Rockstone Capital v. IDR Enterprises
1423 EDA 2016
| Pa. Super. Ct. | Sep 26, 2017Background
- Rockstone obtained a $218,552.54 judgment against Hantman (personal guaranty for IDR) in 2011 and served a writ of execution on Isdaner as garnishee.
- Between 2011–2012 Green Valley Country Club billed charges addressed to Hantman for club expenses.
- Isdaner paid Green Valley $21,032.69 in 2012, characterizing the payments as business expenses of Isdaner (not reimbursements to Hantman).
- Hantman filed bankruptcy on December 31, 2012.
- Rockstone moved to enforce the writ, arguing the writ attached to funds Isdaner used to pay Green Valley and that Isdaner improperly facilitated Hantman’s avoidance of garnishment; the trial court denied that portion of the motion.
- The trial court found Isdaner used its own funds to pay business expenses, did not possess or pay out Hantman’s property, and therefore the writ did not attach to those payments; the Superior Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether writ of execution served on Isdaner attached as a lien to funds Isdaner used to pay Green Valley | Writ created a judicial lien on all Hantman property in Isdaner’s possession; Isdaner was obligated under its operating agreement to reimburse Hantman for these expenses, so payments should be subject to the writ | Isdaner paid its own business expenses with its own funds; payments were not reimbursement or property of Hantman in Isdaner’s possession | Court held writ did not attach to Isdaner’s payments to Green Valley because payments were Isdaner’s funds for its business expenses, not Hantman’s property |
| Whether public policy forbids a garnishee from making payments that facilitate a debtor’s avoidance of garnishment | Allowing Isdaner to pay Green Valley undermines garnishment and facilitates avoidance; public policy (and Witco) require garnishees to protect creditors’ rights | Isdaner acted on its own funds and did not possess or transfer Hantman’s property; no wrongful facilitation occurred | Court rejected public-policy argument where the garnishee did not possess debtor’s property and payments were not compensatory or payable to the debtor |
Key Cases Cited
- Witco Corp. v. Herzog Bros. Trucking, Inc., 863 A.2d 443 (Pa. 2004) (defines possession for garnishment and examines when third‑party control yields attachment)
- Casey v. GAF Corp., 828 A.2d 362 (Pa. Super. 2003) (trial court findings of fact are binding on appeal; motions to enforce reviewed de novo as to law)
- Garden State Standardbred Sales Co. v. Seese, 611 A.2d 1239 (Pa. Super. 1992) (describes garnishment as a method to collect from third‑party holdings of a judgment debtor)
- Korman Commercial Properties, Inc. v. Furniture.com, 81 A.3d 97 (Pa. Super. 2013) (garnishee must exercise care to protect parties' rights during garnishment)