Medical Mutual v. Davis

Annotate this Case
Download PDF
Re: Medical Mutual Liability Insurance Society of Maryland v. Williette Da vis, et al. No. 84, September Term, 2002 INTEREST - MONEY JUDGMENTS - GARNISHMENT - JUDGMENT CRED ITOR IS NOT ENTITLED TO POST-JUDGMENT INTEREST ON ACCRUED POST -JUDGMENT INTEREST ON JUDGMENT. IN THE COURT OF APPEALS OF MARYLAND No. 84 September Term, 2002 ______________________________________ MEDICAL MUTUAL LIABILITY INSURANCE SOCIETY OF MARYLAND v. WILLIETTE DAVIS, ET AL. ______________________________________ Bell, C.J. *Eldridge Raker Wilner Cathell Harrell Battaglia, JJ. Opinion by Bell, C.J. ______________________________________ Filed: September 15, 2005 * Eldridge, J. now retired, participated in the hearing and conference of this case while an active membe r of this Court; after being recalled pursuant to the Constitution, Article IV, Section 3A, he also participated in the decision and adoption of this opinion. The issue we are required in this case to decide is whether a judgment creditor, indisputably entitled to post-judgm ent interest on its judgment, who accepts a remittitur, may receive interest on that portion of the post-judgm ent interest pa id pursuant to a court order, entered in a writ of garnishment proceeding, determining that post-judgment interest begins to run when the judgment is entered, rather than when the remittitur is accepted, where, prior to the initiation of the garnishment proceedings, the judgment debtor s insured had paid into the court the judgmen t debtor s po licy limits and the post-judgment interest at issue accrued after the judgment creditor s acceptance of the remittitur. The Circuit Court for Prince George s County con cluded tha t Williette Davis and Massaquai Kamara, the appellees, were entitled to the post-judgment interest they sought from Medical Mutual Liability Insurance Society of Maryland, the appellant, reasoning that a money judgment had been entered in the garnishment proceedin gs they initiated. T his Court, o n its own in itiative, granted the appellant s petition for writ of certiorari before the Co urt of S pecial A ppeals acted. Medical Mutual Liability Insurance Society of Maryland v. Davis , 371 Md. 613, 810 A. 2d 961 (2002). W e shall revers e the judgm ent of the C ircuit Court. I. This is the second time this case has reached this Court. On the first, the issue we addressed was when post-judgment interest began to accrue on a money judgment returned by a jury, where the jury s verdict is subsequently reduced by the trial court, pursuant to a remittitur. Medical Mutual Liability Insurance Society of Maryland v. Davis , 365 Md.477, 478 , 781 A. 2d 781, 781 (2001). 1 This Court affirmed the judgm ent of the C ircuit Court. Id. at 487, 7 81 A. 2 d at 787 . Applying Maryland R ule 2-604 (b), 2 in accordance with the purpose of post-jud gment inte rest and the c onsiderab le case-law governing the running of 1 The jury verd ict was return ed in wro ngful dea th and surv ivor actions, b rought in the Circuit Court for Prince George s County and alleging negligence in the delivery of the appellees son. The v erdict was in the amo unt of $5,313,283 .30, which the court entered on the d ocket o n Nov embe r 13, 19 96. Medical Mutual Liability Insurance Society of Maryland v. Davis , 365 Md.47 7, 478 , 781 A. 2d 781, 782 (2001 ). Dr. Mo dy, the defend ant doctor, w ho was in sured by M edicial M utual Liability Society o f Ma ryland, file d a mo tion for a new trial or, in th e alterna tive, for remittitu r. Id. at 479, 781 A. 2d at 782. Having reduced the noneconomic damages awarded to the estate of the appellee s son from $ 2 million to $ 350,000, at the parties suggestion, referen cing the cap on nonec onom ic dam ages sta tute, see Md. C ode (197 4, 1998 R epl. Vol.), § 11- 108 (b), bu t having de nied the m otion with re spect to the n onecono mic damages awarded to the appellees, the Circuit Court granted the motion only as to the medic al expe nses aw arded to the estat e. Id. Specifically, it ordered a new trial unless the estate remitted those damag es to zero. Pursuant to that ruling, a total judg ment [of] $ 2,350,000 with costs, subject to the estate s acceptance of the remittitur, was entered on the doc ket. Id. at 479-480, 781 A. 2d at 782. In lieu of a new trial, the estate accepted a remittitu r on Se ptemb er 25, 19 97, thus render ing the ju dgme nt for $ 2,350.0 00 fina l. Id. at 480, 781 A. 2d at 782. Thereafter, on February 19, 1998, the appellant tendered payment of Dr. Mody s policy limits of $1,000,000, along with the post-judgment interest accrue d from Septem ber 25, 1 997, the date tha t the esta te accep ted the re mittitur. Id. The app ellees, believin g that post-jud gment inte rest accrued earlier, from th e date of the jury s verdict, filed, directly against the appellant, a Request for Writ of Garnishment for Post-Judgment Interest, seeking the post-judgment interest that had accrued from that date, November 7, 1996. The Circuit Court agreed that the appellees were entitled to additional post-judgment interest, but only from the date of the original judgment, November 13, 1996. Therefore, it entered judgment awarding the appellees post-judgment interest, accounting from that date, at the rate of ten percent, but only on the redu ced jud gmen t amou nt. Id. 2 Maryland Rule 2-604 (b) provides: (b) Post-judgment interest. A money judgment shall bear interest at the rate pre scribed by law fr om the date of entry. 2 post-judgment interest, 3 id. at 484, 781 A. 2d at 78 5, we held that the appelle es were entitled to the loss of income on the $ 2, 350, 000.00 [the amount of the rem itted judgm ent] from November 13, 1996, observing: Presumably, Medical Mutual earned interest on that sum during the ten-month period from November 1996 to September 1997. Id. at 485, 781 A. 2d at 785. T he appellan t paid the po st-judgme nt interest in the a mount ordered.4 Its effort to have the appellees judgment entered on the docket as fully paid and satisfied met with opposition from the appellees, however, whereupon it filed a Motion To Enter Judgment As Fully Paid And Satisfied.5 The appellees claimed that additional post-judgment interest 3 We stated that the pu rpose of p ost-judgm ent interest is ob viously to com pensate the successful suitor for the same loss of the use of the monies represented by a judgment in its favor, an d the loss of income th ereon, betw een the time of entry of the judgmen t nisi - when there is a judicial determination of the monies owed it - and the satisfaction of the judgment by payment. Medical Mutual Liability Insurance Society of Maryland v. Davis, 365 Md. at 484, 781 A. 2d at 785, quoting I. W. Berman Prop. v. Porter Bros., 276 Md. 1, 24, 344 A . 2d 65, 79 (1975). 4 The appellees sought $ 206, 670.58, the amount resulting from the application of the ten percent interest rate to the reduced judgment amount, calculated from the date of the jury s verdict, November 7, 1996. The Circuit Court set interest at ten percent (10 %) on the judgment as remitted, accounting from November 13, 1996. Thus, the amount ordered by the court, and presumably paid by the appellant, was somewhat less than $ 206, 670.58, notwithstanding the parties reference to that figure as the amount ordered and paid. 5 Maryland Rule 2-645, governing the garnishment of property other than wages and partne rship interests su bject to a cha rging orde r, prescribes h ow a ga rnishee sho uld proceed when the judgment creditor fails to file a statement of satisfaction after the garnishee believes the judgment against it has been paid. Rule 2-645 (l). That procedu re involves proceedin g under R ule 2-626 . That Ru le provides : (a) Entry upon notice. Upon being paid all amounts due on a money judgment, the judgment creditor shall furnish to the judgment debtor and file with the clerk a written statement that the judgment has been satisfied. 3 on the judgment had become due during the litigation and, what s more, has remained unpaid. The Circ uit Court held a hearing on the appellant s motion, after which, agreeing with the appellee s, it ordered that the appellant pay interest on the post-judgm ent interest it had previously paid. At issue on this appeal, therefore, is the propriety of the order entered by the Circuit Court that assess[ed] judgment interest on the judgment of garnishm ent ... from J anuary 2 9, 1999 to the pr esent an d contin uing. II. Garnishment is a form of attac hmen t, Fico, Inc. v. Ghingher, 287 Md. 150, 158-59, 411 A. 2d 430, 4 36 (1980 ); Catholic University of America v. Bragunier Masonry Contractors, Inc., 139 Md. App. 277, 293, 775 A . 2d 458 , 467 (2 001), aff d, 368 Md. 608, 796 A. 2d 744 (2002), and method of execu tion. Northwestern Nat l. Ins. v. Wethe rall, 267 Upon the filing of the statement the clerk shall enter the judgment satisfied. (b) Entry upon motion. If the judgm ent creditor f ails to comp ly with section (a) of this Rule, the judgment debtor may file a motion for an order declaring that the judgment has been satisfied. The motion shall be served on the judgmen t creditor in the manner prov ided in Rule 2-121 . If the court is satisfied fro m an aff idavit filed by the judgmen t debtor that d espite reasonable efforts the judgment creditor cannot be served or the whereab outs of the ju dgment c reditor cann ot be determ ined, the cou rt shall provide for notice to the judgment creditor in accordance with Rule 2-122. (c) Costs and expenses. If the court en ters an orde r of satisfactio n, it shall order the judgment creditor to pay to the judgment debtor the costs and expense s incurred in o btain ing the order , includin g rea sona ble a ttorn ey's fees, unless the court fin ds that the jud gment cre ditor had a ju stifiable reason for not com plying with the requirements set fo rth in section (a). If the motion for an ord er of satisfac tion is denied , the court m ay award co sts and ex penses , includin g reaso nable a ttorney's fe es, und er Rule 1-341 . 4 Md. 378, 38 4, 298 A . 2d 1, 5 ( 1972) . See Park ville Fed . Sav . Ban k v. M arylan d Na t'l Bank, 343 Md. 41 2, 418, 681 A. 2d 52 1 (1996) ( A writ of garnishment is a means of enforcing a judgment. ). As such, it is derived from a special and limited statutory power. Belcher v. Government Employees Ins. Co., 282 Md. 718, 720, 387 A. 2d 770, 772 (1978), quoting Cole v. Randall Park Holding Co., 201 Md. 616, 623, 95 A .2d 273, 277 (1953); see Killen v. America n Casua lty, 231 Md. 105, 108, 189 A. 2d 103, 105-06 (1963); Coward v. Dillinger, 56 M d. 59, 60 -61 (18 81). Proceedings via writ of garnishment permit the attachment of the property of the judgment debtor in the po ssession of third parties a nd, when the writ has been issued and served, require the g arnishee, the third party posse ssor, to keep safe the pro perty in his possession or that may come into possession. Parkville, 343 Md. at 419, 681 A.2d at 524; Fico, 287 Md. at 162, 4 11 A. 2 d at 437 . See also Bragunier M asonry, 139 Md. App. at 293, 775 A. 2d a t 467-6 8. In that way, such proceedings enable the judgment creditor to enforce its judgment against the judgment debtor even though th e judgme nt debtor is n ot in possession of the p roperty. Parkville, 343 M d. at 418, 68 1 A. 2d a t 524 ( [A writ of garnishm ent] allows a judgment creditor to recover pr operty own ed by the deb tor but held by a third party. ) See PAUL V. NIEMEYER AND LINDA M. SCHUETT, MARYLAND RUL ES C OM MEN TAR Y at 51 8 (2nd ed. 199 2). This Court has characterized, at length, the nature and function of a garnishment proceeding. E.g, Catholic University of America v. Bragunier Masonry Contractors, Inc., 5 368 Md. 608, 621-24, 796 A. 2d 744, 751 - 53 (2002 ); Parkville, 343 Md. at 418, 681 A. 2d at 524; Fico, 287 Md. at 158-59, 411 A. 2d at 436, and cases therein cited, concluding and emphas izing the principle growing out of the nature and function of a garnishment proceeding, that the creditor merely steps into the shoes of the debtor and can only recover to the same extent as could the debtor. Bragunier M asonry, 368 Md. at 623, 796 A. 2d at 752. Fico is illustrative. There, we commented: A garnishment proceeding is, in essence, an action by the judgment debtor for the benefit of the judgment creditor which is brought against a third party, the garnishee, who h olds the assets o f the jud gmen t debtor . Northw estern Na t'l Ins. Co. v. Wetherall, Inc., 272 M d. 642, 652 , 325 A.2d 869, 874 (1974); Messall v. Suburban Trust Co., 244 Md. 502, 506, 224 A.2d 419, 421 (1966). An attaching judgmen t creditor is sub rogated to the rights of the judgment debtor and can recover only by the same right and to the same extent that the judgment debtor might re cover. Northwestern Nat'l Ins. Co., 272 Md. at 65051, 325 A.2 d at 874; Myer v. Liverpool, London & Glob e Ins. Co., 40 Md. 595, 600 (1874). The judgment itself is conclusive proof of the judgment debtor's obligation to the judgment creditor. The sole purpose of the garnishment proceeding therefo re is to determine whether the garnishee has any funds, property or credits which belong to the judgment debtor. Northwestern Nat'l Ins. Co . v. Wethera ll, 267 M d. 378, 3 84, 2 98 A.2d 1 , 5 (1972 ). 287 Md. at 159, 411 A. 2d at 436. See also Peninsula Ins. Co. v. Houser, 248 Md. 714, 717, 238 A. 2d 95, 97 (1968); Cole v. Randall Park Holding Co., 201 Md. 616, 623-24, 95 A. 2d 273, 277 (1953 ). From this prin ciple, it fo llows, a nd is w ell settled , moreover, that garnishment proceedings are not desig ned or inte nded to place the ga rnishee in a w orse position , in reference to the rights an d credits attach ed, than if he had been sued by the defendant 6 [judgment debtor]. Bragunier M asonry, 368 Md. at 624, 796 A. 2d at 753, quoting Farmers & Merchants Bank v. Franklin Bank, 31 M d. 404, 4 12, 186 9 WL 2863, * 5 (186 9). See Employers' Liability Assur. Corp. v. Perkins, 169 Md. 269, 284, 181 A. 436, 443 (1935); Farley v. Colver, 113 Md. 379, 385, 77 A. 589, 591-92 (1910). Thus, we have explained: The attaching creditor seeks to have himself substituted to the rights of his debtor as against the garnishee, and by laying his attachment, he acquires no superior right to that of his debtor. The right of condemnation must, therefore, be subject to an y such right of set-off or d ischarge existing at the time of garnishm ent, as would be available to the garnishee if he were sued by the defenda nt. Any other rule would, in many cases, work gross injustice, and might, m oreove r, be sub ject to gr eat abu se. Farmers & Merchants Bank, 31 M d. at 412 , 1869 W L at *5 . Similarly, in Perkins, we said: The plaintiffs in the attachment proceedings have no right superior to that of the assured. They stand in his place, and the same defenses which the insurance carrier had against the right of action on the part of the assured on the policy of insura nce are av ailable to the assurer as the garnishee of the plaintiffs. So, the assured's breach of a condition precedent with which the assurer may bar a recovery by the assured is equally a bar to an attachm ent laid in the hands of the assurer by a creditor of the assured. The law does not permit the garnishee to be put in a worse position by the issue of a writ of attachm ent. 169 Md. at 284, 181 A. at 443, citing Hodge and McLane on Attachments, § 148; 76 A. L. R. pp. 235, 236. The provisions of the pertinent sections of Maryland Rule 2-645, the Rule govern[ing] garnishment of any property of the judgment debtor, other than wages subject to Rule 2-64 6 and a pa rtnership interest subject to a charging orde r, in the hands of a third person for the purpose o f satisfying a m oney judgm ent, subsec tion (a), are co nsistent. Rule 7 2-645 (a) defines the property to which it is applicable as including any debt to the judgment debtor, whether immediately payable or unmatured. Subsection (b) prescribes the process for obtaining issuance of a writ of garnishment. It requires that a request for writ of garnishm ent, containing inter alia the caption of the case and the amount owed under the judgm ent, be filed in the same actio n in which the judg ment w as enter ed. When issued, the Rule provides, the writ will contain the informa tion provide d in the requ est and con tain instructions and notice s relevant to any answer that may be made. Rule 2-645 (c). Rule 2645 (e) p ertai ns to the g arnishee s an swe r. It permits the gar nish ee, if he tim ely files an answer, to ad mit o r den y indebtedn ess to the jud gment de btor, to admit or deny possession of any property and, if possessed, how much, to specify the nature and amount of any debt to the judgment debtor and describe the property, and assert any defense that the garnishee may have to the garnishment, as well as any defen se that th e judgm ent deb tor cou ld assert . If an issue is joined betwe en the judgmen t creditor and the garnishee, by the garnishee s timely filing of an answer and the judgment creditor s timely filing of a response, the garnishment proceedin g shall pro ceed as if it were an original action between the judgment creditor as plaintiff and the garnishee as defendant and shall be governed by the rules applica ble to civ il actions . Rule 2-645 (g). Ne verthele ss, [t]he judgment against the garnishee shall be for the amount admitted plus any amount that has come into the hands of the garnishee after service of the writ and before the judgment is entered, but not to exceed the amount owed under t he cred itor s jud gmen t agains t the deb tor and enforc emen t costs. Rule 2-645 (j). Subsection (l) provides for the judgment creditor to file a statement of 8 satisfaction when the garnishee satisfies the judgment entered against it, setting forth the amount paid, and, in the event of a default in that regard, for the garnishee to proceed pursuant to Rule 2-626. III. Emphasizing the nature of a garnishment proceeding - an action by the judgment debtor for the benefit of the judgment creditor which is brought against a third party, the garnishee, who holds the assets of the judgment debtor, Bragunier M asonry, 368 Md. at 622, 796 A. 2d at 752, quoting Parkville Federal Savings Bank v. Maryland National Bank, 343 Md. 412, 418, 681 A. 2 d 521, 52 4 (1996) - a nd its ancillary and auxiliary aspect - it grows out of and is dep endent on the action o ut of wh ich the judg ment issue d - , the appe llant argues that no additional post-judgment interest is payable by it in respect to the judgment the appellees obtained against its insured, since it does not hold assets of its insure d. It explains: The judgment debtor in this case has no right of interest on the interest accrued on the original judgment. M edical M utual satisfied all of its obligations under the terms of the liability policy when it paid post judgment interest of $ 206, 670.58. [The appellees] have come forward with no eviden ce to the contrar y. The appellant also argues that the appellees are seeking to recover compou nd interest. The recovery of compound interest is not permitted, it contends, the language of the applicable statute, Md. Code (1973, 2002 Repl. Vol.) § 11-107 (a) of the Courts and Judicial 9 Proceedings Article,6 being in term s of simple interest and this Court h aving so h eld, in Walker v. Acting Director, Dept. of Forests and Parks, 284 Md. 357, 367, 396 A. 2d 262, 267 (1979). It submits: [The appellees ] c laim is for interest on unpaid interest. [The appellees could not recover interest on the unpaid interest if this action was against Dr. Mody directly. [The appellees], therefore, cannot recover against [the appellant] for interest o n the un paid inte rest. The judgment awarded against it being for what is, in effect, compound interest, it concludes, must b e revers ed. The appellees se e it differently, as one might expect. They acknowledge that Medical Mutual is correct that with the pa yment of $2 06, 670.58 it discharged its duty under its liability insu rance p olicy. They maintain, howev er, that the app ellant remain ed liable for post judgment interest on the judgment of garnishment entered against it in favor of the Appe llees. Presuming that the appellant was able to invest the interest on the remitted judgment amount and thereby earn substantial returns, the appellees position is premised on its belief that [a] judgment of garnishment is a money judgment [and, therefore, r]egardless of the und erlying nature o f the debt, once the debt is reduced to a judgm ent, the statutorily 6 Md. Code (1973, 2002 Repl. Vol.) § 11-107 (a) of the Courts and Judicial Proceedings Article provides: Legal rate o f interest on ju dgments . Except as provided in § 11-106 of this article, the legal rate of interest on a judgment shall be at the rate of 10 percen t per ann um on the am ount of judgm ent. Section 11 -106 presc ribes the intere st payable in resp ect to mon ey judgmen ts entered in an ac tion arising from a con tract for the lo an of mo ney. 10 provided interest shou ld begin to accrue . 7 Pursuant to Maryland R ule 2-604 , they point out, statutorily provided post-judgment interest applies to all money judgments. 8 Because the purpose of post-jud gment inte rest is to compensate the plaintiff for the loss of the use of the money represented by a judgment and it is this deprivation during litigation that is the evil sought to b e addresse d by the allow ance of p ost-judgm ent interest, the appellees view the appellant s argument that Maryland R ule 2-604 (b) does no t apply to a judgment debt for interest bearing post judgment interest, as illogical and, wh at is more, as carving out an unwarranted exception.9 Notwithstanding their concession that a claim for compound interest is forbidden, the appellees, noting their inability to invest or otherwise realize a return from the interest that was the subject of the previous appeal, justify their characterization of the appellan t s argume nt on the ab sence, in this case, of an intervening judg men t aga inst a new party: 7 Anticipating the appellees money judgment argument, the appellant, countered that this garnishment procee ding produced, rather tha n a money judgm ent, a declaratory judgment. As the appellant sees it, the Circuit Court did not order it to pay a sum certain; it decided simply that the appellees right to the interest they claimed were due ran from the date of the o riginal ju dgme nt rather than the date tha t the judg ment w as remi tted. 8 Maryland Rule 2-604 (b) provides: Post-judgment interest. A mon ey judgmen t shall bear inter est at the rate prescrib ed by law from th e date o f entry. 9 The appellees argue that, under the doctrines of law of the case and judicial estoppel, the appellant is precluded from even raising the issue of whether a valid money judgment was entered in this case. At bottom, the argument is premised on the fact that the appellant noted an appeal of the garnishment judgment, thereby implicitly rais[ing] and assert[ing] that a final, appealable judgment had been entered by the trial court. Neithe r argum ent has merit. 11 The distinction between a claim for compound interest on a judgment ... and the claim in this case is t hat in this c ase the A ppellees had alrea dy sought to collect, been refused and thereafter reduced their claim for simple interest to a judgm ent in ga rnishm ent. Despite their awareness of the nature of garnishment proceedings, the relationship of such proceedings to the judgments they are designed to enforce or execute and that their rights are limited by the rights of their judgment debtor, the appellees argue that a garnishment is the functional equivalent of a direct action by the debtor, albeit with a realignment of the parties. It follows, therefore, the appellees submit, that, just as the judgment their judgment debtor w ould receiv e in a suit by that d ebtor again st his insurance carrier would b e a mone y judgment, so, too, would they receive a money judgment in a garnishment action ag ainst the same carrier. 10 They reason: 10 The app ellees posit the following scenario as the precise equivalen t of their situation: [I]f Dr. Mody had been forced to pay Appellees the post judgment interest that was the subject of the earlier appeal, and if after paying the Appellees Dr. Mo dy had been forced to p roceed dire ctly against [the a ppellant], his carrier, for reimbursemen t, he would then hav e had a right to recover a money judgment against [the appellant] that would bear post judgment interest, and it is irrelevant that the underlying debt upon which his money judgment against [the appellant] was predicated was for interest. ... [Th e appellees] h ave reduc ed the und erlying interest de bt to a judgm ent capab le of itself bearing interest, and, as such, they are entitled to judgment interest on the judgment of garnishment. As the appellant points out, the two scenarios are not precisely the same. The one the appellees posit is a breach of contract action, as to the damages for which post- judgment interest may indeed be payable. The garnishment action, on th e other hand, is ancillary to the action which gave rise to the judgment on which execution is sought. It can produce recovery only for that which belongs to the judgment debtor or which the garnish ee ow es the ju dgme nt debto r. 12 In a garnishment action, where the judgment creditor steps into the shoes of the judgment debtor, he is limited by the rights the judgment debtor has against the garnishee. However, it is equally clear that the Maryland Rules of Procedure, by providing that a garnishment proceeding concludes with the entry of judgment, contemplate that along with those limitations come correla tive ben efits, on e of w hich is e ntitleme nt to jud gmen t interest. Of the statement in Walker v . Acting D irector, Dep t. of Forests & Parks, 284 Md. at 367, 396 A. 2 d at 267, tha t [a]llowa nce of in terest on the unpa id interest am ounts to compound interest on a judgment, on which the appellant relies, the appellees dismiss it as dicta. They emp hasize, mo reover, that, rath er than a sub sequent jud gment against a different party, as in the case sub judice, what was disallowed in Walker was detention damages sought in the same action from the same party in the form of interest in a judgment of condemnation. IV. Post-judgment interest begins to run on a money judgm ent from the date of th e entry of that judgment, Maryland Rule 2-604 (b), and it accrues, at the rate of 10 percent per annum, the rate prescribed by law, § 11-107 of the Courts and Judicial Proceedings Article. Post-judgment interest continues to accrue u ntil the judgm ent is satisfied b y payment. Maryland State High way Adm in. v. Kim, 353 Md. 313, 327 , 726 A. 2d 238 , 245-46 (1999); I. W. Berman Prop. v. Porter Bros., 276 M d. at 24, 344 A. 2d at 79. See Mayor an d City Counc il of Baltimore v. Kelso Corp., 294 Md. 26 7, 271, 449 A. 2d 40 6, 408 (19 82) (Postjudgment interest serves to comp ensate the judgment creditor for the loss of the monies due and owing to him by the judgment debtor from the time the judgment is entered un til it is 13 paid. ). This is consistent with th e purpo se of p ost-judg ment in terest, to compensate the successful suitor for the same loss of the use of the monies represented by a judgme nt in its favor, and the loss of income thereon, between the time of entry of the judg ment ... - when there is a judicial determination of the monies owed it - and the satisfaction of the judgment by payment. Medica l Mutual L iability Insurance Society of M aryland v. Da vis , 365 Md. at 484, 781 A. 2d at 785 (2001), quoting I. W. Berman Prop. v. Porter Bros., 276 Md. at 24, 344 A. 2d at 79. Judgment was entered in favor of the appellees and the estate of their son, and against the appellant s insured, albeit in an amount greater than the amount ultimately determined to be due, on November 13, 1996. There followed thereafter post-trial proceedings, lasting close to a year, resulting in the ordering of a new trial unless the estate remitted all of the medical expenses awarded to the estate. The estate accepted the remittitur on September 25, 1997, thus finalizing the judgment amount due the appellees. Several months thereafter, on February 19, 1998, the appellant paid the judgment by tendering its insured s policy limits. It also tendered post-judgment interest, but only in an amount calculated from the date of the acceptance of the re mittitur. Believing that additional post-judgment interest was due, that post-judgment interest began to run with the initial entry of the judgment, and relying on the appellant s contractual undertaking to pay post-judgment interest in respect to any judgment entered agains t its insure d, Medica l Mutual L iability Insurance Soc iety of Marylan d v. Dav is, 365 Md. at 480 n. 3, 781 A. 2d at 782 n. 3, the appellees filed directly against the appellant 14 a garnishment proceeding to recover the additional post-judgment interest. This Court conclude d that, notw ithstanding th at the judgm ent amou nt was red uced as a re sult of posttrial proceedings, post-judgment interest accrued when the judgment was entered and, consequ ently, the appellees were entitled to a portion of the additional post- judgment interest they sought. Id. at 487, 781 A. 2d at 786-87. Consistent with that order, the appellant paid the amount of additional post-judgment interest found to be due. On February 19, 1998, when the appellant paid its insured s policy limits, in payment of the judgment again st its insured, and partial post-judgmen t interest, the appellees were entitled to receive, and the appellant s insured was obligated to pay, an amount equal to the amount of the ju dgme nt, plus in terest ac crued f rom the date of the entry o f the jud gmen t. Con tract ually, the appellant was required to pa y that amo unt on b ehalf o f its insu red. Because the appellant s payments were not sufficient to discharge the total indebtedness, the insured remained indebted to the appellee s to the extent o f the unpa id post-judg ment interes t. Likewise, the appellant remained contractuall y obligated to its insured to the same extent and, thus, possessed property, of that value, be longing to the appellees judg ment debtor. Marylan d Rule 2-645 (a). When, howev er, the appella nt paid the post-ju dgment in terest determ ined by this Court to be payable to the appellees, the judgment debtor s, the appellant s insured s, total obligation under the judgment had been satisfied; the judgment had been paid and so, too, had the appellees been compensated for the delay between the entry of judgmen t and its 15 payment. In addition, as the appellees concede, the appellant also discharged its contractual obligation to its insured to p ay accrued p ost-judgm ent interest on any judgme nt against its insured. Conseq uently, no long er being ind ebted to its insu red, the app ellant no longer possessed any property of the judg ment debtor. It is well se ttled, as w e have seen, Bragunier M asonry, 368 Md. at 622, 796 A. 2d at 752, that the judgment creditor in a garnis hment proceeding is subrogated to the rights of the judgment debtor and can recover from the garnishee only to the extent that the judgment debtor could have done so. The creditor s rights may not rise above the rights the debtor would have had against the garnishee. Id. at 623, 796 A. 2d at 75 3; see Peninsula Ins. Co. v. Houser, 248 Md. 714, 717, 238 A. 2d 95,97 (1968); Messall v. Suburban Trust Co., 244 Md. 502, 506, 224 A. 2d 41 9, 421 (19 66); Bendix Radio Corp. v. Hoy, 207 Md. 225, 229, 114 A. 2d 45, 47 (19 55); Thomas v. Hudson Sales Corp., 204 Md. 450, 229, 105 A. 2d 225, 227 (1954); Cole v. Randall Park Holding Co., 201 Md. 616, 623-24, 95 A . 2d 273, 277 (195 3). Con sequ ently, the appellee s may recove r from the a ppellant on ly to the extent that its insured, the judgment creditor, could recover. Because the appellant does no t possess an y of its insured s property and has discharged its contractual obligations to him, as the appellees concede that it has, there is nothing that the appellant s insured can recover from the appellant. As a resu lt, being subro gated to the rights of the appellant s insured, the appellees are in no better position. W ere it otherwise, the appellees would have a superior right to that of [their] debtor and it would place the garnishee in a worse position, in ref erence to the 16 rights and credits attached, than if he had been sued by the defen dant [ju dgme nt debto r]. Farmers & Merchants Bank v. Franklin Bank, supra, 31 Md. at 412. M oreover, a garnishor s judgment against a garnishee ma y not exceed the amo unt owed un der the creditor s judgment against the d ebtor and e nforcem ent costs. M aryland Rule 2-645 (j); see Chromacolour Labs, Inc. v. Snider Bros. Property Management, Inc., 66 Md. App. 320, 331, 503 A . 2d 136 5, 1370 (1986 ). Nor may the appellees recover post-judgment interest on an award of post-judgment interest. Com pound interest is interest p aid on u npaid in terest. B. F. Saul Co. v. West End Park North, Inc., 250 Md. 707, 717, 246 A. 2d 591, 598 (1968). Such interest on a judgment is not per mitted in this State . Walker v. Acting Director, Dept. of Forests and Parks, supra, 284 Md. at 367, 39 6 A. 2d at 267. See Mayor and City Cou ncil of Baltimore v. Kelso Corp ., 294 Md. 267, 270, 449 A. 2d 406, 407 (198 2); Agnew v. State, 51 Md. App. 614, 654 n. 29, 446 A. 2d 4 25, 447 n. 29 (198 2). In Walker, a condem nation case , although it had no rig ht to quick ta ke and, thu s, title to the land condemned passed upon payment of the judgment and costs, the State obtained, prior to the inquisition, an ex parte order granting it possession. Subsequent to the inquisition, but without paying any compensation, it took possession of the land condemned and, thereafter, be ing aggriev ed by the am ount of the inquisition , noted an a ppeal. This Court dismissed the State s appeal on the grounds that by taking possession of the land and proceeding to develop it, the State had waived its right of appeal, but the State did not pay 17 the judgment until three weeks less one day after the filing of our mandate, id. at 360, 396 A. 2d 263, and, then, it paid only the judgment; the State made no effort to pay interest on the award and did not do so for almost five years, while the case mad e its way back to this Court. We rejected the landowner s argument that he was entitled to detention money or damages for delay, accounting from the date of passage o f the ex parte order to the date when the State paid interest on the judgment, calculated at the rate of return the State was earning upon it s investm ents. Id. at 360-61, 396 A. 2d at 264. Instead, we held that the landowner was entitled to interest at the rate of 6% per annum on the amo unt o f the jury's award from the d ate of the entry of the judgment nisi to the date of the deposit of this sum with the clerk of the circuit cou rt, at which time it became available to [him]. Id. at 366-67, 396 A. 2d a t 267. The Court w as clear: any award of interest beyond the date of payment of the judgment was error, since [a]llowance of interest on the unpaid interest amounts to compound interest on a judgment. We are acquainted with no rule of law in this State which would permit such a claim. Id. at 367, 396 A. 2d at 267. There is no questio n but that the object of th ese procee dings is the recove ry of postjudgment interest as the result of the delay, albeit due to good faith litigation of an unresolved issue, in the payment of other post-judgm ent interest. Th e appellees could not p revail on this point in an action against the appellant s insured, their judgment creditor, and the appellees concede the point. The appellees, despite the appellate delay, were compensated for the loss of the use of the monies represented by the judgment against the appellant s insured between 18 the entry of the jud gment a nd the satisfaction of the judgment by payment. Again, the appellees stand in the shoes of the judgment debtor, being entitled to recover only to the extent that the judgment deb tor cou ld, Bragunier M asonry, 368 Md. at 622, 796 A. 2d at 752, and also being subject to any defense that the judgment debtor could assert. Maryland Rule 2 -645 (e ). We are aware that a differe nt result recently was reached b y the Indiana in termediate appellate court. Grubnich v. Renner, 746 N .E.2d 1 11 (Ind . App. 2 001), trans. denied, Grubnich v. Renner, 761 N.E.2d 416 (In d. 2001 ). In that case, a medical malpractice case, the defendant d entist, after an unsuccessful appeal, paid the portion of a jury judgment applicable to him.11 Id. at 113. He did not pay post-judgment interest that had accrued on his portion of the judgment, however, relying, apparently, on Phoehlman v. Feferman, 693 N. E. 2d 1 355, 13 59 (Ind . App. 1 998), a decision by ano ther panel o f the interm ediate appellate court. In that decision, the court indicated that, notwithstanding a p laintiff s entitlement to post-judg ment interest, a defendant doctor s liability is limited to $100,000 under the M edical M alpractic e Act. Id. at 116. That decision, however, had been vacated when, in 706 N.E.2d 173 (Ind.1998), the Indiana Supre me Co urt gran ted trans fer. Id. After the Supreme C ourt issued its opinion, holding that the $100,000 liability limit provided by the Medical Malpractice Act does not apply to post-jud gmen t interest a nd cos ts, see 11 The jury returned a verdict of $150,000. Pursuant to the medical malpractice statute then in effect, the defendant dentist s maximum liability was $ 100,000, the remainder being payable by the Patient s Compensation Fund. 19 Phoehlman v. Feferman, 717 N. E. 2d 578, 582 (Ind. 1999), and, therefore, both the doctor and the Patient s Compensation Fund were req uired to pay accrued post-judgment interest on the underlying damage award, 717 N. E. 2d at 58 4, the plaintiff sought pa yment of po stjudgment interest f rom bo th partie s. Grubnich v. Renner, supra, 746 N.E.2d at 114. Although the Fund paid its portion of the post-judgment interest, the doctor re fuse d to p ay, prompting the filing, by the plaintiff, of a motio n for, inter alia, post-judgment interest and costs. Id. Affirmin g the trial cour t, the intermed iate appellate court held that the plaintiff was entitled to post judgment interest and, con cluding that the order requ iring [the doctor] to pay intere st is a mo ney judg ment, 12 id. at 118, to interest on the u npaid in terest. Id. Explaining the latter holding, the court said: Here, Grubnich should have paid the interest at the time he paid the $100,000 as satisfaction for the money judgment against him. However, he failed to do so. Rather, he forced the Renners to seek enforcement of the judgment from the trial court. On August 22, 2000, the trial court ordered Grubnich to pay post-judgment interest on the $100,00 0. Grubn ich has no t yet paid that amount. Thus, the Renners are entitled to post-judgment interest on the judgment for interest, which began accruin g on A ugust 2 2, 2000, and runs u ntil the date Grub nich pa ys the judg ment f or intere st. Id. It previously had stated the purpose of post-judgment interest: to compensate fully the 12 Indiana C ode, § 24-4 .6-1-101 p rovides: Except as otherwise provided by statute, interest on judgments for money whenever rendered shall be from the date of the return of the verdict or finding of the court un til satisfaction at: * * * * (2) an annual rate of eight percent (8%) if there was no contract by the parties. 20 injured party by providing interest for the deprivation of the use of money. Id. The Indiana Court of Appeals relied on Indiana Revenue Bd. v. State ex rel. Bd. of Comm'rs of Hen dricks Co unty, 385 N.E.2d 1131 (Ind. 1979). That was a For Mandate 13 action against the Indiana Revenue Board, brought by the State on beh alf of cou nties, to enforce a statute providing for the sha ring of inhe ritance tax rev enues be tween the State and the counties in which they were collected. The trial court mandated that the State Revenue Board pay the money owed to the counties, in a lump sum, to the clerk of the co urt. Although it paid the judgment, albeit six months later, the Board did not pay post-judgment interest on the judgmen t and it continued to refuse to pay the interest, whereupon the counties sued separately for the interest, obtaining a judgment therefor. The trial court found for the counties, assessing post-judgment interest on the judgment amount. The Supreme Court of Indian a affirm ed. Rejecting the Board s argument that interest is not p roperly assesse d on a ma ndate judgmen t, the court he ld that such a judgmen t is eff ectiv ely a money judgment, on which 13 A For m andate ac tion is an actio n to com pel the perf ormance of a duty resulting from office, trust, or station. Indiana Reven ue Bd. v. State ex rel. Bd. of Com'rs of Hen dricks Co unty, 385 N.E.2d 1131, 1134 (Ind. 1979). The court explained: The mandate itself is meant to accomplish what cannot otherwise be accomplished through ordinary legal or equitable remedies. Here, the State Revenue Board was mandated to pay the amou nt of mon ey due to the co unties in a lum p sum to th e Clerk of the Shelby C ircuit Court. 21 interest is assessed, explaining: Here, the State Revenue Board was mandated to pay the amount of money due to the counties in a lump sum to the Clerk of the Shelby Circuit Court. The mandate judgment, then, was also effectively a money jud gment. T he Resu lt is the sam e. Id. at 1134 . The court also held that the trial court properly awarded post-judgment interest on the counties judgment for accrued post judgment interest. It reasoned: The Indiana Revenue Board should have paid the interest into court on the $16,555,787.95 judgment at the same time it paid the judgment itself. By delaying and refusing, the Indiana Revenue Board forced the State of Indiana, on behalf of the ninety-nine counties, to sue separately for the interest. ...[T]hat suit resulted in a final judgmen t in the Marion Sup erior Court .. .. The final judgment was for the amount of interest which had accrued pursuant to Ind. Code s 34- 2-22-1 (Burns 1973). That final judgment, then (rendered in the Superior Court of Marion County), was subject to the accrual of interest pursua nt to Ind . Code s 34-4- 16-6 (B urns 19 73) . Id. at 1135. We are not persuaded. First, Grubnich and Indiana Revenue Bd., on which the appellees relied, did not apply Maryland law and, in fact, conflict with Maryland law. Therefore, they are not bin ding on th is Court. In b oth cases, unlike in Walker, where such considerations, while regrettable, were determined not to have been a sufficient basis for an award of post-judgment interest, the court found it significant that the judgm ent debtors refused to pay the post-judgment interest, thus delaying the c reditor s enjoyment of the interest and forcing the creditor to take addition al action to ob tain the interest. S econd, this case is a garnishment proceeding, ancillary to the malpractice case out of which the subject judgment emanated . On the oth er hand, bo th Grubnich and Indiana Revenue Bd. are actions 22 on the judgments. Finally, we are not persuaded that the judgment in this case is a money judgm ent with in the m eaning of M aryland R ule 1-2 02 (p). Maryland Rule 1-202 (p) provides: (p) Money judgment. "Money judgment" means a judgment determining that a specified amoun t of money is immediately payable to the judg ment creditor. It does n ot includ e a judg ment m andatin g the pa yment of mone y. Although once the issue is joined between the judgment creditor and the garnishee, the garnishment proceeding proceeds as any original a ction, with the judgment creditor as plaintiff and the ga rnishee as d efendan t and is gov erned by the ru les applicable to civil actions, such actions are not original actions, independent of the actions out of which the judgm ents sou ght to b e enfo rced em anate. Garnishment p roceedings, rather, are certainly related to, and, indee d are ancilla ry to such action s. Thus, the a mount o f the judgm ents obtained in the underlying action, to which the garnishment action relates and, indeed, depends, is information necessary for the issuance of a writ of garnishment. Also, the judgment itself conclusively establishes the judgment debtor s obligation to the judgment creditor. Indeed, the purpose of a garnishment proceeding is to satisfy mon ey judgmen ts with prop erty of the judg ment deb tor that is in the hands of third persons. Pursuant to that purpose, garnishment proceedings necessarily must determine whether the garnishee has any funds, property or credits which belong to the jud gmen t debtor . Nor thwestern N at'l Ins. Co. v. Wethe rall, 267 Md. 378 , 384, 298 A. 2d 1 , 5 (1972). In this case, there was no issue of whether the appellant had property belonging to the 23 judgment debtor, given its contractual obligation to its insured under his liability policy to pay post-judgment interest on any liabi lity judgment. Nor was there any issue of the extent of the judgment debtor s obligation to the judgment creditor. The payment of post- judgment interest on a mon ey judgmen t and the percentage rate, being statutorily required, the calculation of the amount of interest due on a judgment is easily determined. Deciding the date from w hich post-ju dgment interest was payable, the issue in the initial garnishment proceeding, was a necessary and preliminary step to determining whether the appellant had property of the judgmen t debtor. If the date from which the interest ran was the date of the remittitur, then the ap pellant wo uld not have had property of the judgment debtor, it having paid all amounts due. On the other ha nd, if the date was, as this Court held that it was, the date that the judgment was entered, the appellant would have had property of the judgment debtor, namely, the amount of the post-judgment interest that had accrued on the judgment prior to payment. Once it has been determined that the garnishee has property of the judgment debtor, the garnishment judgment is in the nature of a judgment mandating the payment of money; it orders satisfaction of the judgmen t from the property in the garnish ee s ha nds. JUDGMENT OF THE CIRCUIT COURT FOR PRINCE GEORGE S COUNTY REVERSED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO ENTER AN ORDER CONSISTENT WITH THIS OPINION. COSTS TO B E PA ID BY THE APP ELL EES. 24

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.