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Friday, February 10, 2012



            In response to legal action taken by The Pennsylvania Insurance Department, The Commonwealth Court of Pennsylvania issued an Order of Liquidation for First Sealord Surety on February 8, 2012. The Department’s actions were likely prompted by A.M. Best’s downgrading of First Sealord’s insurer ratings from an A- rating to a C- rating late last year amidst growing concerns of the company’s declining capitalization.

            This news will necessarily create significant concern throughout the construction/surety industry as surety bonds are not themselves typically re-insured against company failure. Owners whose Contractors or Subcontractors are currently bonded with First Sealord should contact them as soon as possible to arrange for substitute bonding on any ongoing projects. Contractors, Subcontractors and Materialman with potential bond rights against a First Sealord Surety bond should likewise consult with legal counsel as soon as practicable to determine what alternative lien rights they might have on any such projects and other measures that might be taken to preserve their interests and claims.  

Jose A. Rodriguez, Esq.
The Soto Law Group, P.A.

Thursday, February 9, 2012


You get an email from your lawyer to the tune of “a final judgment was entered,” to which you likely respond, great!!! So where is my money?!?! Followed by, “Got any copy of checks”?

Obtaining an order of final judgment against a customer in default only entitles you to enforce the judgment; it does not per say “give” you any money. While there are many collection methods, the typical vehicle of collection for Suppliers and Materialman are Writs of Garnishment. Florida Statutes § 77.01 provides that “every person or entity who has sued to recover a debt or has recovered judgment in any court against any person or entity has a right to a writ of garnishment . . .”

The writ can generally be issued against 3rd parties who have a monetary obligation to the defendant, typically a bank. In essence the writ of garnishment acts as a lien. Once the “lien” has attached to the debtors property (in this case a bank account), the property or money in that account is frozen until the court or parties determine who is in fact entitled to the money. Some garnishments are heavily contested, either because another creditor has laid claim to the account or the defendant themselves claims the property is exempt. In cases where another creditor is or has laid claim to the account, who served the garnishment first usually wins.

However, situations may arise where the embattled creditors will have to prove who “perfected” their rights first. In this respect the time when the final judgment was recorded may be extremely important. It is always a good idea to record your judgments, but it is an even better practice when perfecting your garnishment action. Assuming your counsel knows what banks to garnish, Writs of Garnishment are not free and getting the Bank to release the money may or may not be easy. Typically, the defendant is set for a deposition in an effort to gather information leading to possible sources of collection.

Defendants do not always appear at their deposition, making it even more difficult to collect on a judgment. However, Suppliers and Materialman can greatly increase their chance of success of enforcing a judgment by simply retaining copies of customer checks used to pay for their materials. Being able to provide your lawyer with such copies not only gives them an immediate source to garnish but can prove to be a cost saving exercise. Make it a practice to have checks received from customers stored in hard copy or scanned and e-saved to their files.

By: Jose A. Rodriguez, Esq.
The Soto Law Group, P.A.