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Mason Dixon Intermodal, Inc. v. RNR Transportation Inc.

April 20, 2009

MASON DIXON INTERMODAL, INC., PLAINTIFF,
v.
RNR TRANSPORTATION INC., SCOTT RINGEL, & KIMBERLY ROEBKE DEFENDANTS.
NATIONWIDE TRANSPORT SERVICES, INC. GARNISHEE DEFENDANT



The opinion of the court was delivered by: Judge Shadur

Magistrate Judge Denlow

MOTION AND MEMORANDUM FOR JUDGMENT ON ANSWER OF GARNISHMENT SUMMONS OF GARNISHEE DEFENDANT NATIONWIDE TRANSPORT SERVICES, INC.

Mason Dixon Intermodal, Inc. ("MDII"), by and through its attorneys, Sullivan Hincks & Conway, hereby submits the following Memorandum in Support of MDII's Request for a Judgment on the answer of Nationwide Transport Services, Inc. ("Nationwide") to the Garnishment Summons served by MDII:

1. On January 28, 2009, Judgment was entered in favor of MDII and against Defendants RNR Transportation, Inc. ("RNR"), Scott Ringel, and Kimberly Roebke, jointly and severally in the sum of $803,134.48.

2. Upon the belief that Nationwide was indebted to RNR for payments other than wages, MDII obtained the issuance of a Garnishment Summons upon Nationwide returnable on or before March 12, 2009. See Garnishment Summons (non-wage) and Affidavit of Garnishment attached as Exhibit "1".

3. On February 26, 2009, MDII served the Garnishment Summons on Nationwide's registered agent for the service of process in the State of Illinois. See Motor Carrier Details Report from the Federal Motor Carrier Safety Administration and Affidavit of Service from the Sangamon County, Illinois Sheriff's Office attached as Exhibit "2".

4. Nationwide served an Answer to MDII's Garnishment Summons on March 31, 2009 after MDII filed a Motion for Conditional Judgment. A copy of Nationwide's Answer to MDII's Garnishment Summons is attached hereto as Exhibit "3".

5. In its Answer, Nationwide asserts under oath that on February 26, 2009, the day that Nationwide received service of the Garnishment Summons from MDII, Nationwide mailed payments to RNR for services provided and lease payments due in the amount of $5,547.34. According to the Answer, the payments to RNR were not due until February 27, 2009, the day after Nationwide received service of the Garnishment Summons.

6. Nationwide's Answer also asserts that as of February 26, 2009, Nationwide had claims against RNR for advances made in the amount of $4,851.80.

7. MDII is entitled to a turnover of the funds owed by Nationwide to RNR on the date the Garnishment Summons was served on Nationwide in the amount of $5,547.34 to satisfy the Judgment entered against RNR in favor of MDII.

8. In its Answer, Nationwide argues that it is not obligated to turn over the $5,547.34 owed to RNR on the date it was served with the Garnishment Summons, because Nationwide allegedly had offsetting claims against RNR as of that date and because Nationwide did not know that it had been served with the Garnishment Summons as of February 26, 2009. Neither argument is sustainable.

9. While a garnishee may be entitled in certain circumstances to setoff against the amounts owed to the debtor as of the date it received the Garnishment Summons, a garnishee waives the right to assert its setoff if he does not in fact apply such debt. "Whether a garnishee claims a debt due from the debtor as a set-off, he must in fact apply such debt on the amount due from him to the debtor. If, instead, he pays the funds in his hands to defendant pending the garnishment proceedings he will be regarded as waiving his right to a set off." South East National Bank of Chicago v. Ravin, 35 Ill. App. 2d 366 (1st Dist. 1962) quoting 38 CJS § 203, p. 443.

10. The First District Appellate Court in South East National Bank also cited with approval an abstract opinion in the matter George v. Fox Head Restaurant Co., 290 Ill. App. 599, 8 N.E.2d 218 which appears directly on point: In the instant case, the garnishee, Fox Head Restaurant Company, clearly had the right under .the Garnishment Act to set off the indebtedness of George to it against such amount, if any, due George from said garnishee, but when it paid him $175 'as advances' after it had been served with summons in garnishment and before it had filed its answer without adjusting its demands against him, ...


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