Fifth Third Bank v. Triangle Associates Inc

STATE OF MICHIGAN

COURT OF APPEALS

FIFTH THIRD BANK, UNPUBLISHED
October 29, 2015
Plaintiff-Appellee,

No. 321737
Kent Circuit Court
TRIANGLE ASSOCIATES, INC., LC No. 13-004365-CZ

Defendant-Appellant.

Before: TALBOT, C.J., and BECKERING and GADOLA, JJ.

PER CURIAM.

Defendant, Triangle Associates, Inc. (Triangle), appeals as of right the April 28, 2014
order granting summary disposition to plaintiff, Fifth Third Bank (Fifth Third Bank), in this
declaratory action. We affirm.

I. PERTINENT FACTS AND PROCEDURAL HISTORY

The procedural history of this case is as long as it is complicated, and reads like a law
school student’s Civil Procedure exam nightmare. In 2008, Triangle obtained a judgment against
Bentwaters Partners (Bentwaters) in the amount of $430,465.96. Bentwaters had a deposit
(checking) account with Fifth Third Bank (the Bentwaters Account). In August 2011, Fifth Third
Bank, Bentwaters, and the United States Department of Agriculture (USDA) entered into a deposit
account control agreement (DACA), in which Bentwaters granted the USDA a security interest in the
Bentwaters Account.

A. WRIT OF GARNISHMENT AND DEFAULT JUDGMENT

In what provided the spark for a series of litigation, Triangle sought and received from
the clerk of the Kent Circuit Court a writ of garnishment against Fifth Third Bank in June 2012.
The writ of garnishment was served on Fifth Third Bank the following day. Fifth Third Bank placed
a hold on the funds and notified Bentwaters of the writ, but it did not deliver a verified disclosure
within 14 days of receiving the writ, as is required by MCR 3.101(H). As a result, on June 26, 2012,
the clerk of the Kent Circuit Court entered a default against Fifth Third Bank, at Triangle’s request.
The following day, the circuit court entered a default judgment “[f]or” Triangle, “[a]gainst” Fifth
Third Bank, in the amount of $484,550.40. That same day, Fifth Third Bank delivered its garnishee
disclosure form.

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 Fifth Third Bank moved the circuit court to set aside the default on July 16, 2012, arguing
that there was good cause for its delay and that it had a meritorious defense, i.e., it was precluded
from making any distributions under the writ of garnishment because the USDA had a security
interest in the Bentwaters Account. The circuit court denied the motion, as well as a subsequent
motion for reconsideration.

In November 2012, Fifth Third Bank filed two motions for relief from the default judgment,
the second of which is pertinent to this appeal. In the second motion for relief from judgment, Fifth
Third Bank argued that the default judgment should be vacated because of noncompliance with the
court rules regarding default judgments. The circuit court denied the motion, expressing satisfaction
that “everything was done properly under the court rules . . . .” As will be discussed in more detail
below, this Court subsequently granted Fifth Third Bank’s application for leave to appeal the denial
of this second motion for relief from judgment.

B. INTERPLEADER ACTION

On September 5, 2012, Fifth Third Bank filed an interpleader action in Kent Circuit Court to
resolve what it described as competing interests in the Bentwaters Account. It identified the USDA,
Triangle, and Mercantile Bank1 as parties with competing interests in the account. Thereafter, the
USDA removed the interpleader action to federal court in the United States District Court for the
Western District of Michigan (district court). Triangle moved the district court to dismiss the action
based on a number of grounds, including res judicata, collateral estoppel, waiver, and unclean hands.
In evaluating the motion for dismissal, the district court examined the nature of the default judgment
that Triangle obtained against Fifth Third Bank. Triangle argued that, upon entry of the default
judgment, the writ of garnishment obtained against Fifth Third Bank merged with the default
judgment and ceased to operate as to the funds in the Bentwaters Account. In other words, Triangle
argued that Fifth Third Bank was liable to pay Triangle its own assets, regardless of any assets held
on behalf of Bentwaters, in order to satisfy the default judgment.

The district court rejected the notion that Fifth Third Bank was liable to pay Triangle out of
its own assets. It stated MCL 600.4051 expressly provides for circumstances when a garnishee may
become personally liable. Those circumstances—when a garnishee knowingly and willfully answers
falsely upon disclosure or examination—were not present in this case. The district court explained
that the default judgment was entered against Fifth Third Bank because it failed to timely file its
verified disclosure; thus, the default judgment was entered against Fifth Third Bank without regard to
anything disclosed by it. The district court also denied Triangle’s motion for summary judgment.

Thereafter, Bentwaters argued that the USDA was entitled to summary judgment, argued that
the funds in the Bentwaters Account should be awarded to the USDA because the USDA’s security
interest was superior to the claims of Mercantile Bank and Triangle. Triangle argued that it did not
have a claim to the funds to the Bentwaters Account because the default judgment was a personal
judgment against Fifth Third Bank. Triangle also argued that the federal court lacked the ability to
discharge Fifth Third Bank from liability in excess of the funds in the Bentwaters Account. The

1
The details of Mercantile Bank’s claims to the funds in the Bentwaters Account are not
pertinent to this appeal; consequently, we do not discuss Mercantile Bank in any detail.

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district court found that the USDA had a security interest in the funds in the Bentwaters Account, and
that this security interest had priority over the claims of Mercantile Bank and Triangle. As a result, it
granted the motion for summary judgment.

In addition, the court reiterated its belief that Fifth Third Bank was not personally liable to
pay the default judgment. However, the court reasoned that it was unnecessary to rehash Triangle’s
argument that the default judgment constituted a personal judgment against Fifth Third Bank because
Fifth Third Bank did not seek a discharge of liability with respect to anything outside the funds in the
Bentwaters Account, and its judgment would not affect Fifth Third Bank’s liability outside those
funds. In accordance with the district court’s ruling, Fifth Third Bank tendered a check in the
amount of $486,235.40 to the district court. The court then discharged Fifth Third Bank from all
liability with respect to the Bentwaters Account.

C. DECLARATORY ACTION—THE INSTANT PROCEEDINGS

On May 9, 2013, the day after tendering the funds to the district court, Fifth Third Bank
initiated the instant action by filing a complaint for declaratory relief in the trial court.2 Fifth Third
Bank alleged that in the course of all the proceedings between it and Triangle, a controversy had
arisen regarding whether it was personally liable to Triangle under the default judgment. Fifth Third
Bank believed that Triangle would attempt to execute the default judgment against its personal
assets. According to Fifth Third Bank, the parties needed a declaratory judgment to guide their
action with respect to the default judgment. It asked the trial court to declare that: (1) the default
judgment gave Triangle an interest in the Bentwaters Account; (2) Triangle’s interest in the
Bentwaters Account was adjudicated in the interpleader action as being inferior to the USDA’s
security interest; (3) Fifth Third Bank, upon complying with the judgment of the federal court, had
no further obligations under the default judgment; (4) Fifth Third Bank was not personally liable to
Triangle under the default judgment; and (5) Triangle may not execute or enforce the default
judgment against Fifth Third Bank’s assets or proceed against an appeal bond Fifth Third Bank had
filed earlier in conjunction with one of its applications for leave to appeal the circuit court’s earlier
rulings in regard to the default judgment.

Fifth Third Bank moved for summary disposition in March 2014. It argued that a garnishee
is generally only liable for the property of the defendant in a garnishment action. Only when a
garnishee knowingly and willfully answers falsely upon disclosure or examination, contended Fifth
Third Bank, can a garnishee be liable to satisfy a judgment out of its own assets. Those
circumstances were not present in this case because the default judgment was entered before Fifth
Third Bank ever filed a disclosure. Thus, Fifth Third Bank argued it was only liable for the funds in
the Bentwaters account, and this liability had been discharged in the interpleader action.

Triangle filed a cross-motion for summary disposition, arguing that Fifth Third Bank brought
the action for declaratory relief as an improper collateral attack on the default judgment. Triangle
also argued that the trial court did not have subject-matter jurisdiction over the action, which it
characterized as an attack on judgments entered by the circuit court and the district court. As a third

2
In order to avoid confusion amongst the various courts involved in this case, we use the term
“trial court” to refer only to the trial court in the instant action.

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reason for positing that it was entitled to summary disposition, Triangle contended that the action
was precluded by res judicata, arguing that the issue of Fifth Third Bank’s personal liability had
already been decided on the merits by the default judgment. Further, Triangle argued that the trial
court should decline to issue declaratory relief in the instant case because the district court lacked
subject-matter jurisdiction in the interpleader action.

In a written opinion and order entered April 28, 2014, the trial court granted summary
disposition to Fifth Third Bank and denied Triangle’s cross-motion for the same. Citing MCR
3.101(G)(1), the trial court reasoned that “a garnishee is generally liable only for the property
belonging to the defendant in the garnishee’s possession or control.” Although an exception to that
general rule exists under MCL 600.4051 if a garnishee knowingly and willfully answers falsely in its
disclosures, the trial court noted that a false disclosure was never at issue in this case. Finally, the
trial court found that the district court discharged Fifth Third Bank from liability with respect to the
Bentwaters Account, and that it had no further obligations thereunder. Thus, it had completed its
performance as garnishee under the default judgment. The trial court rejected Triangle’s assertions
that it lacked jurisdiction to grant declaratory relief, and declared the following: (1) the default
judgment was not a personal money judgment against Fifth Third Bank and Fifth Third Bank was
only liable for Bentwaters’s property and was not liable to pay out of its own assets; (2) Fifth Third
Bank had fully performed its obligations under the default judgment in accordance with the appeal
bond and had no further obligations to perform; (3) Fifth Third Bank was not in contempt of the
circuit court’s orders for complying with the orders entered by the federal court in the interpleader
action; and (4) Triangle may not execute or enforce the default judgment against Fifth Third Bank’s
personal assets or against the appeal bond. It is from this order that Triangle now appeals as of right.

D. APPLICATION FOR LEAVE TO APPEAL IN DOCKET NO. 313726

At this point in the recitation of the facts, we take a brief chronological detour to give account
of the appellate proceedings concerning the default judgment. While the instant case was pending in
the trial court, this Court granted Fifth Third Bank’s application for leave to appeal the circuit court’s
order denying its second motion for relief from judgment. Triangle Assoc, Inc v Bentwaters Partners
LP, unpublished order of the Court of Appeals, entered October 18, 2013 (Docket No. 313726). This
Court held oral argument on the matter on May 7, 2014, which was after the trial court granted
summary disposition to Fifth Third Bank in the instant case and declared that Fifth Third Bank was
not personally liable to pay the default judgment.

On June 26, 2014, this Court issued an unpublished per curiam opinion in which it found the
issue raised moot and remanded the matter to the circuit court for entry of an order of dismissal.
Triangle Associates, Inc v Bentwaters Partners, LLP, unpublished opinion per curiam of the Court of
Appeals, issued June 26, 2014 (Docket No. 313726) (the Triangle opinion), at 1, 3.3 After setting
forth the procedural history of the case, the panel stated that “[t]hough the events of the past few
months have radically altered each party’s position,” the appeal “remain[ed] limited to ‘the issues
raised in the application and supporting brief,’ namely Fifth Third’s contention that the [circuit]

3
Although the Triangle opinion is not part of the lower court record in this case, we take judicial
notice of the opinion. See In re Jones, 286 Mich App 126, 129; 777 NW2d 728 (2009).

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court” did not comply with the court rules. Id. at 2. The panel found that the issue was moot,
explaining that:

Whatever relief Fifth Third sought . . . was granted by the trial court in the April
28, 2014 final judgment, in which the trial court stated that Fifth Third performed
its obligations as a garnishee defendant and cannot be held liable for the
$484,550.40 in Triangle’s writ of garnishment. It is thus impossible for our Court
to grant relief, as an affirmance or reversal of the trial court’s denial of Fifth
Third’s motion . . . would have no impact on the trial court’s April 2014 final
judgment. [Id. at 3.]

The Court then went on to opine that the trial court reached the right result with its “April
2014 final judgment”:

In any event, the trial court’s final judgment reached the correct result, as Triangle
essentially demands that Fifth Third pay it a massive windfall. Triangle sought to
force Fifth Third to pay $484,550.40 from Fifth Third’s corporate funds to satisfy
a debt that Bentwaters—not Fifth Third—incurred. Triangle offers no compelling
argument as to why it should receive this money from Fifth Third’s corporate
funds, and instead lists now irrelevant ways in which it believes Fifth Third has
violated Michigan Court Rules. “An appellant may not simply announce a
position on appeal and leave it to this Court to rationalize the basis for that claim.”
Ypsilanti Charter Twp v Kircher, 281 Mich App 251, 287; 761 NW2d 761 (2008).
The proper forum for such an argument is an appeal of the trial court’s final
judgment, which Triangle may make if it so chooses. [Id. at 3.]

The Court remanded the cases for entry of an order of dismissal. Id. Neither party sought leave
to appeal the matter to the Supreme Court.

II. SUBJECT-MATTER JURISDICTION

Returning to the instant case, Triangle attacks the trial court’s summary disposition ruling
in a number of ways, the first of which is to argue that the trial court lacked subject-matter
jurisdiction to issue the declaratory ruling. Among other reasons for contending that the trial
court lacked subject-matter jurisdiction, Triangle argues that there was no case or controversy to
be resolved because any controversy that existed was resolved by the default judgment. It also
argues that the trial court’s issuance of a declaratory judgment was an impermissible review of a
final judgment entered in another case, i.e., the default judgment. A party may question the trial
court’s subject-matter jurisdiction at any time. Midwest Energy Coop v Mich Pub Serv Comm, 268
Mich App 521, 522; 708 NW2d 147 (2005). We review de novo Triangle’s challenges to the trial
court’s subject-matter jurisdiction. Id.

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 A. SUMMARY OF GARNISHMENT PROCEEDINGS

Triangle first argues that the trial court did not have subject-matter jurisdiction to issue a
declaratory judgment because any case or controversy that existed between Triangle and Fifth Third
Bank was extinguished by the default judgment entered in the garnishment action. In order to
provide context for this and other issues, we briefly turn our attention to garnishment proceedings.

In this case, Triangle obtained a judgment against Bentwaters. After obtaining a
judgment, a party may utilize garnishment in order to satisfy the claim. Ward v DAIIE, 115
Mich App 30, 35; 320 NW2d 280 (1982). “The design of a garnishment proceeding is to
preserve a principal defendant’s assets in the control of the garnishee, i.e., one who has property
or money in his possession belonging to the defendant, so that the assets may later be accessible
to satisfy a judgment against the principal defendant.” Id. The conditions under which a court
may garnish personal property are set forth by statute. Macatawa Bank v Wipperfurth, 294 Mich
App 617, 619; 822 NW2d 237 (2011). In this regard, MCL 600.4011 provides, in pertinent part:

(1) Subject to [MCL 600.4061 and MCL 600.4061a4], and the conditions in
subsections (2) to (10), the court has power by garnishment to apply the following
property or obligation, or both, to the satisfaction of a claim evidenced by
contract, judgment of this state, or foreign judgment, whether or not the state has
jurisdiction over the person against whom the claim is asserted:

(a) Personal property belonging to the person against whom the claim is asserted
but which is in the possession or control of a third person if the third person is
subject to the judicial jurisdiction of the state and the personal property to be
applied is within the boundaries of this state.

(b) An obligation owed to the person against whom the claim is asserted if the
obligor is subject to the judicial jurisdiction of the state.

“The court may exercise its garnishment power only in accordance with the Michigan
Court Rules.” Nationsbanc Mtg Corp of Georgia v Luptak, 243 Mich App 560, 564; 625 NW2d
385 (2000). MCR 3.101 governs postjudgment garnishment proceedings, which are at issue in this
case. Garnishments generally involve three parties: (1) the “plaintiff,” which is the judgment
creditor; (2) the “defendant,” which is the judgment debtor; and (3) the “garnishee” which is the
garnishee defendant. MCR 3.101(A)(1)-(3).5 A request for a writ of garnishment shall be submitted
to the clerk of the court that entered the judgment. MCR 3.101(D). The request must include a
verified statement, which states, in part, that a judgment has been entered against the defendant and
remains unsatisfied, as well as giving the total amount of the unsatisfied judgment. MCR

4
MCL 600.4061 and MCL 600.4061a are inapplicable to the present case. MCL 600.4061 concerns
when a garnishment writ is served against the state of Michigan. MCL 600.4061a specifically
concerns a writ of garnishment that seeks a state tax refund or credit.
5
In the garnishment action, Triangle was the plaintiff; Bentwaters was the defendant; and Fifth Third
Bank was the garnishee.

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3.101(D)(1), (2). Upon the issuance of a writ of garnishment, the writ must be served upon the
garnishee. MCR 3.101(E)(2), (F)(1). The writ must include the verified statement, MCR
3.101(E)(1), and the verified statement acts as the plaintiff’s complaint against the garnishee, MCR
3.101(M)(2).

Within 14 days of being served with the writ of garnishment, the garnishee shall mail or
deliver to the trial court, the plaintiff, and the defendant a verified disclosure. MCR 3.101(H). In
this case, it is undisputed that Fifth Third Bank failed to file its verified disclosure within the time
specified by MCR 3.101(H). The verified disclosure serves as the garnishee’s answer. MCR
3.101(M)(2). In the verified disclosure, the garnishee shall indicate whether it is indebted to the
defendant. MCR 3.101(H)(1). If the garnishee is indebted to the defendant, “the garnishee shall file
a disclosure revealing the garnishee’s liability to the defendant as specified in subrule (G)(1) . . . .”
MCR 3.101(H)(1)(a). If the garnishee is not indebted to the defendant, the garnishee shall so indicate
in the verified disclosure. MCR 3.101(H)(1)(b). As indicated, MCR 3.101(G)(1) specifies a
garnishee’s liability to the defendant by listing the property belonging to a defendant for which the
garnishee can be liable. See also Nationsbanc Mtg Corp, 243 Mich App at 564 (“[S]ubrule
3.101(G)(1) delineates the various categories of items for which a garnishee is liable.”). Specifically,
the rule provides:

Subject to the provisions of the garnishment statute and any setoff permitted by
law or these rules, the garnishee is liable for

(a) all tangible or intangible property belonging to the defendant in the
garnishee’s possession or control . . . .;

(b) all negotiable documents of title and all goods represented by negotiable
documents of title belonging to the defendant if the documents of title are in the
garnishee’s possession . . . .;

(c) all corporate share certificates belonging to the defendant in the garnishee’s
possession or control . . . .;

(d) all debts, whether or not due, owing by the garnishee to the defendant . . . .;

(e) all debts owing by the garnishee evidenced by negotiable instruments held or
owned by the defendant . . . .;

(f) the portion of the defendant’s earnings that are not protected from garnishment
by law . . . .;

(g) all judgments in favor of the defendant against the garnishee in force . . . ;

(h) all tangible or intangible property of the defendant that, when the writ is
served on the garnishee, the garnishee holds by conveyance, transfer, or title that
is void as to creditors of the defendant . . . .; and

(i) the value of all tangible or intangible property of the defendant that, before the
writ is served on the garnishee, the garnishee received or held by conveyance,

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 transfer, or title that was void as to creditors of the defendant . . . . [MCR
3.101(G)(1).]

“The garnishee is liable for no more than the amount of the unpaid judgment, interest, and costs as
stated in the verified statement requesting the writ of garnishment.” MCR 3.101(G)(2). “If there is a
dispute regarding the garnishee’s liability or if another person claims an interest in the garnishee’s
property or obligation, the issue shall be tried in the same manner as other civil actions.” MCR
3.101(M)(1).

“Judgment may be entered against the garnishee for the payment of money or the delivery of
specific property as the facts warrant.” MCR 3.101(O)(1). “A money judgment against the
garnishee may not be entered in an amount greater than the amount of the unpaid judgment, interest,
and costs as stated in the verified statement requesting the writ of garnishment. Judgment for
specific property may be enforced only to the extent necessary to satisfy the judgment against the
defendant.” Id. The judgment against the garnishee discharges the garnishee from all demands by
the defendant for the money paid or property delivered in satisfaction of the judgment. MCR
3.101(O)(2). “Satisfaction of all or part of the judgment against the garnishee constitutes satisfaction
of a judgment to the same extent against the defendant.” MCR 3.101(O)(7).

“If the garnishee fails to disclose or do a required act within the time limit imposed, a default
may be taken as in other civil actions.” MCR 3.101(S)(1). “A default judgment against a garnishee
may not exceed the amount of the garnishee’s liability as provided in [MCR 3.101(G)(2).”] Id. This
default process is the process that occurred between Triangle and Fifth Third Bank.

B. DECLARATORY JUDGMENT

Triangle argues that the trial court did not have subject-matter jurisdiction to issue a
declaratory judgment in the present case. MCR 2.605, which governs declaratory judgments,
provides, in pertinent part:

(1) In a case of actual controversy within its jurisdiction, a Michigan court of record
may declare the rights and other legal relations of an interested party seeking a
declaratory judgment, whether or not other relief is or could be sought or granted.

(2) For the purpose of this rule, an action is considered within the jurisdiction of a
court if the court would have jurisdiction of an action on the same claim or claims in
which the plaintiff sought relief other than a declaratory judgment.

This court rule neither limits nor expands the subject-matter jurisdiction of a trial court. Associated
Builders & Contractors v Dep’t of Consumer & Indus Servs Director, 472 Mich 117, 125; 693
NW2d 374 (2005), overruled in part on other grounds by Lansing Sch Ed Ass’n, MEA/NEA v Lansing
Bd of Ed, 487 Mich 349 (2010).

“An actual controversy is deemed to exist in circumstances where declaratory relief is
necessary in order to guide or direct future conduct.” Huntington Woods v Detroit, 279 Mich App
603, 616; 761 NW2d 127 (2008). See also Lansing Sch Ed Ass’n, MEA/NEA v Lansing Bd of Ed,
487 Mich 349, 372 n 20; 792 NW2d 686 (2010) (stating that the “essential requirement of the term
‘actual controversy’ under [MCR 2.605] is that plaintiffs plead and prove facts which indicate an

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adverse interest necessitating the sharpening of the issues raised”) (citation and quotation marks
omitted).

C. APPLICATION—THE TRIAL COURT HAD SUBJECT-MATTER JURISDICTION

1. ACTUAL CASE OR CONTROVERSY

We conclude that there was an actual case or controversy in the instant matter and we
disagree with Triangle’s contention that the default judgment entered against Fifth Third Bank
extinguished any case or controversy. As noted, an actual controversy for purposes of MCR 2.605
exists when declaratory relief is necessary to guide or direct future conduct. Huntington Woods, 279
Mich App at 616. In its complaint in the instant case, Fifth Third Bank alleged that because there
were insufficient funds in the Bentwaters Account to satisfy the default judgment and the USDA’s
security interest, it filed an interpleader action. In the interpleader action, after holding that the
USDA’s security interest had priority over Triangle’s interest, the district court ordered Fifth Third
Bank to tender the funds to the court. According to Fifth Third Bank, because of the resolution of the
interpleader action and Triangle’s assertions before the district court that Fifth Third Bank was
required to satisfy the default judgment out of its corporate assets, Triangle would “undoubtedly
attempt” to execute the default judgment against Fifth Third Bank’s corporate assets. This shows an
actual case or controversy. As will be discussed in more detail below, the default judgment in this
case did not establish Fifth Third Bank’s personal liability in the garnishment action. Rather, the
default simply acknowledged that Fifth Third Bank was obligated as a garnishee, to the extent it held
property on behalf of Bentwaters. The effect of the USDA’s interest in the Bentwaters Account, and
any potential liability for Fifth Third Bank beyond what is typically required of a garnishee, was not
at issue at the time the default judgment was entered. Declaratory relief was necessary to guide or
direct the future conduct of the parties regarding whether Fifth Third Bank had any obligation to pay
the default judgment out of its own corporate assets after the federal court ordered the funds in the
Bentwaters Account to be tendered to it. See Huntington Woods, 279 Mich App at 616.

In reaching this conclusion, we find unconvincing Triangle’s citation to DAIIE v Sanford,
141 Mich App 820; 369 NW2d 239 (1985). In DAIIE, after being injured in an automobile accident,
the defendant initiated arbitration proceedings against the plaintiff insurance company, which had
issued a policy that covered him, and Auto-Owners Insurance Company, which insured the driver of
the vehicle in which he was riding. In the arbitration proceedings, the attorneys for the two insurance
companies raised the issue of stacking and argued that the defendant’s recovery should be limited to
$20,000. Nonetheless, the arbitration panel issued the defendant an award of $20,000 against Auto-
Owners Insurance Company and an award of $20,000 against the plaintiff. Auto-Owners Insurance
Company satisfied its obligation, but the plaintiff filed a complaint for declaratory relief. The
plaintiff sought a ruling that the award against it was unenforceable as contrary to the anti-stacking
provision of the insurance policy it had given to the defendant. The trial court granted a declaratory
judgment in favor of the plaintiff. This Court reversed, holding that there was no actual controversy.
Id. at 826-827. The panel explained that because the parties had already submitted their dispute to an
arbitration panel and had obtained a decision on the merits, the plaintiff did not need a declaratory
judgment to guide its future conduct. Id. In sum, the arbitration panel had already determined the
plaintiff’s obligation, and any claim of error regarding that determination could only have been
pursued through a motion to vacate the arbitration award. Id. at 827.

Triangle’s reliance on DAIIE is misplaced, as the case is distinguishable from the instant
matter. A determination whether a trial court has subject-matter jurisdiction is made by reference to

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the allegations in the complaint. See Grubb Creek Action Comm v Shiawassee Co Drain Comm’r,
218 Mich App 665, 668; 554 NW2d 612 (1996). After Triangle obtained the default judgment, Fifth
Third Bank moved the circuit court to set it aside, as well as to grant relief therefrom. In part, Fifth
Third Bank argued that the default judgment was void because Triangle and the circuit court had not
complied with the court rules regarding notice and hearing. By contrast, when it filed its complaint
for declaratory relief in the instant matter, Fifth Third Bank acknowledged the default judgment.
And, rather than arguing again that the default judgment was void, Fifth Third Bank requested that
the trial court declare that, once it complied with the federal court’s order in the interpleader action
and tendered the funds in the Bentwaters Account to the federal court, it had no further obligations
under the default judgment and Triangle could not execute or enforce the default judgment against
Fifth Third Bank’s corporate assets. This dispute was not something that had been submitted to the
circuit court in the earlier garnishment proceedings. Because Fifth Third Bank was not seeking a
declaration that the default judgment was void based on grounds that were presented in its motions to
set aside the default judgment or for relief from the judgment, DAIIE is clearly distinguishable.

2. UNDERLYING SUBSTANTIVE CLAIM

Next, Triangle argues that the trial court lacked subject-matter jurisdiction because Fifth
Third Bank’s request for declaratory relief was not based on an underlying substantive claim.
Triangle relies on statements made by the Supreme Court in Taxpayers Allied for Constitutional
Taxation v Wayne Co, 450 Mich 119; 537 NW2d 596 (1995). In that case, the Supreme Court
considered whether certain claims for declaratory relief were barred by the statute of limitations. At
the beginning of its analysis, the Supreme Court stated the following:

Limitations statutes do not apply to declaratory judgments as such. Declaratory
relief is a mere procedural device by which various types of substantive claims
may be vindicated. There are no statutes which provide that declaratory relief will
be barred after a certain period of time. Limitations periods are applicable not to
the form of the relief but to the claim on which the relief is based. [Luckenbach
Steamship Co v United States, 312 F2d 545, 548 (CA 2, 1963).] [Id. at 128
(emphasis added).]

We find Triangle’s citation to Taxpayers unavailing. The statements from that case upon
which Triangle relies regarding declaratory relief and substantive claims were made in the
context of determining whether claims for declaratory relief were barred by the statute of
limitations. This context is not present in the instant case; there is no claim in the present case that
Fifth Third Bank’s request for declaratory relief was precluded by any applicable statute of
limitations. Rather, Fifth Third Bank sought to vindicate its claim that the declaratory judgment did
not establish its personal liability and that, by paying the money in the Bentwaters Account in
satisfaction of the USDA’s interest, it satisfied any liability under the default judgment. As discussed
above, this request for relief met the requirements for an “actual controversy,” which is a requirement
of subject-matter jurisdiction on a claim for declaratory relief. See, e.g., UAW v Central Mich Univ
Trustees, 295 Mich App 486, 495; 815 NW2d 132 (2012); Lansing Sch Ed Ass’n, MEA/NEA v
Lansing Bd of Ed (On Remand), 293 Mich App 506, 515-516; 810 NW2d 95 (2011).

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 3. NOT AN “APPEAL” FROM AN EARLIER CIRCUIT COURT JUDGMENT

Next, Triangle argues that the trial court lacked subject-matter jurisdiction because this
case was functionally an appeal to the trial court from an earlier circuit court judgment (the
default judgment). As Triangle correctly notes, jurisdiction over appeals of judgments from the
circuit courts is vested in this Court. See MCL 600.308(1); MCR 7.203(A). However, we do not
agree with Triangle’s contention that Fifth Third Bank was seeking an appeal of the default
judgment. Indeed, Fifth Third Bank’s complaint in the present case did not ask the trial court to
declare that the default was void, nor did it request to have the default vacated. Rather, Fifth Third
Bank asked the trial court to declare whether it had any personal liability or any further obligations
under the default judgment in light of changed circumstances, i.e., complying with the district court’s
order in the interpleader action to tender the funds in the Bentwaters Account to the district court. In
short, Fifth Third Bank did not seek the equivalent of appellate relief from the default judgment.

4. PUBLIC POLICY

Lastly, Triangle makes an appeal to what it terms “public policy,” as it argues that the
issuance of a declaratory judgment interpreting a default judgment entered in a prior circuit court
case is against “public policy.” Triangle’s argument is based on its contention that the
declaratory judgment in this case was essentially appellate review of an earlier circuit court
ruling. Having rejected that argument above, we find this vague appeal to “public policy” to be
unconvincing. Contrary to Triangle’s suggestions, the action for declaratory relief was not
simply a request by a dissatisfied litigant to obtain relief that was denied at an earlier proceeding.
Rather, it was a request for guidance on future conduct, which is the very purpose for declaratory
relief. See, e.g., Huntington Woods, 279 Mich App at 616.

III. RES JUDICATA

Next, Triangle argues that the doctrine of res judicata applies and that it should have
prevented Fifth Third Bank from litigating the issue of its personal liability on the default
judgment in the instant case. The application of res judicata is a question of law that this Court
reviews de novo. Duncan v Michigan, 300 Mich App 176, 194; 832 NW2d 761 (2013).

A. DEFAULT JUDGMENT AS A SOURCE OF RES JUDICATA

Triangle argues that there are two potential sources of res judicata: (1) the default judgment;
and (2) the judgment in the interpleader action. We first examine this claim as it pertains to the
default judgment. Res judicata bars a subsequent action between the same parties when the evidence
or essential facts are identical. TBCI, PC v State Farm Mut Auto Ins Co, 289 Mich App 39, 43; 795
NW2d 229 (2010). Res judicata applies “when (1) the prior action was decided on the merits, (2)
both actions involve the same parties or their privies, and (3) the matter in the second case was, or
could have been, resolved in the first.” Adair v Michigan, 470 Mich 105, 121; 680 NW2d 386
(2004). In addition, the prior action must have resulted in a final decision. Richards v Tibaldi, 272
Mich App 522, 531; 726 NW2d 770 (2006). Our Supreme Court “has taken a broad approach to the
doctrine of res judicata, holding that it bars not only claims already litigated, but also every claim
arising from the same transaction that the parties, exercising reasonable diligence, could have raised
but did not.” Adair, 470 Mich at 121. The burden of establishing the applicability of res judicata is
on the party asserting it. Baraga Co v State Tax Comm, 466 Mich 264, 269; 645 NW2d 13 (2002).

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 Two elements of res judicata are not in dispute because a default judgment represents a
decision on the merits for purposes of res judicata, Richards, 272 Mich App at 531, and there is no
doubt that this action involves the same parties—Triangle and Fifth Third Bank—that were involved
in the prior garnishment action. In respect to those elements, we are in agreement with Triangle.

However, this is where our agreement with Triangle comes to an end, as we conclude that the
instant action was not barred by the doctrine of res judicata. Triangle claims that the issue of Fifth
Third Bank’s personal liability could have been resolved in the garnishment action because, pursuant
to MCR 3.101(M)(1), any dispute about the garnishee’s liability shall be tried before the trial court.
It appears that Triangle is equating the garnishee’s liability referenced in MCR 3.101(M)(1)—which
refers to a garnishee’s liability for the defendant’s assets—with a garnishee’s personal liability to pay
a default judgment. Triangle misinterprets MCR 3.101(M)(1). MCR 3.101(M)(1) provides that “[i]f
there is a dispute regarding the garnishee’s liability . . . the issue shall be tried in the same manner as
other actions.” Only one subsection of MCR 3.101 specifically addresses the scope of a garnishee’s
liability—MCR 3.101(G)—and this subsection speaks of a garnishee’s liability for assets held on
behalf of the defendant. Accordingly, Triangle’s argument is based on a misunderstanding of the
court rules. On this basis alone, we could find that Triangle did not carry its burden of establishing
the applicability of res judicata. See Baraga Co, 466 Mich at 269.

Moreover, Triangle’s argument fails to account for the change in facts that occurred in this
case. See Labor Council, Michigan Fraternal Order of Police v Detroit, 207 Mich App 606, 608;
525 NW2d 509 (1994) (“if the facts change, or new facts develop, res judicata will not apply.”). The
default judgment was entered for Triangle, against Fifth Third Bank. There was no issue concerning
the USDA, at least according to the default judgment, and thus no reason for Triangle to even seek to
impose liability upon Fifth Third Bank personally.6 Indeed, the default judgment did not account for
the USDA’s interest, as it was solely a default judgment against Fifth Third Bank, in favor of
Triangle. As will be discussed in more detail in Section IV, infra, the default simply decided
whether there was an account that could be garnished. It did not venture into the area of personal
liability that Triangle suggests it did. Subsequent to the entry of the default judgment, the issue of a
competing interest in the Bentwaters Account was litigated in the interpleader action. And, the
district court’s decision to award priority to the USDA over Triangle in that interpleader action
altered the factual landscape of this case. In light of the way the facts of this case unfolded, we find
the doctrine of res judicata inapplicable. See id. See also Bennett v Mackinac Bridge Auth, 289
Mich App 616, 636 n 10; 808 NW2d 471 (2010).

Further, even assuming that the issue of Fifth Third Bank’s personal liability could have been
resolved in the garnishment proceeding,7 we would not find the last element of res judicata to be

6
While, as discussed below in footnote 7, Fifth Third Bank could have raised the issue of the
USDA’s interest in the Bentwaters Account had it timely filed its disclosure, there was
nevertheless no determination as to whether that interest was superior to any interest asserted by
Triangle. That determination did not come about until after the district court rendered a decision
in the interpleader action.
7
We note that if Fifth Third Bank had timely filed its verified disclosure, it could have created a
dispute regarding, at the very least, the priority of the USDA’s interest in the Bentwaters
Account. See MCR 3.101(M)(1); see also Blue Water Fabricators, Inc v New Apex Co, Inc, 205

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present, i.e., that the prior action resulted in a final decision. See Richards, 272 Mich App at 531.
Again, we acknowledge that a default judgment is treated as a decision on the merits for purposes of
applying the doctrine of res judicata, and that it can be a final decision. See id. However, “[t]o be
accorded the conclusive effect of res judicata, the judgment must ordinarily be a firm and stable one,
the last word of the rendering court[.]” Kosiel v Arrow Liquors Corp, 446 Mich 374, 381; 521
NW2d 531 (1994) (citation and quotation marks omitted). Here, in Fifth Third Bank’s second
motion for relief from judgment, it argued that the default judgment had to be vacated because,
contrary to MCR 2.603(B), Triangle did not give notice of its request for a default judgment and
Triangle did not file a motion with the circuit court for entry of a default judgment. The circuit court
denied the motion, and we granted leave to appeal. In the ensuing Triangle opinion, we declined to
address the issue concerning whether the default judgment was entered in compliance with MCR
2.603(B), concluding that the issue was moot, in light of the April 28, 2014 final order entered in this
case.

“A judgment cannot be asserted for purposes of res judicata where a party without fault on
his or her part is prevented from obtaining a review of a judgment merely because, from intervening
events, the controversy has become moot.” 47 Am Jur 2d, Judgments, § 531, p 87. See also Gelpi v
Tugwell, 123 F 2d 377, 378 (CA 1, 1941) (stating the rule).8 Here, Fifth Third Bank was prevented
from obtaining review of the default judgment because this Court, in the Triangle opinion, declared
that an intervening event—the trial court’s April 28, 2014 final order—rendered moot the issue
whether the default judgment was entered in compliance with MCR 2.603(B). Because the
intervening act that prevented Fifth Third Bank from obtaining review of the default judgment was
the April 28, 2014 final order, which was rendered by the trial court in a dispute between the parties
regarding the scope of the default judgment, we conclude that Fifth Third Bank was without fault for
being prevented from obtaining review of the default judgment. As such, we conclude that the
present case is not barred by the doctrine of res judicata. See Richards, 272 Mich App at 531; 47 Am
Jur 2d, Judgments, § 531, p 87.

Furthermore, in regard to the Triangle opinion’s declaration that the matter was moot in light
of the April 28, 2014 order, we note that the panel expressly directed the parties to address the issue
of personal liability on appeal of the April 28, 2014 order. In other words, the panel instructed the
parties to raise this very issue in the present appeal and indicated that the instant appeal was the
proper forum for such an argument. Thus, it appears the prior panel correctly recognized that the
garnishment action failed to yield a determination on the precise question now at issue: was Fifth
Third Bank personally liable on the default judgment, such that Triangle could collect from Fifth
Third Bank even after the issue of priority between the USDA’s and Triangle’s competing claims to
the Bentwaters Account was resolved? We address that issue in Section IV of this opinion.9

Mich App 295, 301; 517 NW2d 319 (1994) (indicating that a dispute under MCR 3.101(M)(1) can
include the priority of competing claims on amounts the garnishee owes the defendant).
8
Although Gelpi is not binding on this Court, we may consider the opinion as persuasive
authority. Ammex, Inc v Dep’t of Treasury, 273 Mich App 623, 639 n 15; 732 NW2d 116 (2007).
9
Because of our resolution of Triangle’s issues concerning subject-matter jurisdiction and res
judicata, we need not address Fifth Third Bank’s argument that the prior Triangle decision
constitutes the law of the case and represents an alternate ground for affirmance. See
Bloemendaal v Town & Country Sports Center, Inc, 255 Mich App 207, 216; 659 NW2d 684

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 B. INTERPLEADER ACTION AS A SOURCE OF RES JUDICATA

As a final note on the issue of res judicata, Triangle argues that the interpleader action filed in
federal district court could have decided the issue of Fifth Third Bank’s personal liability, and, as a
result, the interpleader action should have precluded Fifth Third Bank from raising the issue in the
instant case. The question whether a federal court judgment precludes relitigation of an issue in state
court is resolved by federal preclusion law. Pierson Sand & Gravel, Inc v Keeler Brass Co, 460
Mich 372, 380-381; 596 NW2d 153 (1999). In its brief on appeal, Triangle makes no mention of
federal preclusion law. In addition, Triangle—perhaps conveniently—fails to mention that it raised
the issue of Fifth Third Bank’s personal liability on the default judgment in its motion for summary
disposition, and that the district court expressed a belief that the issue was meritless, but expressly
declined to rule on the matter. As a result of Triangle’s failure to address this matter in any detail,
we find that Triangle abandoned the issue of whether the present case should have been barred by the
interpleader action. “An appellant may not merely announce his position and leave it to this Court to
discover and rationalize the basis for his claims, nor may he give issues cursory treatment with little
or no citation of supporting authority[.]” Peterson Novelties, Inc v Berkley, 259 Mich App 1, 14; 672
NW2d 351 (2003) (internal citation omitted).

IV. FIFTH THIRD BANK WAS NOT PERSONALLY LIABLE

Next, we turn our attention to Triangle’s challenge to the trial court’s summary
disposition ruling. That is, we consider whether the trial court erred by granting summary
disposition in the declaratory action and by concluding that Triangle could not execute the
default judgment against Fifth Third Bank’s corporate assets, and instead was limited to
executing the default judgment against any obligation that Fifth Third Bank owed to
Bentwaters.10 We review de novo the trial court’s decision on a motion for summary disposition
in an action for a declaratory judgment. Farm Bureau Ins Co v Abalos, 277 Mich App 41, 43; 742
NW2d 624 (2007). Because it appears the trial court considered documentary evidence in granting
the motion for summary disposition, we consider the court’s order as one granted pursuant to MCR
2.116(C)(10). See Cuddington v United Health Servs, Inc, 298 Mich App 264, 270; 826 NW2d 519
(2012). Summary disposition is appropriate under MCR 2.116(C)(10) if “there is no genuine issue of
material fact, and the moving party is entitled to judgment as a matter of law.” In reviewing the issue
we construe the affidavits, pleadings, depositions, admissions, and other documentary evidence
submitted by the parties in a light most favorable to the party opposing the motion. Liparoto Constr,
Inc v Gen Shale Brick, Inc, 284 Mich App 25, 29; 772 NW2d 801 (2009).11

(2002). We also disagree with Fifth Third Bank’s position. Notably, we find Fifth Third Bank’s
argument to be based on a statement of fact, not on any conclusion of law or holding by the
Triangle panel. Nor are we convinced by Fifth Third Bank’s argument that the prior panel
believed that the default judgment was an interlocutory order.
10
We note that in light of the interpleader action, any claim Triangle had to the Bentwaters
Account would be subordinate to the USDA’s claim against the account.
11
At the outset of our analysis on this issue, we once again note that we have rejected any
assertion by Fifth Third Bank that the prior Triangle panel decided or necessarily decided any
issues that would constitute the law of the case and which would preclude us from addressing
this issue. Moreover, we note that, although Fifth Third Bank claims the law of the case doctrine

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 Triangle first directs our attention to what it calls the “face” of the default judgment, pointing
out that the language employed in the default judgment simply entered judgment “for Triangle” and
“against” Fifth Third Bank. Triangle argues that this alone should compel the conclusion that the
default judgment “clearly establishes” that it was a money judgment against Fifth Third Bank, i.e.,
one that is to be satisfied from Fifth Third Bank’s personal assets, not from any obligation Fifth
Third Bank owed to Bentwaters.12 We review judgments in the same manner as we review contracts
or other written instruments, meaning our review is de novo and we attempt to ascertain the intent of
the issuing court based on the plain language of the document. See Neville v Neville, 295 Mich App
460, 466; 812 NW2d 816 (2012). See also 46 Am Jur 2d, Judgments, § 74, pp 447-448.

In the instant case, we are in agreement with Triangle that the default judgment was a money
judgment, as it directed the payment of a sum of money. See Stewart v Isbell, 155 Mich App 65, 80;
399 NW2d 440 (1986) (describing money judgments). However, we do not agree with Triangle that
the inquiry is so simple. While an unambiguous judgment must be enforced according to its terms,
we also construe the judgment in light of the pleadings and circumstances present at the time it was
entered. See 46 Am Jur 2d Judgments, § 74. Here, we cannot overlook the fact that the default
judgment was entered in a garnishment proceeding after Fifth Third Bank, the garnishee, failed to file
its verified disclosure. See MCR 3.101(S)(1) (providing for the entry of a default when a garnishee
fails to make the requisite disclosures). This, we feel, compels us to examine judgments in
garnishment proceedings and to determine whether such judgments would ordinarily subject a
garnishee to personal liability, beyond the assets possessed by the debtor. Also, we examine whether
there is any reason to treat a default judgment in a garnishment action differently than a non-default
judgment in a garnishment action.

A. JUDGMENTS IN GARNISHMENT PROCEEDINGS

Reviewing pertinent statutes, caselaw, and court rules leads to the conclusion that a judgment
on a writ of garnishment generally only makes a garnishee liable for the property of the defendant
that the garnishee possesses. See MCL 600.4011(1)(a) (stating that a trial court may apply personal
property belonging to the defendant but which is in the possession or control of the third party or an
obligation owed the defendant to satisfy a judgment against the defendant); MCR 3.101(G)(1)
(providing that a garnishee is liable for property belonging to the defendant that is in the garnishee’s

applies and precludes us from revisiting this issue, Fifth Third Bank’s own argument shows why
the doctrine is inapplicable with regard to this issue. Indeed, Fifth Third Bank contends that the
Triangle panel recognized that the trial court in this case decided the issue at hand; Fifth Third
Bank points to nothing in the Triangle opinion to suggest that the panel decided the issue at
hand. See New Props, Inc v George D Newpower, Jr, Inc, 282 Mich App 120, 132; 762 NW2d
178 (2009) (the law of the case doctrine applies to rulings of an appellate court, not a trial court).
12
Triangle also argues that the trial court’s “findings” in the April 28, 2014 final order
“required” the conclusion that the default judgment was a money judgment to be satisfied against
Fifth Third Bank’s assets, without regard to assets it held on behalf of Bentwaters. We reject this
argument. Regardless of whether the trial court made such a “finding”—and we doubt it did, as
such a “finding” would be inconsistent with the trial court’s eventual ruling—we do not afford
deference to the trial court in deciding a motion for summary disposition; instead, our review is
de novo. See Calhoun Co v Blue Cross Blue Shield Mich, 297 Mich App 1, 12; 824 NW2d 202
(2012).

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possession or control or debts the garnishee owes the defendant); Smit v State Farm Mut Auto Ins Co,
207 Mich App 674, 683; 525 NW2d 528 (1994) (explaining that a plaintiff in a garnishment action is
entitled to recover against the garnishee “only to the extent that the principal defendant . . . could
recover against [the garnishee-defendant]”). There are exceptions to this general rule in cases
involving fraud or wrongdoing on the part of the garnishee. One such instance involves a situation
where a garnishee refuses to expose property so that execution can be levied on the property. See
MCR 3.101(O)(5). In such a case, “the court may order that an execution be issued against the
garnishee in an amount not to exceed twice the value of the specifically chargeable property.” MCR
3.101(O)(5). Additionally, a garnishee faces personal liability “to pay out of his own goods and
estate the full amount due” on a judgment obtained by the plaintiff when the garnishee “knowingly
and willfully” makes false statements on the verified disclosure. MCL 600.4051.13 In a statement
that is consistent with these two exceptions, our Supreme Court has declared that “[i]t is elementary
law that the right of a plaintiff against the garnishee, except there be fraud, is no more than the
right of the principal debtor.” Erb-Kidder Co v Levy, 262 Mich 62, 64; 247 NW 107 (1933).

B. DEFAULT JUDGMENTS IN GARNISHMENT PROCEEDINGS

With that in mind, we turn to the default judgment entered in this case. MCR 3.101(S)(1)
provides that, in the event a garnishee fails to make a timely verified disclosure, “[a] default may
be taken as in other civil actions.” A default operates as an admission of liability by the defaulting
party. Kalamazoo Oil Co v Boerman, 242 Mich App 75, 79; 618 NW2d 66 (2000). A default
judgment is not an admission regarding damages, however. Id. As to the amount of the default
judgment in garnishment proceedings, MCR 3.101(S)(1) purports to offer some guidance, providing
that “[a] default judgment against a garnishee may not exceed the amount of the garnishee’s
liability as provided in subrule (G)(2).” “Subrule (G)(2)” as referenced in the preceding court
rule, refers to MCR 3.101(G)(2), which provides:

The garnishee is liable for no more than the amount of the unpaid judgment,
interest, and costs as stated in the verified statement requesting the writ of
garnishment. Property or debts exceeding that amount may be delivered or paid
to the defendant notwithstanding the garnishment.

C. A DEFAULT IN A GARNISHMENT ACTION DOES NOT IMPOSE PERSONAL
LIABILITY ON THE GARNISHEE

We are not of the opinion that, by referencing MCR 3.101(G)(2), the court rules set the
amount of liability a garnishee has to the plaintiff, without regard to any property of the
defendant’s held by the garnishee. Rather, a default in a garnishment action operates as an
admission by the garnishee of liability to the defendant, and the default judgment in such an
action is no different than a non-default judgment. In other words, just like a default in “other
civil actions” does not operate as an admission as to the amount of damages, a default in
garnishment proceedings does not operate as an admission of damages for which the garnishee is

13
There have been no arguments that either MCR 3.101(O)(5) or MCL 600.4051 apply to the
instant case.

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liable, irrespective of any property or assets held on behalf of the defendant. See, generally,
Kalamazoo Oil Co, 242 Mich App at 79. Thus, a default judgment does not, as Triangle would
have us conclude, establish that the garnishee is liable to satisfy the judgment out of its personal
assets.

We reach this conclusion by first noting that MCR 3.101(G)(2) sets an upper limit on a
garnishee’s liability. This upper limit is set by referencing the property belonging to the
defendant, not the garnishee. Indeed, consistent with the general rule that a garnishee’s liability
is to be determined by reference to the defendant’s property, subrule (G)(2) states that a
garnishee may deliver to the defendant any property exceeding the amount of the judgment. The
context in which subrule (G)(2) appears in the garnishment process shapes this conclusion as
well. See In re McCarrick/Lamoreaux, 307 Mich App 436, 446; 861 NW2d 303 (2014)
(“When interpreting a court rule, we must read the rule’s provisions reasonably and in context.”)
(citation and quotation marks omitted). Here, subrule (G)(2) appears immediately after MCR
3.101(G)(1), which expressly lists the types of property belonging to a debtor for which the
garnishee can be liable. Subrule (G)(2), then, ensures that a garnishee’s liability, having been
established through the defendant’s assets and property listed in (G)(1), is not to exceed the
principal judgment, and that all of the defendant’s property which exceeds the judgment may be
returned to the defendant.

Further, our conclusion is shaped by the significance of the role that a verified disclosure
form plays in the default process. The verified disclosure form—which, we again note, forms
the basis of the default in the first instance when the garnishee fails to timely file it—has a
distinct purpose. That purpose, according to MCR 3.101(H)(1)(a), is to disclose “the garnishee’s
liability to the defendant as specified in [MCR 3.101(G)(1)],” if any. (Emphasis added). The
significance of this form, then, is to point out the garnishee’s liability to the defendant. This
focus on the garnishee’s liability to the defendant is consistent with the framework of
garnishment proceedings as a whole—that is, to require payment from the garnishee for the
defendant’s assets held by the garnishee. Nothing in this rule even broaches the subject of a
garnishee’s potential personal liability. That a default arises from the garnishee’s failure to
disclose its liability to the defendant supports the notion that a default could at most serve as an
admission of liability to the defendant, and not an admission by the garnishee that it is liable,
regardless of whatever assets it held on behalf of the defendant.

In sum, we conclude that it would be incongruous with the entire garnishment process for
us to find, as Triangle suggests, that a default judgment entered in a garnishment proceeding
operates to impose personal liability on the garnishee. There is simply no support for Triangle’s
position in the pertinent statutes, court rules, or caselaw. Thus, we read the reference to subrule
(G)(2) in MCR 3.101(S)(1) as stating that a default is to an admission of liability on the part of
the garnishee, but only for the amount of the defendant’s assets or property—as listed in MCR
3.101(G)(1)—held by the garnishee. Such amount cannot be determined by a default judgment,
as it is unknown what assets, if any, can be garnished. Likewise, a default judgment does not
operate to substitute the garnishee’s assets for those belonging to the defendant. Again, this
interpretation is not only supported by reference to the court rules in context, but also by the
purpose of garnishment proceedings as a whole. That is, a garnishment is meant to ensure
payment to the plaintiff from the defendant’s assets held by the garnishee, and not anything
beyond the defendant’s assets. See, e.g., Erb-Kidder Co, 262 Mich at 64; Smit, 207 Mich App at

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683. When the default judgment in the instant case is construed in light of garnishment law as a
whole, the default judgment makes Fifth Third Bank liable for the funds in the Bentwaters
Account, i.e., those belonging to the debtor, and not for the personal assets of Fifth Third Bank.
Accordingly, we are not convinced that a default judgment entered in a garnishment proceeding
is any different from any other judgment entered in a garnishment proceeding, and Triangle fails
to make a compelling claim that default judgments should be treated differently than non-default
judgments in a garnishment action.

We have found no authority in Michigan to suggest otherwise. Triangle contends the
concept that a judgment against a garnishee can be satisfied from the garnishee’s personal assets
has existed in Michigan for over 100 years. It directs our attention to Childs v N B Carlstein, 76 F
86, 94 (ED Mich, 1896), for the statement that “his failure to expose for execution such property and
effects after the plaintiff has become entitled to levy thereon renders the garnishee defendant
personally liable in his own goods and estate to the amount of such judgment.” Setting aside for now
that we are not bound by Childs, see Wormsbacher v Seaver Title Co, 284 Mich App 1, 5; 772 NW2d
827 (2009) (a decision from a lower federal court is not binding), we disagree that the statement from
the case even lends support to Triangle’s position. The cited statement does not provide that, in all
circumstances, a judgment against a garnishee can be satisfied from the garnishee’s personal assets.
Rather, it states that the garnishee is liable to pay the judgment from his or her own goods and estate
when the garnishee fails to expose the defendant’s property for garnishment. As noted above, that
remains the law today. See MCR 3.101(O)(5). In addition, we note that Triangle cites Missouri Tie
& Lumber, Co v Sullivan, 275 Mich 26, 28; 265 NW 779 (1936), for the statement that “[t]he general
statute relative to garnishment permits execution to issue upon a judgment against a garnishee
defendant.” Missouri Tie & Lumber also does not support Triangle’s argument, as the case gives no
indication whether a garnishee’s personal assets can be used to satisfy a judgment against a
garnishee. Nor does the rest of the decision in Missouri Tie & Lumber support Triangle’s position.

Finally, we note that Triangle cites this Court’s decision in Chayka v Brown, 92 Mich App
360; 284 NW2d 530 (1979). In that case, the plaintiff obtained a judgment against the defendants.
Thereafter, the garnishee entered into a land contract with the defendants to buy a piece of property.
The plaintiff served writs of garnishment on the garnishee, which prohibited the garnishee from
paying any obligations to the defendants. However, the garnishee paid the remainder of the
installment payments to the defendants. The trial court entered judgment in favor of the plaintiff and
against the garnishee for an amount not to exceed 1-1/4 times the amount owing on the judgment
against the defendants. On appeal, this Court affirmed in part the judgment against the garnishee. Id.
at 369. The panel stated:

Garnishees’ duties and obligations under the rules and their potential liability to
the plaintiffs attach at the time they are properly served with the writ. GCR 1963,
738.4, 738.5. They then become responsible for the timely performance of the
specific duties imposed by GCR 1963, 738, at the risk of default judgment against
them which may be executed against their own funds or property, GCR 1963,
738.8. Their liability in such situations is limited to 1¼ times the amount of the
judgment entered in favor of the plaintiffs against principal defendants. [Id.
(emphasis added).]

We find the citation to Chayka unavailing for a number of reasons. First, the case was
decided before 1990, and we are not bound by the decision. In re Stillwell Trust, 299 Mich App

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289, 299 n 1; 829 NW2d 353 (2012). Moreover, the statement that garnishees were responsible “for
the timely performance of specific duties . . . at the risk of default judgment entered against them
which may be executed against their own funds or property” was not necessary to the resolution of
any issues raised in Chayka. Indeed, the case did not involve a default judgment, so any statement
about default judgments was unnecessary to the case, and is non-binding dicta. See Auto-Owners Ins
Co v All Star Lawn Specialists Plus, Inc, 497 Mich 13, 21 n 15; 857 NW2d 520 (2014). Further, and
perhaps most fatal to Triangle’s reliance on the case, the statement in Chayka about default
judgments cited the now-outdated GCR 1963, 738.8, which provided:

If the garnishee fails to make disclosure or do any of the acts required of him by
these rules within the time limitations imposed by these rules, default may be
taken against the garnishee as in other civil actions and in case he fails to comply
with an order of the court he may be adjudged in contempt of court. Judgment
shall not be rendered against the garnishee or his property until after judgment
has been recovered by the plaintiff against the principal defendant. [Emphasis
added.14]

It is the last sentence that references the garnishee’s property, and, we suspect, is the sentence
upon which the panel in Chayka relied in stating that a garnishee’s personal property could be
used to satisfy a default judgment. However, this last sentence has been deleted from the current
version of the court rule on default judgments in garnishment actions. As noted above, MCR
3.101(S) provides, in pertinent part:

(1) If the garnishee fails to disclose or do a required act within the time limit
imposed, a default judgment may be taken as in other civil actions. A default
judgment against a garnishee may not exceed the amount of the garnishee’s
liability as provided in subrule (G)(2).

(2) If the garnishee fails to comply with the court order, the garnishee may be
adjudged in contempt of court.

A change in the language employed in a statute or court rule is presumed to reflect a change in
meaning. See Michigan Charitable Gaming Ass’n v State, __ Mich App __; __ NW2d __
(Docket No. 323410, issued May 28, 2015), slip op at 12. Here, the pertinent sentence of GCR
1963, 738.8 was omitted from the current version of the court rules. Thus, to the extent the sentence
at issue could be read to impose personal liability on the garnishee and force the garnishee to satisfy
a default judgment from its personal assets, we presume that the omission of that sentence in the
current version of the court rules was intentional. Accordingly, we reject Triangle’s argument that a
default judgment in a garnishment action allows a plaintiff to access the garnishee’s personal assets

14
We note, as does Triangle, that 4 Longhofer, Michigan Court Rules Practice, p 21, contains a
very similar statement. However, we are not bound by this treatise. We also note that the
treatise cites MCR 3.101(S)(1) as support for this proposition. However, as discussed, MCR
3.101(S)(1) does not support that position.

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in order to satisfy the underlying judgment.15 Rather, the garnishee’s liability is based on the
property of the defendant that is held by the garnishee.

In light of this conclusion, we find that the trial court did not err in granting summary
disposition to defendant. As noted above, the default judgment entered in the garnishment case did
not establish that Fifth Third Bank was liable to pay the default judgment out of its personal assets.
Rather, the default judgment only served as an admission of Fifth Third Bank’s liability for the assets
of Bentwaters or obligations owed to Bentwaters, if any. In the interpleader action, the district court
determined that the security interest of the USDA in the funds in the Bentwaters Account had priority
over any claim by Triangle to the funds. After Fifth Third Bank tendered the funds in the Bentwaters
Account to the district court, the district court discharged Fifth Third Bank from all liability with
respect to those funds. Because the default judgment made Fifth Third Bank liable for its debt or
obligation to Bentwaters, and because Fifth Third Bank was subsequently discharged from any
liability regarding the funds in the Bentwaters Account, the trial court correctly concluded that Fifth
Third Bank was not required to satisfy the default judgment out of its corporate assets and that it had
no further obligations under the default judgment.

V. EFFECT OF THE INTERPLEADER ACTION

In its April 28, 2014 opinion and order, the trial court declared that Fifth Third Bank
performed its obligations under the default judgment when, following the order in the
interpleader action, it paid the funds in the Bentwaters Account to the district court. Triangle
contends that the trial court erred by concluding that Fifth Third Bank had no further obligations
under the default judgment.16 Of the four arguments advanced on appeal, we note that Triangle
has failed to preserve its first two arguments because it did not raise them before the trial court.
Because of Triangle’s failure to properly preserve these arguments, we could decline to consider

15
We note that Triangle cites the general proposition that funds which are deposited in a bank
account create a debtor-creditor relationship between the bank and the depositor. See Riverview
Co-op, Inc v First Nat’l Bank & Trust Co of Mich, 417 Mich 307, 317-318; 337 NW2d 225 (1983).
The money becomes the property of the bank, and the bank has an obligation to pay the depositor the
money in the account, upon demand. See id. Triangle seems to argue that, because the money that
Bentwaters deposited in its account is now part of Fifth Third Bank’s assets, the default judgment
should simply be construed as a judgment to be satisfied by Fifth Third Bank’s corporate assets. We
reject that position. Although the funds in the Bentwaters Account belonged to Fifth Third Bank
upon deposit, the fact remains that, in a garnishment action, it is the defendant’s assets that are
subject to garnishment, not the garnishee’s assets. See MCL 600.4011(1)(b); MCR 3.101(J)(1). In
this case, it was Fifth Third Bank’s obligation to pay money on Bentwaters’ demand that was subject
to garnishment, not any property owned by Fifth Third Bank. See MCR 3.101(G)(1)(e).
16
To the extent Fifth Third Bank asks this Court not to consider Triangle’s arguments because of
its contention that the Triangle panel’s decision represents the law of the case, we do not agree
that our consideration of these issues is constrained by the law of the case doctrine. The Triangle
panel did not address these issues, nor were these issues necessarily decided by the Triangle
panel. See Kalamazoo v Dep’t of Corrections (After Remand), 229 Mich App 132, 135; 580
NW2d 475 (1998) (describing the law of the case doctrine).

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them. See Johnson Family Ltd Partnership v White Pine Wireless, LLC, 281 Mich App 364,
377; 761 NW2d 353 (2008); Coates v Bastian Bros, Inc, 276 Mich App 498, 509-510; 741
NW2d 539 (2007). Moreover, we note that Triangle’s brief is largely wanting in terms of
citation to authority for some of its propositions. Nevertheless, we will briefly address and reject
Triangle’s claims.

A. UNPRESERVED ARGUMENTS

First, to the extent Triangle argues that the trial court’s decision in the instant case was in
error because of an erroneous determination of priority by the district court, we note that
Triangle has never filed a direct appeal of the district court’s determination. Any attempt to
attack that determination in the instant case would be barred by the res judicata. See Browning v
Levy, 283 F3d 761, 771 (CA 6, 2002) (listing the elements of res judicata, for purposes of federal
preclusion law, as (1) a final decision on the merits, (2) a subsequent action between the same parties
or their privies, (3) an issue in the subsequent action was litigated or should have been litigated in the
prior action, and (4) an identity of the causes of action). Second, Triangle essentially argues that the
default judgment in the garnishment action had to result in payment to Triangle, and that any other
action besides payment could not satisfy the judgment. However, as set forth above, the default
judgment did not establish that Fifth Third Bank was required to pay Triangle out of its own assets.
Given the subsequent interpleader action, declaratory relief was necessary to set forth the rights and
obligations of the parties, and we see no error in the conclusion that Fifth Third Bank’s obligation in
regard to the Bentwaters Account was satisfied when it paid the USDA, an entity with higher priority
in regard to the funds.

B. PRESERVED ARGUMENTS

Next, we turn our attention to the two arguments that Triangle raised before the trial court.
Triangle claims that the trial court could not have relied on the interpleader action for determining
that Fifth Third Bank had satisfied its obligations under the default judgment, because, according to
Triangle, the district court lacked subject matter jurisdiction to consider the interpleader action.
However, Triangle has provided this Court with no authority for the proposition that a state appellate
court can declare, in what can only be described as a collateral attack on the district court’s judgment,
that a federal district court lacked subject-matter jurisdiction. And, we note that in Chicot Co
Drainage Dist v Baxter State Bank, 308 US 371, 376; 60 S Ct 317; 84 L Ed 329 (1940), the United
States Supreme Court held that, although the lower federal courts are courts of limited jurisdiction,
their determinations regarding whether they have subject-matter jurisdiction over an action, while
open to direct review, may not be collaterally attacked. Although the lower court record does not
indicate whether Triangle challenged the jurisdiction of the federal court in the interpleader action,
“the rule applies with equal force to suits in which jurisdiction has been expressly determined and
those in which resolution of the jurisdictional question is merely implicit,” In re Bulldog Trucking,
Inc, 147 F3d 347, 352 (CA 4, 1998).17

17
In any event, we find no merit in Triangle’s claim that the district court lacked subject-matter
jurisdiction in the interpleader action.

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 Finally, Triangle again takes issue with the interpleader action filed in this case, arguing that
“a judgment debtor cannot satisfy a judgment by filing a post-judgment lawsuit seeking interpleader
and essentially paying a third-party rather than the judgment creditor.” However, this argument—
which is largely unsupported in Triangle’s brief—presupposes the correctness of Triangle’s position
that the default judgment made Fifth Third Bank personally liable and that the judgment could only
be satisfied by paying Triangle. As noted above, we have rejected that position. In addition, to the
extent Triangle attempts to argue that Fifth Third Bank should not have been able to bring the
interpleader action in the first instance, we construe such a claim as an impermissible collateral
attack on the district court’s ruling on the interpleader action. We will not entertain such a collateral
attack.

Affirmed.

/s/ Michael J. Talbot
/s/ Jane M. Beckering
/s/ Michael F. Gadola

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