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According to a Florida district court of appeal, both confirmed and unconfirmed arbitration awards are subject to garnishment, because all such awards are final at the time they are rendered.
In Capital Factors, Inc. v. Alba Rent-A-Car, Inc., No. 4D06-4330, 2007 WL 2428538 (Fla. Dist. Ct. App. Aug. 29, 2007), Alba and Avalon arbitrated deceptive trade practice and breach of contract disputes, resulting in an award entered in favor of Alba. Capital, which had an uncollected judgment in its favor against Alba from an unrelated lawsuit, sought to garnish Alba’s award from Avalon. Avalon and Alba argued that the award was not garnishable, because the award had only been rendered and not confirmed by the court.
After being served with notice of the garnishment attempt, Alba and Avalon entered into a settlement agreement and withdrew the confirmation-related actions. However, the parties did not move to dissolve Capital’s action for garnishment within the statutory 20 day time period. Later, Capital was denied garnishment by the trial court, which held that the award was not subject to garnishment because it was not confirmed.
On appeal, the Court reversed, finding that both confirmed and unconfirmed awards are subject to garnishment under Florida law. The Court noted that an arbitration award, regardless of any subsequent actions for vacatur or modification, is binding and conclusive at the time it is rendered, just as a court’s judgment would be as a result of litigation. This binding effect of an arbitration award, stated the Court, did not come from the subsequent judicial confirmation or enforcement of the award, but from the power of the arbitrator under the agreement to render a decision.
According to the Court, once the arbitrator’s findings are released and the award is rendered, the award is a final adjudication by agreement and must be treated as a court judgment would be for the purposes of garnishment. Therefore, in this case, Alba’s award was final when it was rendered, regardless of whether it was later confirmed, and was subject to Capital’s garnishment at that time.
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