THE CIRCUIT COURT OF FAIRFAX COUNTY Robert J. Smith, Judge
PRESENT: Lemons, C.J., Mims, McClanahan, Powell, Kelsey, and
McCullough, JJ., and Koontz, S.J.
WILLIAM C. MIMS, JUSTICE.
appeal, we consider whether the circuit court erred by
placing the burden of proof in a garnishment proceeding on
SunTrust Bank, the garnishee, rather than on PS Business
Parks, L.P. ("PS Business"), the judgment creditor.
Additionally, we consider whether the circuit court erred by
finding that SunTrust was indebted to Deutsch & Gilden,
Inc. ("Deutsch"), the judgment debtor, in the
amount of $1.2 million.
BACKGROUND AND MATERIAL PROCEEDINGS
Business leased a storefront to Family Furniture Centers,
Inc. Deutsch guaranteed the lease. After Family Furniture
Centers and Deutsch stopped paying rent, PS Business obtained
a judgment against the companies in the amount of $664,
923.34 plus interest and attorney's fees. PS Business
filed a garnishment summons, which named Deutsch as the
judgment debtor and SunTrust as the garnishee, against
"all accounts, including [the] account ending [in]
61663." The garnishment summons was served on SunTrust
on March 5, 2013 with a return date of April 12, 2013.
response, SunTrust processed a $15, 050.11 legal order debit
against an account titled to Deutsch ending in 95497 and
filed a check in that amount with the circuit court. SunTrust
also filed a check for $133, 656.69 drawn from an account
ending in 61663, which was owned by G&D Furniture
Holdings, Inc. ("G&D").
G&D filed a motion to quash the garnishment of account
61663. PS Business filed a cross-motion to ascertain the
funds held by SunTrust in accounts 61663 and 95497. At the
hearing on the motions, Andrew Dolson, vice president and
assistant general counsel for SunTrust, testified that
accounts 61663 and 95497 were part of a "zero balance
account arrangement." In such arrangements there is a
master account and several subsidiary accounts. The funds in
the subsidiary accounts are transferred daily into the master
account. According to Dolson, this consolidation of available
funds from the subsidiary accounts allows the master account
owner to "put the cash to some good effective use."
For example, the funds "might be invested overnight in
some securities investment."
are transferred from the master account back to subsidiary
accounts as needed to answer for demands presented against
them such as paying checks, honoring automated clearing house
debits, and performing wire transfers. Dolson indicated that
account 61663 is the master account in the zero balance
arrangement and account 95497 is a subsidiary account.
SunTrust receives a garnishment summons for an account that
is a part of a zero balance arrangement, it typically severs
the ties between the master and subsidiary accounts. This was
not done when SunTrust received the garnishment summons for
account 95497, which caused "funds to flow into [it]
from the master [account]." Dolson testified that as a
result the balances reflected on the account statements were
"not just faulty . . . or unreliable" but
"preposterously oversized amounts."
circuit court granted G&D's motion to quash the
garnishment of account 61663. The court also ordered payment
to PS Business of $15, 050.11, the amount of the check drawn
on account 95497. PS Business appealed to this Court. We
affirmed the circuit court's ruling with respect to the
garnishment of account 61663:
In the absence of evidence regarding the contractual
relationship between the Deutsch and G&D accounts, the
periodic transfer of funds between those accounts does not
establish a debtor relationship between SunTrust and Deutsch
to the funds in G&D account 61663 that would subject
those funds to a claim by a creditor with a judgment against
PS Business L.P. v. Deutsch & Gilden, Inc., 287
Va. 410, 417-18, 758 S.E.2d 508, 511 (2014).
reversed the order of payment from account 95497, however,
finding that the statements showed that SunTrust's
indebtedness to Deutsch exceeded $15, 050.11:
[A]ny funds that reached the account between March 5, 2013
and April 12, 2013, the garnishment period, were funds that
Deutsch was entitled to and, consequently, ...