First Virginia Bank-Central Maryland v. Schumacher & Seiler, Inc.

ALPERT, Judge. This case concerns the distinction between Maryland Rules 2-632 (Automatic stay of enforcement of a judgment) and 8-422 (Stay of enforcement of judgment from which an appeal is taken). 1 In this “Expedited Appeal,” pursuant to Rules 8-207(b) and 8-413(b), the parties — (1) First Virginia Bank-Central Maryland, garnishee and appellant (hereinafter, “FVB”), and (2) Schumacher & Seiler, Inc., judgment creditor and appellee (hereinafter, “S & S”) — filed an agreed. State-. ment of the Case and Facts, which will be summarized below. ⁴³⁵ On November 28, 1990, the Circuit Court for Harford County entered an Order granting judgment by default in favor of S & S, and against Fallston Plumbing, Inc. (hereinafter, “Fallston”) in the amount of $34,729.53, plus attorney’s fees of $13,150.05 and court costs. On December 13, 1990, S & S requested a writ of garnishment which was issued and served on FVB the following day. 2 Subsequently, on January 16, 1991, FVB filed a Plea of Garnishee (1) confessing possession of Fallston’s funds in the amount of $1,209.56, and (2) requesting that the Court instruct FVB as to whether FVB should release said funds or whether it should distribute them to the plaintiff, S & S. That same day, Fallston filed a Motion to Exempt Property from Execution requesting that $1,282.81 of the amount it held at FVB be exempted from execution.

On January 23, 1991, S & S filed a response to said Motion alleging that the claimed exemption was only available to individuals. FVB filed no reply. On June 17, 1991, a hearing was held in the Circuit Court for Harford County regarding the Motion to Exempt Property from Execution. S & S asserted that Fallston was not entitled to the claimed exemption.

The circuit court entered an Order for Release of Property in favor of Fallston, ordering the release from garnishment of $1,282.81 of Fallston’s funds. On June 20, 1991, at FVB’s request, counsel for S & S sent to the Bank a copy of its Notice of Appeal evidencing its intent to appeal the Order for Release of Property. One day later (i.e., June 21, 1991), FVB, by letter of the same date, informed the eourt, Fallston, and S & S that it had complied with the Order for Release of Property by crediting Fallston’s bank account in the amount of $1,282.21. On June 25, 1991, S & S timely filed a Notice of Appeal from the Order, but failed to file either a supersedeas bond or a motion to stay enforcement of the order.

On May 5, 1992, ⁴³⁶ this Court, in a reported opinion 3 , reversed the circuit court’s Order for Release of Property. Later, on July 20, 1992, S & S filed with the circuit court a Request for Entry of JudgmentGarnishment against the Bank in the amount of $1,209.56. On or about August 4, 1992, FVB filed a response in which it argued that FVB had released the funds because it had not been notified of the filing of either a supersedeas bond or a motion for stay of execution of the Order for Release of Property. On October 19, 1992, a hearing was held before Judge Stephen M. Waldron in the Circuit Court for Harford County on S & S’s Request for Entry of Judgment-Garnishment.

S & S argued that there was no reason to file a supersedeas bond prior to June 27, 1991, because enforcement of the Order for Release of Property was automatically stayed for 10 days pursuant to Rule 2 — 632(b); and there was no reason to file a bond after June 27, 1992, because FVB had already released the funds by that date. FVB countered with the argument that, despite notification that a Notice of Appeal would be filed, FVB was entitled to release the funds in order to comply with the court’s Order because S & S had neither moved for a stay of execution nor filed a supersedeas bond. At the conclusion of the hearing, Judge Waldron granted a judgment of garnishment in favor of S & S, and against FVB, in the amount of $1,209.56. On October 29, 1992, FVB timely filed an appeal from that judgment and asks 4 : Whether the defendant garnishee bank was entitled to release garnished funds pursuant to the trial court’s order for release of property, pending a notice of appeal filed by the plaintiff judgment creditor.

We answer the above question in the negative and, therefore, affirm the decision of the trial court. ⁴³⁷ DISCUSSION The crux of the instant case is whether the voluntary compliance (prior to the expiration of the automatic 10-day stay period provided by Maryland Rule 2-632(b)) by the garnishee bank (FVB) with a court order, mandating the release of garnished funds imposes an obligation on the part of the judgment creditor (S & S) to post a supersedeas bond (otherwise not required within the 10-day post judgment period) in order to preserve its rights with regard to those funds. S & S argues that, because pursuant to Rule 2-632(b), enforcement of the June 17, 1991 Order was stayed until June 27, 1991, and FVB released the garnished funds on June 21, 1991 (prior to the expiration of the 10-day stay period), the posting of a supersedeas bond during the 10-day post-judgment period would have been unnecessarily duplicative. We agree and explain. The effect of a supersedeas bond with respect to the stay of enforcement of a judgment (as S & S accurately asserted at the lower court hearing) is “to stay execution or suspend the operation of the decree or order appealed from.” Cook v. Boehl, 188 Md. 581, 592 , 53 A.2d 555 (1947) (Emphasis added).

Indeed, Rule 8-422(a) provides: Except as otherwise provided in the Code or Rule 2-632, an appellant may stay the enforcement of a civil judgment ... from which an appeal is taken by filing a supersedeas bond under Rule 8-423.... (Emphasis added). Rule 2-632(b), on the other hand, states: Except as otherwise provided in this Rule, enforcement of a judgment is automatically stayed until the expiration of ten days after its entry. (Emphasis added).

The distinction between these two rules is clear. Rule 8422(a) dictates what is required for a stay of the enforcement of a judgment which has been appealed, while 2-632(b) provides for an automatic stay for ten days following the entry of judgment (without regard to whether or not such judgment ⁴³⁸ was appealed). Rule 2-632(b) is derived from Fed.R.Civ.P. 62(a) which provides that no execution shall issue upon a judgment nor shall proceedings be taken for its enforcement until the expiration of 10 days after its entry. The 10-day stay period is meant to correspond to the 10-day window afforded by Rules 2-532, 2-533, and 2-534, for filing motions (1) for judgment notwithstanding the verdict; (2) for new trial; (3) to alter or amend a judgment; and (4) to revise a judgment, respectively.

See Gordon v. Gerhold, 90 Md.App. 360, 368 , 600 A.2d 1194 (1992). FVB would have us hold that, because S & S filed a notice of an intention to appeal within the first ten days following the date of the judgment, Rule 8-422(a) (governing the procedures to be followed in requesting a stay of a judgment from which an appeal is taken) overrides the automatic 10-day stay provided by Rule 2-632(b). Indeed, in its brief, FVB asserts the following: The purpose of the automatic ten day stay is to allow the parties to think about their strategy. If the party’s strategy is to appeal, then that appellant must take whatever steps are necessary in order to protect its