Cottrell v. Taylor, Bean & Whitaker Mortg. Corp.

• Decision Date: 08 January 2016
• Docket Number: No. 2D14–5885.,2D14–5885.
• Citation: 198 So.3d 688
• Court: Florida District Court of Appeals
• Parties: W. Justin COTTRELL; W. Justin Cottrell, as Trustee of the 1456 South Swinging Trail Land Trust dated March 4, 2013; Derrick Klump; and Kristine L. Klump, Appellants, v. TAYLOR, BEAN & WHITAKER MORTGAGE CORP., Appellee.

198 So.3d 688

W. Justin COTTRELL; W. Justin Cottrell, as Trustee of the 1456 South Swinging Trail Land Trust dated March 4, 2013; Derrick Klump; and Kristine L. Klump, Appellants,

v.TAYLOR, BEAN & WHITAKER MORTGAGE CORP., Appellee.

No. 2D14–5885.

District Court of Appeal of Florida, Second District.

Jan. 8, 2016.

Rehearing Denied Feb. 24, 2016.

Gregory J. Guidish of Cottrell Law and Title Group, Naples, for Appellants.

Owen H. Sokolof and Marjorie Levine of Clarfield, Okon, Salomone & Pincus, West Palm Beach, for Appellee.

SALARIO, Judge.

Taylor, Bean, and Whitaker Mortgage Corporation voluntarily dismissed this foreclosure action against W. Justin Cottrell and Derrick and Kristine Klump without prejudice after its law firm advised that the suit was barred by limitations. When later investigation revealed that this advice might have been wrong, Taylor Bean moved pursuant to Florida Rule of Civil Procedure 1.540(b)(1) to vacate the voluntary dismissal on grounds of mistake. Without taking evidence, the trial court granted Taylor Bean's motion, and that order is the subject of this appeal. Because the asserted error is on its face the product of a deliberate judgment by counsel, and not the type of nonjudgmental mistake to which rule 1.540(b) applies, we reverse and remand with instructions to deny the motion and to reinstate the dismissal.

I.

This is a suit on a note secured by a mortgage on real property owned, at least initially, by Mr. and Mrs. Klump. In March 2013, the Klumps established a land trust, with Mr. Cottrell—their attorney—serving as the trustee. Mr. Klump then deeded the property that is the subject of Taylor Bean's mortgage to Mr. Cottrell in his capacity as trustee of the land trust. The nature of each of the Klumps' remaining interests in the land after the deed to Mr. Cottrell, however, is not discernable from the limited appendices the parties have provided. In July 2013, Taylor Bean filed a complaint to foreclose the mortgage, naming the Klumps and Mr. Cottrell as defendants.

Sometime thereafter, Taylor Bean's law firm advised it that its foreclosure claim was potentially barred by the statute of limitations. As a result, the law firm advised Taylor Bean to voluntarily dismiss the action and reinstitute attempts to collect on the note underlying the mortgage. Pursuant to rule 1.420(a)(1), Taylor Bean filed a notice of voluntary dismissal without prejudice on August 20, 2014. That notice disposed of the case in its entirety as to all parties.

After the notice was filed, Taylor Bean learned that Mr. Klump was on active duty in the United States military and that his service may have tolled the statute of limitations in accord with the Servicemembers Civil Relief Act.¹ See 50 U.S.C. app. § 526(a) (2012) (“The period of a servicemember's military service may not be included in computing any period ... for the bringing of any action or proceeding in a court....”). In September 2014, it filed a motion under rule 1.540(b) to vacate the voluntary dismissal. This motion did not provide any reasons for the relief sought and did not contain any evidentiary support. It was denied without prejudice.

In October 2014, Taylor Bean filed a renewed motion to vacate accompanied by an affidavit from the paralegal who advised it to dismiss the action based on the potential limitations issue. Taylor Bean alleged that its law firm was not aware when it filed the dismissal notice that Mr. Klump was in the military and that, had it known, it would not have filed the document. It further alleged that the law firm did not conduct a search for the parties' military service because the case had been transferred to it from a different law firm. As legal support, the motion cited rule 1.540(b) but did not identify the specific subsection of the rule upon which it relied.

At the hearing on the motion, Taylor Bean argued that the filing of the voluntary dismissal was based upon a mistake as to Mr. Klump's military service, making it remediable under rule 1.540(b)(1). Counsel for Mr. Klump argued that the intentional filing of a voluntary dismissal was a tactical mistake that could not provide the trial court with jurisdiction to reinstate the case following the voluntary dismissal. The trial court granted the motion at the conclusion of the arguments and without taking any evidence. Mr. Cottrell and the Klumps timely filed this appeal.

II.

Mr. Cottrell and the Klumps argue both that Taylor Bean's voluntary dismissal based on the incorrect assumption that Mr. Klump had not served in the military is not cognizable under rule 1.540(b)(1) and that, at all events, they were entitled to an evidentiary hearing before the trial court ruled on the renewed motion to vacate. Both issues are pure questions of law as to which our review is de novo. See Pino v. Bank of N.Y., 121 So.3d 23, 30–31 (Fla.2013).

The supreme court has held that the filing of a notice of dismissal under rule 1.420(a)(1) immediately and finally terminates a trial court's jurisdiction over a case:

[T]he effect of a plaintiff's voluntary dismissal under rule 1.420(a)(1) is jurisdictional. The voluntary dismissal serves to terminate the litigation, to instantaneously divest the court of its jurisdiction to enter or entertain further orders that would otherwise dispose of the case on the merits, and to preclude revival of the original action.

Pino, 121 So.3d at 32. The court has recognized only one exception to the rule that a notice of dismissal terminates a trial court's jurisdiction with “absolute finality”—the existence of grounds justifying relief under rule 1.540(b). Miller v. Fortune Ins. Co.,

484 So.2d 1221, 1223 (Fla.1986) ; see also

Pino, 121 So.3d at 33–41 (identifying and rejecting other potential exceptions to the finality of a rule 1.420(a)(1) dismissal).

Because a trial court necessarily has jurisdiction to determine whether it has jurisdiction, the filing of a rule 1.540(b) motion after a case has been voluntarily dismissed vests the trial court with the limited authority to determine whether the grounds asserted by the movant justify relief under the rule. Miller, 484 So.2d at 1223–24 ; Lee & Sakahara Assocs., AIA, Inc. v. Boykin Mgmt. Co., 678 So.2d 394, 395 (Fla. 4th DCA 1996), receded from on unrelated grounds in Condo. Ass'n of La Mer Estates, Inc. v. Bank of N.Y. Mellon Corp., 137 So.3d 396 (Fla. 4th DCA 2014). Where a motion under rule 1.540(b) sets forth “a colorable entitlement to relief,” the trial court should conduct an evidentiary hearing to determine whether such relief should be granted. Chancey v. Chancey, 880 So.2d 1281, 1282 (Fla. 2d DCA 2004) ; see also Navarro v. Castro, 110 So.3d 499, 501 (Fla. 4th DCA 2013) (“[B]ecause the defendant's motion pled the existence of a ground set out under rule 1.540(b), the circuit court had jurisdiction to consider the motion and should have set an evidentiary hearing on the motion.”). It follows that where the allegations of a rule 1.540(b) motion do not give rise to a right to relief, an evidentiary hearing on those allegations is not required and the trial court's jurisdiction is limited to the entry of an order denying the motion. See generally Freemon v. Deutsche Bank Trust Co. Ams., 46 So.3d 1202, 1204 (Fla. 4th DCA 2010) (“If a motion does not set forth a basis for relief on its face, then an evidentiary hearing is unnecessary ....” (quoting Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., 20 So.3d 952, 955 (Fla. 4th DCA 2009) )).

As pertinent here, rule 1.540(b)(1) provides for relief from an improvidently filed notice of voluntary dismissal on grounds of mistake. In determining whether relief is warranted on this basis, the supreme court has distinguished between judgmental or tactical errors by a party or its counsel and other types of errors that do not involve the deliberate exercise of judgment. See Miller, 484 So.2d at 1223. Judgmental or tactical errors are not regarded as mistakes within the meaning of rule 1.540(b)(1) —and thus will not relieve a party from a voluntary dismissal—while nonjudgmental errors do qualify for relief under the rule. See id.; see also Davidson v. Lenglen Condo Ass'n, 602 So.2d 687, 688 (Fla. 4th DCA 1992) (“[T]rial courts have the jurisdiction to correct only clerical, i.e., secretarial, substantive errors in cases such as the present one. Rule 1.540(b)... may not be employed for relief from an attorney's tactical errors or judgmental mistakes or in cases of attorney miscalculation.”).

In Miller, the plaintiff in a lawsuit against an insurance company sought relief under rule 1.540(b)(1) after filing a notice of voluntary dismissal with prejudice. 484 So.2d at 1222. The motion was supported by affidavits from the plaintiff's lawyer and his secretary to the effect that the secretary erroneously drafted the notice to be “with prejudice,” notwithstanding a standard office practice to make all voluntary dismissals “without prejudice” unless otherwise instructed. Id. The supreme court held that the plaintiff was entitled to an evidentiary hearing to determine whether her allegations supported relief because “the limited jurisdiction conferred ... by rule 1.540(b) to correct errors includes the power to correct clerical substantive errors in a voluntary notice of dismissal.” Id. at 1224.

In so holding, the court distinguished its earlier decision in Randle–Eastern Ambulance Service, Inc. v. Vasta, 360 So.2d 68 (Fla.1978), which considered a plaintiff's asserted entitlement to relief under rule 1.540(b) when she learned, after taking a voluntary dismissal, that she had lost the opportunity to relitigate against the defendant. In that case, the supreme court held that relief was not appropriate in such circumstances because it was incumbent on counsel “to ascertain the need for and the consequence of a voluntary dismissal” before filing the notice and “[i]t has never been the role of the trial courts ... to relieve attorneys of their tactical mistakes.” Id. at...