14.5.6.3 The Net Contribution Approach

580 See, e.g., Gateway Commercial Fin., L.L.C. v. NRG Bldg. & Consulting, Inc., 2017 WL 3387923 (S.D. Cal. Aug. 7, 2017) (applying net contribution rule; crediting non-debtor’s testimony that funds in account were derived from his odd jobs and Social Security—and that debtor daughter’s name was on account only to manage his affairs if he could not); In re Simkins, 2013 WL 6010496 (Bankr. D. Wyo. Nov. 13, 2013) (creditor can execute on joint account only to extent of debtor’s equitable interest in it); Schacht v. Kunimune, 440 P.3d 149 (Alaska 2019) (Alaska’s statutory net contribution rule applies to bank levies by third-party creditor; non-debtor did not waive statutory protection by signing account agreement stating that either party could withdraw funds; remanding for tracing of non-debtor’s contributions); Watlow Elec. Mfg. Co. v. Wrob, 881 S.W.2d 650 (Mo. Ct. App. 1994) (right of creditor to garnish joint account depends on actual ownership of funds in the account).

581 Triplett v. Brunt-Ward Chevrolet, Oldsmobile, Pontiac, Cadillac, GMC Trucks, Inc., 812 So. 2d 1061 (Miss. Ct. App. 2001) (bank has duty to implement garnishment of joint account, since account agreement gives either party right to withdraw the funds; bank has no duty to notify non-debtor joint account holder of garnishment; either holder could, however, intervene and assert non-debtor’s ownership of the funds); Ingram v. Hocking Valley Bank, 708 N.E.2d 232 (Ohio Ct. App. 1997) (upholding summary judgment against consumer on claim against bank, creditor, and collector based on garnishment of joint account; under Ohio law, either party to joint account may withdraw entire amount, so bank properly turned over entire balance of joint account in response to garnishment, without inquiring into ownership, but opinion suggests that non-debtor co-owner can obtain release of the funds by requesting a hearing and presenting evidence of net contributions in court that issued the garnishment).

582 Ross v. Thrift Sav. & Loan Co., 573 N.E.2d 788 (Ohio Ct. App. 1989) (when account was established by spouses to freeze assets pending their divorce and required two signatures for withdrawal, equal ownership not presumed; bank wrongfully paid husband’s creditor on a garnishment order when husband could not withdraw funds on his own signature).

583 Lind v. Midland Funding, L.L.C., 688 F.3d 402 (8th Cir. 2012) (Minn. law) (all funds presumed to belong to debtor; burden on non-debtor to prove they do not); United States v. Seymour, 275 Fed. Appx. 278 (5th Cir. 2008) (Miss. law) (reversing decision allowing garnishment of only half of joint account funded by debtor-husband; non-debtor wife failed to carry burden of proof as to her ownership rights; equitable division principles applicable at divorce not relevant here); Soc’y of Lloyd’s v. Collins, 284 F.3d 727 (7th Cir. 2002) (Ill. law) (non-debtor wife rebutted presumption of joint ownership when funds came from her rental property and account was used to pay her debts or joint debts; husband’s use of account to pay credit card bill on which wife was jointly liable did not make it subject to garnishment); Ackley State Bank v. Thielke, 920 F.2d 521 (8th Cir. 1990) (Iowa law); Dobbs v. Dobbs, 2008 WL 3843528 (S.D.N.Y. Aug. 14, 2008) (presumption that depositor into joint account intends a gift is rebuttable regardless of account agreement’s language; fact issue here whether deceased depositor intended convenience account); Harp’s Food Stores, Inc. v. Res. Grp. Servs., L.L.C., 2006 WL 2056648 (E.D. Okla. July 21, 2006) (non-debtor ex-wife rebutted presumption of debtor’s ownership; only funds in account were deposited by husband to satisfy court order requiring payment to wife upon refinancing of marital home); Puerto Rican Am. Ins. v. Burgos-Diaz, 2005 WL 1643299 (D. P.R. June 30, 2005) (Mag.) (lifting attachment of joint bank account after father rebutted presumption of ownership by establishing that funds were his and that debtor son’s name had been added for convenience); S & S Diversified Servs., L.L.C. v. Taylor, 897 F. Supp. 549 (D. Wyo. 1995) (when non-debtor claimed that funds in account came from her annuity, she must prove both ownership of the annuity and her intent in depositing funds in joint account); In re Ruvalcaba, 2018 WL 2317682 (Bankr. N.D. Ill. May 17, 2018) (presumption that depositor intends a gift to co-tenant may be rebutted only by clear and convincing evidence of intent to create a convenience account); In re Grodetzky, 2012 WL 714349 (Bankr. E.D.N.Y. Mar. 5, 2012) (rebuttable presumption that debtor owns entire account; here debtors failed to show convenience account, but creditor allowed to attach only 50% of funds when both owners contributed); In re Tucker, 430 B.R. 499 (Bankr. N.D. Ill. 2010) (evidence that non-debtor deposited large sum not sufficient to rebut presumption); In re Johnson, 232 B.R. 735 (Bankr. C.D. Ill. 1999) (placing another’s name on a bank account creates presumption that a gift was intended, rebuttable only by clear and convincing evidence); In re Nunley, 19 B.R. 785 (Bankr. E.D. Tenn. 1982) (presumption of joint ownership created by bank account agreement can be rebutted by clear and convincing evidence); Maloy v. Stuttgart Mem’l Hosp., 872 S.W.2d 401 (Ark. 1994) (non-debtor, who contributed all funds to account, failed to rebut presumption with testimony that she intended to avoid probate, enable her children to write checks in an emergency, and shield funds from possible nursing home bills); Traders Travel Int’l, Inc. v. Howser, 753 P.2d 244 (Haw. 1988) (judgment debtor presumptively holds all of joint account and has burden of showing otherwise); Highsmith v. Dep’t of Pub. Aid, 803 N.E.2d 652 (Ill. App. Ct. 2004) (burden on non-debtor to show ownership of funds); Brown v. Ky. Nat. Res. & Env’t Cabinet, 40 S.W.3d 873 (Ky. Ct. App. 1999) (rebuttable presumption that debtor owned the whole account; trial court should consider net contributions of each spouse, whether non-debtor spouse was sufficiently removed from other spouse’s indebtedness, and spouses’ expectations about use of the funds); Savig v. First Nat’l Bank of Omaha, 781 N.W.2d 335 (Minn. 2010) (there is a statutory presumption that co-depositors own the funds in proportion to their net contributions but, in garnishment proceedings, depositors have burden of proving their net contribution; without such a showing, the judgment debtor is presumed to have contributed all the funds); Delta Fertilizer, Inc. v. Weaver, 547 So. 2d 800 (Miss. 1989) (judgment debtor is rebuttably presumed to hold entire account, but rebutted when debtor’s mother showed that she deposited all the funds); In re Estate of Johnson, 777 N.Y.S.2d 212 (N.Y. App. Div. 2004) (presumption of joint tenancy rebutted here by clear and convincing evidence of convenience account); Tayar v. Tayar, 618 N.Y.S.2d 35 (N.Y. App. Div. 1994) (opening of joint account creates presumption that each tenant is possessed of whole account; burden of proof on party seeking to rebut); Jiminez v. Brown, 509 S.E.2d 241 (N.C. 1998) (funds in joint account with minor son were available to creditors “to the extent of debtor’s contribution to the account”; funds presumed to be those of debtor, burden on debtor and co-tenants to prove ownership); Sears Roebuck & Co. v. Cosey, 44 P.3d 582 (Okla. Civ. App. 2002) (presumption that joint account holder is entitled to use entire account may be rebutted even if account agreement allows single signature withdrawal; rebutted here by evidence that non-debtor mother deposited all the funds); Mitchell v. Mitchell, 756 A.2d 179 (R.I. 2000) (rebuttable presumption that putting name on joint account shows intent to make a gift, but convenience accounts still recognized); Trustmark Nat’l Bank v. Sunshine Carwash No. 5 Partners, 558 S.W.3d 157 (Tenn. Ct. App. 2018) (Tennessee allows creditor to take entire amount, but provides a right of action for non-debtor to show that funds were attributable to them to the exclusion of debtor; ordering return of garnished funds where non-debtor was sole contributor and debtor only had access to write checks for their business); Russ ex rel. Schwartz v. Russ, 734 N.W.2d 874 (Wis. 2007) (depositor to joint account presumed to make gift to co-tenants, absent clear and convincing evidence of other intent). See also RPS, Inc. v. Travel-Max Int’l, Inc., 823 So. 2d 243 (Fla. Dist. Ct. App. 2002) (judgment creditor entitled to jury trial on question of whether funds in bank account belonged to debtor or to third-party claimant); New York Cmty. Bank v. Bank of Am., 93 N.Y.S.3d 7 (N.Y. App. Div. 2019) (statutory presumption of joint tenancy with right of survivorship applies to safe deposit box; not rebutted here, so judgment creditor can garnish contents). See generally L. C. Di Stasi, Jr., Annotation, Joint Bank Account As Subject to Attachment, Garnishment, or Execution by Creditor of One of the Joint Depositors, 11 A.L.R.3d 1465, 1476 (1967).

584 See Sea Salt, L.L.C. v. Bellerose, 2018 WL 5499537 (D. Me. Oct. 29, 2018) (Maine law presumes that joint tenants each hold a half interest; non-debtor is given the opportunity to show that they own a larger share as a result of net contributions); Kieffer v. New Century Fin. Servs., Inc., 2011 WL 1899272 (D.N.J. May 19, 2011) (rebuttable presumption of 50-50 ownership); Blue Cross Blue Shield v. Askanzi, 2007 WL 2874012 (E.D. Mich. Sept. 25, 2007) (rebuttable presumption that each owner of joint account owns half the funds; rebutted here by tracing origin of funds); Fed. Deposit Ins. Corp. v. Koffman, 849 F. Supp. 176 (N.D.N.Y. 1994); In re Rochester, 2008 WL 1782350 (Bankr. D.N.M. Apr. 16, 2008) (rebuttable presumption that married joint owners made equal contributions; rebutted here when funds in account were wife’s separate property and debtor-husband, whose name was added for estate planning purposes, never wrote checks on account); In re Kondora, 194 B.R. 202 (Bankr. N.D. Iowa 1996) (joint accounts presumed to be owned in equal shares, rebuttable by clear and convincing evidence; funds may be garnished only to the extent of the debtor’s interest in the property); In re Baugh, 60 B.R. 102 (Bankr. E.D. Ark. 1986) (in absence of evidence of different contributions to an account jointly held by spouses, presumed that one-half of account was a gift to each other, making one-half of the account available to the creditor of one of them); Bakwin v. Mardirosian, 6 N.E.3d 1078, 1088–1089 (Mass. 2014) (relying on former Massachusetts statute that treated each account holder as owning one-half of joint account); Danielson v. Lazoski, 531 N.W.2d 799 (Mich. Ct. App. 1995); Univ. of Mont. v. Coe, 704 P.2d 1029 (Mont. 1985) (when signature card did not specify joint tenancy or mention survivorship, account was a tenancy in common; allowing creditor to execute on one half of two-person account); Sicari v. First Fid. Bank, 668 N.Y.S.2d 406 (N.Y. App. Div. 1998) (parties to joint checking account are presumed to be entitled to equal shares); Velocity Invs., L.L.C. v. Kawski, 864 N.Y.S.2d 734 (N.Y. City Ct. 2008) (limiting creditor to half of joint account even though non-judgment debtor joint tenant did not respond after being served with garnishment petition); Velocity Invs., L.L.C./Citibank v. Astoria Fed. Sav. & Loan, 824 N.Y.S.2d 767 (N.Y. Dist. Ct. 2006) (presumption of fifty-fifty ownership, but fact question when non-debtor father testified that debtor daughter’s name was on account only so she could write checks for invalid mother if he was “not around”); Vetter v. Hampton, 375 N.E.2d 804 (Ohio 1978); Citizens Fed. Sav. Bank v. Zierolf, 694 N.E.2d 496 (Ohio Ct. App. 1997) (presumption of equal ownership is rebuttable). See generally L. C. Di Stasi, Jr., Annotation, Joint Bank Account As Subject to Attachment, Garnishment, or Execution by Creditor of One of the Joint Depositors, 11 A.L.R.3d 1465, 1477 (1967).

585 See, e.g., In re Johnson, 232 B.R. 735 (Bankr. C.D. Ill. 1999) (placing another’s name on a bank account creates a presumption that a gift was intended, rebuttable by “clear and convincing” evidence); In re Kondora, 194 B.R. 202 (Bankr. N.D. Iowa 1996); In re Nunley, 19 B.R. 785 (Bankr. E.D. Tenn. 1982) (presumption of joint ownership created by bank account agreement can be rebutted by clear and convincing evidence); Gataric v. Colak, 59 N.E.3d 109 (Ill. App. Ct. 2016) (burden is on non-debtor to show ownership by clear and convincing evidence); Morgan Stanley & Co. v. Andrews, 123 A.3d 640 (Md. Ct. Spec. App. 2015) (non-debtor father presented clear and convincing evidence to rebut presumption of joint ownership when he deposited all funds, bank manager testified that father wanted son to be able to write checks “in case something happened,” and son testified that he wrote checks only for benefit of father); Craig v. Hasting State Bank, 380 N.W.2d 618, 623 (Neb. 1986); Fireman’s Fund Ins. Co. v. Nw. Paving & Constr. Co., 891 P.2d 747 (Wash. Ct. App. 1995); Russ ex rel. Schwartz v. Russ, 734 N.W.2d 874 (Wis. 2007).

586 See LR Credit 10, L.L.C. v. Welsh, 851 N.Y.S.2d 70 (N.Y. Auburn City Ct. 2007) (non-debtor joint tenant’s failure to respond to garnishment petition is sufficient to rebut presumption that she owns half of it, so creditor is entitled to turnover of entire account); Ford Motor Credit Co. v. Astoria Fed., 733 N.Y.S.2d 583 (N.Y. Dist. Ct. 2001) (non-debtor co-tenant’s failure to respond to notice of garnishment of account is sufficient to rebut presumption that he owns half of it, so creditor can seize entire account). See also Kieffer v. New Century Fin. Servs., Inc., 2012 WL 1853895 (D.N.J. May 21, 2012) (not wrongful for creditor to issue garnishment against entire joint bank account despite statutory presumption that it was owned in equal shares by debtor and non-debtor spouse; account owners must follow statutory procedures to release funds).

587 Gateway Commercial Fin., L.L.C. v. NRG Bldg. & Consulting, Inc., 2017 WL 3387923 (S.D. Cal. Aug. 7, 2017) (applying net contribution rule; crediting non-debtor’s testimony that funds in account were derived from his odd jobs and Social Security—and that debtor daughter’s name was on account only to manage his affairs if he could not); Coiro v. Wachovia Bank, 2011 WL 5196725 (D.N.J. Oct. 31, 2011) (applying New Jersey’s net contribution statute to determine ownership of account and decide whether it is included in bankruptcy estate); In re Estate of Delaney, 819 A.2d 968 (D.C. 2003) (inheritance case; D.C. law presumes convenience account, notwithstanding language of signature cards, when one party deposits all the funds); Banc of Am. Leasing & Capital, L.L.C. v. Fletcher-Thompson, Inc., 179 A.3d 1058 (N.J. Super. Ct. App. Div. 2018) (denying turnover; non-debtor wife showed that funds were her earnings and pension; debtor husband’s agreement to consent judgment allowing garnishment was not binding on wife); Sweetman v. Suhr, 72 N.Y.S.3d 756 (N.Y. App. Div. 2018) (convenience account shown; mother deposited proceeds of murdered son’s life insurance, then placed her present husband’s name on the account so he could administer it on behalf of her grandchild if she died; funds could not be seized for husband’s child support debt to former wife); In re Kolodziejczyk & Rotella v. Wing, 689 N.Y.S.2d 825 (N.Y. App. Div. 1999) (testimony of mother that she owned money in joint account and had put her son’s name on account only to confer right of survivorship was sufficient to rebut statutory presumption of joint ownership; money was not “available to” son so as to disqualify him for food stamps); Blanton v. Clark, 2002 WL 709958 (Ohio Ct. App. Apr. 19, 2002) (court will “look to the realities of ownership,” but funds here were traceable to debtor). See also In re Estate of Mayer, 664 N.E.2d 583 (Ohio Ct. App. 1995) (when contributing co-tenant died, non-contributor owed the estate the sums she had withdrawn for her own use during his lifetime); Trustmark Nat’l Bank v. Sunshine Carwash No. 5 Partners, 2018 WL 1641008 (Tenn. Ct. App. Apr. 5, 2018) (burden is on non-debtor to show which funds are “directly attributable to him or her [the non-debtor depositor] to the exclusion of the debtor depositor”; shown here where non-debtor showed that she was the source of all the funds). But see Alcantar v. Sanchez, 257 P.3d 966 (N.M. Ct. App. 2011) (New Mexico follows net contribution rule but may be overridden by contract provision allowing garnishee bank to treat entire account as property of debtor). But cf. In re Houston, 2012 WL 4490890 (E.D. Mich. Sept. 26, 2012) (statute gives credit union the right to set off debt against entire account that is in the names of debtor and his mother regardless of their intent or who made the contributions, and it is more specific, so is an exception to general multi-party account statute).

588 In re Ruvalcaba, 2018 WL 2317682 (Bankr. N.D. Ill. May 17, 2018) (presumption that depositor intends a gift to co-tenant may be rebutted only by clear and convincing evidence of intent to create a convenience account); Hayden v. Gardner, 381 S.W.2d 752 (Ark. 1964) (garnishment allowed only to extent of debtor’s ownership, which can be established by parol evidence of contributions and intent to make a gift); In re Estate of Shea, 848 N.E.2d 185 (Ill. App. Ct. 2006) (estate rebutted presumption that adding joint tenant was a gift when account owner had discussed, with lawyer and others, need for someone to pay bills and so forth if he became disabled); Highsmith v. Dep’t of Pub. Aid, 803 N.E.2d 652 (Ill. App. Ct. 2004) (burden on non-debtor to show ownership of funds and lack of donative intent; when father funded account for son’s education and son did not choose to be educated, this was at most a conditional gift and could not be reached for son’s child support obligation); Enright v. Lehmann, 735 N.W.2d 326 (Minn. 2007) (by statute, funds belong to depositors in proportion to contribution; no garnishment of funds contributed by non-debtor, unless creditor can show intent to make gift to debtor); Craig v. Hasting State Bank, 380 N.W.2d 618, 623 (Neb. 1986) (Nebraska presumes that there is no intent to make a gift without clear and convincing evidence). See also In re Sciarra, 175 B.R. 2 (Bankr. D. Conn. 1994) (depositor told bank he wanted funds in certificate of deposit to pass to his brother upon depositor’s death; brother’s name, but not signature, on the signature card; no intent to make inter vivos gift, so certificate of deposit could not be set off for brother’s debt); Food Servs. Corp. v. Rheam, 145 S.W.3d 484 (Mo. Ct. App. 2004) (non-debtors may show that debtor contributed nothing and that they did not intend a gift). But cf. Vitacco v. Eckberg, 648 N.E.2d 1010 (Ill. App. Ct. 1995) (Illinois presumes that depositor intends a gift to non-contributing co-tenants, but presumption overcome here by clear and convincing evidence of convenience account when elderly depositor sued his co-tenant after he learned she was writing checks to herself instead of paying his bills).

589 See, e.g., Giove v. Stanko, 882 F.2d 1316 (8th Cir. 1989) (Neb. law) (allowing creditor to garnish certificates of deposit held jointly by debtor and children; rejecting claim that debtor made a gift of the funds to the children which would have shielded the funds from garnishment); Gen. Elec. Capital Corp. v. Bunker Aircraft Mgmt., Inc., 2013 WL 6000018 (N.D. Ind. Nov. 12, 2013) (allowing garnishment of entire joint account for husband’s debt when non-debtor wife, who did not contribute any of the funds, failed to establish that husband made a gift of the funds to her).