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An Update on the Florida Law of “Proceedings Supplementary”

April 21, 2016 | News

The law of Florida relating to proceedings supplementary is changing on July 1, 2016.

Section 56.29, Florida Statutes, which is found in in Chapter 56 of the Florida Statutes, entitled “Final Process,” provides a judicial mechanism for Judgment Creditors to recover assets that have been fraudulently transferred into the names and hands of third parties.   The causes of action brought pursuant to section 56.29 are often called actions for “fraudulent transfer,” “fraudulent conveyance,” “alter ego,” and “piercing the corporate veil.”

 The Florida Legislature has substantially amended chapter 56, Florida Statutes, including the section on proceedings supplementary.  The new version of section 56.29(5), which goes into effect on July 1, 2016, provides as follows:

The judgment creditor shall, in the motion described in subsection (1) or in a supplemental affidavit, describe 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 which may be applied toward the satisfaction of the judgment. Upon filing of the motion and affidavits that property of the judgment debtor, or any debt, or other obligation due to the judgment debtor in the custody or control of any other person may be applied to satisfy the judgment, then the court shall issue a Notice to Appear. The Notice to Appear shall direct such person to file an affidavit, as provided in s. 56.16, with the court by a date certain, which date shall not be less than 7 business days from the date of service of the Notice to Appear, stating why the property, debt, or other obligation should not be applied to satisfy the judgment. For good cause shown, the court may shorten the time for serving an affidavit. The Notice to Appear must describe with reasonable particularity the property, debt, or other obligation that may be available to satisfy the judgment, must provide such person with the opportunity to present defenses, and must indicate that discovery as provided under the rules of civil procedure is available and that there is a right to a jury trial as provided in s. 56.18. The Notice to Appear must be served as provided for in chapter 48.  A responding affidavit must raise any fact or defense opposing application of the property described in the Notice to Appear to satisfy the judgment, including legal defenses, such as lack of personal jurisdiction.

SeeChapter 2016–33, § 10, Laws of Florida.