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MOORE, et al. v. MILLERS COVE ENERGY, et al.



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MOORE, et al.

v.

MILLERS COVE ENERGY CO., et
al.


November 5, 1999

Record No. 982376

RONALD L. MOORE, INDIVIDUALLY, ET AL.

v.

MILLERS COVE ENERGY CO., INC., ET AL.

FROM THE CIRCUIT COURT OF LEE COUNTY

Ford C. Quillen, Judge

PRESENT: Carrico, C.J., Compton, Lacy, Hassell,
Keenan, and Koontz, JJ., and Stephenson, Senior Justice

OPINION BY SENIOR JUSTICE ROSCOE B. STEPHENSON,
JR.


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.

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
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 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.

 

FOOTNOTES:

[1] 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.

[2] 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.

 

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