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Court sanctions victims who sought redress for wrongful garnishment

Kirt and Janice Wipperforth owed money to the Macatawa Bank.  After a judgment for $42,000 entered against them, the bank and its attorneys attempted to garnish their TD Ameritrade IRA account to pay off the judgment.  The Wipperfurths  objected that the account was personal property maintained in another state, and therefore not subject to garnishment.  The parties agreed to hold the garnished amount, $70,000.00, in escrow, pending a decision on the propriety of garnishment.

Ultimately, the Court concluded that Macatawa and its attorney, Scott Mancinelli, had no legal basis for executing a writ of garnishment on the out-of-state personal property, and the TD Ameritrade IRA was returned to the Wipperfurths.  The Wipperfurths then filed a lawsuit against the bank and its attorneys for conversion of the IRA funds.  The trial judge dismissed the case, summarily, holding that forcing the funds into a court-supervised escrow account did not meet the definition of "conversion," because the Defendants did not get the use of the money.  Most likely the debtors argued that moving the money into an "accessible" account location benefited the creditors and was, in any event, illegal because it denied the plaintiffs the use of the money (or perhaps interest on it).  The debtors appealed the lower court ruling.

On appeal, the higher court held that the Plaintiffs had failed to state a legitimate cause of action and that their lawsuit was "frivolous."  It upheld sanctions awarded in favor of the bank and the attorney in the amount of about $22,000.00.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262