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

necessarily delayed to ensure that writ serves its intended purpose -- to 'trap' funds belonging tothe [Debtor] but in the hands of a third party. In re L.A.M. & Associates, 975 S.W.2d 80, 84(Tex. App.—Austin 1998 no writ).One Court of Appeals has held that the Debtor's participation in the Garnishmentproceeding waives service of a copy of the writ. DEL-PHI Engineering Associates, Inc. v. TexasCommerce Bank-Conroe, N.A., 771 S.W.2d 589, 591 (Tex. App.—Beaumont 1989, no writ).Other Courts of Appeal have held that an appearance by the Debtor does not waive the noticerequirement under Tex. R. Civ. P. 663a. Walnut Equipment Leasing Co. v. J-V Dirt & Loam, aDiv. of J-V Marble Mfg., Inc., 907 S.W.2d 912, 915 (Tex. App.—Austin 1995, writ denied);Mendoza v. Luke Fruia Investments, Inc., 962 S.W.2d 650, 652 (Tex. App.—Corpus Christi1998, no writ); Small Bus. Inv. Co. of Houston v. Champion Int'l Corp., 619 S.W.2d 28, 30 (Tex.Civ. App.—Houston [1st Dist.] 1981, no writ). These Courts have held that when a Debtorvoluntarily answers and appears in a Garnishment proceeding, the Debtor waives onlyirregularities in the Garnishment, such as defects in the affidavit or bond. Id. Voluntaryappearance does not waive the requirements of the writ itself. Id. Under this line of cases, nocontrol or custody of a Debtor’s property can be gained by his answer if he has not beenproperly served. Id.The Garnishee lacks standing to assert the failure of the Creditor to serve a copy of thewrit on the Debtor. Sherry Lane Nat. Bank v. Bank of Evergreen, 715 S.W.2d 148, 151 (Tex.App.—Dallas 1986, writ ref'd n.r.e.).10. Garnishee's Response to a Writ of GarnishmentThe garnishment action is technically a lawsuit that has been filed against theGarnishee. The Garnishee's response is governed by the Texas Rules of Civil Procedureunless specifically modified by the chapter dealing with garnishments. Generally, theGarnishee's answer is due on the Monday following 20 days after the writ has been served(except in Justice Court wherein the answer is due on the Monday following 10 days after thewrit has been served). TEX. R. CIV. P. 659.The Garnishee's first obligation is to identify any funds and/or property that it holds forthe Debtor identified in the Writ of Garnishment. For financial institutions, this normally includeschecking accounts, savings accounts, CD accounts and contents of safe deposit boxes. Issuessometimes arise where it is unclear who the actual owner of the funds is. In such cases, a bankmay rely on its deposit agreement in determining whether it has funds owned by the namedDebtor. Bank One, Texas. N.A. v. Sunbelt Sav. F.S.B., 824 S.W.2d 557, 558 (Tex. 1992);Newsome v. Charter Bank Colonial, 940 S.W.2d 157 (Tex. App.—Houston [14 th Dist.] 1996, writdenied).A Writ of Garnishment impounds the alleged money, property or credits of the Debtor.Mendoza v. Luke Fruia Investments, 962 S.W.2d 650, 651 (Tex. App.—Corpus Christi 1998, nowrit). The Garnishee has an obligation to freeze all funds and/or property owned by the namedDebtor up to the amount set forth on the Order granting the Application for Writ of Garnishment.This includes any funds held by the Garnishee at the time the writ was served and any fundsthat are received through the date that the Garnishee filed its answer. Tex. R. Civ. P. 661.Matter of Bohart, 743 F.2d 313, 324 (5 th Cir. 1984); Rome Industries, Inc. v. Intsel Southwest,683 S.W.2d 777, 779 (Tex. App.—Houston [14 th Dist.] 1984, writ ref'd n.r.e.) If the Garnisheefails to freeze the funds, it may become liable to the Creditor for the value of the funds andproperty that are not frozen. Tex. R. Civ. P. 661; See Collier Mfg. & Supply, Inc. v. InterfirstBank Austin, N.A., 749 S.W.2d 560 (Tex. App.—Austin 1988, no writ). Additionally, where aGarnishee distributes funds to a Debtor after being served with a Writ of Garnishment, and doesso knowingly, willfully, maliciously and with actual intent to injure the Creditor, the GarnisheePage 10 of 36