Banks and banking – Bank defeats customer’s conversion claim

Virginia Lawyers Weekly//April 22, 2026//

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Where a bank debited five accounts belonging to at least one judgment debtor, after receiving writs of execution from a court, the customer’s conversion claim against the bank was dismissed. Nothing about the bank’s conduct was wrongful, and it was not required to give notice to the account holders.

Background

Signal Ventures LLC obtained a default judgment in Texas state court against Hugh D. Dale Jr. and two of his companies: Drilco Oil and Gas Inc. and Drilco 2019 1V2H Drilling Program LLC. Signal then filed a copy of the Texas judgment with the Circuit Court of Calhoun County, West Virginia. The clerk of the circuit court then issued writs of execution, commanding the county sheriff to seize and sell personal property of the judgment debtors sufficient to satisfy the judgment.

Signal also filed suggestions with the circuit court which indicated that a bank in the state, Peoples Bank, likely had property in its control belonging to the judgment debtors. The clerk of the court duly issued summonses to Peoples Bank ordering it to respond to Signal’s suggestions, and it also sent Peoples Bank copies of the writs of execution.

Peoples Bank reviewed its accounts and identified five that had been opened by Dale between 2002 and 2008. Each had a judgment debtor (either Dale or Drilco) listed as an owner, but each also had co-owner that was not a judgment debtor, but was a partnership managed by Dale.

Since all five accounts were in the name of at least one judgment debtor, Peoples Bank debited them and sent cashier’s checks to Signal. The bank wrote to the circuit court explaining that it had sent the judgment debtors’ property in its control to Signal “as per instructions from the Court.” And it wrote directly to Dale and Drilco informing them that it had debited their accounts “[i]n order for us to comply with” “a Suggestion in the Circuit Court of Calhoun County, West Virginia.”

The partnerships then sued Peoples Bank and several of its employees. It alleged that, when Dale set up the accounts two decades earlier, he allegedly told the bank to put them in the partnerships’ names alone. Instead the bank set them up as joint tenancies between the partnerships and Dale or Drilco, thereby making them vulnerable to execution by Dale and Drilco’s future creditors.

The district court dismissed the negligence and conversion claims for failing to state a claim. The partnerships appealed only the dismissal of the conversion claim.

Analysis

In West Virginia, conversion is “the exercise of dominion over the personal property of another by a person who has no legal right to do so.” “The term ‘no legal right’ is equated to a wrongful exercise of dominion.”

No one contests that the money in the five bank accounts here was the property of the partnerships. Nor does anyone contest that Peoples Bank exercised dominion over the money when it debited the accounts and issued cashier’s checks to Signal. The only question is whether Peoples Bank’s conduct was wrongful.

The partnerships’ primary theory is that Peoples Bank acted wrongfully by removing money from accounts it should have known did not belong to the judgment debtors. But the pleadings nevertheless make clear that Dale personally signed deposit agreements that showed the accounts as having co-owners, and that Dale used the accounts for up to 21 years without objecting.

The bank in 2023 had absolutely no reason to believe that accounts listed in Dale’s and Drilco’s names were anything other than accounts owned by Dale and Drilco. It would twist the concept of conversion beyond recognition to hold that the bank had “no legal right” to comply with the law in this way or that its compliance was “wrongful.”

The partnerships’ backup theory is that Peoples Bank acted wrongfully by removing money from the bank accounts without first giving Dale and Drilco a chance to respond to the suggestions. The statute makes clear, however, that a bank served with a suggestion is not required to wait for a judgment debtor’s or account holder’s authorization before acting. If it were not already clear from the statutory text, the Supreme Court of Appeals has explained that “none of the provisions in [§ 38-5] expressly require that a judgment debtor be notified of suggestion proceedings.”

Affirmed.

Cin Dale 3 v. Peoples Bank Corp., Case No. 25-1454, March 9, 2026. 4th Cir. (Wilkinson), from NDWVA at Clarksburg (Kleeh). Cory L. Carlyle for Appellants. Arie M. Spitz for Appellees. VLW 026-2-084. 11 pp

Full-Text Opinion

VLW 026-2-084
Virginia Lawyers Weekly

Tags: Signal Ventures LLC, default judgment, West Virginia, Circuit Court of Calhoun County, Peoples Bank, writs of execution, Commercial law, conversion claim, suggestion proceedings, judgment debtor

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