BAXTER HEALTHCARE CORPORATION, ETC., APPELLANT,
v.
UNIVERSAL MEDICAL LABS, INC., ET AL., APPELLEE
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
Baxter Healthcare challenged a bank's right to offset a pre-agreed garnishment fee from garnished funds before responding to a writ of garnishment. The court held that when a depositor has agreed to pay an administrative fee for garnishment notices, the bank may offset that fee from the garnished account because the bank's contractual right to the fee arose simultaneously with the garnishment's effectiveness.
Yes. A bank may offset a pre-agreed garnishment fee from garnished funds because the bank's contractual right to the fee arises in the same moment as the garnishment's effectiveness. Where rights arise simultaneously, the party in possession of the funds prevails unless the garnishing party shows a greater right, not merely an equal right.
[1] A bank may offset a pre-agreed fee for expenses incurred in responding to a garnishment from a garnished account before remitting funds, provided the depositor agreed to…
[2] A depositor's agreement to pay a fee for a garnishment notice creates a right for the bank to offset that fee at the same moment the garnishment writ becomes effective.
Previewing 2 of 6 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“in order to make the bank turn over funds to which it is entitled, the one garnishing the account must show a greater right, not an equal right”
Establishes the core principle that when offset rights arise simultaneously with garnishment, the bank (party in possession) prevails unless the garnishing party can show superior rights
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceA bank had a previous agreement with its depositor that a $65 per garnishment fee would be charged to cover the bank's expenses when a garnishment was…
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
HARRIS, J.
This issue in this case is whether a bank which has a previous agreement with its depositor that a pre-agreed fee will be charged to cover the bank’s expenses in the event a garnishment is served on the bank may offset that amount from the garnished account before responding to the writ of garnishment.
We agree with appellant’s attorney that the writ of garnishment became effective as to the monies in the account within “the blink of an eye” of the service of the writ. But since the depositor agreed to pay the bank a $65 per “notice of a garnishment” fee, the bank’s right to offset came into existence within that same “blink of an eye.” This tie, we conclude, should go to the one in possession of the money sought. In other words, in order to make the bank turn over funds to which it is entitled, the one garnishing the account must show a greater right, not an equal right.
In addition to its “blink of an eye” argument, appellant also asserts that the garnishment law does not permit the bank to deduct an administrative fee. Nor, insofar as we can tell, does it specifically prohibit it. Certainly the bank and its depositors are free to contract as they wish. Section 77.28, Florida Statutes, does provide that the court shall determine the garnishee’s costs and expenses upon entry of a final judgment. This provision indicates that indeed the bank is entitled to collect a reasonable fee to cover its expenses necessitated by the garnishment action and suggests that if the one garnishing an account disputes the bank’s charges, the matter may be submitted to the judge. In this case, it was.
Appellant moved for summary judgment arguing that the fee should not be permitted as an offset. Appellee moved for summary judgment asking the court to approve the fee as an offset. Appellee submitted an affidavit detailing the basis for its claim and, by references to charges of competing banks, established that the fee charged was reasonable. Appellant does not challenge the reasonableness of the fee. The court, although relying primarily on its finding that the depositor “owed” the fee to the bank upon service of the writ of garnishment, thus justifying the offset, nevertheless approved the fee. Thus the judicial oversight of the “garnishee’s costs and expenses” provided in section 77.28 has been met.
AFFIRMED.
THOMPSON, C.J.1, and PLEUS, J., concur.