Preserving a Defendant’s Assets Before Judgment is Entered

Let’s say that you are considering a business or commercial litigation lawsuit against another person or company. You think you have a good case but you have one concern: collection. Specifically, you have concern that by the time that you win or settle your case, whatever proceeds, assets, or property that the Defendant has which could be used to pay you, will be gone.

The Prejudgment Writ

There is a way that someone can protect and preserve a Defendant’s assets—even before any judgment is entered against that Defendant. It’s called a prejudgment writ of garnishment, and while it can only be used in limited circumstances, there are situations where it can be useful, to ensure that you eventually collect on whatever it is that you might win.

The prejudgment writ can only be sparingly sued, because you are freezing or seizing someone else’s assets and property before there is any judgment entered. That means that a court is very careful about entering these kinds of writs.

Risk of Lost Assets

To get a writ, you just demonstrate to a court that assets that belong to the Defendant, which could be used to satisfy any potential judgment entered in your favor in the future, could be lost. You can show that the assets could be hidden, used, or destroyed.

You can get a writ against the Defendant, but you can also get the writ against a third person, if that third person has property belonging to the Defendant, which could be lost or destroyed. This can be valuable as against these third parties, who may use, destroy, or sell the Defendant’s property, unknowingly and innocently, unaware that you have a pending lawsuit against the Defendant.

You must clearly identify the property that you feel will be lost or destroyed, and explain to the court why you feel the property must be frozen or seized or held—you can’t just say “he may not be able to pay me so freeze his bank accounts.” There often has to be some demonstrable reason why there is a good faith belief that assets could be lost or destroyed.

Affidavits and Bonds

You must make these statements under oath through an affidavit submitted to the Court with your request for the prejudgment writ of garnishment. Additionally, to ensure that the Defendant is safe, you’ll have to post a bond, twice the amount of the value of the property that is subject to the writ, and will also have to pay any damages the Defendant might sustain, in the event that you lose the case, and thus, making the prejudgment writ unnecessary.

Third parties who get a prejudgment writ will get notice and the chance to object to the writ within 20 days, but the bond and the guarantee of damages still must be paid.

Call our Fort Lauderdale business litigation lawyers at Sweeney Law P.A. at 954-440-3993 for help with your commercial litigation lawsuit today.

Sources:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0076/0076.html

casetext.com/statute/florida-statutes/title-vi-civil-practice-and-procedure/chapter-77-garnishment/section-77031-issuance-of-writ-before-judgment/analysis?citingPage=1&sort=relevance