Citizens v. Ouhrabka

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Citizens v. Ouhrabka
Court Vermont Supreme Court
Citation 190 Vt. 251, 30 A.3d 1266
Date decided August 5, 2011

Facts

  • Ouhrabka was the owner of a jewelry store in Rhode Island
  • RBS Citizens, N.A. = Citizens Bank = a bank that loaned Ouhrabka's company more than $15 million
  • In August 2006, Ouhrabka signed a personal guarantee with Citizens Banks ("Citizens") whereby he became personally responsible for 1/2 million dollars of the debt
  • Later on, Ouhrabka accepted personal liability for all of the jewelry company's debt
  • Ouhrabka submitted a financial statement to Citizens listing his house that he co-owned with his wife as tenants by the entirety
  • Ouhrabka's house with his wife was worth $1/4 million at the time
  • The jewelry store was placed into receivership.

Procedural History

  • Citizens Bank sued Ouhrabka in a Vermont state court seeking to recover an estimated $10 million.
  • Citizens sought to attach a writ to Ouhrabka's house
  • Citizens lost & was denied the writ because Ouhrabka's wife was not a debtor
  • Citizens filed an interlocutory appeal to the Vermont Supreme Court

Issues

Can an individual creditor of 1 spouse satisfy a debt personally owned by that spouse by attaching a lien to property jointly held by both spouses (tenants by the entirety)?

Holding

No; an individual creditor of 1 spouse can't satisfy a debt personally owed by that spouse by attaching property jointly held by both spouses as tenants by the entirety.

Judgment

Affirmed

Reasons

The Rights of Married Women Act of Vermont was applied in this case.

Please be advised that a court in another court could have ruled differently.

Rule

Resources