Guideone Mut. Ins. Co. v. Resurreccion
| Decision Date | 12 August 2011 |
| Docket Number | Case Number: 11-20497-CIV-MARTINEZ-MCALILEY |
| Parties | GUIDEONE MUTUAL INSURANCE COMPANY, Plaintiff, v. IGLESIA BAUTISTA RESURRECCION, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
ORDER DENYING DEFENDANT'S MOTION TO SET ASIDE
DEFAULT FINAL JUDGMENT
THIS CAUSE came before the Court upon Defendant's Motion to Set Aside Default Final Judgment (D.E. No. 22). Defendant Iglesia Bautista Resurreccion ("Defendant") moves to set aside the default judgment, arguing that Plaintiff GuideOne Mutual Insurance Company ("Plaintiff") "had actual knowledge that Defendant was represented by counsel, [and] Plaintiff failed to forward the Notice of Service of Process, or any of the other subsequent pleadings and motions to counsel for Defendant." Id. at 2. Defendant further argues that this action was improper from the first instance, alleging that Plaintiff participated in gamesmanship by deciding to file this lawsuit when another lawsuit "aris[ing] from the same set of facts" was pending. Id. at 4. After careful consideration and for the reasons set forth below, this Court denies Defendant's motion.
On February 10, 2011, Iglesia Bautista Resurreccion, the "Defendant" in the present action, served GuideOne Mutual Insurance Company, the "Plaintiff" in the present action, with acomplaint for breach of contract in the Circuit Court for Miami-Dade County, Florida (Iglesia Bautista Resurreccion v. GuideOne Mutual Insurance Company, Case Number 10-56832 CA 10 ("Breach of Contract Action")).1 (D.E. No. 23 at 2). Defendant there alleged that Plaintiff breached its contractual duty under an insurance policy to cover losses resulting from hurricane damage to property incurred on October 24, 2005. (Case Number 11-cv-20823-Martinez, D.E. No. 1-2, Complaint in Breach of Contract Action at 3-4).
Plaintiff subsequently filed the present action for declaratory relief on February 14, 2011 ("Declaratory Action") but claims that it filed this action prior to learning that it had been served in the Breach of Contract Action on February 16, 2011. Id. Also on that day, counsel for Plaintiff sent correspondence to Robert Reynolds, Defendant's counsel in the Breach of Contract Action,2 advising Reynolds of the filing of the Declaratory Action and attaching a copy. See . Furthermore, Plaintiff's counsel stated in this letter to Reynolds that a Summons had been issued in the case and inquired if Reynolds would accept service for the Declaratory Action or if a Church officer should be served.3 See id.
On March 2, 2011, Defendant filed an amended complaint in the Declaratory Action "due to a misnomer in the original Dec [sic] Action." (D.E. No. 23 at 3); see also (D.E. No. 1,Complaint; D.E. No. 6, Amended Complaint). In its Amended Complaint, Plaintiff alleged that Defendant: (1) "failed to make any temporary repairs to the property or otherwise protect the subject property following the loss"; (2) submitted a Proof of Loss statement that "was inconsistent and contradictory"; and (3) "re-open[ed] the claim, nearly five (5) years from the date of loss . . . creat[ing] a delay which has prejudiced . . . [Plaintiff] in . . . [its] ability to handle, investigate and evaluate . . . [Defendant's] claim." (D.E. No. 6 at 9-10). On March 3, 2011, Plaintiff's counsel emailed Reynolds asking again if he would accept service of the Declaratory Action for Defendant. See (D.E. No. 23-1, Exh. C). Plaintiff's counsel also attached a copy of the Amended Complaint in the Declaratory Action and a copy of the Scheduling Order. See id.; (D.E. No. 23 at 3). Plaintiff's counsel then removed the Breach of Contract action to the United States District Court, Southern District of Florida, on March 8, 2011 (Case Number 11-cv-20823).4 (D.E. No. 23 at 3).
On March 20, 2011, Plaintiff then asked Reynolds if Defendant was served with process in the Declaratory Action, notified him that the Breach of Contract Action was removed to federal court, and inquired if he would be amenable to consolidation of the two cases. See id. Reynolds sent another email indicating that he and Defendant would not oppose removal and asked "what is the nature of the dec [sic] action." See (D.E. No. 23-1, Exh. E). In response, Plaintiff's counsel sent Reynolds another copy of the Amended Complaint in the Declaratory Action and indicated his availability to discuss this matter with Reynolds by telephone. See id.; (D.E. No. 23 at 3).
Plaintiff contends that it received no further responses as to whether Reynolds wouldaccept service of the Amended Complaint in the Declaratory Action, which it served on Defendant by mail on March 15, 2011. (D.E. No. 23 at 4; D.E. No. 6-1); see also (D.E. No. 8, Affidavit of Service). On March 21, 2011, Plaintiff's counsel sent Reynolds correspondence regarding the Declaratory Action, advising him that Defendant had been served with the Complaint for Declaratory Relief. See (D.E. No. 23-1, Exh. F). In this letter, Plaintiff's counsel again suggests the possibility of consolidation to Reynolds and also encloses a copy of the Joint Scheduling Order in the Declaratory Action, indicating its effect upon Reynolds' appearance on behalf of Defendant. See (D.E. No. 23-1, Exh. E). Plaintiff claims that Defendant did not respond to this letter. (D.E. No. 23 at 4). Following the Court's entry of default for failure to appear, answer, or otherwise plead in the Declaratory Action on April 7, 2011, Plaintiff filed a Motion for Default Final Judgment on April 25, 2011. Id. Defendant contends that Plaintiff failed to forward this motion to Defendant, as well as other pleadings. (D.E. No. 22 at 5). Plaintiff, however, directs the Court's attention to the certificate of service for this motion which indicates that Plaintiff's Motion for Default Final Judgment "was furnished by U.S. Mail and the court's CM/ECF system this 25th day of April, 2011" to Defendant and Reynolds. See (D.E. No. 23 at 4; D.E. No. 16 at 8). Plaintiff claims that in the absence of communication from Defendant, it contacted Reynolds on April 28, 2011, advising him that a Scheduling Report was due in the Breach of Contract Action, that a Clerks' Default was entered in the Declaratory Action, and that Defendant moved for entry of Default Final Judgment. Id.
On April 29, 2011, Default Final Judgment was entered against Defendant.5 On May 5,2011, Defendant filed an Answer to the Declaratory Action in which Defendant provides general denials to Plaintiff's allegations in the Amended Complaint. See (D.E. No. 18). On May 24, 2011, Defendant filed a Motion to Set Aside Final Default Judgment in the Declaratory Action. See (D.E. No. 22). Defendant argues that it failed to respond to the complaint in a timely fashion due to a "reasonable misunderstanding" that the attorneys had received copies of the pleadings and were acting on their behalf. (D.E. No. 22 at 3). In addition, Defendant alleges that the Declaratory Action is evidence of Plaintiff's gamesmanship and should have been brought as a compulsory counterclaim to the Breach of Contract Action rather than as a separate lawsuit. Id. at 3-4.
Generally, determining cases on their merits is preferred over default judgments. See Fla. Physician's Ins. Co., Inc. v. Ehlers, 8 F.3d 780, 783 (11th Cir. 1993) (citations omitted). In order to have a default judgment set aside, however, Defendant must meet certain standards. See In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003). Pursuant to Federal Rule of Civil Procedure 60(b), a district court has the power to vacate or set aside a final default judgment "whenever such action is appropriate to accomplish justice." Lender v. Unum Life Ins. Co. of America, Inc., 519 F. Supp. 2d 1217, 1223 (M.D. Fla. 2007) (citations omitted). For this reason, federal courts construe Rule 60 liberally. Id. (citation omitted). Although Defendant failed to argue its case under Rule 60(b) and instead cited Florida law, the Court will analyze Defendant's arguments under each of the relevant Rule 60(b) provisions. After careful consideration, however, the Court finds that Defendant failed to meet its burden under any of these provisions.
Rule 60(b)(1) provides that a court may vacate or set aside a final judgment for reasons of "mistake, inadvertence, surprise, or excusable neglect." Fed. R. Civ. P. 60(b)(1). "To establish mistake, inadvertence, or excusable neglect under Rule 60(b)(1), a defaulting party must show that: (1) it had a meritorious defense that might have affected the outcome; (2) granting the motion would not result in prejudice to the non-defaulting party; and (3) a good reason existed for failing to reply to the complaint. In re Worldwide Web Sys., Inc., 328 F.3d at 1295.
In order to establish a meritorious defense, the moving party "must make an affirmative showing of a defense that is likely to be successful." Id. at 1296 () (citations omitted). "To establish prejudice, the plaintiff must show that the delay will result in the loss of evidence, increased difficulties in discovery, or greater opportunities for fraud and collusion." Berthelsen v. Kane, 907 F.2d 617, 621 (6th Cir. 1990) (citing INVST Financial Group, Inc. v. Chem-Nuclear Sys. Inc., 815 F.2d 391, 398 (6th Cir. 1987), cert. denied, 484 U.S. 927 (1987)). In Rule 60(b)(1) cases, when "internal procedural safeguards are missing, a defendant does not have a 'good reason' for failing to respond to a complaint." Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 935 (11th Cir. 2007) (citations omitted). Therefore, "failure to establish minimum procedural safeguards for determining that action in response to a summons and complaint is being taken does not...
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