American Eastern Corp. v. Henry Blanton, Inc., 79-1264

• Citation: 382 So.2d 863
• Decision Date: 23 April 1980
• Docket Number: No. 79-1264,79-1264
• Parties: AMERICAN EASTERN CORPORATION, Appellant, v. HENRY BLANTON, INC., a Florida corporation, Richard R. Madden, an individual, Henry H. Blanton, an individual, and GIHLS Properties, Inc., a corporation, Appellees.
• Court: Court of Appeal of Florida (US)

Page 863

382 So.2d 863

AMERICAN EASTERN CORPORATION, Appellant, v. HENRY BLANTON, INC., a Florida corporation, Richard R. Madden, an individual, Henry H. Blanton, an individual, and GIHLS Properties, Inc., a corporation, Appellees.

No. 79-1264.

District Court of Appeal of Florida, Second District.

April 23, 1980.

George H. Bailey of Jones, Paine & Foster, West Palm Beach, for appellant.

Stephen D. Hughes, Largo, for appellees, Henry Blanton, Inc., Henry H. Blanton, and Gihls Properties, Inc.

Harold N. Hume, Jr. of Allen, Knudsen, Swartz, DeBoest, Rhoads & Edwards, Fort Myers, for appellee, Richard R. Madden.

SCHEB, Judge.

The trial court dismissed American Eastern Corporation's case for lack of prosecution. The court found that no record activity had occurred for one year prior to the defendants' filing their motion to dismiss, and that American Eastern had failed to show good cause why its case should not be dismissed. American Eastern appeals contending that it did show good cause under Florida Rule of Civil Procedure 1.420(e), and that, therefore, the court erred in dismissing its cause of action. We agree and reverse.

On October 23, 1975, American Eastern sued to collect on a promissory note. It sought $216,000 plus interest, attorney's fees and court costs. During the course of the litigation, American Eastern moved for summary judgment but, on July 27, 1976, before the motion was heard, the parties filed a stipulation for judgment. The defendants agreed that they were liable to American Eastern for $216,000 plus interest at seven and one-half percent per annum from March 1, 1974, together with reasonable attorney's fees and costs. They further agreed to pay their total indebtedness no later than August 1, 1976, with the proviso that American Eastern's attorney's fees and costs would be determined by agreement and that failing agreement, the court would fix them. Finally, the stipulation provided that if the defendants did not discharge their obligation by August 1, 1976, American Eastern could have a judgment entered against the defendants upon notice to their counsel.

On April 10, 1979, the defendants moved to dismiss American Eastern's action for failure to prosecute on the ground that there had been no record activity since February 11, 1977. American Eastern filed affidavits of its two attorneys along with a memorandum citing the stipulation for judgment and subsequent activities between the parties as grounds for denying the defendants' motion. Nevertheless, on June 12, 1979, the trial court dismissed the case under Rule 1.420(e).

Rule 1.420(e), as amended effective January 1, 1977, states:

All actions in which it appears on the face of the record that no activity by filing of pleadings, order of court or otherwise has occurred for a period of one year shall be dismissed by the court on its own motion or on motion of any interested person, whether a party to the action or not, after reasonable notice to the parties, unless a party shows good cause in writing, at least five days before the hearing on the motion, why the action should remain pending. Mere inaction for a period of less than one year shall not be sufficient cause for dismissal for failure to prosecute.

Counsel for the parties indicate that the trial court's dismissal was based upon its perception that Rule 1.420(e), as construed by this court in Sainer Constructors, Inc. v. Pasco County School Board, 349 So.2d 1212 (Fla. 2d DCA 1977), precluded American Eastern from establishing good cause by nonrecord activity. It follows that the court did not consider the facts as stated in American Eastern's affidavits as basis to establish good cause.

In Sainer we stated that Rule 1.420(e), as amended, requires that activity must appear "on the face of the record" to save a cause from dismissal. Nevertheless, the thrust of our ruling was that the amendment operated prospectively only. Thus, we held that nonrecord activity could constitute good cause where it occurred prior to the effective date of the amendment. In dicta, however, we added, "Non-record activity as defined in the decisional law construing the former rule can no longer be good cause to avoid dismissal for lack of prosecution." 349 So.2d at 1214.

The Fourth District Court of Appeal chose not to follow this statement in F. M. C. Corp. v. Chatman, 368 So.2d 1307 (Fla. 4th DCA 1979). There the court said that "to do so would render the excerpt from the rule '. . . unless a party shows good cause . . . .' mere surplusage." Id. at 1308. We agree with our sister court and now recede from our dicta in Sainer. ¹

Nevertheless, the amendment to Rule 1.420(e) must not be disregarded. Its purpose was to eliminate most nonrecord activity of the type recognized prior to the amendment as a basis to establish good cause to avoid a dismissal for lack of prosecution. ² Consequently, the standard in determining whether particular nonrecord activity constitutes good cause must be set high, ³ and a party must now show a compelling reason to avoid dismissal where there has been no record activity. For example, the party might show estoppel, as in the present case, or a calamity preventing record activity.

We now turn to the affidavits filed by American Eastern in its attempt to avoid dismissal by a showing of good cause. According to these affidavits the defendants did not make payment in full by August 1, 1976, as they agreed to under the stipulation. There were a series of contacts between counsel for the parties with defendants requesting American Eastern to defer taking judgment to give them time to raise the funds. Then on November 24, 1976, when the defendants still had not paid, American Eastern moved for entry of judgment on the basis of the stipulation. Once again, it postponed action at the defendants' request to give them additional time to resolve their financial problems. During 1977 the defendants paid a total of $160,000 on the stipulated obligation. In February 1978 American Eastern informed them that if the balance remained unpaid on May 5 it would insist on entry of judgment. Again, the defendants secured a delay, their counsel...