Trustees of the Teamsters Union Local No 142 Pension Trust Fund v. Brown et al

Filing 27

OPINION AND ORDER: Court DENIES 17 Motion for Turnover Order to Garnishee-Defendant, Demotte State Bank and DENIES IN PART AND GRANTS IN PART 19 Motion for Turnover Order to Garnishee-Defendant, Fowler State Bank. Fowler State Bank is directed to transfer $2,300.36 to the plaintiffs, Teamsters Union Local 142 Pension Fund. Signed by Magistrate Judge Andrew P Rodovich on 2/8/2012. (tc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
TRUSTEES OF THE TEAMSTERS UNION )
LOCAL NO. 142 PENSION TRUST
)
FUND,
)
)
Plaintiff
)
)
v.
)
)
ROGER A. BROWN, Individually,
)
RAB BROKERAGE, INC.,
)
)
and
)
)
DEMOTTE STATE BANK and FOWLER
)
STATE BANK,
)
)
Garnishee-Defendants )
)
Defendant
)

CIVIL NO. 2:10 cv 249

OPINION AND ORDER
This matter is before the court on the Motion for Turnover
Order to Garnishee-Defendant, DeMotte State Bank [DE 17], and the
Motion for Turnover Order to Garnishee-Defendant, Fowler State
Bank [DE 19], filed by the plaintiff, Trustees of the Teamsters
Union Local No. 142 Pension Fund, on November 18, 2011, and
December 8, 2011, respectively.

For the following reasons, the

Motion for Turnover Order to Garnishee-Defendant DeMotte State
Bank [DE 17] is DENIED, and the Motion for Turnover Order to
Garnishee-Defendant Fowler State Bank [DE 19] is DENIED IN PART
and GRANTED IN PART.

Background
The plaintiff, Trustees of the Teamsters Union Local No. 142
Pension Fund, owns a judgment against the defendants, Roger A.
Brown and RAB Brokerage, Inc., in the amount of $16,005.87,
entered on August 2, 2010.

Local 142 served interrogatories on

the garnishee-defendants, Demotte State Bank and Fowler State
Bank.

DeMotte responded that Roger Brown and his wife, Marsha

Brown, have a joint account with a deposit amount of $15,257.01.
All contributions to this account were the direct deposits of
income from Marsha’s employment, plus interest.
Fowler Bank responded that Roger and Marsha had a joint
account with deposits totaling $11,513.39.

Fowler later amended

its response, stating that the Browns’ account had an opening
balance of $10,662.08, but that $3,048.00 was protected, leaving
$7,614.08 frozen for garnishment.

The $3,048.00 equals the

amount of Roger’s Social Security benefits deposited on August
17, 2011, September 6, 2011, and September 21, 2011.

In addition

to Roger’s Social Security benefits, Marsha’s income as an employee of B & M Hauling, LLC, and a federal tax refund, were
deposited in the account.

Over the past ten years, 24% of the

total deposits originated from Roger’s Social Security deposits,
45% from Marsha Brown’s income, and 31% from the tax refund.

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The plaintiff now requests a turnover order to satisfy the
judgment against Roger Brown.

Brown objects, arguing that the

funds he received from Social Security and those contributed to
the joint account by his wife are exempt from the turnover order.
Discussion
The judgment-creditor bears the burden of demonstrating that
the judgment-debtor has property or income subject to execution.

Carter v. Grace Whitney Properties, 939 N.E.2d 630, 637 (Ind.
App. 2010).

The existing rules of property govern whether the

judgment-debtor holds an interest in the property subject to
execution.

Arend v. Etsler, 737 N.E.2d 1173, 1176 (Ind. App.

2000). This may include property that the judgment-debtor owns
that is in the hands of a third-party.
852 N.E.2d 17, 20 (Ind. App. 2006).

Freidline v. Thomalla,

Both Indiana and federal

statutes exempt certain property a judgment-debtor owns from
garnishment.

Indiana Code §28-9-3-4(d)(3)(B).

Indiana Code §28-9-3-4(d)(3)(B) states that certain sources
of income deposited into an account are exempt from garnishment,
including "Social Security, Supplemental Security Income, veterans benefits, and certain disability pension benefits, and that
there may be other exemptions from garnishment under federal or
state law."

42 U.S.C. §407(a).

Local 142 disputes whether the

funds in the deposit account are traceable to Roger’s Social

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Security benefits.

The funds in the account were co-mingled, and

it is not clear what proportion of the funds were derived from
each source.

However, in its reply brief, Local 142 concedes

that $3,048.00 of the funds in the Fowler Bank account are exempt
as Social Security benefits.

Consequently, these funds are not

subject to garnishment.
The parties have not reached such a concession with regard
to the ownership of the remaining funds.

The signature cards for

the accounts state that they are joint accounts with survivorship, not tenants in common.

Indiana Code §32-17-11-4 defines a

joint account as "an account payable on request of one (1) or
more of two (2) or more parties whether or not mention is made of
any right of survivorship."
(a) Unless there is clear and convincing
evidence of a different intent, during the
lifetime of all parties, a joint account
belongs to the parties in proportion to the
net contributions by each party to the sums
on deposit.
(b) Unless:
(1) a contrary intent is manifested
by the terms of the account or the
deposit agreement; or
(2) there is other clear and convincing evidence of an irrevocable
trust; a trust account belongs
beneficially to the trustee during
the trustee's lifetime.
Ind. Code §32-17-11-23
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The ownership of funds in a joint account is a question of fact
during the lifetime of the parties.

Rollings v. Smith, 716

N.E.2d 502, 505 (Ind. App. 1999).
Local 142 first argues that the terms of the Browns’ agreement with each bank is indicative of an intent to hold the funds
jointly, rather than by their respective contributions, because
the agreements state "Joint Account - With Survivorship (And Not
As Tenants In Common)".

A concurrent estate can be held as

tenants in common, joint tenants, or tenants by the entirety.

United States v. Craft, 535 U.S. 274, 279, 122 S.Ct. 1414, 1421,
152 L.Ed.2d 437 (2002). Tenants in common are presumed to own the
property in equal shares, however, evidence may be submitted to
prove the parties' intent to the contrary and for purposes of
determining how much of the property is owned by each tenant in
common.
1989).

Willett v. Clark, 542 N.E.2d 1354, 1358 (Ind. App.
Individuals who deposit money into a joint account are

entitled to the opposite presumption.

Indiana Code §32-17-11-23

states that the individual who made the contribution to the joint
account retains ownership of the respective funds unless there is
clear and convincing evidence of a contrary intent.

The Browns’

agreement with the bank specifically states that the Browns do
not hold the account as tenants in common.

Therefore, it is not

assumed that the Browns hold the money in equal shares.

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Rather,

the Browns hold the money as joint tenants, and Local 142 has the
burden to present clear and convincing evidence that the Browns
intended for mutual use of all funds contributed to the account.
Local 142 also criticizes the Browns for failing to indicate
the percentages of ownership on their agreements with the banks.
However, Local 142 has not shown that it is necessary to state
the percentages of ownership on the agreement with the bank.
Rather, the law is clear that the parties own the amount equal to
their contributions absent clear and convincing evidence to the
contrary.

Local 142, not the Browns, has the burden of proving

that the Browns' ownership of the funds deviates from the statutory presumption.

There is nothing apparent from the Browns’

agreement with the banks manifesting an intent contrary to the
presumption described in Ind. Code §32-17-11-23.
Local 142 finally argues that the manner in which the Browns
used the funds indicates that they intended to share the funds
jointly, rather than maintain ownership of their respective
contributions.

Roger made withdrawals and signed checks from the

accounts for his personal and business use.
"The right to withdraw and the right of ownership, however,
are separate and distinct rights."
N.E.2d 1107, 1109 (Ind. 1993).

Shourek v. Stirling, 621

The deposit agreement may give a

joint tenant the right to withdraw funds, but it does not alter

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the ownership of the funds. Shourek, 621 N.E.2d at 1110.

To

alter the arrangement from the statutory presumption, there must
be clear and convincing evidence that the parties intended for
joint use of the funds, or that the contributor gave the deposit
to the joint tenant by gift, irrevocable trust, or contract.

See

Hibbard v. Hibbard, 73 N.E.2d 181, 182 (Ind. App. 1947) (explaining that a joint account holder does not own the funds deposited
by another account holder absent proof that it was given by gift,
contract, or irrevocable trust); Rogers v. Rogers, 437 N.E.2d 92,
96 (Ind. App. 1982) (explaining that a joint tenant cannot
deprive the other joint account holder of ownership of the funds
he contributed by unilaterally conveying the funds without the
contributor’s knowledge and consent).
Roger’s use of the funds alone is not clear and convincing
evidence that Marsha intended to relinquish ownership of the
funds in their entirety.

Local 142 has not shown the history or

extent of withdrawals or what the money was used for.

Addition-

ally, it is not clear that his withdrawals exceeded Roger’s own
contributions.

Even considering the withdrawals Roger made, the

court does not believe there is clear and convincing evidence
that Martha intended for Roger to have unfettered use of the
funds.

Local 142 has not met is burden to show that the funds

deposited by Marsha were given to Roger by gift, trust, or con-

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tract, and are subject to garnishment.

Therefore, Local 142 is

limited to garnishing the tax refund check deposited in the
Fowler Bank account.
_______________
Based on the foregoing reasons, the Motion for Turnover
Order to Garnishee-Defendant, DeMotte State Bank, [DE 17] filed
by the plaintiff on November 18, 2011, is DENIED, and the Motion
for Turnover Order to Garnishee-Defendant, Fowler State Bank, [DE
19] filed by the plaintiff on December 8, 2011, is DENIED IN PART
and GRANTED IN PART.

Fowler State Bank is directed to transfer

$2,300.36 to the plaintiff, Teamsters Union Local 142 Pension
Fund.
ENTERED this 8th day of February, 2012

s/ ANDREW P. RODOVICH
United States Magistrate Judge

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