AMERICAN ALTERNATIVE INSURANCE CORP., APPELLANT,
v.
SOUTH FLORIDA GLAZING, INC. AND COLONIAL BANK, N.A., APPELLEES
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American Alternative Insurance Corp., a judgment creditor, appealed the dissolution of a writ of garnishment against Colonial Bank. The court affirmed the dissolution, holding that a promissory note was in default based on missed payments, which gave the bank a superior right to the funds without requiring the bank to take affirmative action to accelerate the note.
The court held that the promissory note was in default based on the missed payments, and the bank did not need to take affirmative action to accelerate the note before the garnishment could be dissolved. The trial court properly dissolved the writ of garnishment based on the bank's superior right to the funds.
[1] A writ of garnishment may be dissolved when a bank demonstrates a superior right to the garnished funds due to a borrower's default on a promissory note.
[2] A promissory note can be in default based on the occurrence of events specified in the note, such as failure to make payments when due, without requiring affirmative acti…
Previewing 2 of 3 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“it was unnecessary for the bank to have taken some affirmative action to accelerate the note prior to the service of the writ of garnishment”
Establishes the key holding that no affirmative action by the bank is required to establish default under a promissory note
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceAmerican Alternative obtained a judgment against South Florida Glazing and sought garnishment of funds held by Colonial Bank. The bank initially conce…
The full statement of facts, procedural history, and disposition for this case are member content.
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KLEIN, J.
Appellant, a creditor, appeals an order granting a motion to dissolve a writ of garnishment. We affirm.
The creditor, after obtaining a judgment against South Florida Glazing, moved for a writ of garnishment stating that Colonial Bank had property of South Florida Glazing. The bank, on March 21, 2008, filed an answer conceding indebtedness in a specific amount. Five days later, on March 26, the bank filed an amended answer and affirmative defenses asserting that it had a superior right to the funds because of a promissory note from South Florida Glazing to the bank which was in default. The bank asserted that payments due on February 7 and March 7 had not been made. The writ of garnishment was then, over the objection of the creditor, dissolved, and the creditor appeals.
The creditor raises two arguments, first, that the notes were not in default, and, in the alternative, even if they were, the bank had taken no action on the default.
The closest ease on point is Barsco, Inc. v. H.W.W., Inc., 346 So. 2d 134 (Fla. 1st DCA 1977), in which the facts were similar to those in the present case. In Barsco the bank, which had been garnished, alleged that the loan was in default because the debtor had sold a piece of property that the debtor was required to retain as collateral for the loan. The debtor was not in default of'the monthly payments, and the bank had taken no action on the default at the time the writ of garnishment was served: The Barsco court, in a case of first impression, adopted the view, on which there was a split of authority, that it was ¡unnecessary for the bank to have taken some affirmative action to accelerate the note prior to the service of the writ of garnishment. The court noted that under the current state of the law, it was the security agreement which determined what constituted an event of default and, under the agreement in Barsco, no affirmative reaction was required by the bank.
The note in the present case provided that the occurrence of any of a number of events “shall, constitute a default,” including the failure to make a payment when due or the entry of a judgment against the obligor. No notice of default was neces•sary. As in Barsco, the note was in default without the need for bank action, and the trial court properly dissolved the writ of garnishment. .Affirmed.
WARNER and TAYLOR, JJ., concur.