Background
After obtaining a judgment, Storey Mountain, LLC sought to collect from Roberto Vinas, a guarantor of a commercial loan. During its collection efforts, Storey Mountain learned that Vinas’s wife, Martha Yee, had agreed to lend Vinas $2.5 million in exchange for a security interest in a Fisher Island condominium that they co-owned.
The transaction was documented by Vinas’s promissory note and a mortgage recognizing Yee’s lien on the condominium. Storey Mountain contended that Yee never transferred the loan proceeds to Vinas and sought supplementary proceedings, including a notice requiring Yee to appear and a $2.5 million judgment against her. The circuit court declined to issue the notice.
The Court’s Holding
The Third District affirmed. Although section 56.29 uses the word “shall,” the court held that Storey Mountain had not satisfied the statute’s other requirements for issuing a notice to appear in supplementary proceedings.
The asserted $2.5 million obligation was a debt owed to Yee, not a debt or asset owed to Vinas. Because another person’s debt is not property of the judgment debtor under section 56.29(2), it could not be targeted through the requested notice to appear.
Key Takeaways
- A judgment creditor must identify property of the judgment debtor, or a debt or obligation due to that debtor, to obtain a notice to appear under section 56.29.
- The statute’s mandatory wording does not eliminate its substantive prerequisites.
- A debt owed to a third party cannot be used as the judgment debtor’s asset in supplementary proceedings.
Why It Matters
The decision confirms that supplementary proceedings are limited to assets, debts, or obligations belonging to or owed to the judgment debtor. Creditors cannot use the procedure merely because a transaction involving a debtor may be disputed or because a third party may have failed to fund an alleged loan.