A common issue persons may face in lawsuits is not so much the difficulty in obtaining judgment for remedies, but actually collecting on the judgment once obtained. There are different ways in which judgment debtors try to defeat collection on judgments, which pose problems for those holding outstanding executions. In order to give effect to an already-existing judgment lien that has not been satisfied, a judgment creditor may invoke section 56.29 of the Florida Statutes, which governs Proceedings Supplementary.
Proceedings supplementary is a cause of action, separate from the action from which the unsatisfied judgment originated, in which the assets of the judgment debtor may be discovered and subjected to execution. Through this proceeding, the court may reach the assets of the judgment debtor for the benefit of the judgment creditor. This allows the judgment creditor to pursue either assets held by the debtor, assets held by another that are not exempt from execution, or void any transfer to a spouse or third party that was made by the debtor for the purpose of delaying, hindering, or defrauding a creditor.
The judgment creditor may begin the proceedings by filing an affidavit containing the statutory requisites. The judgment creditor then files a motion to set a time and place for the examination of the judgment debtor, called a Motion for Proceedings Supplementary to Execution. Then, the court will order the debtor, here the defendant in execution, to appear before it at a specific time and place to be examined concerning his property. This Order Supplementary may be obtained before serving the motion on the debtor. However, once obtained, the order must be served on the debtor within reasonable time before the specified date of examination. The order may be served on debtor or on his attorney as provided for service of papers.
Proceedings supplementary are conducted as a nonjury trial. Testimony is made under oath and is not subject to the 5th Amendment privilege against self-incrimination since answers given in this proceeding cannot be used in criminal prosecutions. Also, any testimony tending directly or indirectly to aid in satisfying the execution is admissible. The defendant has the burden of proving that transfers of personal property made (within one year before service of process) to a spouse, relative, or friend, were not done in order to defraud or hinder creditors in satisfying debts. If the debtor made any gift, transfer, assignment or other conveyance of personal property in order to delay, hinder, or defraud creditors, the court can order the gift, transfer, assignment or other conveyance to be void and direct the sheriff to take the property to satisfy the execution; however, this does not apply to exempted property, such as where a levy or bonafied buyer are involved. Where corporations are involved, if transfers were made to defraud creditors, the court can pierce the corporate veil. Corporate defendants also must attend the proceeding and answer through an officer specified in the order. But if an officer to appear for the corporation is not specified in the order, the corporation should designate an officer with knowledge of its financial affairs.
Where a third person has a claim or demand against property in which the judgment debtor has an interest, then the plaintiff, here the judgment creditor, must file an impleader complaint and serve process on the third person so that this third party may defend her interest or give any necessary evidence. Otherwise, orders in proceedings supplementary are not binding on the third party.
Additionally, the statute for Proceedings Supplementary provides that the costs involved in such an action are to be paid by the judgment debtor, which include the attorney’s fees incurred by the judgment creditor in attempting to satisfy the outstanding execution. For more information or advice regarding collections on judgments, please visit http://www.epgdlaw.com, or call (786) 837-6787. Our staff will be glad to assist you and work with your case to achieve the best possible result for you.