O'Brien v. Bank of America, N.A.
75 A.3d 964
Md. Ct. Spec. App.2013Background
- Citi Financial obtained a judgment against Dorothy O’Brien and served a writ of garnishment on Bank of America seeking Dorothy’s funds.
- Bank of America answered the writ stating several accounts were held in the names of two or more persons (joint accounts) and froze amounts consistent with Md. Code, Cts. & Jud. Proc. § 11-603(c).
- Appellants Michael and Lavelle O’Brien sued Bank of America and the Maryland Attorney General alleging conversion, breach of contract, violation of the Expedited Funds Availability Act, and that § 11-603(c) violated federal and state due process and the Maryland constitutional protection of a wife’s property.
- The trial court converted dismissal motions into summary judgment, granted judgment for defendants, and held § 11-603(c) constitutional and compliant with federal law; appellants appealed.
- On appeal the court reviewed (1) whether appellants had fair opportunity to present materials after conversion to summary judgment; (2) constitutionality of § 11-603(c) under the Fourteenth Amendment and Maryland Article 19; (3) whether § 11-603(c) violated Article 3, § 43 (wife’s property protection); and (4) whether federal funds-availability law was violated.
- The appellate court affirmed, holding the bank properly relied on the statute and deposit agreement, appellants had notice/opportunity to respond, and the statute survived constitutional and federal-law challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellants were given reasonable opportunity to introduce materials after the court treated motions as summary judgment | Appellants: Bank argued joint ownership at hearing; court cut off opportunity to submit evidence about Lavelle’s account | Bank/State: Appellants had prior notice of extraneous materials and had no contrary evidence to supply | Court: No error — appellants knew of materials, had opportunity to respond under Md. Rule 2-322(c) |
| Whether § 11-603(c) violates due process (U.S. Const. & MD Art. 19) | Appellants: Freezing joint accounts before notice/hearing to non-debtor owners deprives property without due process | Bank/State: Postjudgment garnishment statutes serve creditor interests; bank is not a state actor and acted under statutory/judicial process | Court: No violation — statute bears reasonable relation to public welfare; postjudgment process and opportunity for hearing are adequate; bank not state actor |
| Whether § 11-603(c) violates Article 3, § 43 (wife’s property protection / tenancy by entirety) | Appellants: Statute permits seizure of accounts that may be tenancy by entirety, infringing marital-protection provision | Bank/State: Statute and deposit agreement presume joint accounts with survivorship; legislature balanced interests and banks cannot always know marital status | Court: No violation — legislature’s scheme was reasonable; courts should not presume tenancy by entirety from standard deposit language in a way that would frustrate statute’s purpose |
| Whether bank’s hold violated the Expedited Funds Availability Act | Appellants: Holding funds violated federal funds-availability requirements | Bank/State: Federal guidance permits holding funds to satisfy garnishment/court order | Court: No violation — holding funds under garnishment is permissible under the statute and its implementing commentary |
Key Cases Cited
- Worsham v. Ehrlich, 181 Md. App. 711 (Md. Ct. Spec. App. 2008) (Rule 2-322(c) notice and opportunity to present materials under converted motions)
- Hrehorovich v. Harbor Hosp. Ctr., 93 Md. App. 772 (Md. Ct. Spec. App. 1992) (party aware of extraneous materials bears burden to produce contrary evidence)
- Maryland Nat. Bank v. Pearce, 329 Md. 602 (Md. 1993) (legislative history and interpretation of § 11-603 and trust/joint-account distinctions)
- Tyler v. City of College Park, 415 Md. 475 (Md. 2010) (standard for reviewing statutes under due process — police-power rational basis)
- Fuentes v. Shevin, 407 U.S. 67 (U.S. 1972) (prejudgment seizure of tangible property without prior notice/hearing violates due process — distinguished from postjudgment garnishment)
- Lind v. Midland Funding, L.L.C., 688 F.3d 402 (8th Cir. 2012) (postjudgment garnishment of joint accounts does not necessarily violate due process; focus on actual notice and post-deprivation hearing)
- Savig v. First Nat. Bank of Omaha, 781 N.W.2d 335 (Minn. 2010) (judgment creditor may serve garnishment on joint accounts; non-debtor presumed to own funds rebuttably)
- Fleet Bank Connecticut, N.A. v. Carillo, 240 Conn. 343 (Conn. 1997) (courts should avoid applying real property rules strictly to bank joint accounts; administrative burdens of mandatory accounting)