This week I received no less than 4 inquiries from out of state owners of Florida real estate. Each one of them was under the impression that by moving away from Florida they also "moved away" from the ability of the bank to pursue them for any deficiency or other Florida incurred debt. Each one of them is completely wrong.
Recognition of Judgment
Generally, the "recognition" of a foreign judgment occurs when the court of one country or state accepts a judicial decision made by the courts of another "foreign" country or state, and issues a judgment in substantially identical terms without rehearing the substance of the original lawsuit.
Enforcement of Judgment
Once a foreign judgment is recognized, the party who was successful in the original case can then seek its "enforcement" in the recognizing state or country. If the foreign judgment is a money judgment and the debtor has assets in the recognizing jurisdiction, the judgment creditor has access to all the enforcement remedies as if the case had originated in the recognizing jurisdiction, e.g. garnishment, judicial sale, etc. If some other form of judgment was obtained, e.g. affecting status, granting injunctive relief, etc., the recognizing court will make whatever orders are appropriate to make the original judgment effective.
Essentially, if a Florida court enters a deficiency money judgment for $50,000 and the debtor lives in Kentucky, that judgment can be enforced in Kentucky as if the judgment was obtained in a Kentucky court. In other words, you can't "run away" from the judgment.
Full Faith and Credit - United States Constitution
Almost every state has adopted the Uniform Enforcement of Foreign Judgments Act (see sections 55.501 to 55.509 for the Florida version, which mirrors most all the others). In reality, the Act is not necessary for enforcement of judgments between states - although it does give the mechanical method of doing so. The basic premise for enforcing judgments across state lines is under the "full faith and credit clause" of the United States Constitution (see Article IV, Section 1), which requires each state to consider judgments of another state to be "local". [Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.]
Outside the USA
Foreign country judgments are handled pretty much the same way, with one important proviso - the judgment has to have been rendered with at least some of the basic prerequisites of due process and proof that we have in the United States. The concept is called "comity". The term refers to the idea that courts should not act in a way that prejudices the laws or judicial decisions of another jurisdiction. Part of the presumption of comity is that other jurisdictions will reciprocate the courtesy shown to them. For example, such reciprocity would mean that the judgments of a particular jurisdiction will be recognized and enforced by a forum only to the extent that the other jurisdiction would recognize and enforce the judgments rendered by that forum. End effect is, between the common theory of comity and the many foreign country treaties, you should presume that a judgment can follow you about anywhere in the world.
As stated above, most non-treaty countries (that is, a treaty with the USA) use the basic sense that the judgment must have been obtained using due process (there must have been jurisdiction of the foreign court to enter the judgment) and that the judgment was not obtained through fraud. The non-US court will not (usually) look into the facts behind the judgment, such as retrying the case in chief.
A good summary of enforcement procedures for the British Commonwealth was prepared by Steve Loble at http://www.loble.co.uk/enforcement_of_foreign_judgments.htm
In essence, the enforcement procedure is first one of "registration" of the foreign (or other state) judgment and then the actual enforcement. So first you register the judgment so it gets recognition, and then you enforce the registered judgment.
For How Long is the Judgment Enforceable?
Another question is how long a judgment is good for if sought to be enforced in another state. Generally the law requires full faith and credit. So a Florida judgment good for 20 years in Florida would be good for 20 years in Kentucky, even if Kentucky has only a 10 year judgment duration statute. See a good article on this subject in the Florida Bar Journal.
You Can't Run Away
It is an "urban legend" that if you go from a "deficiency state" to a "non-deficiency state" that you are then protected from the judgment. If there is a judgment that can be pursued in the state where the obligation was created, then it can be enforced where a similar obligation may not be enforceable. Essentially, you cannot "run away" from a judgment or debt in one state by moving to another state - neither before nor after the judgment is rendered.
Copyright 2011 Richard P. Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 email: RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com Website www.Florida-Counsel.com .
See our easy to understand articles at: