Burrowes v. Bank of America, N.A.
2017 WL 641264
Ga. Ct. App.2017Background
- In Feb. 2015 Sheffield Properties served a garnishment summons on Bank of America (BOA) seeking funds from Celio Burrowes' BOA checking account. BOA was served at 9:20 a.m. on Feb. 11.
- Burrowes visited a BOA branch ~2:00 p.m. the same day, withdrew $10,000 cash and purchased a $67,100 cashier’s check payable to himself (remitter and payee), and the bank debited his account when issuing the cashier’s check.
- BOA’s Legal Order Processing learned of the earlier garnishment at 3:46 p.m. and immediately froze the account and placed a stop-payment on the cashier’s check; BOA asked Burrowes to return the check but he did not.
- Burrowes deposited the cashier’s check in a North Carolina bank; BOA refused to honor it and later paid all held funds into the garnishment court, which released them to the garnishment plaintiff.
- Burrowes sued BOA under OCGA § 11-3-411(b) for wrongfully refusing to pay a cashier’s check; BOA defended under § 11-3-411(c) (asserted defenses and that payment was prohibited by law). The trial court granted BOA summary judgment; Burrowes appealed.
Issues
| Issue | Burrowes' Argument | BOA's Argument | Held |
|---|---|---|---|
| Whether BOA was required to honor the cashier’s check after purchase | The cashier’s check funds were withdrawn from his account and thus no longer subject to garnishment, so BOA must honor the check | BOA can refuse payment because defenses (mistake, failure of consideration) apply and, in any event, payment was prohibited by law due to the prior garnishment | Court: Affirmed BOA — payment was prohibited by law under garnishment statute; funds assigned to payee but held by BOA were subject to garnishment |
| Whether Burrowes can recover expenses/consequential damages under § 11-3-411(b) | He is entitled to remedies for wrongful refusal to pay | § 11-3-411(c) bars recovery if refusal based on asserted bank defenses or payment is prohibited by law | Court: Recovery barred because subsection (c)(iv) applies — payment was prohibited by law (garnishment) |
| Whether court should consider a fiduciary-duty claim raised on appeal | N/A on appeal — Burrowes argued he would have taken cash if warned | BOA: claim not raised below so should be forfeited | Court: Forfeited — claim not raised in trial court, cannot be raised first on appeal |
Key Cases Cited
- Howerton v. Harbin Clinic, 333 Ga. App. 191 (2015) (standard of review for summary judgment)
- Weldon v. Trust Co. Bank of Columbus, 231 Ga. App. 458 (1998) (cashier’s check is drawn by the bank; issuance assigns bank funds to the payee)
- Wright v. Trust Co. of Ga., 108 Ga. App. 783 (1963) (bank may assert defenses like mistake or want of consideration against original payee when no holder in due course)