Old Plank Trail Community Bank, N.A. v. Mattcon General Contractors, Inc. (mem. dec.) ( 2019 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 13 2019, 7:57 am
court except for the purpose of establishing
CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
estoppel, or the law of the case. and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Scott A. Pyle Zachary J. Eichel
Dyer, Indiana Michael L. Einterz
Zionsville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Old Plank Trail Community December 13, 2019
Bank, N.A, Court of Appeals Case No.
19A-PL-1033
Appellant-Garnishee Defendant,
Appeal from the Marshall Circuit
v. Court
The Honorable Curtis D. Palmer,
Mattcon General Judge
Trial Court Cause No.
Contractors, Inc., 50C01-1806-PL-25
Appellee-Defendant/Counter-Plaintiff.
Altice, Judge.
Court of Appeals of Indiana | Memorandum Decision 19A-PL-1033 | December 13, 2019 Page 1 of 7
Case Summary
[1] Old Plank Trail Community Bank, N.A. (Old Plank), appeals the trial court’s
denial of its motions to correct error, which determined that Old Plank had waived
its right to set-off the garnished funds of its account holder, Mattcon General
Contractors (Mattcon), because it had not adequately preserved its right to a set-
off. Old Plank further contends that the trial court abused its discretion in entering
a final order in garnishment in light of its right to set-off the amounts owed.
[2] We affirm.
Facts & Procedural History
[3] On June 14, 2018, Burrink Commercial Services, Inc. (Burrink) filed a complaint
to foreclose a mechanic’s lien, for damages, and for breach of contract against
Mattcon General Contractors (Mattcon). Aldi Inc. was also a named defendant
because the work and materials for the construction project at issue were located
on real estate that it owned. Burrink alleged that Mattcon had paid only part of
what was owed, and an outstanding balance remained in the amount of $176,305.
[4] Although the parties filed a series of claims, counterclaims, and motions from
June, 2018 through December 2018, this appeal only concerns post-judgment
collection efforts. Specifically, on December 6, 2018, the trial court entered a
judgment for $162,178.95 in Mattcon’s favor against Burrink. Thereafter, on
January 8, 2019, Mattcon’s counsel filed a series of proceedings supplemental
Court of Appeals of Indiana | Memorandum Decision 19A-PL-1033 | December 13, 2019 Page 2 of 7
pleadings directed towards Old Plank—the garnishee defendant—as the holder of
Burrink’s accounts.
[5] The following day, the trial court ordered Old Plank to answer on or before
February 1, 2019, certain interrogatories that Mattcon had filed or, at its option,
appear in court and answer the interrogatories in person at a hearing scheduled for
February 8, 2019, at 8:30 a.m. The order specifically provided that “[a]ny claim or
defense to the proceedings supplemental garnishment order must be presented at
the time and place of the hearing.” Appendix Vol. II at 20-21.
[6] On January 24, 2019, Old Plank answered the interrogatories, indicating that
Burrink maintained two checking accounts with it. Old Plank did not list any
deposit amounts, and a handwritten note indicated that the “Bank has claimed set-
off rights as past loans due to Bank.” Appellant’s Appendix Vol. II at 23. In its
supplemental answers to those interrogatories, Old Plank asserted that there were
amounts of deposits totaling $97,944.07 in the combined accounts, along with a
handwritten note indicating, “set-off claimed” as to both amounts. Id. at 26. No
further explanations regarding its claimed right of set-off were provided.
Additionally, even though Old Plank’s legal request coordinator remained in
contact with Mattcon’s counsel throughout the process, it did not provide any
documents in support of its claimed set-off.
[7] Old Plank did not appear at the February 8, 2019 hearing, and the trial court issued
a handwritten order that was captioned, “CCS ENTRY.” Appendix Vol. II at 27.
This entry provided, among other things, that Old Plank’s failure to appear at the
Court of Appeals of Indiana | Memorandum Decision 19A-PL-1033 | December 13, 2019 Page 3 of 7
February 8, 2019 proceedings supplemental hearing waived “any defenses as to
garnished funds.” Id.
[8] On February 11, 2019, Mattcon submitted a final order in garnishment. The trial
court approved the order and entered judgment that same day. The order
indicated that Old Plank had submitted answers to the interrogatories and that
Burrink had accounts with Old Plank. The trial court ordered Old Plank to pay
the balance due Mattcon in the amount of $97,943.96 to the county clerk.
[9] Old Plank filed two separate motions to correct error regarding the February 8,
2019 order and the subsequent order in garnishment. Old Plank asserted that the
trial court erred in concluding that it had waived any defenses to the garnished
funds. Specifically, Old Plank argued that even though it did not appear at the
proceedings supplemental hearing, it had filed two separate pleadings with the trial
court (the interrogatories) and had adequately provided Mattcon’s counsel with the
set-off rights and claims prior to the February 8, 2019 hearing. Old Plank alleged
that it had the right, as Burrink’s depositary bank, to set-off any amounts owed
after receiving notice of the garnishment proceedings. Hence, Old Plank argued
that the trial court should vacate the garnishment order.
[10] The trial court denied Old Plank’s motions to correct error and it now appeals.
Discussion & Decision
[11] A trial court has broad discretion to correct errors, and we will reverse only for an
abuse of that discretion. Speedway SuperAmerica, LLC v. Holmes, 885 N.E.2d 1265,
Court of Appeals of Indiana | Memorandum Decision 19A-PL-1033 | December 13, 2019 Page 4 of 7
1270 (Ind. 2008). An abuse of discretion occurs when the trial court’s action is
against the logic and effect of the facts and circumstances before it and the
inferences that may be drawn therefrom, or if it is based on impermissible reasons
or considerations. Lighty v. Lighty, 879 N.E.2d 637, 640 (Ind. Ct. App. 2008).
Moreover, an abuse of discretion will be found only when the trial court’s
judgment is clearly erroneous. Sanders v. Sanders, 105 N.E.3d 1102, 1106 (Ind. Ct.
App. 2018). We further note that in this case, Old Plank is appealing from a
negative order in garnishment. Thus, we will not reverse a trial court’s order
unless it is contrary to law. Stoffel v. JPMorgan Chase Bank, 3 N.E.3d 548, 552 (Ind.
Ct. App. 2014). We will reverse only where the evidence leads to but one
conclusion, and the trial court reached the opposite conclusion. Smith v.
Dermatology Assoc., 977 N.E.2d 1, 4 (Ind. Ct. App. 2012).
[12] A garnishment proceeding is a means by which a judgment creditor seeks to reach
property of a judgment debtor in the hands of a third person, so that the property
may be applied in satisfaction of the judgment. Fifth Third Bank v. Peoples Nat’l
Bank, 929 N.E.2d 210, 214 (Ind. Ct. App. 2010). A judgment creditor has the
initial burden of proving that funds are available for garnishment. Commercial
Credit Counseling Serv’s. v. W.W. Grainger, Inc., 840 N.E.2d 843, 847 (Ind. Ct. App.
2006). Once a creditor has made a prima facie showing, the garnishee-defendant
must demonstrate a countervailing interest in the property or assert a defense to the
garnishment. Id.
[13] In general, a depositary bank has the right of set-off after receipt of notice of
garnishment. Fifth Third Bank, 929 N.E.2d at 214. However, in the particular
Court of Appeals of Indiana | Memorandum Decision 19A-PL-1033 | December 13, 2019 Page 5 of 7
context of banks as garnishee defendants, a bank may waive its right to a set-off.
First Bank of Whiting v. Samocki Bros. Trucking Co., 509 N.E.2d 187, 199 (Ind. Ct.
App. 1987), trans. denied. Waiver has been defined as the voluntary relinquishment
of a known right. Kowalskey v. State, 42 N.E.3d 97, 103 (Ind. Ct. App. 2015).
Normally, silence or failure to act will not constitute waiver unless the holder of
the right fails to speak or act when there is a duty to speak or act. Grenchik v. State
ex rel. Pavlo, 373 N.E.2d 189, 193 (Ind. Ct. App. 1978).
[14] In this case, Old Plank submitted its answers to interrogatories that indicated a
potential right to a set-off as a defense to a garnishment. However, it failed to
include or reference any relevant loan documents, payment histories, statements of
outstanding balances, or notices of default that would support its claimed set-off
rights. Moreover, Old Plank had the duty, knowledge, and opportunity to present
and prove the claimed defense to garnishment at the February 8 hearing. It failed
to do so, despite the trial court’s order that the claims or defenses were to be
presented at the time and place of the hearing. Under these circumstances, we
cannot say that the trial court abused its discretion in determining that Old Plank
waived its right of set-off. See Commercial Credit Counseling Serv’s, 840 N.E.2d at
848-49 (holding that the garnishee-defendant failed to establish a security interest
in the judgment debtor’s assets and hence, a defense to garnishment, when it only
included an illegible security agreement between it and another debtor, an
unsigned blank exemplar agreement, and an uncertified financing statement in
support of its claim). The trial court’s final order in garnishment stands.
[15] Judgment affirmed.
Court of Appeals of Indiana | Memorandum Decision 19A-PL-1033 | December 13, 2019 Page 6 of 7
Brown, J. and Tavitas, J., concur.
Court of Appeals of Indiana | Memorandum Decision 19A-PL-1033 | December 13, 2019 Page 7 of 7