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O'Brien v. Bank of America N.A.

Court of Special Appeals of Maryland

September 9, 2013

MICHAEL ROBERT O'BRIEN, SR., ET AL.
v.
BANK OF AMERICA, N.A., ET AL.

Wright, Hotten, Salmon, James P. (Retired, Specially Assigned), JJ.

OPINION

HOTTEN, J.

This case arises from a garnishment of bank accounts jointly held by a married couple, Dorothy O'Brien ("Dorothy") and appellant, Michael O'Brien ("Michael"), as well as another bank account held by Dorothy, Michael, and appellant, Lavelle O'Brien ("Lavelle"), [1]who is Michael's mother, to satisfy a judgment entered against Dorothy.[2] Appellants filed an amended complaint in the Circuit Court for Baltimore City against appellees, Bank of America, N.A. ("Bank of America") and the Attorney General of Maryland, Douglas Gansler ("Attorney General"), in his official capacity, alleging conversion and/or trespass to chattel, breach of contract, and a violation of the Expedited Funds Availability Act. Appellants further requested a declaratory judgment that appellees violated Md. Code (1974, 2013 Repl. Vol.), § 11-603(c) of the Courts and Judicial Proceedings Article [3] [hereinafter Cts. & Jud. Proc. Art. § 11-603(c)], the Due Process Clause of the Fourteenth Amendment to the United States Constitution, Article 19 of the Maryland Declaration of Rights, and Article 3, Section 43 of the Maryland Constitution.[4] Appellees filed their respective motions for judgment, which the trial court granted. Appellants noted an appeal, and presents five issues for our consideration:

1. Did the trial court erroneously fail to give [ ] [a]ppellants a reasonable opportunity to introduce materials pertinent to whether Lavelle O'Brien's account was a joint account?
2. Did the trial court commit a legal error by finding and declaring that subsection 11-603(c) does not violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution?
3. Did the trial court commit a legal error by finding and declaring that subsection 11-603(c) does not violate Article [3], [S]ection 43 of the Maryland Constitution?
4. Did the trial court commit a legal error by finding and declaring that subsection 11-603(c) does not violate Article 19 of the Maryland Declaration of Rights?
[5]. Did the trial court commit a legal error by finding that the seized accounts were "available for withdrawal" under the Expedited Funds Availability Act?

For the reasons that follow, we answer all of the above-mentioned questions in the negative. We affirm the judgment of the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND

On November 12, 2009, Citi Financial, Inc. ("Citi Financial") obtained a judgment against Dorothy in the District Court of Maryland for Prince George's County ("District Court").[5] Citi Financial filed a request for a writ of garnishment, seeking garnishment of Dorothy's Bank of America accounts. On July 26, 2010, the District Court issued service of a writ of garnishment on Bank of America, which directed it "to seize and hold all of Dorothy's property that was in the bank's possession."[6] On August 20, 2010, Bank of America filed a plea, stating:

1. Garnishee holds property in a checking account no. XXXXXXXX6220, savings account no. XXXXXXXX9379, savings account no. XXXXXXXX9382 and checking account no. XXXXXXXX7801 all accounts are in the name of two (2) or more persons, one (1) or more of whom but fewer than all of whom, are judgment debtors.
2. Pursuant to Md. Code Ann., Cts. & Jud. Proc. Art., § 11-603, Garnishee is holding in said accounts the amounts of $241.87, $15.17, $10.01, and $900.00, respectively, pending further order of the [c]ourt.

According to the Bank of America Deposit Agreement and Disclosures ("Deposit Agreement"), signature cards, and bank statements, Dorothy and Michael jointly owned three of the abovementioned bank accounts, and in 2000 or 2001, pursuant to a power of attorney, Dorothy and Michael were authorized to use and withdraw funds from the remaining account, which belonged to Lavelle.

Thereafter, Dorothy filed a motion for release of garnished funds, prompting Citi Financial, Bank of America, and Dorothy to enter into an agreement.[7] As a result, the District Court issued an order on September 14, 2010, which granted Dorothy's motion, stating (strike-outs omitted) (signatures omitted):

Upon review and consideration of the Judgment Debtor's Motion for Release of all Garnished Funds, other than wages, any opposition thereto, and for good cause demonstrated, it is this 14[th] day of Sept., , 2010
ORDERED, that Judgment Debtor's Motion for Release of Garnished Funds other than wages be, and the same hereby is, GRANTED; by agreement; and
ORDERED, that the garnishment directed to the Garnishee be, and the same hereby is, QUASHED; and it is further
ORDERED, that any monies being held by the Garnishee other than wages pursuant to the Garnishment in the name of the Judgment Debtor be released forthwith to the Judgment Debtor.

On July 26, 2011, appellants filed a complaint in the Circuit Court for Baltimore City against appellees, [8] alleging conversion and/or trespass to chattel, breach of contract, and a violation of the Expedited Funds Availability Act. Appellants contended that Bank of America did not release the funds, despite notification that the garnishment neither applied to the joint marital accounts nor Lavelle's account. On September 9, 2011, Bank of America filed its motion to dismiss. On September 26, 2011, appellants filed their opposition to Bank of America's motion, to which Bank of America filed a reply on October 14, 2011.

On December 6, 2011, appellants filed an amended complaint, adding the Attorney General to the action. Appellants further requested a declaratory judgment that appellees violated Cts. & Jud. Proc. Art. § 11-603(c), the Due Process Clause of the U.S. Constitution, Article 19 of the Maryland Declaration of Rights, and Article 3, Section 43 of the Maryland Constitution. On December 27, 2011, Bank of America filed its motion to dismiss the amended complaint. On January 4, 2012, the Attorney General filed his motion to dismiss or, in the alternative, motion for summary judgment. On January 17 and January 23, 2012, appellants filed their respective oppositions to Bank of America's and the Attorney General's motions. On January 31, 2012, Bank of America filed a reply in support of its motion to dismiss and a response to the Attorney General's motion. Following a motions hearing, the court treated Bank of America's and the Attorney General's motions to dismiss as motions for summary judgment. On May 24, 2012, the court issued a memorandum opinion, final declaratory judgment, and order, granting the motions for summary judgment and holding that Cts. & Jud. Proc. Art. § 11-603(c) did not violate the Due Process Clause of the U.S. Constitution, Article 19 of the Maryland Declaration of Rights, or Article 3, Section 43 of the Maryland Constitution.

STANDARD OF REVIEW

The question of whether summary judgment under Maryland Rule 2-501 was properly granted is one of law, which we review de novo in order to determine whether the trial court was legally correct. David A. Bramble, Inc. v. Thomas, 396 Md. 443, 453 (2007) (citing Walk v. Hartford Cas., 382 Md. 1, 14 (2004); Todd v. Mass. Transit Admin., 373 Md. 149, 154 (2003); Sadler v. Dimensions Healthcare Corp., 378 Md. 509, 533 (2003); Southland Corp. v. Griffith, 332 Md. 704, 712 (1993)). Summary judgment is appropriate where "there is no genuine dispute as to any material fact and . . . the party [in whose favor judgment is entered] is entitled to judgment as a matter of law." Md. Rule 2-501(f). Upon any given statement of facts, or upon clear facts, the legal relation that existed between the parties must be decided by the court. Whitehead v. Safway Steel Prods, Inc., 304 Md. 67, 73-74 (1985).

In reviewing the grant of summary judgment, "'we independently review the record to determine whether the parties properly generated a dispute of material fact and, if not, whether the moving party is entitled to judgment as a matter of law.'" Charles County Comm'rs v. Johnson, 393 Md. 248, 263 (2006) (quoting Myers v. Kayhoe, 391 Md. 188, 203 (2006)). Our examination is limited to the same record and legal reasoning that the trial court analyzed to grant the motion for summary judgment. D'Aoust v. Diamond, 424 Md. 549, 575 (2012) (citing Messing v. Bank of Am., N.A., 373 Md. 672, 684 (2003); Anderson v. Council of Unit Owners of the Gables on Tuckerman Condo., 404 Md. 560, 571 (2008)) (parenthetical phrase omitted); see also River Walk Apartments, LLC v. Twigg, 396 Md. 527, 541-42 (2007) (quoting Standard Fire Ins. Co. v. Berrett, 395 Md. 439, 451 (2006)). "So long as the record reveals no genuine dispute of any material fact necessary to resolve the controversy as a matter of law, and it is shown that the movant is entitled to judgment, the entry of summary judgment is proper." Appiah v. Hall, 416 Md. 533, 547 (2010) (internal quotation omitted) (O'Connor v. Baltimore County, 382 Md. 102, 111 (2004)).

DISCUSSION

I. Whether The Trial Court Provided Appellants A Reasonable Opportunity To Introduce Materials Pertinent To Whether Lavelle's Account Was A Joint Account.

Appellants allege that Bank of America first argued during the motions hearing that Lavelle's account was jointly owned. As a result, appellants maintain that the trial court did not provide them with a reasonable opportunity to submit material to counter Bank of America's contention.

In Worsham v. Ehrlich, et al., 181 Md.App. 711, 716 (2008), the defendants instigated pre-recorded telephone communications regarding political candidates. As a result, in November 2006, the plaintiff filed an action against three defendants, alleging violations of consumer protection laws that shielded consumers against unwanted telephone solicitations that encompassed commercial content. Id. at 715. In January 2007, the plaintiff submitted "call trace" phone records and an affidavit when he added two defendants to the action and filed a motion for partial summary judgment. Id. at 716. Thereafter, a hearing was held because three defendants filed their respective motions to dismiss. Id. at 716-17. In May 2007, on the same day that the hearing occurred, another defendant (hereinafter "fourth defendant") filed his motion to dismiss. Two weeks later, the plaintiff filed his response to the fourth defendant's motion, and in June 2007, the plaintiff requested a second hearing. Id. at 717. Several days later, the court granted the initial defendants' motions to dismiss. Id. In August 2007, the court denied the plaintiff's request for a second hearing, stating "an additional hearing on [the fourth defendant's] motion to dismiss . . . would have been pointless as the court had already heard and considered legal argument on [the plaintiff's] opposition to the motions to dismiss at the [initial] hearing . . . ." Id. at 718.

On appeal, the plaintiff averred that the trial court erred because it did not grant his second request for a hearing. Id. at 715. Our Court examined Md. Rule 2-322(c), [9] and acknowledged that the plaintiff "attached extraneous material, i.e., the affidavit, to his motion for partial summary judgment, and argued his position in support of that motion" at the first hearing. Id. at 723. Hence, our Court affirmed, concluding that the plaintiff "had a full and fair opportunity to present his arguments with respect to the law at the [first] motions hearing . . . . A second hearing would have been merely duplicative." Id. at 731-32 (citing Vinogradova v. Suntrust Bank, Inc., 162 Md.App. 495, 511 (2005)).

In Hrekorovich v. Harbor Hospital Center, Inc., et al., 93 Md.App. 772, 777-78 (1992), the defendants–employers terminated the plaintiff's–employee's position as a hospital director when an advisory committee determined that the plaintiff was no longer competent in performing his duties. The plaintiff filed a complaint against the defendants, alleging several causes of action, including wrongful termination, and attached certain provisions of the hospital's bylaws and the employment manual. Id. at 778-79. The defendants filed a motion to dismiss, submitted other sections of the bylaws and manual, and maintained that neither established an employment contract. Id. at 779-80. The trial court granted the defendant's motion, but without a memorandum opinion.[10] Id. at 778.

On appeal, the plaintiff alleged that the court erred in treating the motion as one for summary judgment because the court did not provide him with sufficient notice that it would consider the defendant's supplementary materials. Id. at 785. The plaintiff further maintained that if known, he would have contested the defendant's position with his "evidence, testimony and documents." Id. at 785-86 (internal quotations omitted). Our Court determined that the plaintiff was aware that the trial court could consider ancillary documents, id. at 786, and that he failed to provide further information because he lacked such evidence. Id. at 788. Accordingly, our Court affirmed the trial court's decision. Id. at 801.

As stated previously in the instant case, the trial court converted Bank of America's and the Attorney General's motions to dismiss into motions for summary judgment. Thus, Md. Rule 2-322(c) was triggered, and the trial court had to provide appellants with a "reasonable opportunity to present all material made pertinent to such a motion by [Md.] Rule 2-501." Md. Rule 2-322(c).

After appellants filed their initial complaint, Bank of America filed a motion to dismiss and a reply in support of its motion. In the reply, Bank of America explained that Lavelle's account had joint ownership because Michael and Dorothy were listed on the account. Additionally, in support of its contention, Bank of America stated:

At the outset, [Bank of America] requests that the [c]ourt take judicial notice pursuant to [Md.] Rule 5-201(b)[11] of: (1) the BOA[12] Deposit Agreement and Disclosures, which is a standard agreement for 27 states, including Maryland, and the District of Columbia; (2) a statement on Lavelle O'Brien's account showing the account ownership; (3) the Plea of Bank of America, N.A., Garnishee filed in the District Court . . .; and (4) the Order of Court entered by the District Court . . . . These documents are attached to this [r]eply as [e]xhibits 1-4, respectively.

Specifically, the Deposit Agreement included a clause regarding "Joint Accounts, " which stated:

If more than one persons's name appears in the title of an account without a fiduciary, beneficiary or other designation, then the account is a joint account. All persons whose names appear on the account are co-owners of the account, regardless of whose money is deposited in the account.

Bank of America further attached the signature card, which was signed when appellants and Dorothy applied for the bank account, as well as bank statements from Lavelle's account. The bank statements were attached with Bank of America's reply in support of the motion to strike the jury demand and its reply in support of the motion to dismiss the amended complaint. Moreover, in support of the Attorney General's motion to dismiss, or, in the alternative, a motion for summary judgment regarding joint ownership of Lavelle's account, he also attached the Bank of America Deposit Agreement.

Unlike the plaintiff in Worsham, but akin to the plaintiff in Hrehorovich, appellants had notice regarding Bank of America's contention, but did not possess any documentation or materials to refute Bank of America's argument that Lavelle's account was jointly owned. We perceive that this explains why no exhibits were attached in explanation. As a result, appellants "knew of the extraneous materials, had an opportunity to respond to them, and had not refuted their accuracy." Hrehorovich, 93 Md.App. at 787. Accordingly, the trial court complied with the requirements of Md. Rule 2-322(c).

II. Whether The Trial Court Committed A Legal Error By Finding And Declaring That Cts. & Jud. Proc. Art. § 11-603(c) Did Not Violate The Due Process Clause Of The U.S. Constitution Or Article 19 of the Maryland Declaration Of Rights.

In Tyler v. City of College Park, 415 Md. 475, 500-01 (2010), the Court of Appeals discussed the standard of review for determining whether statutes are unconstitutional due to a failure to afford a citizen his or her right to due process, stating:

In order to determine whether a given statute or ordinance satisfies the due process requirement . . ., we ask rhetorically whether the legislative enactment, as an exercise of the legislature's police power, bears a real and substantial relation to the public health, morals, safety, and welfare of the citizens of the State or municipality. Westchester West No. 2 Ltd. P'Ship v. Montgomery County, 276 Md. 448, 454 . . . (1975); Bowie Inn, Inc. v. City of Bowie, 274 Md. 230, 236 . . . (1975). In applying this test, courts perform a very limited function, resisting interference unless it is shown that the legislature exercised its police power arbitrarily, oppressively, or unreasonably. Westchester West, 276 Md. at 460 . . . (noting that "[p]rice control, like any other form of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty") (quoting Nebbia v. New York, 291 U.S. 502, 539 . . . (1934)); see also Hargrove v. Bd. of Trustees of Md. Retirement Sys., 310 Md. 406, 427 . . . (1987); Bowie Inn, 274 Md. at 236 . . . . The wisdom or expediency of a statute duly adopted by the legislative body is not subject to judicial scrutiny, and the statute will not be held void if there are any considerations relating to the public welfare by which it may be supported. Hargrove, 310 Md. at 427 . . .; Westchester, 276 Md. at 455 . . .; Bowie Inn, 274 Md. at 236 . . . . We have noted that "'courts are under a special duty to respect the legislative judgment where the legislature is attempting to solve a serious problem in a manner which has not had an opportunity to prove its worth.'" Bowie Inn, 274 Md. at 237 . . . . As such, courts should hesitate before invalidating an ordinance where doing so would deprive the legislative body contemplating such a statute "'of any opportunity to discover whether the chosen method will be good, bad or indifferent in its results.'" Id. at 237-38 . . . .

In accordance with the abovementioned standard, we review Cts. & Jud. Proc. Art. § 11-603(c)'s legislative history and policy to determine whether the General Assembly exercised its power properly or arbitrarily, and whether the public's welfare was contemplated in enacting this statute, which relates to the garnishment of joint accounts. In Maryland Nat. Bank v. Pearce, 329 Md. 602, 620-25 (1993) [hereainfter "Pearce"], the Court of Appeals discussed the origin of Cts. & Jud. Proc. Art. § 11-603(c), stating:

Ch. 818 of the Acts of 1989 began its legislative life with the introduction of House [B]ill 1027. That bill provided:
"AN ACT concerning
Garnishment–Jointly Owned Property
FOR the purpose of providing that a garnishment against jointly held property in the hands of certain financial institutions is not valid unless all ...

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