2019 - Wetherington Hamilton, P.A.

Recent Changes to Florida’s Construction Lien Statute and Public Bonded Projects – Changes to Florida Statute Section 255.05

October 10, 2019/in Articles, Construction Law/by Ted Hamilton

Recent Changes to Florida’s Construction Lien Statute and Public Bonded Projects – Changes to Florida Statute section 255.05

By: Theodore J. Hamilton, Esq.

The Florida law for a subcontractor, equipment lessor or materialman to perfect a claim on a public construction bond recently changed. Law of Florida 2019-94: see link here: http://laws.flrules.org/2019/94 Florida Statute section 255.05 governs the process to be followed to claim on a bond on a public construction project with a public entity in the State of Florida. This section does not apply to Federally Bonded projects. The changes focus primarily in two areas:

The new law requires the Notice of Non-Payment to be signed under oath before a notary;
The new law adds a penalty of non-enforce-ability if it is determined the notice of non-payment is willfully exaggerated in its amount; and
The new law confirms that the time frame for serving the notice of non-payment for rental equipment is 90 days after the last date the rental equipment was on the job site and available for use.

The Notice of Non-Payment must now be under oath.

The new Florida Statutes 255.05 provides a form of a Notice of Non-Payment. This form must now provide for a notary to confirm that the person signing the Notice did so under oath. The new form must be “substantially” followed and must include the oath. Without the required elements the claimant risks making the notice invalid.

The new law adds a penalty of non-enforcement if the notice of non-payment is willfully exaggerated in its amount.

The Notice of Non-Payment must be accurate. To be fraudulent the Notice would either be (1) willfully exaggerated as to the amounts due; (2) willfully include a claim for work not performed or materials not furnished; or (3) prepared the notice of nonpayment with willful and gross negligence, which results in a willful exaggeration. Ultimately, the notice needs to be accurate. This new provision will give owners a defense should the Notice contain willful errors.

The new law confirms the time frames for an equipment rental supplier to serve the notice of non-payment.

For equipment rental suppliers, the new statutory changes make it 100% clear that the notice of non-payment must be served no later than 90 days after the last date the rental equipment was on the job site and available for use. Thus, if the equipment is on the site, but broken down, the 90 days would run from the date it was last usable. These changes, clarify some ambiguities created by conflicting decisions in the Florida Courts as to the last day available to serve the Notice in such a situation.

Conclusion:

This is just a brief summary and not a complete review of each situation. It highlights one of the changes in the last year to the Construction Lien provisions in Florida. For further information contact our office.

Collection and Domestication of an out of state Judgment in Florida

July 31, 2019/in Articles, Debt Collection/by Ted Hamilton

Collecting on a Foreign Judgment in Florida

Our firm is frequently asked to collect and domesticate out of state judgments in Florida. Debtors often move to Florida from other states when faced with a Judgment due to the unlimited homestead exception in Florida. An out of state judgment is considered a “foreign” judgment in Florida. The Full Faith and Credit Clause of the United States Constitution requires each state to recognize the judgments of the other states except in very limited circumstances.

Florida has adopted the Revised Uniform Enforcement of Foreign Judgment Act. The Florida enforcement of Foreign Judgments Act (FEFJA) requires the creditor to file an affidavit containing certain information in order to recognize the judgment in Florida. Errors in the filing of these affidavits can result in challenges to the filing. To file the judgment in Florida a lawsuit a case must be filed in the County where the debtor is located. The filing must include a certified copy of the original judgment along with an affidavit. The Affidavit must contain the name, social security number, if known, and the last known post office address of the judgment debtor and of the judgment creditor. The clerk will then send notice to the debtor. Our firm also routinely also sends a notice to the debtor. The debtor has thirty days to challenge the judgment.

REASONS FOR NON-RECOGNITION OF A FOREIGN JUDGMENT IN FLORIDA

The judgment debtor has 30 days to challenge the recording of the Foreign Judgment in Florida. In order to contest the judgment, the debtor must record a lis pendens in the public records and file a new lawsuit contesting the judgment. Just objecting to the judgment being recorded is not enough. A new suit must be filed. In order to successfully challenge the judgment, the judgment debtor will have to show that the law of the state where the judgment was entered was not followed as to jurisdiction. Thus, for example, not following the service statutes in the state where the judgment arose would result in the judgment not being recognized. However, when the foreign state laws allow for the entry of a judgment without service with only mail notice, Florida must recognize this judgment.

STATUTE OF LIMITATIONS

Florida courts have also ruled that the Florida 20 year statute of limitation to a foreign judgment filed in Florida. Thus, although the state where the judgment originated might have a shorter statute of limitations, in Florida the 20 year statute applies once the judgment is recorded in Florida.

In short, the domestication of out of state judgments requires clear knowledge of Florida statutes. Failure to follow these statutes precisely can delay your collections efforts.

By: Theodore J. Hamilton, Esq.

What is a Bankruptcy Meeting of Creditors?

July 12, 2019/in Articles, Bankruptcy/by Ted Hamilton

At the beginning of any Bankruptcy case, the Clerk of the Bankruptcy Court mails a written notification of a bankruptcy filing. All creditors listed in initial bankruptcy documents filed by a Debtor receive the Notice. This Notice of Bankruptcy Case sets forth the date, time and location of a Meeting of Creditors along with other information.

1.The Purpose of the Meeting of Creditors

The purpose of the Meeting of Creditors in a bankruptcy case is confusing to many creditors. Section 341 of the Bankruptcy Code (the terms are often used interchangeably) authorizes the Creditors Meeting. Thus, the Creditors Meeting is sometimes referred to as a 341 Meeting. This Section of the Bankruptcy Code requires a Meeting of Creditors in every bankruptcy case. The 341 Meeting allows the questioning the Debtor under oath pertaining to the Debtor’s assets and liabilities.

2.Who conducts the Meeting of Creditors

The Bankruptcy Trustee appointed to administer the case or the United States Trustee in a Chapter 11 case where no Trustee has been appointed holds the Meeting of Creditors. There is no court reporter present at the Meeting (unless the Creditor arranges to have a court reporter present). The Meeting is recorded digitally. A Creditor may obtain a recording of the Meeting on a CD by contacting the Office of the United States Trustee after the Meeting.

Chapter 7 Cases

At the Meeting of Creditors in a Chapter 7 bankruptcy case, the Trustee questions the debtor as follows:

1.Reviews the Debtor’s bankruptcy petition and schedules filed in the case;

2. Confirming the Debtor’s identity;

3. Attempts to locate any property or other assets that can be sold or otherwise administered for the benefit of creditors;

4. Questions the Debtor about any transfers of property or other assets made by the Debtor prior to the filing of the case. The Bankruptcy Code provides that certain transfers can be avoided (reversed) by the Trustee and the property transferred brought back into the bankruptcy case;

5. Alternatively, depending on the facts of the matter, the Trustee may seek to obtain a money judgment as to the recipient of the transfer if it is avoidable.

Chapter 13 Cases

The Standing Chapter 13 Trustee, in a case filed under Chapter 13, questions the Debtor on whether the Debtor’s Chapter 13 Plan properly addresses creditors claims and complies with the terms of the Bankruptcy Code.

Chapter 11 Cases

In a Chapter 11 case, the United States Trustee (or Chapter 11 Trustee if one is appointed) generally questions the Debtor (or the Debtor’s representative in a business case) about the Debtor’s assets, liabilities, finances and conduct. In a business case (which comprises most Chapter 11 cases) the United States Trustee will inquire as to the Debtor’s business and reasons for filing the bankruptcy case. The Trustee will also inquire as to the Debtor’s intention and anticipated proposal as to a plan for reorganization. The Trustee will also inquire as to whether the Debtor’s expected future income and anticipated future expenses are consistent with such a Plan. The United States Trustee will also question the Debtor to ensure that the Debtor understands that the Debtor must comply with specific reporting, insurance, banking and other requirements.

3.The Meeting of Creditors as an Opportunity for Creditors

In all cases, the Creditor uses the Meeting of Creditors as an opportunity to question the Debtor about the Debtor’s financial practices, the possibility of claiming a debt to be non-dischargeable due to fraud or other reasons. The Creditor might also want to determine the circumstances pertaining to when the Debtor incurred the indebtedness owing to the Creditor. For example, the Creditor would question the Debtor as to the loan (credit) application and the accuracy and completeness of information set forth in such application. All of these questions might be helpful in determining whether the claim of the creditor might not be wiped out or reduced by the bankruptcy filing.

Likewise, the Creditor might question the Debtor as to assets and property and other collateral (if any) which secures the debt, the condition of such collateral and whether the collateral had been sold or otherwise transferred prior to the filing of the case. The Creditor may also ask about the Debtor’s use of business income and payments made to insiders prior to the filing of the case. Other questions in a Chapter 11 might focus on mismanagement or fraud in the Debtor’s financial operation.

Creditors attend the Meeting of Creditors on their own behalf or through their attorney for the purpose of questioning the Debtor and providing information to the Trustee. Creditors attending a Meeting may have information about undisclosed assets or transfers made by a Debtor which are not set forth on the Debtor’s bankruptcy documents filed with the Court and made known to the Trustee. In addition, Creditors choosing to attend a Meeting of Creditors may use the opportunity to question the Debtor under oath to investigate whether there is a basis for asserting that the Debtor is not entitled to a discharge or that the debt owed to the Creditor is non-dischargeable in the bankruptcy case on account of fraud or another basis.

By Brad Hissing, Esq.