Asset Searches and Investigations

What are asset searches and investigations?

Asset searches and investigations are processes by which judgment creditors search for assets judgment debtors own to collect on court-issued judgments. This investigation occurs the court issues a judgment in favor of the creditor, but the debtor has failed to pay the debt in full. The investigation aims to determine if the debtor has any assets to satisfy the judgment. Such an investigation might include searching for bank accounts, real property, personal property, and other assets that the debtor may have failed to disclose in previous court proceedings.

No two asset investigations are the same, and some investigations are more complex than others. For example, imagine a judgment debtor who owns multiple properties in Florida and other states, has numerous bank accounts and has transferred some assets to a family member or business associate in another state. In this scenario, the judgment creditor may need to conduct a thorough investigation to locate the debtor’s assets and determine their value. These complex situations often require hiring investigators to perform asset searches in multiple states, serving subpoenas on banks and financial institutions to obtain account records, and conducting depositions to gather information from the debtor and other parties who may know the debtor’s assets.

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What legal issues typically arise related to asset searches and investigations?

The following disputes are among the most common in asset searches and investigations:

Privacy: These investigations often involve searching for sensitive financial information about the debtor’s assets (e.g., bank account records and tax returns), which raises privacy concerns for the debtor.
Investigatory scope: Debtors and creditors often disagree about the creditor’s right to access certain assets.
Exempt assets: The assets discovered during a post-judgment asset investigation may be exempt from execution under Florida law, meaning that the creditor may not be able to seize certain assets, such as retirement accounts or certain types of personal property, to satisfy the debt.
Due process violations: The post-judgment asset investigation process must comply with the rules and procedures outlined in Florida law. If the creditor violates the debtor’s rights during the investigation, the debtor may have a claim for due process violations.

What are relevant laws related to asset searches and investigations in Florida?

A mixture of the Florida Constitution, Florida Statutes, and Florida Rules of Civil Procedure govern the procedures for asset searches and investigations, including the following:

Florida Constitution Article I, Section 23: Florida has an explicit right to privacy in its state constitution, which is absent from even the U.S. Constitution. This privacy protection extends to personal financial information, including the information of judgment debtors. Therefore, careful compliance with statutes and rules of procedure is the only way to avoid violating the debtor’s privacy rights.
Florida Statutes Section 56.29: This statute authorizes ‘proceedings supplementary’ against a judgment debtor, including subpoenas to obtain asset information, and also sets out the procedures for conducting post-judgment investigations.
Florida Statutes Section 56.30: This statute clarifies the framework for post-judgment discovery.
Florida Rule of Civil Procedure 560: Attorneys must abide by Rule 1.560, which covers discovery in aid of judgment execution.

What is required to execute asset searches and investigations properly in Florida?

To avoid common disputes and potential violations of a debtor’s statutory or constitutional rights, a judgment creditor must:

Obtain a valid judgment: Before conducting a post-judgment asset search or investigation, the judgment creditor must first obtain a valid judgment in a Florida court. This judgment establishes the creditor’s right to collect on the debt owed by the debtor.
Comply with the Florida Rules of Civil Procedure: The creditor must comply with these rules, including serving the debtor with the appropriate legal documents, investigating promptly, and notifying the debtor of the investigation results.
Adhere to privacy laws: In conducting a post-judgment asset search or investigation, the creditor must ensure it does not violate the debtor’s rights to privacy and due process.
Determine the scope: The investigation’s scope depends on the specific facts and circumstances. The creditor must determine what assets are subject to the investigation and what types of information they are entitled to access.
Obtain court orders if necessary: In some cases, the creditor may need to obtain a court order to access certain information or assets during the investigation. For example, if the creditor needs to access bank records or other financial information, they may need to obtain a court order.
Comply with exemptions from execution: In Florida, certain assets are exempt from execution, and the creditor cannot seize them to satisfy a judgment. The creditor must know these exemptions and not attempt to take exempt assets during the investigation.

When a set of facts is appropriate to meet the requirements of asset searches and investigations, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path forward to seek appropriate remedies.

To see what actions may be available for your unique situation, please contact our office to set up your initial consultation.

What are common defenses to asset searches and investigations in Florida?

The primary defenses that judgment debtors assert against asset searches and investigations in Florida include:

Statute of limitations: In Florida, the statute of limitations for enforcement of a judgment is generally 20 years.
Exempt assets: In Florida, certain assets are exempt from execution, and the creditor cannot seize them to satisfy a judgment.
Inadequate notice: The Florida Rules of Civil Procedure require that the creditor provides the judgment debtor with adequate notice of the post-judgment asset search or investigation. If the creditor does not correctly notify the debtor, the debtor may argue that the investigation is invalid.
Privacy violations: A judgment debtor may argue that the post-judgment asset search or investigation violates their Floridian right to privacy.
Improper scope: The scope of the post-judgment asset search or investigation must be reasonable and proportional to the amount of the judgment. If the creditor seeks information or assets that are not reasonably related to the judgment, the debtor may argue that the scope of the investigation is improper.
Hardship: In some cases, the judgment debtor may argue that the enforcement of the judgment would cause undue hardship. For example, suppose the assets in question are necessary to support the judgment debtor’s basic living expenses. In that case, the court might find the judgment enforcement unduly harsh.

To see what defenses may be available for your unique situation, please contact our office to set up your initial consultation.

Have more questions about asset searches and investigations-related situations?

Crucially, this overview of asset searches and investigations does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to set up a consultation.