County Nat. Bank of North Miami Beach v. Sheridan, Inc.

• Court: Florida District Court of Appeals
• Writing for the Court: ANSTEAD
• Citation: County Nat. Bank of North Miami Beach v. Sheridan, Inc., 403 So.2d 502 (Fla. App. 1981)
• Decision Date: 26 August 1981
• Docket Number: No. 80-1690,80-1690
• Parties: COUNTY NATIONAL BANK OF NORTH MIAMI BEACH, Appellant, v. SHERIDAN, INC., a Foreign Corporation, and William H. Blacker, Appellee.

Page 502

403 So.2d 502

COUNTY NATIONAL BANK OF NORTH MIAMI BEACH, Appellant, v. SHERIDAN, INC., a Foreign Corporation, and William H. Blacker, Appellee.

No. 80-1690.

District Court of Appeal of Florida, Fourth District.

Aug. 26, 1981.

Craig D. Savage of Mamber, Epstein & Savage, North Miami Beach, for appellant.

Stephen J. McDonald of Hodges, Gossett, McDonald & Gossett, P.A., Hollywood, for appellee Sheridan, Inc.

ANSTEAD, Judge.

This is an appeal from an order denying appellant's motion to vacate a final judgment entered upon a default. At issue is whether the default should have been set aside.

The facts are not in dispute. In 1977, Sheridan, Inc. obtained a final summary judgment against William H. Blacker in the amount of $2,873.36. On May 6, 1980, Sheridan filed a motion for the issuance of a writ of garnishment after judgment, seeking to levy upon funds maintained by Blacker in a bank account at County National Bank of North Miami Beach. The writ issued and was served on the Bank on May 15, 1980; however, the Bank failed to appear or serve an answer. A default was entered against the Bank on June 10, 1980 and a final judgment in garnishment was entered on June 18, 1980 in the full amount of the Blacker judgment, $2,873.76.

The Bank received a copy of the judgment on June 23, 1980, and on June 30, 1980, served a sworn motion to set aside the final judgment in garnishment along with supporting affidavits and exhibits, and an answer. The motion and answer averred that the Bank had a meritorious defense to the writ with regard to any funds in excess of $274.09, since that was the balance in Blacker's account at the time the writ of garnishment was served, and further alleged that its failure to respond to the writ was caused by mistake and excusable neglect. The affidavits and exhibits attached to the motion revealed that the Bank, after receiving service on May 15th, immediately transferred Mr. Blacker's funds in the amount of $274.09 then on hand into a garnishment escrow fund and notified the office of the Bank's attorney of the proceedings the next day. On May 19th or 20th, the secretary of 20 years to the Bank's attorney picked up the writ shortly before lunch and temporarily placed it into an unlabeled file until she could prepare a new file upon her return from lunch. However, during lunch the secretary became ill; her illness prevented her from returning to work until May 27th, when she became involved in preparing for a complicated real estate closing and forgot to open a file and calendar the garnishment papers. The Bank's attorney did not actually learn of the writ until June 23, 1980, when a copy of the final judgment was received.

We must first observe that we believe the case law on the subject of vacating default judgments appears to be in a state of hopeless confusion. In the first instance trial courts are advised that they should follow a policy of liberality in exercising their discretion to vacate default judgments. On the other hand appellate courts are advised that they must find a gross abuse of discretion by the trial court before disturbing its ruling on a motion to vacate. Both of these principles are set out in the case of North Shore Hospital, Inc. v. Barber, 143 So.2d 849 (Fla.1962), the case most frequently cited in subsequent appellate opinions on this subject. Most appellate courts are naturally reluctant to announce that a trial court has "grossly" abused its discretion even though it may be clear that the trial court did not apply a policy of "liberality" in considering the motion to vacate. Hence, there is a great deal of straining apparent in appellate opinions holding that the trial court erred in refusing to set aside a default. Our views are not unlike those expressed by Judge Ott in the case of Garcia Insurance Agency, Inc. v. Diaz, 351 So.2d 1137 (Fla. 2d DCA 1977) although we are not as certain as he that the seemingly competing concepts of "liberality" and "gross abuse of discretion" are always consistent with sound decision making in this area.

Initially, we must review the trial court's action to determine if the appropriate standard for determining motions to vacate default judgments was followed. In Clark v. Roberto's, Inc., 320 So.2d 870 (Fla. 4th DCA 1975), we held that a defendant is entitled to relief from a default if he can demonstrate that his neglect to respond was excusable and that he had a meritorious defense:

It has long been the policy of the courts in this state to liberally set aside defaults for failure of a defendant to plead so as to allow a determination of the controversy on the merits when the defendant demonstrates that his neglect was excusable and that he has a meritorious defense.... However, the absence of either of these elements will defeat an attempt to set aside a default.

At 871.

Later cases suggest a third element should be considered, that of due diligence on the part of the defendant in seeking relief upon learning of the default. Garcia Insurance Agency, Inc. v. Diaz, supra.

It is undisputed here that the Bank has a meritorious defense since it has established by sworn affidavit that the judgment debtor Blacker had only $274.09 in the bank at the time the writ of garnishment was served, whereas the amount sought to be collected and for which a garnishment judgment was entered was $2,873.76.

The issue of mistake or excusable neglect is not as easy. It is undisputed that the mistake and neglect was principally that of the secretary for the Bank's attorney. She failed to set up a file and calendar the garnishment proceedings for a proper response. Her excuse was that she was ill. That too is undisputed. Under all the circumstances presented we believe the Bank's neglect in failing to respond was excusable. In Travelers Insurance...