Dunn Law Instrumental in Reconciling Florida Statutes Regarding Debtor-Creditor Law
By dunnlawpa Announcements, Assignment for Benefit of Creditors, Bankruptcy, Southern District of Florida, Uncategorized
bankruptcy, creditors, Florida Statutes, judgement, judgement lien, southern district of florida
0 CommentsOn Sept. 14, 2018, Dunn Law was an integral part of a recent decision in relation to Florida Statutes §§ 319.27 and 55.202 ― a major development in debtor-creditor law. Inconsistencies in the state law were reconciled, due to the involvement of Dunn attorneys Michael P. Dunn, Esq. and Alexis S. Read, Esq.
The case concerned the strict requirements creditors have to abide by in order to secure, enforce, and collect on judgments. This particularly applies when there is a subsequent bankruptcy, and the trustee has certain “strong arm” powers that would supersede creditors who haven’t properly followed requirements or “perfected” their rights.
On Sept. 14, Judge A. Jay Cristol of the United States Bankruptcy Court Southern District of Florida, granted a motion for summary judgment in favor of Marcia T. Dunn, as Chapter 7 trustee of the bankruptcy estate of Oswaldo A. Ramos.
When Ramos filed for bankruptcy, Marcia Dunn liquidated assets (including 12 vehicles, sneaker collection, photography equipment, a baseball card collection and other items.) The dispute was whether the money collected from the assets went to the defendant (creditor Guardian Building Products), or to the bankruptcy estate to pay the general creditor body.
The defendant’s premature filing of its judgment lien certificate did not create a valid lien on the liquidated assets. Even if it had, the defendant failed to perfect its lien as to the vehicles, because it did not file a notice of lien upon title or otherwise take possession of the vehicles. The trustee took priority over the defendant’s purported judgment lien, and thus was entitled to the sale proceeds of the vehicles free and clear of the defendant’s claim.
Michael Dunn confirmed that a judgment creditor obtains a judgment lien by filing a judgment lien certificate with the Department of State when two conditions are met. First, the certificate must be filed after the judgment has become final; and the certificate should be filed when the time for rehearing has lapsed, no rehearing is pending, and no stay of the judgment or its enforcement is then in effect. In addition, Dunn confirmed that a lien on a motor vehicle must be noted on a vehicle’s certificate of title (the notation requirement determines whether a lien is enforceable.) The notation requirement is also critical in determining priority of creditors.
In the end, Dunn Law voided the creditor’s “secured” status through the court’s order. State law sets forth specific procedures for creditors to perfect and secure their interests in property, both in personal property and vehicles. These procedures are strictly applied.
Thanks to the efforts of the Dunn Law team, others involved in similar cases throughout the state will now refer to the reconciled Florida Statutes §§ 319.27 and 55.202.