Paladin Properties v. Family Inv. Enter., 2D06-4208.

• Decision Date: 09 February 2007
• Docket Number: No. 2D06-4208.,2D06-4208.
• Citation: 952 So.2d 560
• Parties: PALADIN PROPERTIES, a Florida corporation, Appellant, v. FAMILY INVESTMENT ENTERPRISES, a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

952 So.2d 560

PALADIN PROPERTIES, a Florida corporation, Appellant, v. FAMILY INVESTMENT ENTERPRISES, a Florida corporation, Appellee.

No. 2D06-4208.

District Court of Appeal of Florida, Second District.

February 9, 2007.

Rehearing Denied April 11, 2007.

Lauriane Ciccarelli of Troiano & Roberts, PA, Lakeland, for Appellant.

Ricardo Santander of Stephen H. Artman, P.A., Lakeland, for Appellee.

STRINGER, Judge.

Paladin Properties appeals from the trial court's order that set aside a default judgment entered against Family Investment Enterprises in an action grounded on a promissory note. Because we agree with Paladin that the trial court abused its discretion in setting aside the default judgment, we reverse and remand for reinstatement of the default judgment.

In 2002, Paladin and Family Investment entered into a lease agreement pursuant to which Family Investment leased three suites in a commercial property from Paladin. In 2004, Family Investment stopped making the required monthly payments under the lease agreement. As a result, the parties negotiated a new lease agreement that allowed Family Investment to lease a single suite in the same commercial property at a reduced lease rate. As part of that same transaction, Paladin obtained a promissory note signed by James T. Newton, one of Family Investment's principals, to secure payment of the deficiency that was due from Family Investment under the original lease agreement.

In 2005, Family Investment allegedly stopped making the payments due under the promissory note. Paladin sued Family Investment for breach of the promissory note and attached to its complaint the original lease agreement, the new lease agreement, and the promissory note. Family Investment did not respond to the complaint, and the clerk entered a default against Family Investment on August 18, 2005. Paladin then filed a motion for default judgment against Family Investment based on the monetary terms of the promissory note. On September 15, 2005, after a hearing, the trial court entered a default judgment against Family Investment for the amounts due under the promissory note. Several months later, on January 10, 2006, Paladin obtained an amended default judgment that corrected some minor errors in the original default judgment. Both the original default judgment and the amended default judgment were rendered by Judge Jacobsen.

On January 27, 2006, Family Investment filed its first notice of appearance in the case and filed a motion for rehearing under Florida Rule of Civil Procedure 1.530 directed to the amended final judgment. Paladin filed an objection to the motion; however, neither party set the motion for hearing. Instead, on March 1, 2006, Family Investment filed a motion to set aside the default judgment pursuant to Florida Rule of Civil Procedure 1.540(b). In its motion, Family Investment alleged that the default judgment had been entered by mistake because the promissory note was not signed by Family Investment but rather by James T. Newton in his individual capacity. Thus, Family Investment contended that Paladin had sued and obtained a default judgment against the wrong defendant and that this was a "mistake" that was correctable under rule 1.540(b). A hearing on the motion to set aside the default judgment was set for August 17, 2006.

At some point between January 10, 2006, and August 17, 2006, the original trial judge, Judge Jacobsen, had been reassigned to a different division within the Tenth Judicial Circuit. Thus, the hearing on Family Investment's motion to set aside the default judgment was heard by a successor judge, Judge Maloney. At that hearing, Family Investment argued that Judge Jacobsen had entered the default judgment based on a mistake of fact. Family Investment contended that Paladin had misrepresented to Judge Jacobsen that Family Investment was the maker of the promissory note when, in fact, it was James T. Newton. Family Investment argued that this "mistake" could be corrected by a motion pursuant to rule 1.540(b). Paladin argued that it had not made any misrepresentations; that Judge Jacobsen had reviewed the file, including the leases and the note, before ruling; and that the default judgment was not entered based on a mistake of fact. Paladin also argued that even if an error had been made, it was a judicial error that could not be corrected under rule 1.540(b) but that should have been corrected by way of appeal. Judge Maloney found that Judge Jacobsen had made a mistake and set aside the default judgment based on that finding. Paladin then brought this appeal, raising two grounds for reversal.

Paladin first contends that the successor trial judge, Judge Maloney, erred in considering Family Investment's motion because it should have been heard by the original trial judge, Judge Jacobsen. We disagree.

The Florida Supreme Court has held that a successor judge may revisit a final judgment entered by a predecessor judge when there is a motion filed pursuant to Florida Rule of Civil Procedure 1.540. Tingle v. Dade County Bd. of County Comm'rs, 245 So.2d 76, 77-78 (Fla.1971). This is so "because a legally sufficient rule 1.540 motion by definition entails matters which (at least ordinarily) were not presented to, or considered by, the predecessor judge." Batista v. Batista, 553 So.2d 1281, 1282 (Fla. 3d DCA 1989). Essentially, the successor judge is not reconsidering the merits of the predecessor judge's rulings but is instead ruling "on the appropriateness of setting aside that judgment under Rule 1.540." Powers v. ITT Fin. Servs. Corp., 662 So.2d 1343, 1345 (Fla. 5th DCA 1995).

Here, Family Investment's motion to set aside the default judgment is exactly the type of motion that the supreme court has explicitly held may be considered by a successor judge. Accordingly, Judge Maloney did not err in considering Family Investment's motion.

Paladin next contends that Judge Maloney abused his discretion in setting aside the default judgment based on Judge Jacobsen's alleged "mistake" in entering the default judgment. On this point, we agree.

Rule 1.540(b) permits the trial court to relieve a party from a final judgment on several grounds, including mistake or inadvertence. Schrank v. State Farm Mut. Auto. Ins. Co., 438 So.2d 410, 412 (Fla. 4th DCA 1983). The rule envisions an honest mistake made during the regular course of litigation, including those that result from oversight, neglect, or accident. Id.; see also Pompano Atlantis Condo. Ass'n v. Merlino, 415 So.2d 153, 154 (Fla. 4th DCA 1982). However, the rule does not include providing a party with relief from judicial errors. Pompano Atlantis Condo. Ass'n, 415 So.2d at 154; In re Estate of Beeman, 391 So.2d 276, 280 (Fla. 4th DCA 1980). Instead, judicial errors must be corrected by way of an appeal. Estate of Beeman, 391 So.2d at 280.

In defining what constitutes "judicial error," the Fourth District explained:

The key factor is whether or not the court reached a decision in the intentional or purposeful exercise of its judicial function. If the pronouncement reflects a deliberate choice on the part of the court, the act is judicial; errors of this nature are to be cured by appeal.

Id. at 281. Thus, in Estate of Beeman, the court reversed an order vacating an award of attorney's fees which had allegedly been "mistakenly" entered after the trial court...