When can a garnishee commence an interpleader action?

What is a garnishee?  What is a judgment creditor?  What is a judgment debtor?

A garnishee is usually defined as a person other than a judgment debtor, who has property in his possession which belongs to the debtor.  A garnishee  may be ordered to turn over the debtor’s property to a judgment creditor.

A judgment creditor is a party that prevailed in a civil litigation and won a money judgment against another party.  The judgment creditor is usually the plaintiff who won his case and now the defendant must pay him money.

A judgment debtor is a party that lost in a civil litigation and must pay the judgment creditor.  The judgment debtor is usually the defendant who lost his case against the plaintiff.

If the judgment debtor does not pay all the money that he owes to the judgment creditor, the judgment creditor can try to recover the debtor’s property from a garnishee.  That is, the party that won the case can try to take property that belongs to the party that lost the case, even if that property is being held by a third party.

Remember, the judgment creditor is the person who was awarded a money judgment in a civil case (probably the plaintiff), and the judgment debtor is the person who lost the case (probably the defendant) and now must pay the creditor.

What is interpleader?

Under Rule 22 of the Federal Rules of Civil Procedure, and similar rules in state courts, a party who is subject to potentially inconsistent legal obligations or multiple liability can seek interpleader relief.  That is, if more than one party asserts a legal right to property in a person’s possession, that person can force the other parties to litigate their competing claims so the person in possession of the property does not have to worry about to whom to give the property. 

For example, let’s say a tenant is happy to pay her rent but two different people claim to be her landlord.  If the tenant pays the rent to the wrong person she could be sued.  Under these circumstances, the tenant can rely on interpleader to commence an action in which the two landlords  will have to litigate against each other so a court can determine to which landlord the tenant should pay her rent. 

When would a garnishee seek interpleader relief?

Sometimes more than one judgment creditor might claim property that belongs to a judgment debtor but is in another person’s possession.  The person holding the debtor’s property is a garnishee, but he can face inconsistent legal obligations and multiple liability if he chooses on his own which judgment creditor to pay.  The garnishee might ask for interpleader relief so a court can determine which judgment creditor he should pay.

For example, let’s say a bank has an account belonging to a judgment debtor and more than one judgment creditor insists that he has a legal right to the money in the account.  The bank might commence an interpleader action to force the judgment creditors to litigate against each other so the judge can decide to whom the bank should turn over the money in the account.