Ginsberg v. Lennar Florida Holdings, Inc.

• Decision Date: 05 October 1994
• Docket Number: No. 94-363,94-363
• Citation: 645 So.2d 490
• Court: Florida District Court of Appeals
• Parties: 19 Fla. L. Weekly D2117 Morton L. GINSBERG and MLG Properties, Inc., Appellants, v. LENNAR FLORIDA HOLDINGS, INC. and MS Florida Corporation on behalf of Lennar Florida Partners I., a Limited Partnership, Appellees.

Page 490

645 So.2d 490

19 Fla. L. Weekly D2117

Morton L. GINSBERG and MLG Properties, Inc., Appellants, v.LENNAR FLORIDA HOLDINGS, INC. and MS Florida Corporation on behalf of Lennar Florida Partners I., a Limited Partnership, Appellees.

No. 94-363.

District Court of Appeal of Florida Third District.

Oct. 5, 1994.

Rehearing Denied Dec. 21, 1994.

Young, Berman & Karpf and Andrew S. Berman, North Miami Beach, for appellants.

Cadwalader, Wickersham & Taft and James W. Beasly, Jr. and Jacqueline S. Miller

and Michael C. Todd, Palm Beach, for appellees.

Before BARKDULL, HUBBART and BASKIN, JJ.

BARKDULL, Judge.

Appellant seeks review of a trial court order denying a motion to vacate a default judgment.

Appellant, Martin L. Ginsberg, is the owner and operator of, codefendant, MLG Properties, Inc., a property management firm.Mr. Ginsberg is also the general partner of two limited partnerships, Loch Lomond I Associates Limited Partnership and Community Acres Associates Limited Partnership.Each limited partnership owns an apartment complex located in Broward County, Florida.Both apartment complexes were managed by MLG Properties, Inc.In 1988 both Loch Lomond and Community Acres gave mortgages to Amerifirst Bank on their Broward County properties.Mr. Ginsberg, as general partner, signed these mortgages for each partnership respectively.

Appellees, Lennar Florida Holdings, Inc. and MS Florida Corporation are general partners of Lennar Florida Partners I Limited Partnership a real estate investment company.Lennar Florida Partners I Limited Partnership, is the mortgage holder on the Loch Lomond and Community Acres properties located in Broward County, Florida.Lennar purchased these mortgages from an agency of the Federal Government, the Resolution Trust Corporation[RTC], in July of 1992.The RTC had acquired these mortgages, in March of 1991, from the original mortgagee, Amerifirst Bank, after the RTC was appointed receiver of Amerifirst Bank by the Office of Thrift Supervision pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

In late 1991 both the Loch Lomond and Community Acres mortgages were in default, the RTC commenced foreclosure proceedings and a receiver was appointed for the properties.In November of 1992 Lennar obtained a foreclosure judgment and scheduled a foreclosure sale for January 1993.That sale was stayed when the Loch Lomond and Community Acres partnerships sought protection under the United States Bankruptcy Code, filing a Chapter 11 petition in the Southern District of New York.

In March of 1993 Lennar filed, in Dade County Circuit Court, a complaint sounding in tort against Martin L. Ginsberg and MLG Properties, Inc.On April 13, 1993 Ginsberg requested and received a ten day extension to answer Lennar's complaint.On April 27th Ginsberg had not answered and Lennar moved for a default judgment.On the 3rd of May Ginsberg moved to dismiss Lennar's complaint for failure to state a cause of action.Ginsberg's motion was granted in part on May 19th and he was ordered to file an answer within twenty days.

On May 27, 1993 Lennar filed an Amended Complaint.¹Lennar attached to the amended complaint a copy of the Assignment of Mortgage from the RTC and the mortgage documents which control the Loch Lomond and Community Acres loans.Those documents consist of a Loan Agreement, a Promissory Note, a Mortgage Note and a Collateral Assignment of Rents, Leases, and Profits.

Lennar's Amended Complaint alleged generally that Lennar was the holder of the Loch Lomond and Community Acres mortgages; that the mortgages were in default; that the RTC had notified the mortgagor's that they were in default; that the loan documents gave Lennar a right to the rents from the partnership's apartment buildings upon default; that Ginsberg and MLG had wrongfully diverted the rents to Ginsberg's personal use; that said diversion was not within the proper scope of Ginsberg's duties as general partner of either of the limited partnerships; that Ginsberg had a personal stake in the wrongdoing; and, that Lennar had complied with all conditions precedent to bringing the action.Further, Lennar's complaint alleged five specific counts.Count I alleged Conversion against Mr. Ginsberg and MLG Properties, Inc., Count II alleged Waste against MLG Properties, Inc., Count III alleged Civil Theft against Mr. Ginsberg and MLG Properties, Inc., Count IV alleged Violation of the Florida Civil Remedies for Criminal Practices Act[RICO] against Mr. Ginsberg and MLG Properties, Inc. and Count V alleged a Violation of Section 772.103(4), Florida Statutes against Mr. Ginsberg and MLG Properties, Inc.

On June 18, 1993 Lennar moved for default judgment citing Ginsberg's failure to answer the amended complaint.On June 21st Ginsberg moved to dismiss Lennar's amended complaint.On July 9th Ginsberg's counsel moved to withdraw from the case.On July 12th the trial court denied Ginsberg's motion to dismiss and ordered Ginsberg to file an answer by July 15th.On July 19th Lennar filed its third motion for default judgment.On July 22nd the court granted Ginsberg's counsel's motion to withdraw, ordered all pleading and papers to be served on Ginsberg in New York and granted Ginsberg ten days to obtain new counsel and file an answer to Lennar's amended complaint.On August 3rd Lennar filed its fourth motion for default judgment, again citing Ginsberg's failure to answer.Lennar served a copy of this motion on Ginsberg in New York.On August 16th the trial court continued a hearing, set for that day, on Lennar's motion for default.The trial court cited as grounds for the continuance a phone call from a New York attorney apparently attempting to make an appearance on behalf of Ginsberg.The trial court ordered the New York attorney to enter a written appearance and be prepared to respond in person to Lennar's motion on August 24th.At the August 24th hearing the trial court found that Ginsberg had failed to file an answer to the amended complaint and entered a default judgment against Ginsberg.Lennar then set the case for trial on damages and the case was called on December 22, 1993.On December 22nd Ginsberg appeared pro se and requested a sixty day continuance, arguing that he needed time to employ local counsel.The trial court granted that request and continued the case until February of 1994.Ginsberg hired counsel and on January 26th filed a motion to vacate the default judgment.On February 22nd the trial court held a hearing on Ginsberg's motion.Ginsberg argued that the trial court should vacate the default because there had been excusable neglect in his failure to answer the amended complaint and that Lennar's amended complaint failed to state a cause of action.The trial court denied Ginsberg's motion and this appeal followed.

Without discussion we reject Ginsberg's argument that the trial court erred in not vacating the default due to excusable neglect in answering Lennar's amended complaint.See and compareFla.R.Civ.P. 1.540(b);Otero v. G.I.E. Ins. Co., 606 So.2d 443(Fla. 2d DCA1992), review denied, 614 So.2d 502(Fla.1993);World's Finest Inc. v. Carpenter, 564 So.2d 626(Fla. 4th DCA1990);Techvend Inc. v. Phoenix Network Inc., 564 So.2d 1145(Fla. 3d DCA1990);Fischer v. Barnett Banks, 511 So.2d 1087(Fla. 3d DCA1987);Bayview Tower Condominium v. Schweizer, 475 So.2d 982(Fla. 3d DCA1985);Lacore v. Giralda Bake Shop, 407 So.2d 275(Fla. 3d DCA1981);B.C. Builders Supply Co. v. Maldonado, 405 So.2d 1345(Fla. 3d DCA1981).

A default judgment will be set aside where the complaint upon which the default was granted fails, on its face, to set forth a viable cause of action.SeeBecerra v. Equity Imports, 551 So.2d 486(Fla. 3d DCA1989);Magnificent Twelve Inc. v. Walker, 522 So.2d 1031(Fla. 3d DCA1988);Sunshine Security & Detective Agency v. Wells Fargo, 496 So.2d 246(Fla. 3d DCA1986);Fernandez-Aguirre v. Gall, 484 So.2d 1286(Fla. 3d DCA1986).

As this court explained in Becerra:

A default admits liability as claimed in the pleading by the party seeking affirmative relief against the party in default.It operates as an admission of the truth of the well plead allegations of the pleading, except those concerning damages.It does not admit facts not plead, not properly plead, or conclusions of law.Fair inferences will be made from the pleading, but forced inferences will not.The party seeking affirmative relief may not be granted relief that is not supported by the pleading or by substantive law applicable to the pleading.A party in default may rely on these limitations....

Failure to state a cause of action, unlike formal or technical deficiencies, is a fatal pleading deficiency not curable by a default judgment.The reason why a pleading deficiency is not cured by a default judgment--formerly a decree pro confesso--is that in such cases the introduction of proof is not required, and even if the allegation were accepted as true, the plaintiff would not have made a case upon which relief could be granted.

Id., at 488.

Lennar attached several documents to its amended complaint as exhibits.When a party attaches exhibits to the complaint those exhibits become part of the pleading and the court will review those exhibits accordingly.See and compareFranz Tractor v. J.I. Case, 566 So.2d 524(Fla. 2d DCA1990);Health Application Systems v. Hartford Life Ins., 381 So.2d 294(Fla. 1st DCA1980);McClurkin v. Parrish Volvo, 317 So.2d 85(Fla. 1st DCA1975).We are not bound by Lennar's interpretation of the attached exhibits.The conclusions of the pleader, as to the meaning of the exhibits attached to the complaint, are not binding on the court.SeeN.C. Brandon v. County of Pinellas, 141 So.2d 278(Fla.1962).Exhibits attached to the complaint are controlling, where the allegations of the complaint are contradicted by the exhibits, the plain meaning of the...