Moore v. Millers Cove Energy Co. ( 1999 )

PRESENT: Carrico, C.J., Compton, Lacy, Hassell, Keenan, and
Koontz, JJ., and Stephenson, Senior Justice
RONALD L. MOORE, INDIVIDUALLY, ET AL.
OPINION BY
v. Record No. 982376 SENIOR JUSTICE ROSCOE B. STEPHENSON, JR.
November 5, 1999
MILLERS COVE ENERGY CO., INC., ET AL.
FROM THE CIRCUIT COURT OF LEE COUNTY
Ford C. Quillen, Judge
In this appeal, we decide whether a judgment creditor can
obtain by garnishment of a court clerk funds voluntarily
deposited with the court by a judgment debtor in a pending
chancery suit.
On April 8, 1998, Millers Cove Energy Co., Inc. and others 1
(collectively, Millers Cove) instituted a garnishment action
against Ronald L. Moore, individually, and others 2 (collectively,
Moore) and Charles Calton, Clerk of the Circuit Court of Lee
County (the Clerk). Millers Cove sought to garnish $50,000 that
Moore had voluntarily deposited with the circuit court in
connection with a declaratory judgment proceeding Moore had
instituted against Millers Cove. The return date of the
garnishment was May 26, 1998.
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The other judgment creditors are Darrell Barnwell; Hubert D.
Barnwell; Judy Barnwell; Carolyn B. Petrey; Susan M. Kincaid,
Trustee under the Will of Joseph A. Kincaid, deceased; and Mt.
Airy Farms, a Virginia general partnership.
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The other judgment debtors are Ruby Moore, Robert Moore, and
Ronald L. Moore, Co-executors of the Last Will and Testament of
Royce G. Moore, deceased.
Moore is the lessee and Millers Cove is the lessor under
two coal leases on land in Lee County. The garnishment action
is part of a legal dispute that began in 1989 when Millers Cove
gave notice that it considered the leases terminated due to
Moore's alleged breach thereof. After receiving the notice,
Moore instituted the declaratory judgment suit seeking an
adjudication that the leases remained in effect. The money that
Moore deposited with the court was an advance of the minimum
royalties due under the leases.
The declaratory judgment action was stayed when Millers
Cove filed a bankruptcy petition in the United States District
Court for the Eastern District of Tennessee. In the bankruptcy
proceeding, Millers Cove brought an adversary proceeding against
Moore seeking a determination that the leases were terminated
and also an award of monetary damages. Ultimately, in that
proceeding, Millers Cove obtained a judgment against Moore in
the amount of $1,453,036.50. That judgment is currently on
appeal before the United States Court of Appeals for the Sixth
Circuit.
Millers Cove brought the judgment to Virginia and had it
registered in the United States District Court for the Western
District of Virginia. Thereafter, Millers Cove (1) filed a
motion in the pending declaratory judgment action seeking to
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have the funds paid to it and (2) instituted the garnishment
proceeding which is the subject of this appeal.
The trial court denied Millers Cove's motion to have the
funds paid to it, but the court granted the garnishment against
the Clerk. Moore appeals.
A judgment creditor, in a garnishment proceeding under Code
§ 8.01-511, has no rights greater than those possessed by the
judgment debtor. Hartzell Fan, Inc. v. Waco, Inc., 256 Va. 294,
299, 505 S.E.2d 196, 200 (1998); Lynch v. Johnson, 196 Va. 516,
521, 84 S.E.2d 419, 422 (1954). Consequently, the judgment
creditor is entitled to a judgment against a garnishee only if
the garnishee is indebted to the judgment debtor when the
garnishment summons is served on the garnishee or if such
indebtedness arises between the date of service and the return
date of the garnishment. Virginia National Bank v. Blofeld, 234
Va. 395, 400, 362 S.E.2d 692, 695 (1987).
Code § 58.1-3177(A) imposes upon a circuit court clerk "the
duty, unless it is otherwise specially ordered, to receive, take
charge of and hold all moneys paid into the court and to pay out
or dispose of these moneys as the court orders or decrees." In
the present case, therefore, the Clerk had neither the
discretion, obligation, nor authority to pay the money absent an
order of the court to do so. At the time the garnishment
summons was returnable, the court had not entered an order
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directing the Clerk to pay the money to Moore, the judgment
debtor. Therefore, at that time, the Clerk owed no debt to
Moore. Consequently, the trial court erred in awarding the
garnishment against the Clerk.
Accordingly, we will reverse the trial court's judgment and
dismiss the garnishment.
Reversed and dismissed.
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