Florida Judgments FAQ

JUNE 15, 2023

NJTLAW

Florida Judgments | Law | FAQ

JUNE 15, 2023

Florida Judgments FAQ 2

NJTLAW

What is a Final Judgment?

A final judgment is an order of a court that conclusively establishes that a party (person, business, or other legal entity) owes another party a specific amount of money. The party owning or holding the judgment is referred to as the judgment creditor. In Florida judgments including the interest they bear are regulated by Chapter 55 of the Florida Statutes. A judgment can come at the end of a trial either based on the judge’s own decision if it was a bench trial or based on the verdict of a jury if it was a jury trial. A judgment can also come into being at other stages of a lawsuit.

The main concern that Florida consumers should have when there is a final money judgment entered against them is the potential for unpleasant collection methods at the hands of the judgment creditor such as wage/bank garnishment, intrusive and time-consuming discovery proceedings, and judgment liens and levy. The Judgment creditor may engage is collection activities against the debtor’s real or personal property. Judgment creditors typically go after real or personal property of the judgment debtor to enforce the judgment.

Can I Challenge a Final Judgment?

There are only limited ways to challenge a final judgment.

If a person appeals from a final judgment after a trial, the notice of appeal must be filed within 30 days of the rendition of the final judgment. If the appeal is not filed within this time period, the right to appeal is forever lost. An appeal from a final judgment brings before the appellate court all decisions made by the trial court during the course of the case. Thus, any issue raised during the case (and properly preserved for review) is a proper subject of the final appeal.

A final judgment can also be challenged at the trial level by using Rule 1.540 of the Florida Rules of Civil Procedure which provides that a judgment can be vacated for: 1. Clerical mistakes in judgments; 2. mistake, inadvertence, surprise, or excusable neglect; 3. Newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial or rehearing; 4. Fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; 5. That the judgment, decree, or order is void; or 6. that the judgment, decree, or order has been satisfied, released, or discharged, or a prior judgment, decree, or order upon which it is based has been reversed or otherwise vacated.

What if I cannot pay the final judgment?

If a person cannot satisfy the final judgment, it can be enforced by levy, garnishment or foreclosure. The judgment creditor typically asks the court to issue a writ of execution in order to collect on the money judgment. The Judgment debtor also will usually record the final judgment and it then becomes a judgment lien on any real property owned by the judgment debtor.

Can an out-of-state judgment be enforced in Florida?

A Final Judgment obtained in another state (foreign judgment) against a person or corporation residing in Florida can be converted into a Florida Judgment by going through a simple procedure. The simple procedure allows the holder of the foreign judgment to “domesticate” the out-of-state judgment. Once that has been done, effectively, the out-of-state Judgment becomes a Florida Judgment.

In order to domesticate a final judgment from another state, one must follow the requirements of the Florida Statutes in the Florida Enforcement of Foreign Judgments Act (FEFJA). As it is used in the FEFJA, “foreign” refers to any state other than Florida.

The starting point of the domestication procedure is to obtain a certified copy of the judgment from the court of the other state. The certified copy of the foreign judgment is then recorded in the office of the clerk of the circuit court of any Florida county. The clerk will charge a fee to record the judgment.

Additionally, the judgment-credit must file an affidavit with the clerk of court that states the name, social security number (if known) and last known address of the judgment debtor. The affidavit should also provide the same information about the judgment-creditor.

The clerk then notifies the judgment debtor by mail that the final judgment has been recorded. The judgment debtor has 30 days after notice is provided to challenge the validity of the judgment. Once the judgment is recorded, it has the same effect as a judgment that is issued by a Florida court. Thirty days after the judgment is recorded, it becomes a judgment lien against the judgment debtor’s Florida real estate. The recorded final judgment also allows you to follow Florida debt collection procedures, including garnishing or levying the judgment debtor’s Florida assets.

What is a deficiency judgment?

In connection with a repossession, a deficiency judgment is simply a deficiency balance which has been successfully sued upon in a deficiency lawsuit and has now been reduced to a civil judgment. Deficiency judgments typically arise in mortgage foreclosure proceedings and repossession action.

What is a default judgment?

A default judgment is entered by the Court based on the failure of the defendant to file or serve any response after being served with the lawsuit. It may be possible to have a default judgment vacated or set aside. Rule 1.540(b) of the Florida Rules of Civil Procedure provides as follows:

“On motion and upon such terms as are just, the court may relieve a party … from a final judgment, decree, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial or rehearing; (3) fraud (whether … intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) [as well as for when] the judgment or decree is void. …”

For a default to be set aside, the trial court must determine (1) whether the defendant has demonstrated excusable neglect in failing to respond; (2) whether the defendant has demonstrated a meritorious defense; and (3) whether the defendant, subsequent to learning of the default, has demonstrated due diligence in seeking relief.

How Does a Bankruptcy Affect a judgment?

There are two kinds of judgments in bankruptcy – dischargeable and non-dischargeable. In most cases in a Chapter 7 (straight bankruptcy) the money judgment may be wiped out. If the bankruptcy court under its rules and laws determines that the judgment is not subject to the discharge, then the bankruptcy has little impact on it and may only result in some payments against it. Non-dischargeable judgments are those based on claims of intentional misconduct like fraud, defamation, or certain hybrid claims like a seller’s failure to disclose material defects in the sale of a home in Florida.

Depending on the language contained in a jury verdict or final judgment the judgment may automatically be deemed non-dischargeable. In other cases to reach that determination there may have to be a separate trial in the bankruptcy called an adversary action or adversary proceeding. In that trial the bankruptcy judge receives limited evidence to evaluate whether the judgment should be deemed non-dischargeable.

Judgment Liens

If the party owing the money (the judgment debtor) does not pay, the party awarded the money (the Judgment creditor) may file a Florida Judgment Lien Certificate with the Department of State. The debtor then becomes subject to an officially recorded lien.

A judgment lien on real property entitles the judgment creditor to have the sheriff’s department levy and sell the judgment debtor’s property in order to pay the creditor the awarded judgment. Florida law allows the sheriff to seize:

• Personal property owned by the debtor. This generally includes movable things such as art, antiques, cars, boats, furniture, horses, jewelry and other valuables.

• Real property owned by the debtor such as houses, condos, buildings, land, or similar holdings.

Any judgment liens that are part of the public record can affect a Florida homestead property owner’s ability to provide clear title in a sale. Even though a bankruptcy proceeding may clear all debt obligations, any judgment that remains in the official public records of the county where the subject property is located will appear on a title commitment. Similar to a mortgage, any judgment listed on the commitment must be satisfied or released before clear title can be provided to the buyer.

Steps should be taken well in advance of the intended sale date to establish protected homestead status and clear any recorded liens on your property. Depending on the amount of the judgments, a title insurance underwriter might accept a simple owner’s affidavit that declares the property to be your constitutional homestead and thus protected from judgment lien creditors. However, if the value of recorded judgment liens is high, an underwriter will be unlikely to accept an owner’s affidavit.

Can I get a judgment-lien removed?

Typically, a Florida Final Judgment can create a judgment lien on any real property owned by the judgment holder. That judgment lien may be removed by successfully negotiating with the judgment creditor for removal of the lien. If the real property in question is homestead, the judgment lien can be removed by filing a simple action entitled Notice of Homestead against the judgment creditor pursuant to Section 222.01 et seq. of the Florida Statutes. The Debt Relief Law Center has extensive experience litigating judgment issues in Florida and provide comprehensive judgment defense for our clients utilizing every potential legal remedy under Florida and federal law.

Florida Homestead Protection

Article X, Section 4, Constitution of the State of Florida (1968) exempts a homestead from forced sale and provides that no judgment or execution shall be a lien thereon. As will be seen, this strategy would need to be implemented several months before any proposed sale closing event and ideally before any attempts to attach a judicial lien to the property.

Designation of homestead by owner before levy, § 222.01, Florida Statutes, stipulates that any natural person (not a corporation or partnership) residing in the state may avail of the provisions of the constitution and laws exempting property as a homestead from forced sale under any process of law. This is done by making, signing, and recording in the circuit court a written statement describing the real property and declaring that it is the homestead of the party in whose behalf such claim is being made.

Once a judgment on the matter is received and a certified copy of a judgment has been filed in the public records, a person who is entitled to the homestead exemption may file a notice of homestead in the public records of the county in which the homestead property is located. The notice informs filers of judgment liens that the property is an exempt homestead and will be conveyed or mortgaged. Lien holders have 45 days to respond, either to argue the homestead status of the property or foreclose a judgment lien on the property. If they fail to do so, any buyer or lender may take the property free and clear of any judgment lien.

How long is a Final Judgment Good For?

In Florida, a final judgment is good for 20 years. That means that judgments entered in the 1990’s are still enforceable at this time.