In Bedwell v. Rucks, 37 Fla. L. Weekly D2551a (Fla. 4DCA 2012), the Florida Fourth District Court of Appeal had to determine the proper location for lawsuit involving a fraudulent transfer claim. The Plaintiffs in this case originally brought a professional malpractice claim against an accounting firm. Thereafter the Plaintiffs brought a second claim for fraudulent transfers against the individual accountants of that accounting firm after it closed on the basis that the accountants acquired assets from their former employer. The Plaintiffs were seeking to protect their rights for collection in the event they prevailed in their malpractice claim.
Florida Fraudulent Transfers
Pursuant to Florida law, a fraudulent transfer takes place when a debtor transfers an asset to another party to avoid the collection or payment of a debt. Fraudulent transfers commonly occur during a lawsuit or immediately after a final judgment is entered against a debtor. Typically, the debtor will move assets to other companies, friends or family members so there is nothing left for the creditor to collect. The enforcement of Florida judgments is often like the peeling of an onion as one must go through many layers in order to find collectible assets. Often, the collection of a Florida judgment will include the filing of a separate lawsuit for fraudulent transfers that would name those parties that came into possesion of assets, monies or accounts of the debtor.
Florida Venue
Venue for the purposes of a lawsuit is the proper county in which a claim may be filed. A lawsuit must be filed in a county in which there is some connection to the claim. In Florida, venue is proper in a county in which the Defendant resides or where the cause of action for the claim accrued. In this case, the Plaintiffs filed their fraudulent transfer action in the same county in which they filed the professional malpractice claim against the accounting firm. The Plaintiffs argued venue was proper in that same county since that is where the damages from the malpractice claim took place. The individual accountants objected to venue in that county in that they did not reside in that county and they claimed that transfers, if any, would have taken place in a different county. The Fourth District Court of Appeal agreed and held that for the purposes of a claim for fraudulent transfers, proper venue is the county in which the alleged fraudulent transfer took place.
Related Topics: Florida Debt Collection; Florida Judgment Enforcement;
