EBSARY FOUNDATION CO., APPELLANT,
v.
BARNETT BANK OF SOUTH FLORIDA, N.A., APPELLEE
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Ebsary Foundation Co., holder of a judgment against Witmer, garnished Witmer's bank account at Barnett Bank. The bank set off amounts Witmer owed on defaulted notes against the garnishment. The court affirmed the validity of the bank's set-off and rejected the garnisher's statutory and collateral arguments.
The bank validly exercised its set-off right under common law and its customer agreement; the controversy is not governed by the UCC provision addressing payment items but rather by common law set-off principles; the set-off is not defeated by the fact that the debts were otherwise collateralized; and the bank, having resisted the garnishment for its own interests rather than as a disinterested stakeholder, is not entitled to a reasonable attorney's fee under the statute but only to the $100 statutory deposit.
[1] A bank may set off a debtor's funds held in an account against matured debts owed to the bank, even when a writ of garnishment has been served by a third-party creditor.
[2] A bank's right to set off a debtor's funds against matured debts is not defeated by the fact that the debts are otherwise collateralized.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the set-off was validly effected”
States the core holding that the bank's exercise of set-off against the garnished account was valid
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Join FLexlaw to unlock all legal intelligenceEbsary Foundation obtained a judgment against Witmer and served a writ of garnishment on Barnett Bank to reach Witmer's account. Barnett Bank exercise…
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SCHWARTZ, Chief Judge.
After the appellant, the holder of a judgment against one Witmer, served a writ of garnishment on Barnett Bank to reach Witmer’s account there, the bank set off the amounts Witmer owed it on notes due the bank which were in default.
We affirm the trial court’s determination that the set-off was validly effected. Coyle v. Pan American Bank, 377 So. 2d 213 (Fla.1979); Barsco, Inc. v. H.W.W., Inc., 346 So. 2d 134 (Fla. 1st DCA 1977); In re T & B General Contracting Co., 13 B.R. 686 (Bankr.M.D.Fla.1981).
In so doing, we reject Ebsary’s contention that the controversy is governed by section 674.303, Florida Statutes (1989), which pertains only to disputes as to the payment of “items” presented to a bank and does not concern controversies, such as this one, between creditors who present competing claims to a particular bank account. Pittsburgh Nat’l Bank v. United States, 657 F. 2d 36 (3d Cir.1981); In re T & B General Contracting Co., 13 B.R. at 686. Similarly, we do not accept the claim that the bank’s right to a set-off undey the common law and the agreement with its customer is defeated by the fact that the set-off debts were otherwise collateralized. See Jensen v. State Bank of Allison, 518 F. 2d 1 (8th Cir.1975); Motorola Communications & Electronics, Inc. v. National Patient Aids, Inc., 427 So. 2d 1042 (Fla. 4th DCA 1983).
Compare In re Saugus General Hosp., Inc., 698 F. 2d 42 (1st Cir.1983) (applying acknowledgedly minority rule).
On the bank’s cross appeal, we also affirm. Because Barnett resisted the writ of garnishment on its own behalf and for its own interests, rather than as a “stake holder innocently drawn into controversy,” United States Pipe & Foundry Co. v. Holcomb Pipe Lines, Inc., 465 F. 2d 827, 828 (5th Cir.1972), we hold that the trial judge correctly refused to award the bank a reasonable attorney’s fee under section 77.28, Florida Statutes (1989) and appropriately restricted its recovery in this regard to the $100 deposit provided by that section. U.S. Pipe & Foundry, 465 F. 2d at 827; see First Nat’l Bank & Trust Co. v. Bryan, 427 So. 2d 392 (Fla. 4th DCA 1983).
Affirmed.
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ALL Am. Semi-Conductor, Inc. v. Ellison Graphics Corp., 594 So. 2d 342 (Fla. 4th DCA 1992)…take holder drawn into controversy” but resisted the writ of garnishment on its own behalf and for its own interest. United States Pipe and Foundry Co. v. Holcomb Pipe Lines, Inc., 465 F. 2d 827 (5th Cir.1972); Ebsary Foundation Co. v. Barnett Bank, 569 So. 2d 806 (Fla. 3d DCA 1990). On remand, we direct the trial judge to restrict appellant/garnishee’s attorney’s fees award to the $100 deposit provided by section 77.28, Florida Statutes (1989). Ebsary. AFFIRMED IN PART; REVERSED IN PART AND REMANDED WITH…
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Felice Joan Scherer and Gerald E. Cowan v. Scherer, 591 So. 2d 327 (Fla. 4th DCA 1992)…orney’s fees in the final judgment. While the order appealed from contains no rationale for the denial of attorney’s fees, Robert contends that fees were properly denied upon authority of Ebsary Foundation Co. v. Barnett Bank of South Florida, N.A., 569 So. 2d 806 (Fla. 3d DCA 1990), which denied fees to a trustee bank because the bank resisted the writ of garnishment on its own behalf and for its own interests, rather than as a stake-holder innocently drawn into the controversy. It seems the trust itself was…
Authorities Cited
- Motorola Commc'ns & Elecs., Inc. v. Nat'l Patient Aids, Inc., 427 So. 2d 1042 (Fla. 4th DCA 1983)
- Coyle v. PAN Am. Bank OF Miami, 377 So. 2d 213 (Fla. 3d DCA 1979)
- Pittsburgh Nat'l Bank v. United States, 657 F.2d 36 (3d Cir. 1981)
- First Nat'l Bank & Tr. Co. of Stuart v. Bryan, 427 So. 2d 392 (Fla. 4th DCA 1983)
- Roger A. Jensen for the Estate of Jim Uhlenhopp v. State Bank OF Allison, 518 F.2d 1 (8th Cir. 1975)
- Barsco, Inc. v. H.W.W., Inc., 346 So. 2d 134 (Fla. 1st DCA 1977)
- In re Saugus Gen. Hosp., Inc. v. Saugus Bank & Tr. Co., 698 F.2d 42 (1st Cir. 1983)
- United States Pipe & Foundry Co. v. Holcomb Pipe Lines, Inc., 465 F.2d 827 (5th Cir. 1972)