Molina v. Watkins, No. 3D98-1747

• Decision Date: 14 August 2002
• Docket Number: No. 3D98-2053., No. 3D98-1747
• Citation: 824 So.2d 959
• Parties: Ronald MOLINA, Financial Capital of America, Inc., and Silver Pines Partners, Ltd., Appellants, v. Floyd WATKINS, Appellee.
• Court: Florida District Court of Appeals

824 So.2d 959

Ronald MOLINA, Financial Capital of America, Inc., and Silver Pines Partners, Ltd., Appellants, v. Floyd WATKINS, Appellee.

Nos. 3D98-1747, 3D98-2053.

District Court of Appeal of Florida, Third District.

August 14, 2002.

Ronald Molina; Alan K. Marcus, Miami, for appellants.

Weiss, Serota, Helfman, Pastoriza & Guedes, P.A., and Jamie A. Cole, and Matthew H. Mandel (Ft.Lauderdale), for appellee.

Before COPE, GREEN, and RAMIREZ, JJ.

GREEN, J.

This is a consolidated appeal, brought by Ronald R. Molina, individually, and his company, Financial Capital of America, Inc. ("FCA"), from two separate judgments entered in favor of Floyd Watkins on a counterclaim. FCA's judgment was entered pursuant to an ore tenus motion for default made by Watkins just prior to the start of trial when FCA's counsel was permitted to withdraw. Molina's judgment was entered pursuant to a jury verdict. For the reasons which follow we reverse both judgments, but remand with instructions that the trial court enter an interlocutory order in favor of FCA and against Watkins for counts 1, 2 and 6 of Watkins' counterclaim and convert Molina's judgment into an interlocutory order until such time as the trial court disposes of all other remaining issues against Molina in this case.

I

According to the operative pleadings, Molina filed suit against Watkins for tortious interference and defamation. Watkins filed a twelve count countersuit against Molina individually and against his company, FCA, for: (1) violation of Florida Securities and Investor Protection Act; (2) common law fraud; (3) breach of fiduciary duty; (4) civil remedies for criminal practices act (witness tampering in violation of sections 914.22-914.23); (5) civil remedies for criminal practices act (perjury in violation of chapter 837); (6) racketeering (securities fraud in violation of chapter 517); (7) malicious prosecution; (8) abuse of process; (9) defamation; (10) civil forfeiture and other injunctive relief; (11) injunctive relief to protect against racketeering (witness tampering in violation of sections 914.22-914.23); and (12) civil theft. All parties demanded a jury trial on all counts.

Prior to trial, the court entered summary judgment in favor of Watkins on the tortious interference count and entered summary judgment in favor of Molina (but not FCA) on count 12 (civil theft claim) of Watkins' counterclaim. The trial court sua sponte ordered the severance of count 4 (civil remedies for criminal practices act) and count 5 (civil remedies for criminal practices act) of Watkins' counterclaim from the plenary trial, pursuant to Rule 1.270(b) of the Florida Rules of Civil Procedure. The case was then scheduled for jury trial on the remaining counts of the complaint and counterclaim.

On the first day of trial, FCA's legal counsel failed to appear and Molina appeared pro se. Molina orally represented to the trial court, as FCA's president, that FCA's legal counsel had planned to appear and make a motion to withdraw. Molina on behalf of FCA, voiced no objection to this proposed withdrawal and indicated to the court that FCA had no funds to retain new counsel. The trial court permitted the withdrawal of FCA's counsel. Watkins then made an ore tenus motion for default against FCA since a corporate entity could not represent itself at trial and Molina was not an attorney.¹ Molina objected and requested that no judgment be entered against FCA until the close of the evidence at trial. The trial court, however, granted Watkins' ore tenus motion for default against FCA as to counts 1, 2, 3, 6, 7 and 8 of the counterclaim.²

In its purported default judgment against FCA, the trial court reserved ruling on Watkins' count 3 (breach of fiduciary duty); count 7 (malicious prosecution); and count 8 (abuse of process). The court also stated in this judgment that "[n]othing contained herein shall prejudice counts 3, 4, 10 and 11 of Watkins' counterclaims." No order has been entered by the lower court on these issues.

Since Watkins was seeking liquidated damages in counts 1, 2, and 6 of the counterclaim against FCA, the trial court included such liquidated amounts including pre-judgment interest in the final default judgment. However, because Watkins sought unliquidated damages in counts 3, 7 and 8, FCA's default judgment did not include damages for those counts which presumably were to be determined at trial. No evidence of such damages was adduced at the trial below by Watkins and the trial court never made any written rulings as to damages for counts 9, 10, 11 and 12 of the counterclaim. In fact, this case proceeded to jury trial solely on Molina's count for defamation against Watkins and counts 1, 2, 3 and 6 of Watkins' counterclaim against Molina.³

The jury returned its verdict in favor of Watkins on Molina's defamation claim. As to the counterclaim, the jury returned its verdict in favor of Watkins and against Molina for count 3 (breach of fiduciary duty); but in favor of Molina and against Watkins for count 1 (securities fraud); count II (common law fraud); and count 6 (securities fraud pursuant to the civil remedies for criminal practices act). A purported final judgment was entered against Molina pursuant to this jury verdict wherein execution was to issue. However, in this judgment, the court reserved for separate trial the severed counts 4 and 5 of the counterclaim pertaining to the civil remedies for criminal practices act relating to witness tampering, in violation of sections 914.22 and 914.23 and the civil remedies for criminal practices act relating to perjury, in violation of chapter 837. The court also reserved ruling on count 10 of the counterclaim relating to civil forfeiture and other injunctive relief. FCA and Molina filed separate appeals. Their respective appeals have been consolidated for purposes of our review.

II FCA JUDGMENT

On this appeal, FCA raises three issues. First, FCA asserts that the trial court abused its discretion when it entered a default judgment against FCA pursuant to Watkins' ore tenus motion where all parties had demanded a jury trial on all issues and where FCA had no prior notice of Watkins' ore tenus motion for default. FCA next contends that, in any event, the default judgment for counts 1, 2, and 6 of the counterclaim cannot stand where Watkins sought to impose liability against FCA as a result of Molina's conduct and Molina was exonerated by the jury on these counts in the trial court. Finally, FCA maintains that the purported final default judgment cannot stand where it did not dispose of all of the pending issues between the parties.

As to the first issue, we agree that the trial court abused its discretion when it entered a final default judgment against FCA prior to submitting any issues to the jury where all parties had demanded a jury trial and no party had withdrawn its demand. See, e.g., Turner Properties, Inc. v. Marchetta, 607 So.2d 506, 507 (Fla. 3d DCA 1992) (non-appearance by defendants does not relieve plaintiff of its obligation to introduce evidence on liability, and is not basis for entry of default); Cluett v. Krystyniak, 532 So.2d 739, 739 (Fla. 2d DCA 1988) (trial court erred in entering default judgment where the pleadings set forth disputed issues regarding liability and there was no evidence before court prior to its determination of liability); Ortiz v. Nicolaides, 196 So.2d 186, 187 (Fla. 3d DCA 1967) (trial court abused its discretion in entering default against defendant as to liability upon failure of defendant or counsel to appear at trial). Moreover, the entry of this final default judgment was an abuse of discretion where FCA received no prior notice of Watkins' ore tenus application for default pursuant to Rule 1.500(h), Fla. R. Civ. P.⁴See Maranto v. Dearborn, 687 So.2d 940, 941 (Fla. 3d DCA 1997) (holding that "[a]ny default entered in violation of the due process notice requirement of Rule 1.500 [, Fla. R. Civ. P.] must be set aside without any regard as to whether a meritorious defense is presented or excusable neglect is established.").

Rule 1.500(b) makes clear that if a defendant such as FCA has filed or served any paper in the action, that "party shall be served with notice of the application for default." See State, Dep't. of Rev. v. Thurmond, 721 So.2d 827 (Fla. 3d DCA 1998) (judgment entered without notice to a party is void abinitio); Dep't. of Transp. v. Mastrangelo, 691 So.2d 643 (Fla. 5th DCA 1997) (order of default improper where defendant, who had filed papers in action, had not been served with notice of default). See also International Energy Corp. v. Hackett, 687 So.2d 941, 943 (Fla. 3d DCA 1997) quoting Clearvalle, Inc. v. Cohen, 561 So.2d 1354 (Fla. 4th DCA 1990) (stating that "failure to produce proof of service of the required notice of application for default alone renders the entry of a default judgment erroneous."). Absent extraordinary circumstances, an ore tenus motion made in open court does not constitute prior notice of default judgment, even when the party is present. See, e.g., Iteka International v. Hinson, 671 So.2d 204 (Fla. 4th DCA 1996). As the Iteka court explained, "[a]bsent extraordinary circumstances, proper notice should include written notice served a reasonable time before the time specified for the hearing." Id. at 206, quoting, Ingaglio v. Ennis, 443 So.2d 459, 460 (Fla. 4th DCA 1984). Here, as in Iteka, no extraordinary circumstances justified Watkins' failure to file and serve a written motion for default against FCA pursuant to Rule 1.500(b), Fla. R. Civ. P. We therefore...