Eastman v. Flor-Ohio, Ltd.

• Decision Date: 17 September 1999
• Docket Number: No. 98-920.,98-920.
• Citation: 744 So.2d 499
• Parties: David D. EASTMAN, et al., Appellants, v. FLOR-OHIO, LTD., etc., Appellee.
• Court: Florida District Court of Appeals

744 So.2d 499

David D. EASTMAN, et al., Appellants, v.FLOR-OHIO, LTD., etc., Appellee.

No. 98-920.

District Court of Appeal of Florida, Fifth District.

September 17, 1999.

Clarification Denied October 28, 1999.

Sharon Lee Stedman of Sharon Lee Stedman, P.A., Orlando, and James W. Smith of Smith, Schoder & Roddenberry, P.A., Daytona Beach, for Appellants.

Arnold R. Ginsberg of Ginsberg & Schwartz and Nance, Cacciatore, et al., Miami, for Appellee.

ON MOTION FOR REHEARING

ANTOON, C.J.

Upon review of appellant's motion for rehearing of the July 2, 1999 opinion of this court, we withdraw the same and issue the following corrected opinion.In all other respects, the motion for rehearing is denied.

In this negligence action, a jury found Attorney David D. Eastman and his firm, Parker, Skelding, Labasky & Corry, P.A.(the law firm), liable to Flor-Ohio, Ltd.(the park owner) for legal malpractice.The law firm appeals the final judgment arguing the trial court erred in 1) denying its motion for summary judgment based on the theory that the park owner had abandoned its cause of action for legal malpractice by voluntarily dismissing its appeal in an earlier related case, 2) not admitting into evidence a settlement agreement, and 3) denying its motion for a new trial.We affirm.

The park owner owns and operates a mobile home community known as The Lakes of Melbourne.Residents of the community own their mobile homes but pay the park owner rent for the lots upon which the homes are located.In 1988, the park owner hired the law firm to effectuate rental rate increases on its lots.The law firm assigned the project to one of its associates, Attorney Eastman, who prepared rate increase notices effective May 1, 1989.Attorney Eastman sent the notices to the park owner's resident manager for distribution.Again in 1990, 1991, and 1992, Attorney Eastman prepared rate increase notices for the park owner and sent the notices to the park owner's resident manager for distribution.

In October 1989, the board of directors of The Lakes of Melbourne Homeowners' Association(homeowners' association) complained to the park owner's resident manager that the board had not received notice of the May 1, 1989 rent increase.Thereafter, individual home owners filed a class action lawsuit against the park owner seeking reimbursement for the increased rent which had been paid.The complaint alleged that, although the resident manager mailed the notices to the home owners, the manager did not send a notice to the board of directors of the homeowners' association as required by Florida law.¹

Upon motion filed by the home owners, the trial court entered summary judgment against the park owner, finding that the park owner had failed to comply with the notice requirement of section 723.037(1).The court ruled that the "notice of increase in lot rental amount was unlawful and invalid."The park owner timely appealed the summary judgment order and retained new counsel.

After the appeal was filed, the park owner entered into a settlement with the home owners.Upon execution of a settlement agreement, the park owner voluntarily dismissed its pending appeal.

The park owner thereafter filed this negligence action against the law firm alleging legal malpractice in relation to the home owners' class action suit.The complaint alleged that the law firm was negligent in failing to prepare the notice of rental increases in compliance with the requirements set forth in section 723.037(1), Florida Statutes, and that the law firm's negligence caused the park owner damage including lost rents, past and future, to which it would have otherwise been entitled.

The law firm filed a pretrial motion for summary judgment arguing that, as a matter of law, judgment should be entered in its favor because the park owner could not establish its claim of legal malpractice because its appeal in the underlying class action suit had been voluntarily dismissed.More specifically, the law firm argued that the park owner had abandoned its legal malpractice claim by voluntarily dismissing its appeal.After considering argument of counsel, the trial court denied the motion on appeal; the law firm challenges that ruling.

The issue of whether a party's voluntary dismissal of an appeal involving a related case constitutes an abandonment of that party's subsequent action for legal malpractice based upon allegations of negligence occurring in the related case was considered by the third district in Pennsylvania Insurance Guaranty Association v. Sikes,590 So.2d 1051(Fla. 3d DCA1991).In Sikes, an insurance company sued its trial counsel for legal malpractice alleging that counsel had been negligent in defending the company in a related personal injury lawsuit.In the personal injury lawsuit, the trial court had determined that the insurance company's pleadings were inadequate and the court denied the company's motion to amend its pleadings.The matter proceeded to trial and a verdict was later returned against the insurance company.Of particular importance to our discussion is the fact that, after the adverse judgment was entered against the insurance company, the company immediately retained new counsel and appealed the final judgment.The claims of error raised in the appeal related to whether the trial court erred in ruling on the adequacy of the insurance company's pleadings.However, before the appeal was perfected, the insurance company settled the underlying personal injury lawsuit and voluntarily dismissed the pending appeal.

Thereafter, the insurance company sued its trial counsel for malpractice, alleging that the attorney had negligently prepared the pleadings in the personal injury lawsuit.To support this claim, the insurance company relied upon the trial court's ruling that the pleadings were inadequate.Trial counsel moved for summary judgment alleging that the insurance company could not prevail on its claim for legal malpractice because, by voluntarily dismissing its appeal in the personal injury lawsuit, the company had deprived the appellate court of the opportunity to decide whether the trial court had erred in ruling on the adequacy of the pleadings drafted by counsel.The trial court agreed and entered summary judgment in favor of trial counsel.Upon review, the third district affirmed the summary judgment, holding "on the facts of this case ... the [insurance company's] settlement of the underlying personal injury case, while the appeal was pending, constituted an abandonment of any claim that [the insurance company's] loss resulted from legal malpractice rather than judicial error."Id. at 1053.Importantly, the third district noted that "in all likelihood, there would have been a reversal of the judgment" entered in the personal injury case because the trial court had erred in finding that the defensive pleadings were inadequate.Id. at 1053.The court then explained its theory of abandonment by noting that the error which lead to the entry of judgment against the insurance company in the personal injury suit "was judicial error rather than legal malpractice."Id. at 1052.Notably, the third district cautiously based its ruling "on the facts of this case," thereby emphasizing that this theory of abandonment must be narrowly applied on a case by case basis.

A close reading of the Sikes opinion reveals that the third district recognized that the vital element presented by the facts in that case was that the alleged error upon which the insurance company's entire claim of legal malpractice was based (i.e., the trial court's finding that defensive pleadings filed by trial counsel were inadequate) turned out to be an error made by the trial court which would have been corrected had the appeal not been dismissed.This fact was vital to the success of trial counsel's abandonment theory because it was clear to the third district that, had the insurance company prosecuted its appeal in the personal injury lawsuit, reversal of the judgment entered against the insurance company would have been required because the trial court had erred in ruling that the insurance company's pleadings were inadequate.In so ruling, the third district specifically concluded that the insurance company's trial counsel had not been negligent in drafting the pleadings.We agree with the third district that this concept of abandonment can be applied only in limited circumstances where facts similar to those which existed in Sikes are presented.See alsoSegall v. Segall,632 So.2d 76(Fla. 3d DCA1993)(affirming the court's refusal to establish a bright line rule requiring complete appellate review as a condition precedent for pursuit of a subsequent legal malpractice action, and admonishing that not every legal malpractice plaintiff is required to prosecute an appeal of the underlying action to conclusion before asserting a claim for legal malpractice.)

Other courts have recognized and discussed the limited application of this abandonment theory.SeeCoble v. Aronson,647 So.2d 968(Fla. 4th DCA1994), rev. denied sub nom.Fine, Jacobson, Schwartz, Nash, Block & England, P.A. v. Coble,659 So.2d 1086(Fla.1995);see alsoRoger Zitrin, M.D., P.A. v. Glaser,621 So.2d 748(Fla. 4th DCA1993).In Lenahan v. Russell L. Forkey, P.A.,702 So.2d 610, 611(Fla. 4th DCA1997), the fourth district joined the third district in declining to articulate a bright line test for application of the abandonment rule, pointing out that only in "very narrow" circumstances should it be applied as a matter of law.See alsoParker v. Graham & James,715 So.2d 1047(Fla. 3d DCA1998).

Applying this case law to the instant facts, we note first that the law firm invites this court to depart from the historically narrow application of the abandonment theory and adopt a bright line rule that, as a condition precedent to the filing of an action for legal malpractice based upon allegedly negligent...