Choosing Where to Enforce a Federal Judgment in Florida
A federal court has entered a judgment in your client’s favor. Your client seeks to enforce the judgment against the judgment debtor’s assets in Florida. Now what?
The federal rules are not extremely clear. Generally, in Florida, judgment creditors have two options for enforcing civil judgments entered by federal courts: proceed with enforcement in the federal court that entered the judgment, or domesticate the judgment and proceed with enforcement in Florida state court.
Options for Enforcement and Collection
The first option is to proceed with enforcing and collecting on the judgment in federal court. In doing so, Federal Rules of Civil Procedure 64(a) and 69(a)(1) provide that Florida law on collections applies, and federal statutes govern if applicable. The same is true as to post-judgment discovery, as provided for in Federal Rule of Civil Procedure 69(a)(2). So, if you proceed with enforcement and collection in federal court, it is important to confirm you are familiar with and complying with both federal and Florida law.
The other option is to proceed with enforcement and collection in Florida state court. To do so, the judgment creditor again has an option. The judgment creditor can bring an action to enforce the judgment, or the judgment creditor can domesticate the judgment under the Florida Enforcement of Foreign Judgments Act (Sections 55.501-.509, Fla. Stat. (2022), the act). The act, which is based on the full faith and credit clause of the U.S. Constitution, as the First District Court of Appeal explained in New v. Bennett, 249 So. 3d 704, 707 (Fla. 1st DCA 2018), provides a more efficient and speedy procedure for judgment creditors to domesticate and enforce foreign judgments in Florida without requiring the judgment creditor to file a separate action. The act is not intended “to impair the right of a judgment creditor to bring an action to enforce his or her judgment instead of proceeding under this act,” as stated in Section 55.502(2), Florida Statutes.
To domesticate a foreign judgment under the act, the judgment creditor should first record with the clerk of the circuit court a copy of the judgment as well as an affidavit “setting forth the name, social security number, if known, and last known post office address of the judgment debtor and of the judgment creditor,” as set forth in Section 55.505, Florida Statutes. In doing so, the party domesticating the judgment will be required to pay “a service charge as is required for the recording of an original action demanding the relief or judgment granted in the foreign judgment,” as stated in Section 55.503(2), Florida Statutes.
While Section 55.503, Florida Statutes, does not require that the recorded judgment be a certified copy, Section 55.10, Florida Statutes, requires that the recorded judgment be a certified copy to “become a lien on real property ….” Section 55.10 also requires that the judgment creditor’s address be included in the judgment or an affidavit recorded with the judgment to create “a lien on real property”—regardless of where the judgment is issued. Therefore, if the judgment creditor intends to enforce the judgment as a lien on real property in the state of Florida, it is prudent to ensure this information is included in the judgment. That being said, the act suggests you would still need to record an affidavit with the necessary information to domesticate a foreign judgment, even if the judgment already included this information.
Once the judgment creditor records the foreign judgment and affidavit with the clerk, the clerk will mail notice of recording to the judgment debtor at the address in the affidavit. There is then a 30-day wait period for the judgment debtor to challenge enforcement of the foreign judgment. If the judgment debtor contests enforcement, an automatic stay on enforcement goes into effect. If the judgment debtor does not take any action to challenge enforcement within the 30-day period, the lien becomes effective once the 30-day period expires. At that point, the judgment has the same effect as a Florida judgment and the creditor can proceed with enforcement and collection as if the judgment was entered by a Florida court. This process is set forth in Sections 55.505 and 55.509, Florida Statutes.
Considerations for Where to Proceed With Enforcement and Collection
There are several factors to consider in determining the best forum for judgment enforcement. One consideration might be post-judgment discovery. Since Federal Rule of Civil Procedure 69 provides that the judgment creditor or its successor in interest can use discovery as provided in the Federal Rules of Civil Procedure “or by the procedure of the state where the court is located,” there may not be much of a substantive difference between federal and state court—allowing the judgment creditor to determine whether it prefers to conduct such discovery in federal or state court.
Similarly, the judgment creditor might consider the tools that are available for enforcement and collection in either forum. Since Federal Rules of Civil Procedure 64 and 69 incorporate state law, there may not be much of a substantive difference between federal and state court—again allowing the judgment creditor to determine whether it prefers to conduct such proceedings in federal or state court.
The judgment creditor may also consider timing. In state court, it is guaranteed that the process of obtaining a writ will take no less than 30 days due to the 30-day statutory waiting period set forth in the act. Depending on the federal court, and how quickly it rules on a request for a writ, that could be faster or slower than the state court. An article written by retired Judge Randa M. Trapp of the San Diego Superior Court, published by the American Bar Association in September 2021 suggested that judgment collection and enforcement litigation is not top priority for state and federal courts that are managing overcrowded dockets, stating: “Constitutional considerations frequently require courts to prioritize the management of criminal dockets and trials. Moreover, the practical impact of budget and resource constraints, as well as the COVID-19 pandemic, are daily considerations for prioritizing the work of the courts. The net effect can be that judgment collection and enforcement litigation may not proceed at the pace a judgment creditor would prefer.”
Ultimately, determining the best forum for enforcing a judgment depends on the case-specific circumstances of the case and the judgment creditor’s interests.
Benjamin B. Brown, a partner with Quarles & Brady, is the Florida chair of the commercial litigation group. He is Board Certified in business litigation and practices at both the trial court and appellate levels. Melanie Kalmanson, an associate with the firm, focuses her practice on commercial litigation and represents business and individual clients in all phases of litigation in state and federal court.
Reprinted with permission from the December 12, 2022, edition of the Daily Business Review© 2022 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or email@example.com.