Legal Bulletins

The Maryland Court of Appeals held that U.C.C. §4-303(a) implies a bank may properly pay an item if that item is presented before the bank has had "reasonable time" to act on a writ of garnishment. At issue in this case was a check a bank cashed in favor of judgment debtor, two and a half hours after the bank was served with a writ of garnishment. On appeal the court found that the trial court should have determined whether the garnishee bank had a reasonable opportunity to act on the writ of garnishment before releasing the funds. The case was remanded to the lower court to determine whether the two and a half hours the bank had to act on the writ of garnishment was reasonable. While the Maryland Court of Appeals opinion clearly provides that financial institutions are not expected to act immediately upon being served with a writ of garnishment, it is still left to be seen how much time between the time of service and the time a hold is applied to an account will be held "reasonable." The Harbor Bank of Maryland v. Hanlon Park Condominium Association, Inc., 153 Md. App. 54, 834 A.2d 993 (2003).