A CLARIFICATION TO FLORIDA’S LAW PROVIDES GUIDANCE TO COURTS IN REGARD TO PROCEEDINGS SUPPLEMENTARY UNDER § 56.29, FLORIDA STATUTES, WHEN JUDGMENT CREDITORS SEEK TO COLLECT ON JUDGMENTS.
By Bart R. Valdes, Esq. and P. Hayden Haskins, Esq.
On June 20, 2014, Governor Rick Scott approved 2014 Florida Laws Chapter 182, which revised Florida’s law on proceedings supplementary found in § 56.29, Florida Statutes. Effective on July 1, 2014, § 56.29, Florida Statutes, was revised to clarify existing law and provide guidance to judges, creditors and judgment debtors, as well as third parties who may be subjected to collection actions based on transfers made by judgment debtors. It is important for both attorneys and their clients to understand the new law as it impacts how creditors will attempt to collect on judgments or court orders when money or property is transferred to a third party before, during or after a lawsuit.
Proceedings supplementary enable speedy and direct proceedings in the same court in which the judgment was recovered to better afford to a judgment creditor the most complete relief possible in satisfying the judgment. “Proceedings supplementary ‘are equitable in nature and should be liberally construed.’” Zureikat v. Shaibani, 944 So.2d 1019, 1023 (Fla. 5th DCA 2006). “The Florida courts have consistently held that [S]ection 56.29[, Fla. Stat.,] must be given a liberal construction in order to afford a judgment creditor the most complete relief possible.” Pollizzi v. Paulshock, 52 So.3d 786, 789 (Fla. 5th DCA 2010).
Importantly, § 56.29, Florida Statutes, was clarified to state that proceedings supplementary are commenced by filing a motion and an affidavit. Previously, the law had only required the filing of an affidavit. The requirements for what must be contained in the affidavit remain the same. Also, the law was clarified to provide that the court may order any property of the judgment debtor, not exempt from execution, in the hands of any person, or any property, debt, or other obligation due to the judgment debtor, to be applied toward the satisfaction of the judgment debt. The court may also entertain claims concerning the judgment debtor’s assets brought under Florida’s Uniform Fraudulent Transfer Act, Chapter 726, Florida Statutes (“FUFTA”), and enter any order or judgment, including a money judgment against any initial or subsequent transferee, in connection therewith, irrespective of whether the transferee has retained the property. The amended statute also provides that the court may enter a money judgment against any impleaded defendant, irrespective of whether such defendant has retained the property, subject to §§ 56.18 and 56.19, Florida Statutes, and applicable principles of equity, and in accordance with Chapters 76 and 77, Florida Statutes, and applicable rules of civil procedure.
Among other things, the amended statute clarifies that a money judgment may be entered against an impleaded defendant in proceedings supplementary, and, as already provided in FUFTA, the amended statute authorizes the entry of money judgments against transferees who no longer possess the transferred assets. §§ 56.29(5), (9), Florida Statutes. The amended statute further clarifies that the court may order “any property, debt, or other obligation due to the judgment debtor to be applied toward the satisfaction of the judgment debt.” § 56.29(5), Florida Statutes. This means that a judgment debtor, and initial and subsequent transferees of the judgment debtor’s property, cannot thwart legitimate collection efforts by merely passing along property or cash that belongs, or is due, to the judgment debtor. Simply put, the Legislature made clear that courts have broad power to stop “shell games” engaged in by judgment debtors and their transferees, and to provide legitimate relief to judgment creditors. This clarifies the existing case law that already provided courts with broad authority to help creditors collect on their judgments.
Importantly, in passing the law the Legislature specifically stated that the amendments are remedial in nature, are intended to clarify existing law, and shall be applied retroactively to the full extent permitted by law. “Remedial statutes or statutes relating to remedies or modes of procedure, which do not create new or take away vested rights, but only operate in furtherance of the remedy or confirmation of rights already existing, do not come within the legal conception of a retrospective law.” City of Lakeland v. Catinella, 129 So. 2d 133, 136 (Fla. 1961), citing Cunningham v. State Plant Board of Florida, 112 So.2d 905 (Fla. 2d DCA 1959). Section 56.29, Florida Statutes, is an inherently remedial procedural statute because its sole purpose is to provide judgment creditors with a procedural remedy for collecting on the judgment without the necessity of an independent action. The name itself, “proceedings supplementary,” shows that the legislative intent behind the statute is to provide a procedural remedy. As such, the amended statute may apply in all cases currently pending even if the transfer at issue occurred before the law was enacted.