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Canton Student Loan Foundation v. Mayo, 2007ca00242 (4-28-2008)
Citation: 2008 Ohio 2172Docket: No. 2007CA00242.
Court: Ohio Court of Appeals; April 28, 2008; Ohio; State Appellate Court
Gail Mayo, the defendant-appellant, is appealing a summary judgment from the Canton Municipal Court in Stark County, Ohio, which granted a creditor's bill filed by Canton Student Loan Foundation. The court ordered Continental Casualty Company to pay a bond owed to Mayo directly to the creditor. Mayo argues that the court erred in granting summary judgment because the funds in question were exempt from execution, citing that they were derived from her Social Security payments. Previously, on December 29, 2004, Canton Student Loan Foundation obtained judgments against Mayo and her children for unpaid loans, totaling $11,255. Additionally, on September 7, 2006, Mayo received a judgment against Edward Sanders for breach of contract, with Continental being the bonding agency admitting liability up to $10,000. The foundation sought to garnish this bond. Mayo contended that the bond funds were exempt from garnishment under 42 U.S.C. 407, which protects Social Security benefits from such actions, claiming the bond was a reimbursement for payments made to Sanders using her Social Security Income (S.S.I.) checks. The trial court rejected this argument and granted summary judgment based on the absence of genuine disputes over material facts, as outlined in Civ. R. 56. The appellate court applies the same standard as the trial court when reviewing the decision, which requires that no reasonable minds could differ on the conclusions drawn from the evidence, and that the burden of proving the exemption from garnishment rested with Mayo. In General Motors Acceptance Corporation v. Deskins (1984), the Cuyahoga County Court of Appeals ruled that Social Security funds retain their exempt status when deposited in a bank account, even if mingled with nonexempt funds, provided the exempt source can be reasonably traced. This decision was supported by the Supreme Court's ruling in Philpott v. Essex County Welfare Board, which affirmed that Social Security funds are exempt as long as they are readily withdrawable. Additionally, the court referenced First National Master Charge v. Gilardi, which established that poor relief funds in a checking account also maintain their exemption, contingent upon tracing the source of the funds. The case of Trotter v. Tennessee illustrated that while benefits are exempt when received, spending them on property negates this exemption. Ultimately, the court affirmed that the bond from Continental Casualty Company was not exempt, upholding the Municipal Court of Canton's judgment. Costs were awarded to the appellant.