MIAMI — The Florida 3rd District Court of Appeal on April 18 affirmed a discovery order in a lawsuit to determine the owner of more than $13 million held in the Miami branch of a South American bank. 

Judge Edwin A. Scales III wrote, “We affirm the trial court’s discovery order on appeal, and remand for further proceedings,” returning the matter to the trial court.

Judge Edwin A. Scales III
Judge Edwin A. Scales III

In an effort to protect more than $13 million in the Miami branch of Banco Santander International, Villamorey S.A., a Panamanian company, filed a motion for a protective order to prevent BDT Investments, Inc. from claiming the account’s proceeds, according to background information in the ruling. The motion was denied by the Miami-Dade Circuit Court. BDT had obtained a garnishment order, claiming that the company had an interest in the money being retained in the bank. 

BDT had obtained a Panamanian judgment against Lisa S.A., Villamorey’s minority shareholder, and subsequently filed an action in the circuit court to domesticate the foreign judgment. Upon learning that the Miami branch of the bank might be holding in an account the money Villamorey allegedly owed to Lisa, BDT served the bank with a writ of garnishment, information in the ruling said.

The bank responded and moved to dismiss the writ, denying its allegations, and named Villamorey as the account holder. The bank also asserted that the funds in Villamorey’s account had been pledged to it to secure a loan it had made to Villamorey. Banco Santander also expressed doubt over whether the Villamorey account was subject to BDT’s garnishment writ, and as a result, it froze the account.

BDT contended that an audit report showed a dividend of more than $13 million declared by Villamorey and payable to Lisa, according to information in the ruling. Therefore, it claimed this money was subject to BDT’s garnishment. 

Upon receipt of BDT’s notice, Villamorey filed a motion to deny BDT’s writ saying that "(i) Villamorey does not owe any debt to BDT; (ii) a bank account is owned by the entity named on the account (i.e., Villamorey); (iii) the audit report upon which BDT relied did not establish any ownership interest of Lisa in the Villamorey account at Bank; and (iv) BDT’s foreign judgment against Lisa was a sham because, among other things, BDT and Lisa were related entities, owned by the same parent company, and represented by the same counsel," according to the ruling.

Discovery was an issue in this lawsuit. In order to establish legitimacy for its writ of garnishment, BDT served Villamorey with a request for admissions and a request for production of documents, and it also sought to depose Villamorey’s corporate representative, the ruling said.

Villamorey then filed a motion seeking to quash BDT’s discovery or a protective order. Villamorey argued that because the trial court lacked personal jurisdiction over it, it is not a party to the garnishment proceedings and, therefore, it cannot be compelled to respond to BDT’s discovery.

In his ruling, Scales wrote, “We affirm the order on appeal because Villamorey was properly made a party to the garnishment proceeding."

He also wrote that “However, Bank’s answer specifically alleged that  Bank was in doubt as to whether the Villamorey account was subject to BDT’s garnishment writ and thus, froze the account.”

BDT claimed that these dividend funds, held in the Villamorey account at Bank, actually belonged to Lisa, and therefore were subject to BDT’s writ of garnishment. Scales ruled that “Villamorey is entitled to a trial on the issue of whether the money in the Villamorey account at Bank is subject to garnishment (i.e., whether the funds actually belong to Lisa.)”  He also said that Villamorey could be compelled by the trial court to respond to BDT’s discovery.

Judges Barbara Lagoa and Kevin Emas concurred.

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