Florida's New "Judgment Lien Improvement Act"--Judgment Defendants Beware Because Your Creditors May be Able to Get It Although They Can't See It!

• Author: Wolfson, Mark J.
• Date: 01 November 2023

Florida lawyers often hear the cry from their clients that Florida is a "debtor's haven" because of the generous homestead exemption provided by the Florida Constitution, (1) the various personal property exemptions available under statute, (2) and the "tenancy by the entireties" immunity protection afforded to married couples that own property jointly but the creditor holds a judgment against only one spouse. (3) This column, however, is not about protections from creditors' claims. Rather, the holders of Florida money judgments and the attorneys they hire now have another arrow in their collection quivers thanks to the new Judgment Lien Improvement Act, (4) which took effect on July 1, 2023. However, as is the case with creditor's rights generally, there are some limitations, which are discussed throughout this article.

In broad terms, the act first expands the reach of a Florida judgment lien against a defendant's ownership of certain intangible personal property rights. Specifically, the act amends certain provisions of F.S. Ch. 55, to make "accounts" (5) and "payment intangibles" (6) and "the proceeds thereof," (7) owing by a third party legally called an "account debtor," (8) subject to the lien of a judgment lien certificate. Thanks to the act, a judgment creditor, subject to certain requirements, may be able to enforce its judgment against assets a judgment debtor owns but that do not exist in a physical sense. The act applies alike to defendants that are natural persons and business entities. At the same time, the act makes it clear that the rights of pre-existing lienholders are not adversely impacted.

A second focus of the act provides improved methods by which a judgment creditor can ensure its judicial lien is recognized by the State of Florida and effective against its judgment debtor's title to a motor vehicle or vessel. To do this, the act adds a new subsection (b) to F.S. [section]56.29(6) and makes conforming changes to Ch. 319 regarding the process for recognizing judgment liens against titled vehicles and vessels.

The impetus behind the act was the Business Law Section of The Florida Bar. The section created a task force or subcommittee to study and evaluate issues pertaining to whether a right to receive payment should be subject to attachment by a judgment lien creditor and the practical roadblocks when a judgment creditor attempts to levy upon a non-exempt vehicle or boat because of certificate of title protocols. Several members of the section's subcommittee, including me, contributed drafting suggestions, but University of Florida Levin College of Law Prof. Emeritus Jeff Davis was the primary author of the act. (9) The support of Sen. Darryl Rouson and Rep. Christopher Benjamin, the act's lead sponsors in the Senate and House, respectively, was critical to the concept becoming a Florida law.

Why the Need for Change

After winning a civil suit and receiving a monetary award, the plaintiff often faces the challenge of recovering money to satisfy its judgment. Typically, in a large enough case, a judgment creditor will use financial condition information in its files, engage an asset investigator, use web-based asset research tools, and employ the discovery in-aid-of-execution procedures of Fla. R. Civ. P. 1.560(a) to find property that might be subject to levy under F.S. Ch. 56, or perhaps subject to garnishment under F.S. Ch. 77.

Since October 2001, (10) the holder of a money judgment had been entitled to file a judgment lien certificate with the Florida secretary of state, at which time the holder acquires for five years a judgment lien on any of the defendant's non-exempt tangible personal property located in Florida. (11) The historical restriction to tangible property may have been the result of lack of appreciation for the existence in the marketplace of significant contract-based revenues a person or entity might be entitled to receive from third parties. (12)

In addition, the previous statutory rules applicable to obtaining non-consensual liens on certificated vehicles and boats made it practically difficult for judgment creditors to execute on a defendant's high-end car or luxury vessel because the owner could transfer the property to a third party free and clear of the judgment lien as that lien did not appear on the face of the certificate oftitle. (13)

Over a couple years, the section's subcommittee studied, evaluated, and debated the status of post-judgment collection in Florida and issued its "White Paper by Business Law Section of Florida Bar, Bankruptcy/UCC Committee, on Clarifying and Expanding the Scope of Florida's Judgment Lien on Personal Property." (14) The White Paper, which was later updated, discussed the above-described issues, and recommended most of the changes that were incorporated into the act.

What the New Law Does Specifically

The act addresses the main challenges discussed above. First, the act allows a judgment lien to attach to certain intangible personal property, specifically payment intangibles and accounts or accounts receivable. Section 55.202(2), as amended, revised existing law by adding the emphasized (italicized) phrase below: (15)

(2) A judgment lien may be acquired on a judgment debtor's interest in
                all personal property in this state subject to execution under s
                56.061, including payment intangibles and accounts, as those

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