Fla. Eurocars, Inc. v. Pecorak

• Decision Date: 03 April 2013
• Docket Number: No. 4D12–1211.,4D12–1211.
• Citation: 110 So.3d 513
• Parties: FLORIDA EUROCARS, INC., and Edvinas Budzinauskas, Appellants, v. T.J. PECORAK, Appellee.
• Court: Florida District Court of Appeals

110 So.3d 513

FLORIDA EUROCARS, INC., and Edvinas Budzinauskas, Appellants,

v.T.J. PECORAK, Appellee.

No. 4D12–1211.

District Court of Appeal of Florida, Fourth District.

April 3, 2013.

Patrick St. George Cousins of Cousins Law, APA, West Palm Beach, for appellants.

Steven M. Goldsmith of Steven M. Goldsmith, P.A., and Donald S. Hershman of Donald S. Hershman, P.A., Boca Raton, for appellee.

POLEN, J.

The defendants/appellants were defaulted by the clerk, and the plaintiff subsequently obtained a default final judgment. The defendants then moved to vacate the default final judgment pursuant to Florida Rule of Civil Procedure 1.540(b). This motion was denied by the trial court, which expressly found that the defendants failed to show they acted with due diligence in seeking relief from the default judgment. We reverse the trial court's order denying the defendants' motion to vacate because the record and supporting affidavits are sufficient to show the defendants acted with due diligence in seeking relief from the default judgment.

On October 6, 2011, the plaintiff served the defendants with a complaint alleging fraud, breach of contract, and violation of the Florida Deceptive and Unfair Trade Practices Act. The defendants did not file an answer or responsive pleading. The plaintiff moved for a clerk's default on October 31, 2011, which was entered on November 9, 2011. The defendants admit that they were served with the complaint on October 6, but did not respond because conversations with their out-of-state attorney led them to believe that a settlement had been reached and the matter was closed.

On November 18, 2011, the plaintiff filed a motion for final judgment. A hearing on this motion was held on December 15, 2012. The defendants did not attend the hearing because, again, they claim to have been assured by counsel that the matter was resolved.

Final judgment was entered by the court on December 20, 2011. On the same day, the defendants were advised by their out-of-state attorney that he was not permitted to practice law in Florida. The very next day, the defendants retained their current attorney to represent them in this action.

On January 31, 2012, thirty-nine days after current counsel was retained, the defendants filed a motion to vacate the default final judgment. On February 8, 2012, the plaintiff filed a response to the motion to vacate, alleging that defense counsel failed to prove due diligence because he failed to present evidence of exceptional circumstances explaining the delay in filing the motion to vacate. Thereafter, on February 10, defense counsel filed an affidavit of his own explaining the circumstances of his representation, and the extent of his involvement in the current litigation. This affidavit explained the reasons for the delay included, but were not limited to: the holiday closings of the court and counsels' offices; communications with opposing counsel seeking a resolution of the matter; checking the court docket without seeing a final judgment entered against the defendants; and preparing affidavits and an answer with affirmative defenses, while simultaneously addressing a writ of garnishment entered against the defendants.

A hearing was held on the defendants' motion to vacate the default final judgment on February 24, 2012. This hearing was not transcribed. The defendants' motion was denied on March 12, 2012, by an order expressly finding that “the affidavits do not set forth sufficient facts for this Court to conclude that the Defendants acted with due diligence to promptly move to set aside the default.” We hold that the trial court erred in making this determination.

An order denying a motion to vacate a default judgment is reviewed under an abuse of discretion standard. Mullne v. Sea–Tech Constr. Inc., 84 So.3d 1247, 1248 (Fla. 4th DCA 2012). A party moving to vacate a default final judgment must demonstrate three things: “(1) the failure to file a responsive pleading was the result of excusable neglect; (2) the moving party has a meritorious defense; and (3) the moving party acted with due diligence in seeking relief from the default.” Wells Fargo Bank, N.A. v. Jidy, 44 So.3d 162, 164 (Fla. 3d DCA 2010). In this case, the trial court expressly based its order denying the defendants' motion to vacate on the finding that the defendants failed to act with due diligence in seeking relief from the default judgment. Accordingly, the only issue to be addressed on appeal is whether the defendants demonstrated that they acted with due diligence in seeking relief from the default judgment.

In this case, there appears to be no factual dispute upon which the trial court based its decision to deny the defendants' motion. The trial court based its decision on the finding that the defendants' affidavits failed to show the defendants acted with due diligence in seeking relief from the default judgment, which is required by law in order to vacate a default final judgment. Therefore, because the trial court's ruling was made as a matter of law, our standard of review is de novo. See Mourning v. Ballast Nedam Constr. Inc., 964 So.2d 889, 892 (Fla. 4th DCA 2007) (holding that a ruling on a motion to vacate is usually reviewed under the abuse of discretion standard, but when there is no factual dispute and the trial court's ruling is a matter of law, the standard of review is de novo).

Florida's public policy on setting aside defaults is described as one that:

[F]avors the setting aside of defaults so that controversies may be decided on the merits.... In implementing this policy, if there be any reasonable doubt in the matter of vacating a default, it should be resolved in favor of granting the application and allowing a trial upon the merits.

Lloyd's Underwriter's at London v. Ruby, Inc., 801 So.2d 138, 139 (Fla. 4th DCA 2001) (internal quotation omitted). “[W]here inaction results from clerical or secretarial error, reasonable misunderstanding, a system gone awry or any other of the foibles to which human nature is heir, then upon timely application accompanied by a reasonable and credible explanation the matter should be permitted to be heard on the merits.” Latin Am. Prop. & Cas. Ins. Co. v. Italian Palace, Inc., 596 So.2d 1174, 1175 (Fla. 4th DCA 1992) (quoting Somero v. Hendry Gen. Hosp., 467 So.2d 1103, 1106 (Fla. 4th DCA 1985)).

In considering whether a party has made a “timely application” to set aside a default, courts must evaluate both the extentof the delay as well as the reasons for the delay. Roberts v. Safeway Ins. Co., 610 So.2d 700, 701 (Fla. 3d DCA 1992). Examples of justifiable reasons for a delay include: (1) miscommunications between counsel; see Apolaro v. Falcon, 566 So.2d 815, 817 (Fla. 3d DCA 1990) (holding that a delay between thirty and forty days was reasonable because “a...