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The Elephant Stomps a Snake: Judgment Creditor Defeats Exemption Claim


There is an old Chinese proverb stating that, “[a] man’s greed is like a snake that wants to swallow an elephant.” Charles Kane, Harley Kane, and Laura Watson are three South Florida attorneys who may have never heard of it. The trio allegedly settled a number of lawsuits without notifying their clients and another law firm that was assisting on the case(s).

As a result of their conduct, Laura Watson, who became a Broward County Circuit Judge, was removed from the bench by the Florida Supreme Court. See In re Inquiry Concerning a Judge, 174 So.3d 364 (Fla. 2015).

Charles Kane and Harley Kane (the “Kanes”) were personally sued as a result of their conduct and when a $2,000,000.00 personal judgment was entered against them, they did what a lot of debtors try in order to evade their creditors – they filed for bankruptcy. Kane v. Stewart Tingham Fox & Bianchi, P.A., 2016 Fla. App. LEXIS 11413, *2 (Fla. 4th DCA July 27, 2016).

What the Kanes failed to realize is that “the purpose of bankruptcy is to give the honest debtor a fresh start.” Since their debt arose based on alleged dishonesty, their bankruptcy case was dismissed. Once the bankruptcy case was dismissed, the judgment creditor moved for a continuing writ of garnishment on their wages at their newly formed law firm. Id. at *2-4. The Kanes contested the garnishments by stating that their earnings were exempt from garnishment pursuant to Florida’s Head of Household exemption. Id. at *3.

Under Fla. Stat. §222.11, also known as Florida’s Head of Household Statute, a debtor’s disposable earnings are exempt from garnishment if: (1) the earnings are for a certain sum and payable for personal services or labor from wages, salary, commission, or bonus; (2) the debtor provides more than one-half of the support for a child or other dependent; and (3) the debtor’s disposable earnings are less than $750.00 per week (if greater than $750.00 per week, the debtor has to execute a written waiver).

The Kanes acknowledged that they were not receiving a regular salary and were only being paid when their law firm had cash on hand. Id. at *3. Because the statute only allows wages that are for a certain sum to be exempt from garnishment, the trial court denied the Kanes’ Head of Household claim(s) and awarded the judgment creditor 25% of any disbursements made from the law firm to the Kanes.

On appeal, the appellate court agreed with the trial court and held that the “facts lead to the conclusion that the payments flowing from the firm to the Kanes were not salary, in the ordinary sense of the word, but were actually akin to shareholder distributions that were outside the scope of the exemption found in section 222.11.”

Many Florida debtors automatically believe that they are exempt from garnishment because of the Head of Household statute. Some debtors will even flaunt Head of Household to their creditors. Not all debtors qualify for Head of Household and, as in this case, it is oftentimes in a judgment creditor’s best interests to contest a Head of Household claim and force a debtor prove their entitlement.

By contesting the Kanes’ Head of Household claim(s), 25% of any disbursements made from the law firm to the Kanes will go straight to the judgment creditor. Applying the Chinese proverb to this case, it appears that the elephant may have just stomped on the snake.

To find out how the attorneys and staff at Gill Law Firm can help your company collect its unpaid receivables, please contact us via email at awgill@gillattorneys.com or by phone at (561) 454-0301.

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