika A. Pike Turner and Joel Z. Schwarz, Las Vegas, for Respondent.
BEFORE HARDESTY, PARRAGUIRRE and CHERRY, JJ.
A judgment creditor may garnish only a debtor's funds that are held in a joint bank account, not the funds in the account owned solely by the nondebtor. In post-judgment proceedings below, a judgment creditor garnished the funds in bank accounts held by the judgment debtor jointly with her nondebtor children. The children, claiming that the garnished funds belonged to them alone, objected and petitioned the district court for relief, but the district court summarily denied their petition. Because the children's claims to the funds were timely and properly
made, we reverse the district court's decision and remand this matter for an evidentiary hearing to determine whether the garnished funds actually belong, and thus must be returned, to the nondebtor children.
FACTS AND PROCEDURAL HISTORY
Appellants Haley, Tyson, and Trey Brooksby are the children of judgment debtors who, as guarantors of a commercial loan, owe respondent Nevada State Bank on a $4.1 million post-foreclosure judgment. Nevada State Bank executed on the judgment through writs of execution and garnishment of the judgment debtors' Wells Fargo bank accounts. Although the writs and instructions did not mention the Brooksby children's Wells Fargo bank accounts, those accounts were held jointly with their mother and thus were levied as well. According to the Brooksby children, their Wells Fargo bank accounts were established when they were minors and held funds that belonged to them alone— money given to them as birthday presents, college scholarships, and wages they earned from odd jobs while in high school. The Brooksby children were not served with the writs of execution and garnishment, but upon noticing that their funds had been seized, they began corresponding with Wells Fargo and Nevada State Bank.
When their use of informal means failed to result in the return of funds, they made verified claims for wrongful execution and petitioned the district court for a hearing in the deficiency/guarantor action between their parents and Nevada State Bank. The verified claims were not served on the constable who had served the writs of execution and garnishment, however, and upon Nevada State Bank's objection, the children made renewed verified claims one month later, which were mailed to the constable. The next month, without a hearing, the district court denied the Brooksby children's petition and claims; the district court minutes indicate only that the pleading was improper. Unclear on why their petition and claims were denied but presuming that it was based on Nevada State Bank's objection to lack of proper service on the constable, two days later, the Brooksby children filed renewed claims and, shortly thereafter, another petition for the return of their account funds under NRS 21.120 (third-party claims concerning writs of garnishment in aid of execution) and NRS 31.070 (third-party claims statute). Again without holding a hearing, the district court denied their claims and petition, this time stating that the claims were untimely. The Brooksby children appealed.
In their appeal, the Brooksby children argue that bank account funds held jointly by a judgment debtor and a nondebtor are subject to levy by a judgment creditor only to the extent that they are owned by the judgment debtor and thus do not constitute property belonging solely to the nondebtor. We agree.
Only property owned by the judgment debtor is subject to garnishment, and questions regarding title to that property as between the judgment creditor and a third party are properly determined by the court having jurisdiction under NRS 31.070. NRS 31.249(2); Kulik v. Albers, Inc.,91 Nev. 134, 137, 532 P.2d 603, 605-06 (1975); see also NRS 21.120 (referring third-party claims concerning writs of garnishment in aid of execution to the NRS 31.070 process). In line with this ownership rule, a majority of courts, under a variety of theories, have held that a judgment creditor is not entitled to joint bank account funds that truly belong to someone other than the judgment debtor. See, e.g., Maloy v. Stuttgart Mem'l Hosp., 316 Ark. 447, 872 S.W.2d 401, 402 (1994) (noting that this appears to be the majority view and citing Traders Travel Int'l, Inc. v. Howser, 69 Haw. 609, 753 P.2d 244 (1988)); Triplett v. Brunt-Ward Chevrolet, Inc., 812 So.2d 1061, 1066 (Miss.Ct.App.2001); Jemko, Inc. v. ...