E. Ave., LLC v. Insignia Bank

• Decision Date: 17 January 2014
• Docket Number: No. 2D12–94.,2D12–94.
• Citation: 136 So.3d 659
• Parties: EAST AVENUE, LLC, Sarasota Land.com, Inc., and Mark Pierce, Appellants, v. INSIGNIA BANK, Appellee.
• Court: Florida District Court of Appeals

136 So.3d 659

EAST AVENUE, LLC, Sarasota Land.com, Inc., and Mark Pierce, Appellants,

v.INSIGNIA BANK, Appellee.

No. 2D12–94.

District Court of Appeal of Florida,

Second District.

Jan. 17, 2014.

John H. Myers, Sarasota, for Appellants.

Derrick Maginness of Norton, Hammersley, Lopez & Skokos, P.A., Sarasota, for Appellee.

NORTHCUTT, Judge.

We treat this appeal as a proceeding seeking a writ of certiorari, and we grant the writ. As we will explain, the brevity of this ruling belies the complexity of the issues that underlie it.

In this case East Avenue, LLC; Sarasota Land.com., Inc.; and Mark Pierce (collectively referred to as East Avenue) have attempted to appeal an amended summary final judgment for damages entered against them on three counts of a multiple-count complaint. But they are named as defendants in factually and legally interrelated counts that remain pending in the circuit court. For this reason, under traditional rules of finality the judgment at hand is not final or appealable. See S.L.T. Warehouse v. Webb, 304 So.2d 97 (Fla.1974).

That much is fairly straightforward. The wrinkle here is that the judgment contains language authorizing execution. Thus, strict application of the S.L.T. Warehouse finality criteria would leave East Avenue exposed to enforcement of the judgment at a time when it cannot obtain review of it and, importantly, it cannot shield its assets from execution by posting an appellate supersedeas bond. This kind of circumstance has been addressed in a small body of district court case law that variously espouses three distinct approaches to it. Added to this mix are two Florida Supreme Court decisions that, while not directly resolving the issue, are intertwined with it.

The first of the pertinent supreme court cases is McGurn v. Scott, 596 So.2d 1042 (Fla.1992), receded from in part, Westgate Miami Beach, Ltd. v. Newport Operating Corp., 55 So.3d 567 (Fla.2010). In that case the trial court entered a money judgment that was final in all respects save for a reservation of jurisdiction to determine prejudgment interest. The First District dismissed the appeal for lack of jurisdiction because the judgment was not final for appellate purposes. McGurn v. Scott, 573 So.2d 414 (Fla. 1st DCA 1991).

The supreme court acknowledged that the trial court could not enter a final damages judgment while reserving jurisdiction to adjudicate prejudgment interest. McGurn, 596 So.2d at 1044. But it disagreed with the First District's decision to dismiss the appeal. “The judgment's appearance as a final order upon which execution could have issued placed McGurn in a procedural quandary,” the court wrote. Id. “If the judgment were considered an interlocutory order, McGurn would be unable to exercise his right to both an appeal and a supersedeas to stay the enforcement of the judgment. Yet, the order granted Scott the right to let execution issue against McGurn's property.” McGurn, 596 So.2d at 1044–45.

Further, the court observed, if McGurn had not appealed the order when he did, he might have lost the opportunity to do so at a later date. This observation was based on Third District holdings that a nonfinal order that has “the attributes of a ‘true’ final judgment” is “deemed to have taken on the characteristic of such a judgment” and requires review by immediate appeal. 596 So.2d at 1045 (quoting Del Castillo v. Ralor Pharmacy, Inc., 512 So.2d 315, 319 (Fla. 3d DCA 1987), and citing Pointer Oil Co. v. Butler Aviation of Miami, Inc., 293 So.2d 389 (Fla. 3d DCA 1974)). Ultimately, the supreme court held that because the order in McGurn “appeared final in most respects and stated that execution could issue,” it would be “deemed a final order requiring review by immediate appeal.” 596 So.2d at 1045.

The supreme court revisited McGurn in Westgate Miami Beach, Ltd. v. Newport Operating Corp., 55 So.3d 567 (Fla.2010). The Westgate court receded from McGurn's holding that trial courts could not enter final judgments while reserving jurisdiction to award prejudgment interest. Henceforth, trial courts could properly reserve jurisdiction to determine prejudgment interest in the same manner as they could reserve jurisdiction to award attorney's fees and costs. However, “[b]ecause of the procedural quandary recognized in McGurn,” the court expressly declined to recede from McGurn's treatment of a judgment that authorizes execution but reserves jurisdiction to award prejudgment interest as a final appealable order. 55 So.3d at 575.

When announcing its decision, the Westgate court noted that it had considered other options. One of them was to treat an appeal from an otherwise final judgment that reserved jurisdiction on the prejudgment interest issue as a premature appeal under Florida Rule of Appellate Procedure 9.110( l ). ¹ But the court rejected this option for several reasons, including that under this approach the defendant still could be left in the position of being precluded from obtaining review while unable to protect its assets from execution. The court also rejected this solution because “the district courts are in disagreement as to whether an appeal from a judgment that authorizes execution upon a defendant's assets can be considered premature for purposes of appeal.” 55 So.3d at 575–76 (footnote omitted).

The cases cited by the supreme court in the footnote we omitted above are a microcosm of three districts' differing views about the reviewability of such orders. See Westgate, 55 So.3d at 576 n. 10. Thus, in Raymond James & Associates, Inc. v. Godshall, 851 So.2d 879, 880–81 (Fla. 1st DCA 2003), the First District dismissed as premature the appeal of a judgment that authorized execution while reserving jurisdiction to adjudicate the plaintiff's related claim for additional damages. The court rejected the appellant's assertion that such an order should be “deemed final” under McGurn because, it said, McGurn was limited to review of orders reserving jurisdiction to award prejudgment interest. Godshall, 851 So.2d at 880;see also Conti v. B & E Holdings, LLC, 61 So.3d 1272 (Fla. 1st DCA 2011); Couch v. Tropical Breeze Resort Ass'n, 867 So.2d 1219 (Fla. 1st DCA 2004).

Notably, the First District's treatment of these orders as nonfinal and nonappealable leaves the hapless appellant in the very quandary that the supreme court endeavored to rectify in McGurn and Westgate: the appellant is unable to obtain review or a supersedeas of the order while the judgment creditor is able to pursue its collection by execution. This, certainly, was the reason for this court's observation in Lombardo v. Haige, 971 So.2d 1037, 1040 (Fla. 2d DCA 2008), that “[w]e have considerable doubt about the correctness of [the Godshall ] holding because we cannot fathom how one can wait to appeal an order upon which execution can enter.”

The Third District has pursued an altogether different course. As mentioned in the McGurn opinion, the Third District considers otherwise nonfinal judgments that are final in form to be final for purposes of invoking its appellate jurisdiction. See Del Castillo, 512 So.2d at 319. However, honoring the traditional prohibition against piecemeal review, it treats the issuance of a nonfinal order in final form as error because this forces the debtor to prematurely take an appeal—and thus to seek piecemeal review—in order to protect the debtor's rights. It summarily reverses ² the judgment insofar as it is final in form and remands with instructions to enter an interlocutory order on the issues decided to date. It leaves any appellate issues related to the merits to be determined in a later appeal from the final judgment in the case. Molina v. Watkins, 824 So.2d 959, 964 (Fla. 3d DCA 2002); see also Investacorp, Inc. v. Evans, 88 So.3d 248 (Fla. 3d DCA 2011); Hugh F. Culverhouse, Jr., P.A. v. Barth, 699 So.2d 795 (Fla. 3d DCA 1997).

This approach has much to recommend it. It permits the judgment debtor to appeal the judgment and post a supersedeas bond to protect against execution, and it avoids piecemeal review of the case. But it suffers from a significant flaw: appeals from final judgments are plenary. As such, the scope of review includes any ruling that occurred prior to the filing of the notice of appeal. Fla. R.App. P. 9.110(h). By routinely limiting its review to the offending form of the appealed orders and deferring review of the merits, the Third District effectively treats them as appealable nonfinal orders even though no such nonfinal appeal has been authorized by the supreme court in rule 9.130. Arguably, this encroaches on the supreme court's exclusive power to designate which nonfinal orders may be appealed.

More basically, it is not entirely clear whether it is proper to entertain appeals from orders that are final merely in form but not in substance. If the McGurn court had actually adopted this view as a general proposition, the jurisdictional issue before it would have been easily resolved on that basis, and there would have been no need for the Westgate court to be concerned about the district courts' disagreement over whether such an order is encompassed by the premature appeal rule. Moreover, the traditional test of finality is substantive. Especially considering that appellate jurisdiction turns on this substantive inquiry, it is questionable whether it can be evaded by a simple trick or happenstance of form.

We conclude that the most efficacious and conceptually defensible approach to orders such as these was proposed, if not fully explored, in our Lombardo decision. 971 So.2d 1037.Lombardo was filed as a second-tier certiorari proceeding, but we treated it as one seeking mandamus to compel reinstatement of a circuit court appeal that had been incorrectly dismissed as untimely. Id. at 1039. The county court order that was the subject of the appeal was an executable judgment for attorney's fees and costs entered prior to the final judgment in the case. We...