One of the most common misconceptions of non-lawyers regarding the practice of law is that a civil case ends upon conclusion of a trial and that, if a party is victorious at trial, he automatically obtains or is provided with the award he was granted in court. For instance, if one party sues another for $1 million and prevails at trial, the thinking goes, then, upon conclusion of the trial, the other party just hands over the million dollars. Unfortunately, this is not the case.
Instead, upon successfully concluding a trial, the prevailing party is granted a judgment, which is a court document laying out what liability the losing party has to the prevailing party; the prevailing party must still collect on its judgment. When a losing party does not have the means to pay the judgment against it, the prevailing party, also known as the judgment creditor, may use the judgment as a basis for recording a lien against real property (i.e. real estate) owned by the losing party, also known as the judgment debtor.[1] Section 55.10 of the Florida Statutes provides that when a certified copy of the judgment is filed in a county’s official records, the judgment becomes a lien against any real property owned by the judgment debtor in that county. Any judgment recorded on or after July 1, 1994 is good for 10 years from the date of recording, and the lien may be extended for an additional 10-year period by re-recording a certified copy of the judgment. In no case shall a lien last beyond 20 years from the date of entry of the original judgment.
However, when re-recording the judgment, there is some confusion as to whether the judgment creditor’s lien loses it priority as to any subsequently-filed liens. Under Florida law, when a judgment is recorded, the judgment lien takes priority over any liens recorded thereafter, and maintains its priority so long as it exists. When the 10-year life of the original lien expires and the judgment creditor re-records the lien so as to continue it for another 10 years, Florida Statute §55.10(2) provides, “The extension shall be effective from the date the certified copy of the judgment…is rerecorded.” Accordingly, based on a plain reading of the statute, as the re-recorded judgment is effective as of the date of re-recording, and not the date of the original, underlying judgment, any third-party’s lien filed between the judgment creditor’s initial recording of his judgment and the 10 years between his re-recording would thus have priority over the re-recorded lien, despite that the original judgment was recorded first. As one can see, that would seem to be an inequitable and unfair result.
But, recent Florida case law has seemingly carved out an exception to the statute, providing that if the judgment is re-recorded prior to its expiration, then the lien maintains priority as of the date of the original, underlying judgment. Florida’s Fourth District Court of Appeals, in Franklin Financial v. White, 932 So. 2d 434 (Fla. 4th DCA 2006), stated, “If the judgment lien begins to reach its statutorily defined time limit, the judgment creditor may file for an extension pursuant to section 55.10(2). The logical result of filing an extension is that the life of the original judgment lien is extended. By extending the judgment lien’s life, the judgment creditor maintains the judgment lien’s priority over any liens recorded after its original date of recording and also over any liens recorded after its date of extension. A different outcome is produced if the judgment creditor allows the judgment lien to lapse without filing for an extension. In that case, the judgment lien ceases to exist. The judgment creditor may choose to rerecord the judgment at a later time, but a new judgment lien is created and takes no priority over liens already recorded. Like a child that wanders out of a queue, the newly rerecorded judgment lien has lost its place and must go to the back and stand behind all previously recorded judgment liens.” See also Sun Glow Const., Inc. v. Cypress Recovery Corp., 47 So. 3d 371 (Fla. 5th DCA 2010)
Though not supported by the plain language of the statute, the Franklin decision provides for a more equitable treatment of a judgment creditor who has not been able to satisfy his judgment during the first 10 years of the lien’s life. Pursuant to Franklin, so long as the lien is re-recorded prior to the expiration of the initial 10 year life of the lien, then the lien shall continue to take priority over any subsequently recorded lien. This makes sense, as it rewards the diligent creditor, who monitors the status of his lien, and does not allow it to expire.
Resultantly, if you receive a money judgment in Florida and record a lien against the opposing party’s real property, it is crucial to be aware of when the lien expires and, if the judgment has not been satisfied prior to the lien’s expiration, to re-record the lien prior to the expiration of the lien’s initial 10-year life, so as to ensure that you do not lose your priority vis-à-vis any subsequent creditors.
[1] But, note that Florida law provides broad protections for homestead property, which includes a bar against judgment liens attaching to one’s homestead.