How A Judgment Creditor May Take Your Damages Award

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Some of us are lucky enough to avoid court for an entire lifetime, and some of us are not. An individual may contemporaneously be a plaintiff in one action and a defendant in another. A civil judgment may be entered against you in one case while you are a plaintiff in an unrelated cause of action against an unrelated third party. Do you know that Florida law allows a judgment creditor to step into the shoes of a plaintiff/judgment debtor and apply any recovery to the satisfaction of its judgment?

Pursuant to § 56.29 of the Florida Statutes, a judgment creditor may petition a court to have a plaintiff’s lawsuit assigned to a creditor by opening proceedings supplementary. The creditor assumes the role of the plaintiff suing the unrelated third party defendant. § 56.29(5) provides that a court “may order 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, to be applied toward the satisfaction of the judgment debt.”

The debtor’s lawsuit is a chose in action which is property within the scope of proceedings supplementary under § 56.29(5). Puzzo v. Ray, 386 So. 2d 49, 50-51 (Fla. 4th DCA 1980). A “chose in action” is a “personal right not reduced into possession, but recoverable by a suit at law. . . . A right to receive or recover a debt, demand, or damages on a cause of action ex contractu or for a tort or omission of a duty.” Id. at 50 (quoting Black’s Law Dictionary (4th ed. 1968)). Florida courts have examined whether such an order would be inequitable based on the value of a lawsuit exceeding the amount of the creditor’s outstanding judgment.

An exception to the application of § 56.29 occurs when the debtor’s lawsuit is against the same judgment creditor. Courts have not allowed creditors to usurp the debtor’s lawsuit against the same creditor regarding a claim that was not a counterclaim in the underlying action. Donan v. Dolce Vita Sa, Inc., 992 So. 2d 859 (Fla. 4th DCA 2008).

At Loan Lawyers, our South Florida consumer rights and debt defense attorneys can help individuals protect themselves from unscrupulous creditors. For a no-risk, no-cost consultation, contact one of our South Florida consumer defense attorneys today by calling 954-523-HELP (4357).