RBC GLOBAL ASSET MANAGEMENT (U.S.) INC. v. LATTIMORE

Markisha Lattimore won a judgment of more than $20 million against a daycare business, Kim Brothers Kickin' Kids. Without first trying to collect directly from the business, she sent garnishment summonses to twelve financial companies, including RBC Global Asset Management, using the statutory form meant for garnishing a 'financial institution.' Global determined it held no money for the daycare but never responded to the summons, and a default judgment for the full $20 million was entered against it in Fulton County State Court. Global later asked the court to set aside that judgment, arguing it is a registered investment adviser, not a financial institution like a bank, so the wrong summons form was used and the court never gained authority over it. The trial court disagreed and said Global had waived the argument. The Supreme Court of Georgia disagreed with the trial court, holding that Global is not a financial institution, the wrong form was used, the resulting garnishment was invalid, and Global could still raise this defect when seeking to set aside the default judgment.

The court held that a registered investment adviser like Global does not meet the statutory definition of a 'financial institution' because it does not hold accounts where a debtor's funds are deposited, saved, or invested, so using the financial-institution summons form made the garnishment invalid and deprived the court of personal jurisdiction over Global.

The ruling protects investment advisers and similar businesses from being hit with default garnishment judgments based on the wrong legal form, and it clarifies for creditors, banks, and their lawyers statewide which entities actually qualify as 'financial institutions' under Georgia's garnishment law.

Reversed

1. The court reviewed the trial court's denial of the motion to set aside for abuse of discretion, meaning it asked whether the trial judge made a significant legal error or a clear mistake about a key fact.
2. Georgia's garnishment law defines 'financial institution' as banks, credit unions, insurance companies, trust companies, and similar entities that hold accounts where a debtor's money is deposited, saved, or invested; the court explained that the statute's catch-all phrase only describes entities like those already listed, not any financial business generally.
3. Applying that definition, the court found Global is a registered investment adviser that does not accept deposits, does not have actual custody of client funds, and is legally barred from operating as a bank, so it does not qualify as a 'financial institution.'
4. Because Georgia law (O.C.G.A. § 18-4-7 (d)) states that using the wrong garnishment summons form makes the garnishment invalid and relieves the garnishee of liability, Lattimore's use of the financial-institution form against Global meant the court never gained personal jurisdiction over Global.
5. The court rejected the argument that Global waived this defect by not raising it earlier, explaining that a challenge to personal jurisdiction based on improper service can be raised in a motion to set aside a default judgment and is not subject to the usual waiver rules for defenses left out of an answer.
6. The court also rejected the argument that Global's actual notice of the garnishment, or its response to a different summons in an unrelated case, amounted to consent to jurisdiction here, because consent or waiver in one lawsuit does not carry over to a separate lawsuit.

• garnishment default judgment
• financial institution definition
• investment adviser
• personal jurisdiction
• default judgment set aside