The judgment was entered in New York two years ago. Before you could collect on it, the debtor sold his house there and closed his accounts. A search of public records now shows a new company registered in Miami, a Florida driver's license, and a condominium on the water. He has not paid, he does not answer your lawyer's letters, and your judgment is a piece of paper from a court more than a thousand miles from everything he owns.
Florida has long attracted people with creditors behind them, partly for the weather and partly for its laws. A judgment from another state can be enforced here, and the procedure is simpler than most creditors expect. What it reaches, and how quickly, depends on steps taken in the right order and on protections Florida gives the people who live here.
Is a judgment from another state valid in Florida?
Yes. The United States Constitution requires each state to give full faith and credit to the final judgments of the others, and Florida courts will not rehear a case another state's court has already decided. Validity and enforcement are different things, though. A New York judgment cannot support a Florida lien, a garnishment of a Florida bank account, or a sheriff's levy until it has been made a matter of record here. That step is called domestication.
How is a judgment domesticated?
Under the Florida Enforcement of Foreign Judgments Act, the creditor records a certified copy of the judgment with the clerk of the circuit court in any Florida county, together with an affidavit giving the names and last known addresses of the creditor and the debtor. The clerk mails notice of the recording to the debtor. Once recorded, the judgment has the same effect as a judgment of a Florida circuit court and is subject to the same procedures and defenses. No new lawsuit is required. The recording can be made in any county, and creditors usually choose the one where the debtor lives or owns property. A creditor may still choose the older route of filing a Florida action on the judgment, which takes longer but ends in a new Florida judgment, and in some situations that is the better choice.
What happens during the first thirty days?
Nothing can be seized. The statute bars execution or other enforcement process until thirty days after the clerk mails the notice. During that period the debtor may file an action contesting the judgment and record a notice of that action, which stays enforcement until the court decides. A stay is also available on any ground that would stay a Florida judgment, such as a pending appeal, if the debtor posts the security Florida would require. Creditors should plan for the waiting period and use it: this is the time to search for real estate, companies, vehicles, vessels, and bank relationships, so that liens and writs can follow promptly when the window closes.
What can the debtor argue?
Less than debtors expect. The debtor may contest the jurisdiction of the court that entered the judgment or the validity of the judgment itself. In practice that means arguing that the original court had no power over him because he was never properly served or had no connection to that state, that the judgment is not final, that it was obtained by fraud on the court, or that it has already been paid. He may not reargue the case. Whether the money was owed, and how much, was decided in the first lawsuit. Judgments entered by default are the most exposed to a jurisdictional attack, which is why the proof of service from the original case should be in the creditor's file before anything is recorded in Florida.
What can you collect against once it is domesticated?
Everything a Florida judgment can reach. Recording a certified copy in the county where the debtor owns real estate creates a lien on that property, other than a homestead. Filing a judgment lien certificate with the state creates a lien on personal property and sets the creditor's priority. Bank accounts and receivables can be garnished, and business assets can be levied on by the sheriff. The debtor can be required to disclose assets under oath, and third parties holding the debtor's property can be brought before the court. A debtor who rearranged his affairs on the way to Florida has often left a trail of transfers that can be examined under the fraudulent transfer statute.
What will Florida law protect?
A good deal, for individuals who live here. A Florida homestead is exempt from most judgment creditors whatever its value. The wages of a person who heads a household, retirement accounts, annuities, and the cash value of life insurance are protected as well, and property a married couple owns as tenants by the entireties is beyond the reach of a creditor of one spouse alone. There are limits. Homestead protects a permanent residence, not a second home or an investment property. The exemptions belong to people, so a company's assets have none. Federal bankruptcy law restricts the homestead exemption for debtors who acquired a Florida home recently. And moving assets into protected forms after a claim arose can be challenged in some circumstances.
How long do you have, and what should you gather?
Do not assume you have the twenty years Florida allows for its own judgments. Florida applies its own limitation rules to judgments from other states, the method of domestication can affect which period governs, and the time remaining in the state that entered the judgment can matter too. Creditors holding older judgments should act first and investigate second. The file should contain a certified or exemplified copy of the judgment, proof of how the debtor was served in the original case, a record of payments received and interest accrued, and the debtor's current Florida address. Judgments from courts of other countries are handled under a separate Florida statute with requirements of its own.
Salomon Smith PLLC represents creditors enforcing out-of-state judgments against debtors and assets in Florida, from domestication through liens, garnishment, and levy. If a debtor has relocated to South Florida, call (305) 297-1018 for a free consultation, or learn more about our commercial collections practice.
This article is for general informational purposes only and is not legal advice.