Florida Senate - 2020                        COMMITTEE AMENDMENT
       Bill No. SB 660
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  02/04/2020           .                                

       The Committee on Commerce and Tourism (Berman) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete lines 237 - 636
    4  and insert:
    5         (4)This chapter does not displace any existing rule of
    6  procedural or judicial administration of this state governing
    7  service or notice, including, without limitation, Rule 1.070,
    8  Florida Rules of Civil Procedure, and Rule 2.525, Florida Rules
    9  of Judicial Administration, which shall remain in full force and
   10  effect.
   11         714.04Scope; exclusions.—
   12         (1)This chapter applies to a receivership initiated in a
   13  court of this state for an interest in real property and any
   14  incidental personal property related to or used in operating the
   15  real property.
   16         (2)This chapter does not apply to:
   17         (a)Actions in which a state agency or officer is expressly
   18  authorized by statute to seek or obtain the appointment of a
   19  receiver;
   20         (b)Actions authorized by or commenced under federal law;
   21         (c)Real property improved by one or two dwelling units
   22  which includes the homestead of an individual owner or an
   23  affiliate of an individual owner;
   24         (d)Property of an individual exempt from forced sale,
   25  execution, or seizure under the laws of this state; or
   26         (e)Personal property of an individual which is used
   27  primarily for personal, family, or household purposes.
   28         (3)This chapter does not limit the authority of a court to
   29  appoint a receiver under the laws of this state other than this
   30  chapter.
   31         (4)This chapter does not limit an individual’s homestead
   32  rights under the laws of this state or federal law.
   33         (5)Unless displaced by a particular provision of this
   34  chapter, the principles of law and equity, including the law
   35  relative to capacity to contract, principal and agent, estoppel,
   36  laches, fraud, misrepresentation, duress, coercion, mistake,
   37  bankruptcy, or other validating or invalidating cause,
   38  supplement this chapter.
   39         714.05Power of the court.—The court that appoints a
   40  receiver under this chapter has exclusive jurisdiction to direct
   41  the receiver and determine any controversy related to the
   42  receivership or receivership property.
   43         714.06Appointment of receiver.—
   44         (1)The court may appoint a receiver:
   45         (a)Before judgment, to protect a party that demonstrates
   46  an apparent right, title, or interest in real property that is
   47  the subject of the action, if the property or its revenue
   48  producing potential:
   49         1.Is being subjected to or is in danger of waste, loss,
   50  substantial diminution in value, dissipation, or impairment; or
   51         2.Has been or is about to be the subject of a voidable
   52  transaction;
   53         (b)After judgment:
   54         1.To carry the judgment into effect; or
   55         2.To preserve nonexempt real property pending appeal or
   56  when an execution has been returned unsatisfied and the owner
   57  refuses to apply the property in satisfaction of the judgment;
   58         (c)In an action in which a receiver for real property may
   59  be appointed on equitable grounds, subject to the requirements
   60  of paragraphs (a) and (b); or
   61         (d)During the time allowed for redemption, to preserve
   62  real property sold in an execution or foreclosure sale and
   63  secure its rents to the person entitled to the rents.
   64         (2)In connection with the foreclosure or other enforcement
   65  of a mortgage, the court shall consider the following facts and
   66  circumstances, together with any other relevant facts, in
   67  deciding whether to appoint a receiver for the mortgaged
   68  property:
   69         (a)Appointment is necessary to protect the property from
   70  waste, loss, substantial diminution in value, transfer,
   71  dissipation, or impairment;
   72         (b)The mortgagor agreed in a signed record to the
   73  appointment of a receiver on default;
   74         (c)The owner agreed, after default and in a signed record,
   75  to appointment of a receiver;
   76         (d)The property and any other collateral held by the
   77  mortgagee are not sufficient to satisfy the secured obligation;
   78         (e)The owner fails to turn over to the mortgagee proceeds
   79  or rents the mortgagee was entitled to collect; or
   80         (f)The holder of a subordinate lien obtains appointment of
   81  a receiver for the property.
   82         (3)The court may condition the appointment of a receiver
   83  without prior notice or hearing under s. 714.03 on the giving of
   84  security by the person seeking the appointment for the payment
   85  of damages, reasonable attorney fees, and costs incurred or
   86  suffered by any person if the court later concludes that the
   87  appointment was not justified. If the court later concludes that
   88  the appointment was justified and the order of appointment of
   89  the receiver becomes final and no longer subject to appeal, the
   90  court shall release the bond or other security. When any order
   91  appointing a receiver or providing for injunctive relief is
   92  issued on the pleading of a municipality or the state, or any
   93  officer, agency, or political subdivision thereof, the court may
   94  require or dispense with a bond, with or without surety, and
   95  conditioned in the same manner, having due regard for public
   96  interest.
   97         (4)A party adversely affected by an order appointing a
   98  receiver may move to dissolve or modify the order at any time.
   99  If a party moves to dissolve or modify the order, the motion
  100  must be heard within 5 days after the movant applies for a
  101  hearing on the motion or at such time as the court determines is
  102  reasonable and appropriate under the circumstances after the
  103  movant applies for a hearing on the motion. After notice and a
  104  hearing, the court may grant relief for cause shown.
  105         714.07Disqualification from appointment as receiver;
  106  disclosure of interest.—
  107         (1)The court may not appoint a person as receiver unless
  108  the person submits to the court a statement under penalty of
  109  perjury that the person is not disqualified.
  110         (2)Except as otherwise provided in subsection (3), a
  111  person is disqualified from appointment as receiver if the
  112  person:
  113         (a)Is an affiliate of a party;
  114         (b)Has an interest materially adverse to an interest of a
  115  party;
  116         (c)Has a material financial interest in the outcome of the
  117  action, other than compensation the court may allow the
  118  receiver;
  119         (d)Has a debtor-creditor relationship with a party; or
  120         (e)Holds an equity interest in a party, other than a
  121  noncontrolling interest in a publicly traded company.
  122         (3)A person is not disqualified from appointment as
  123  receiver solely because the person:
  124         (a)Was appointed receiver or is owed compensation in an
  125  unrelated matter involving a party or was engaged by a party in
  126  a matter unrelated to the receivership;
  127         (b)Is an individual obligated to a party on a debt that is
  128  not in default and was incurred primarily for personal, family,
  129  or household purposes; or
  130         (c)Maintains with a party a deposit account, as defined in
  131  s. 679.1021.
  132         (4)A person seeking appointment of a receiver may nominate
  133  a person to serve as receiver, but the court is not bound by the
  134  nomination.
  135         714.08Receiver’s bond; alternative security.—
  136         (1)Except as otherwise provided in subsection (2), a
  137  receiver shall post with the court a bond that:
  138         (a)Is conditioned on the faithful discharge of the
  139  receiver’s duties;
  140         (b)Has one or more sureties approved by the court;
  141         (c)Is in an amount the court specifies; and
  142         (d)Is effective as of the date of the receiver’s
  143  appointment.
  144         (2)The court may approve the receiver posting an
  145  alternative security with the court, such as a letter of credit
  146  or deposit of funds. The receiver may not use receivership
  147  property as alternative security. Interest that accrues on
  148  deposited funds must be paid to the receiver upon the receiver’s
  149  discharge.
  150         (3)The court may authorize a receiver to act before the
  151  receiver posts the bond or alternative security required by this
  152  section if the action is necessary to prevent or mitigate
  153  immediate injury, loss, or damage to the party who sought the
  154  appointment of the receiver, or immediate waste, dissipation,
  155  impairment, or substantial diminution in value to the
  156  receivership property.
  157         (4)A claim against a receiver’s bond or alternative
  158  security must be made not later than 1 year after the date the
  159  receiver is discharged.
  160         714.09Status of receiver as lien creditor.—Upon
  161  appointment of a receiver, the receiver has the status of a lien
  162  creditor under:
  163         (1)Chapter 679 as to receivership property or fixtures;
  164  and
  165         (2)Chapter 695 as to receivership property that is real
  166  property.
  167         714.10Security agreement covering after-acquired
  168  property.—Except as otherwise provided by law other than this
  169  chapter, property that a receiver or an owner acquires after
  170  appointment of the receiver is subject to a security agreement
  171  entered into before the appointment to the same extent as if the
  172  court had not appointed the receiver.
  173         714.11Collection and turnover of receivership property.—
  174         (1)Unless the court orders otherwise, on demand by a
  175  receiver:
  176         (a)A person that owes a debt that is receivership property
  177  and is matured or payable on demand or on order shall pay the
  178  debt to or on the order of the receiver, except to the extent
  179  the debt is subject to setoff or recoupment; and
  180         (b)Subject to subsection (3), a person that has
  181  possession, custody, or control of receivership property shall
  182  turn the property over to the receiver.
  183         (2)A person that has notice of the appointment of a
  184  receiver and owes a debt that is receivership property may not
  185  satisfy the debt by payment to the owner.
  186         (3)If a creditor has possession, custody, or control of
  187  receivership property and the validity, perfection, or priority
  188  of the creditor’s lien on the property depends on the creditor’s
  189  possession, custody, or control, the creditor may retain
  190  possession, custody, or control until the court orders adequate
  191  protection of the creditor’s lien.
  192         (4)Unless a bona fide dispute exists about a receiver’s
  193  right to possession, custody, or control of receivership
  194  property, the court may sanction as civil contempt a person’s
  195  failure to turn the property over when required by this section.
  196         714.12Powers and duties of receiver.—
  197         (1)Except as limited by court order or the laws of this
  198  state other than this chapter, a receiver may:
  199         (a)Collect, control, manage, conserve, and protect
  200  receivership property;
  201         (b)Operate a business constituting receivership property,
  202  including preservation, use, sale, lease, license, exchange,
  203  collection, or disposition of the property in the ordinary
  204  course of business;
  205         (c)In the ordinary course of business, incur unsecured
  206  debt and pay expenses incidental to the receiver’s preservation,
  207  use, sale, lease, license, exchange, collection, or disposition
  208  of receivership property;
  209         (d)Assert a right, claim, cause of action, or defense of
  210  the owner which relates to receivership property;
  211         (e)Seek and obtain instruction from the court concerning
  212  receivership property, exercise of the receiver’s powers, and
  213  performance of the receiver’s duties;
  214         (f)Upon subpoena, compel a person to submit to examination
  215  under oath, or to produce and permit inspection and copying of
  216  designated records or tangible things, with respect to
  217  receivership property or any other matter that may affect
  218  administration of the receivership;
  219         (g)Engage a professional pursuant to s. 714.15;
  220         (h)Apply to a court of another state for appointment as
  221  ancillary receiver with respect to receivership property located
  222  in that state; and
  223         (i)Exercise any power conferred by court order, this
  224  chapter, or the laws of this state other than this chapter.
  225         (2)With court approval, a receiver may:
  226         (a)Incur debt for the use or benefit of receivership
  227  property other than in the ordinary course of business;
  228         (b)Make improvements to receivership property;
  229         (c)Use or transfer receivership property other than in the
  230  ordinary course of business pursuant to s. 714.16;
  231         (d)Adopt or reject an executory contract of the owner
  232  pursuant to s. 714.17;
  233         (e)Pay compensation to the receiver pursuant to s. 714.21,
  234  and to each professional engaged by the receiver under s.
  235  714.15;
  236         (f)Recommend allowance or disallowance of a claim of a
  237  creditor pursuant to s. 714.20; and
  238         (g)Make a distribution of receivership property pursuant
  239  to s. 714.20.
  240         (3)A receiver shall:
  241         (a)Prepare and retain appropriate business records,
  242  including a record of each receipt, disbursement, and
  243  disposition of receivership property;
  244         (b)Account for receivership property, including the
  245  proceeds of a sale, lease, license, exchange, collection, or
  246  other disposition of the property;
  247         (c)File with the recording office of the county in which
  248  the real property is located a copy of the order appointing the
  249  receiver and, if a legal description of the real property is not
  250  included in the order, the legal description;
  251         (d)Disclose to the court any fact arising during the
  252  receivership which would disqualify the receiver under s.
  253  714.07; and
  254         (e)Perform any duty imposed by court order, this chapter,
  255  or the laws of this state other than this chapter.
  256         (4)The powers and duties of a receiver may be expanded,
  257  modified, or limited by court order.
  258         714.13Duties of owner.—
  259         (1)An owner shall:
  260         (a)Assist and cooperate with the receiver in the
  261  administration of the receivership and the discharge of the
  262  receiver’s duties;
  263         (b)Preserve and turn over to the receiver all receivership
  264  property in the owner’s possession, custody, or control;
  265         (c)Identify all records and other information relating to
  266  the receivership property, including a password, authorization,
  267  or other information needed to obtain or maintain access to or
  268  control of the receivership property, and make available to the
  269  receiver the records and information in the owner’s possession,
  270  custody, or control;
  271         (d)Upon subpoena, submit to examination under oath by the
  272  receiver concerning the acts, conduct, property, liabilities,
  273  and financial condition of the owner or any matter relating to
  274  the receivership property or the receivership; and
  275         (e)Perform any duty imposed by court order, this chapter,
  276  or the laws of this state other than this chapter.
  277         (2)If an owner is a person other than an individual, this
  278  section applies to each officer, director, manager, member,
  279  partner, trustee, or other person exercising or having the power
  280  to exercise control over the affairs of the owner.
  281         (3)If a person knowingly fails to perform a duty imposed
  282  by this section, the court may:
  283         (a)Award the receiver actual damages caused by the
  284  person’s failure, reasonable attorney fees, and costs; and
  285         (b)Sanction the failure as civil contempt.
  286         714.14Stay; injunction.—
  287         (1)Except as otherwise provided in subsection (5), after
  288  notice and opportunity for a hearing, the court may enter an
  289  order providing for a stay, applicable to all persons, of any
  290  act, action, or proceeding:
  291         (a)To obtain possession of, exercise control over, or
  292  enforce a judgment against all or a portion of the receivership
  293  property as defined in the order creating the stay; and
  294         (b)To enforce a lien against all or a portion of the
  295  receivership property to the extent the lien secures a claim
  296  against the owner which arose before entry of the order.
  298  The court shall include in its order a specific description of
  299  the receivership property subject to the stay, and shall include
  300  the following language in the title of the order: “Order Staying
  301  Certain Actions to Enforce Claims against Receivership
  302  Property.”
  303         (2)Except as otherwise provided in subsection (5), the
  304  court may enjoin an act, action, or proceeding against or
  305  relating to receivership property if the injunction is necessary
  306  to protect against misappropriation of, or waste relating
  307  directly to, the receivership property.
  308         (3)If the court grants injunctive relief, the injunction
  309  must specify the reasons for entry and must describe in
  310  reasonable detail the act or acts restrained without reference
  311  to a pleading or other document. The injunction is binding on
  312  the parties to the action; on the parties’ officers, agents,
  313  servants, employees, and attorneys; and on any person who
  314  receives actual notice of the injunction and is in active
  315  concert or participation with the parties.
  316         (4)A person whose act, action, or proceeding is stayed or
  317  enjoined under this section, or who is otherwise adversely
  318  affected by such stay or injunction, may apply to the court for
  319  relief from the stay or injunction. If a person moves for such
  320  relief, the motion must be heard within 5 days after the movant
  321  applies for a hearing on the motion or at such time as the court
  322  determines is reasonable and appropriate under the circumstances
  323  after the movant applies for a hearing on the motion. After
  324  notice and a hearing, the court may grant relief for cause
  325  shown.
  326         (5)An order under subsection (1) or subsection (2) does
  327  not operate as a stay or injunction of:
  328         (a)Any act, action, or proceeding to foreclose or
  329  otherwise enforce a mortgage by the person seeking appointment
  330  of the receiver;
  331         (b)Any act, action, or proceeding to perfect, or maintain
  332  or continue the perfection of, an interest in receivership
  333  property;
  334         (c)Commencement or continuation of a criminal proceeding;
  335         (d)Commencement or continuation of an action or
  336  proceeding, or enforcement of a judgment other than a money
  337  judgment, in an action or proceeding by a governmental unit to
  338  enforce its police or regulatory power; or
  339         (e)Establishment by a governmental unit of a tax liability
  340  against the receivership property or the owner of such
  341  receivership property, or an appeal of any such liability.
  342         (6)The court may void an act that violates a stay or
  343  injunction under this section.
  344         (7)The scope of the receivership property subject to the
  345  stay under subsection (1) may be modified upon request of the
  346  receiver or other person, after notice and an opportunity for a
  347  hearing.
  348         (8)In connection with the entry of an order under
  349  subsection (1) or subsection (2), the court shall determine
  350  whether an additional bond or alternative security will be
  351  required as a condition to entry of the stay or injunction and,
  352  if required, direct the party requesting the stay or injunction
  353  to post a bond or alternative security as a condition for the
  354  stay or injunction to become effective.
  355         714.15Engagement and compensation of professional.—
  356         (1)With court approval, a receiver may engage an attorney,
  357  an accountant, an appraiser, an auctioneer, a broker, or another
  358  professional to assist the receiver in performing a duty or
  359  exercising a power of the receiver. The receiver shall disclose
  360  to the court:
  361         (a)The identity and qualifications of the professional;
  362         (b)The scope and nature of the proposed engagement;
  363         (c)Any potential conflict of interest; and
  364         (d)The proposed compensation.
  365         (2)A person is not disqualified from engagement under this
  366  section solely because of the person’s engagement by,
  367  representation of, or other relationship with the receiver, a
  368  creditor, or a party. This chapter does not prevent the receiver
  369  from serving in the receivership as an attorney, an accountant,
  370  an auctioneer, or a broker when authorized by law.
  371         (3)A receiver or professional engaged under subsection (1)
  372  shall file with the court an itemized statement of the time
  373  spent, work performed, and billing rate of each person that
  374  performed the work and an itemized list of expenses. The
  375  receiver shall pay the amount approved by the court.
  376         714.16Use or transfer of receivership property not in
  377  ordinary course of business.—
  378         (1)For the purposes of this section, the term “good faith”
  379  means honesty in fact and the observance of reasonable
  380  commercial standards of fair dealing.
  381         (2)Before judgment is entered with respect to the
  382  receivership property in the action in which the receiver is
  383  appointed, with court approval after notice to all parties with
  384  an interest in the property, including all lienholders, and a
  385  hearing, a receiver may use or transfer by sale, lease, license,
  386  exchange, or other disposition receivership property other than
  387  in the ordinary course of business only if the owner of the
  388  property:
  389         (a)After the commencement of the action in which the
  390  receiver is appointed, expressly consents in writing to the
  391  receiver’s proposed use or transfer of the receivership
  392  property, and the receiver notes the property owner’s express
  393  consent in the motion to approve the proposed use or transfer;
  394  or
  395         (b)Before or at the hearing on the receiver’s motion to
  396  approve the use or transfer of the receivership property, fails
  397  to object thereto after the receiver in good faith has provided
  398  reasonable advance written notice to the property owner of the
  399  proposed use or transfer, and the receiver demonstrates in the
  400  motion that the proposed use or transfer is necessary to prevent
  401  waste, loss, substantial diminution in value, dissipation, or
  402  impairment of the property or its revenue-producing potential or
  403  to prevent a voidable transaction involving the property.
  405  Service of notice to lienholders who are not parties to the
  406  action must be made as provided in chapter 48 for service of
  407  original process or, in the case of a financial institution
  408  lienholder, as provided in s. 655.0201. If service cannot be
  409  effectuated in such manner, upon authorization by court order,
  410  the receiver may effect service of notice on the nonparty
  411  lienholder pursuant to chapter 49 or as otherwise ordered by the
  412  court.
  413         (3)After judgment is entered against the property owner
  414  and with court approval in the action in which the receiver is
  415  appointed, a receiver may use or transfer
  417  ================= T I T L E  A M E N D M E N T ================
  418  And the title is amended as follows:
  419         Delete lines 8 - 47
  420  and insert:
  421         for certain court orders; providing construction and
  422         applicability; specifying that a court has exclusive
  423         jurisdiction to direct receivers and determine
  424         controversies under certain circumstances; providing
  425         requirements and authorizations relating to the
  426         appointment of a receiver; authorizing certain parties
  427         to move to dissolve or modify certain orders;
  428         requiring that such motions be heard within a
  429         specified timeframe; specifying when a person is or is
  430         not disqualified from appointment as a receiver;
  431         authorizing certain persons to nominate someone to
  432         serve as a receiver; specifying that the court is not
  433         bound by such nomination; requiring a receiver to post
  434         a bond with the court which meets certain
  435         requirements; providing an exception; prohibiting a
  436         claim against a receiver’s bond or alternative
  437         security from being made after a certain time;
  438         providing that an appointed receiver has certain
  439         statuses of a lien creditor; providing that certain
  440         property is subject to specified security agreements;
  441         providing requirements relating to the collection and
  442         turnover of receivership property; providing for
  443         powers and duties of a receiver; authorizing the court
  444         to expand, modify, or limit such powers and duties;
  445         providing for duties of an owner; authorizing a court
  446         to take certain actions if a person knowingly fails to
  447         perform a duty; authorizing a court to take certain
  448         actions relating to stays and injunctions; authorizing
  449         certain persons to apply for relief from a stay or
  450         injunction; requiring that certain motions be heard
  451         within a specified timeframe; specifying when an order
  452         does not operate as a stay or injunction; authorizing
  453         receivers to engage and compensate certain
  454         professionals under certain circumstances; requiring
  455         certain persons to file an itemized statement with the
  456         court; requiring a receiver to pay an amount approved
  457         by the court; defining the term “good faith”;
  458         authorizing a receiver to use or transfer receivership
  459         property other than in the ordinary course of business
  460         under certain circumstances; providing for the service
  461         of notice to lienholders who are not parties to the
  462         action;