F 21 Flashcards
- Hal and Wanda are married and live in Fairfax County, Virginia.
- They have one minor daughter, Diane.
- Hal and Wanda have a joint bank account at Central Bank in Fairfax with a balance of $5,000.
- The account is held “jointly with right of survivorship.”
- Hal executed and delivered two promissory notes to Chad:
- Note 1: $2,000 used for a cruise Hal and Wanda took.
- Note 2: $2,000 used to pay Diane’s medical bills.
- Hal defaulted on both notes.
- Chad filed a lawsuit in Fairfax County Circuit Court against both Hal and Wanda to collect on Notes 1 and 2.
- Chad intends to satisfy any judgment using funds from Hal and Wanda’s joint bank account.
- Wanda filed an answer asserting she was not a party to either note.
- She claims no liability because she did not sign either note.
- Hal and Wanda have no other defenses to the lawsuit.
How is the Circuit Court likely to rule on Wanda’s defense as to each Note?
Note 1
Wanda is not liable on Note 1.
Liability on a negotiable instrument requires a party’s signature or the signature of an authorized representative.
Wanda did not sign Note 1, so she cannot be held liable.
Note 2
Wanda is likely liable on Note 2.
Under the doctrine of necessaries, both parents share responsibility for their child’s necessary expenses.
The loan was used to pay Diane’s medical bills, making Wanda equally liable despite not signing the note.
Is Chad likely to succeed in satisfying any judgments obtained on Notes 1 and 2 from the account at Central Bank?
The account is held in joint tenancy with the right of survivorship.
Virginia law presumes joint accounts are owned equally by the holders.
Chad can reach Hal’s interest in the account for both judgments.
For Note 2, Chad can also reach Wanda’s share because she is liable for the judgment related to Diane’s medical bills.
Assume for (c) and (d) only, that the judgment on at least one of the Notes can be satisfied from the account at Central Bank.
What action, if any, should Chad take to collect the judgment from Central Bank? Explain fully.
The account is held in joint tenancy with Wait 21 days after the judgment is entered (Rule 1:1).
File a Suggestion in Garnishment with the Clerk’s Office of the court where the judgment was entered.
Request a writ of execution and garnishment on the bank account.
The writ will target the judgment debtors’ shares in the account.
Assume for (c) and (d) only, that the judgment on at least one of the Notes can be satisfied from the account at Central Bank.
What Virginia statutory rights, if any, are available to allow Hal and Wanda to protect the funds in the Central Bank account? Explain fully.
Hal and Wanda can each claim a $5,000 Homestead Exemption.
The exemption applies to funds in the bank account.
