Prejudgment Remedies in Texas - Doug D'Arche - Back to Main Page

Platter Grocery Co. v. Texas & Pac. R.R. Co., 68 S.W. 265, 266 (1902); Alexander v. Berkman,3 S.W.2d 864, 867 (Tex. Civ. App.—Waco 1927, writ ref’d). A liquidated debt is one where theamount owed can be ascertained at the time the garnishee's answer is filed. Waples-PlatterGrocery Co. v. Texas & Pac. Ry. Co., 95 Tex. 486, 68 S.W. 265, 266 (1902); Alexander, 3S.W.2d at 867. A contingent debt is not subject to garnishment, even if the contingency is latereliminated and the debt becomes fixed. Palandjoglou v. United Nat’l Ins. Co., 821 F.Supp.1179, 1186 (S. D. Tex. 1993); Houston Drywall, Inc. v. Construction Systems Inc., 541 S.W.2d220, 222 (Tex. Civ. App.—Houston [1 st Dist.] 1976, no writ). A Writ of Garnishment may beissued only when the demand is not contingent, is capable of ascertainment by the usual meansof evidence, and does not rest in the discretion of the jury. T-M Vacuum Prods. v. TAISC, Inc.,2008 U.S. Dist. LEXIS 39580, *25 (S.D. Tex. 2008). The claim may not be for a tort action,even if it is related to a liquidated debt such as a fraudulent transfer or a piercing of thecorporate veil. Tex. Civ. Prac. & Rem. Code § 63.001; Fogel v. White, 745 S.W.2d 444, 446(Tex. App.—Houston [14 th Dist.] 1988, no writ) (even if a tort action refers to a liquidated debt, itis still unliquidated until it becomes final). In order for the writ to attach, the debt owed by thethird party must be final. Houston Drywall, 541 S.W.2d at 222. For example, if the debt owed tothe Debtor by the third party is a judgment against the third party for an unliquidated claim, itcannot be garnished until all appeals have expired. Commercial Credit Corp. v. U.S. Fire Ins.Co., 630 S.W.2d 651, 653 (Tex. App.—Houston [1 st Dist.] 1981, no writ).Statutory RequirementsTexas Civil Practice and Remedies Code § 63.001 sets forth the grounds necessary forthe issuance of a pre-judgment Writ of Garnishment. There are two possible grounds for a prejudgmentWrit of Garnishment: (1) an original attachment has been issued; or (2) the Creditorsues for a debt and makes an affidavit stating that (a) the debt is just, due and unpaid; (b) withinthe Creditor's knowledge, the Debtor does not possess property in Texas subject to executionsufficient to satisfy the debt; and (c) the garnishment is not sought to injure the Debtor or theGarnishee. T-M Vacuum Prods. v. TAISC, Inc., 2008 U.S. Dist. LEXIS 39580 at *25.Generally, the first and third elements of the affidavit are reasonably straightforward.The second element is more problematic. While the statute requires that the Creditor does nothave knowledge of assets possessed by the Debtor that are in Texas and subject to execution,it does not specify what, if any, investigation should be done in order to determine if thereDebtor has non-exempt assets. In Black Coral Investments v. Bank of the Southwest, 650S.W.2d 135 (Tex. App.—Houston [14 th Dist.] 1983, writ ref'd n.r.e.) the appeals court consideredwhether a writ of garnishment was properly dissolved where there was evidence that the debtorhad other non-exempt assets in the State of Texas that were subject to execution. The courtnoted that the Creditor “introduced evidence of its investigation which resulted in its good faithbelief that the debtor had no assets within the state sufficient to satisfy the judgment.” Basedupon this evidence, the court held that the Creditor was able to prove the grounds that wererelied upon in order for the writ of garnishment to issue. While it was not an issue in this case,the use of the term “good faith” seems to imply that a Creditor has some obligation toinvestigate whether or not the Debtor has assets in Texas that are sufficient to satisfy thejudgment. While there are no cases directly on point, it is probably not sufficient to for aCreditor to allege that it does not have knowledge of other non-exempt assets without engagingin some effort to determine if such assets exits.5. Contents of the Application and Supporting AffidavitTexas Rules of Civil Procedure 657 - 679, and Texas Civil Practice and Remedies CodeChapter 63 establish the procedure and evidentiary principles that govern garnishments. Thesestatutory provisions are used to determine the respective rights and responsibilities of thePage 6 of 36