Riggins v. Rhoades
| Docket Number | 6D23-489 |
| Decision Date | 27 October 2023 |
| Parties | JOE D. RIGGINS a/k/a JOE DAVID RIGGINS and BARBARA RIGGINS a/k/a BARBARA JEAN RIGGINS, Appellants, v. CLIFFORD R. RHOADES, P.A. and CLIFFORD R. RHOADES, Appellees. |
| Court | Florida District Court of Appeals |
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF TIMELY FILED
Appeal from the Circuit Court for Highlands County. Lower Tribunal No. 2021-CA-000065 Angela J. Cowden, Judge.
Richard M. Jones and Andrew M. Feldman, of Klein Park & Lowe, P.L., Miami, for Appellees.
Kevin J. D'Espies, of D'Espies Law P.A., Sebring, for Appellants.
Joe and Barbara Riggins appeal from an order dismissing their counterclaim and third-party complaint with prejudice.[1] They advance two arguments on appeal. First, Appellants argue the trial court impermissibly considered materials outside the four corners of their pleadings when ruling on Appellees' omnibus motion to dismiss. Second, they argue the trial court erred in taking judicial notice of the final judgment entered in a separate action filed in Okeechobee County circuit court, where the parties did not stipulate to the court doing so, and where that judgment was not attached to the pleadings. As to the third-party complaint, we agree and reverse.
In 2008, Appellants retained the Appellees, Clifford R. Rhoades P.A. and attorney Clifford R. Rhoades, to prepare loan documents, in order to assist Appellants in lending money to Brenda Gay Phillips. Rhoades initially prepared a promissory note, by which Phillips borrowed $21,795.37 from Appellants. The note provided for an interest rate of 12% per year. As security for the note, Rhoades prepared a mortgage, which Phillips executed and delivered to Appellants. Rhoades later assisted the parties with several modifications of the loan documents, and, in December of 2010, the parties finally signed a "Corrective and Updated Agreement." According to that updated agreement, Phillips owed Appellants $117,359.05.
When Phillips passed away, David A. Hagen, as Personal Representative of the Estate of Brenda Gay Phillips ("the Estate"), sued Appellants in Okeechobee County circuit court alleging, inter alia, that the loan documents were usurious and unenforceable. Rhoades defended Appellants in that case. The Okeechobee court eventually entered final judgment ("the Okeechobee Judgment") in Appellants' favor. That court found, in relevant part, that the Estate was not entitled to relief on its claim that the loan documents set an unlawful interest rate and that the interest remains lawfully recoverable.
After the Okeechobee case concluded, Clifford R. Rhoades, P.A. sued Appellants, his clients in the Okeechobee action, for unpaid legal fees. Appellants responded by filing a counterclaim and third-party complaint, joining Clifford R. Rhoades individually in the suit. In their pleadings, Appellants asserted legal malpractice claims against Rhoades and his firm for failing to provide appropriate legal counsel, and for preparing usurious loan documents, in violation of the Florida Statutes. Specifically, in their pleadings, Appellants claimed Rhoades and the law firm breached their duty of care by: (a) negligently creating documents that gave the Estate a basis for filing suit; (b) failing to provide competent legal representation in response to the Estate's lawsuit; (c) failing to understand and convey to Appellants that the interest rate was usurious so that the issue could be corrected; and (d) drafting, negotiating, and advising Appellants and Phillips to execute documents, which were improperly created and resulted in subsequent litigation between the parties. Appellants sought actual damages in the form of all attorney's fees paid to, or claimed by, Rhoades and his firm for defending Appellants in the Okeechobee case, as well as all fees paid for preparing the "inappropriate" loan documents.
Notably, the Okeechobee Judgment was not attached to either the counterclaim or the third-party complaint.
In response, Rhoades and his law firm filed their Omnibus Motion to Dismiss Counterclaim and Third-Party Complaint and attached the Okeechobee Judgment as an exhibit to the motion. They argued the trial court could take judicial notice of the Okeechobee Judgment and claimed it was impliedly incorporated into Appellants' pleadings. Rhoades and the firm then urged the trial court that-because the Okeechobee Judgment declared the documents were legally enforceable- Appellants could never prove their legal malpractice claims and those claims should be dismissed. Appellants countered that the trial court could not look to matters outside the four corners of the counterclaim and third-party complaint, and, consequently, the motion to dismiss should be denied.
The trial court dismissed both the third-party complaint and the counterclaim with prejudice. In its order, the court took judicial notice of the Okeechobee Judgment and concluded the findings in that judgment-which pertained to different parties[2]-precluded Appellants' cause of action here:
The Court takes judicial notice of the Final Judgment entered on November 20, 2020 in Okeechobee County. In paragraph 14, the Final Judgment specifically found the Phillips did not meet their burden of proving the required corrupt intent on the part of Riggins for usury. In addition to this finding, the Okeechobee court found that the fact that the parties engaged in a joint venture, even if there was an otherwise unlawful rate of interest imposed, said interest remains lawfully recoverable. Lastly, the Okeechobee court found the usury claim was barred by the statute of limitations. While the Riggins argue the Phillips were not successful in their litigation against the Riggins due to the running of the statute of limitations with regard to the usury claim, a review of the entire Final Judgment reveals that it is not the only reason the Phillips were unsuccessful. For the Riggins to be successful in their claims here, this Court would have to determine that the documents Rhoades drafted were usurious. This issue was fully litigated in Okeechobee, and that court declined to make that finding. In other words, the documents were not rendered invalid by the litigation.
Appellants now appeal that order. As to the dismissal of the third-party complaint, we have jurisdiction. See Art. V, § 4(b)(1), Fla. Const. As to the dismissal of the counterclaim, we do not.
A final order dismissing a complaint with prejudice is reviewed de novo. See Norwich v. Glob. Fin. Assocs LLC, 882 So.2d 535, 536 (Fla. 4th DCA 2004). "A motion to dismiss . . . tests the legal sufficiency of a complaint to state a cause of action and is not intended to determine issues of ultimate fact." Landmark Funding, Inc. ex. rel. Naples Syndications, LLC v. Chaluts, 213 So.3d 1078, 1079 (Fla. 2d DCA 2017). When examining the sufficiency of a complaint, "the court must accept the facts alleged therein as true and all inferences that reasonably can be drawn from those facts must be drawn in favor of the pleader." Schneiderman v. Baer, 334 So.3d 326, 330 (Fla. 4th DCA 2022) (quoting MEBA Med. &Benefits Plan v. Lago, 867 So.2d 1184, 1186 (Fla. 4th DCA 2004)). In addition, the court must follow the four-corners rule, strictly confining its review to the four corners of the complaint and any attachments incorporated into the complaint. Santiago v. Mauna Loa Invs., LLC, 189 So.3d 752, 755-56 (Fla. 2016). Conversely, the mere attachment of documents to a motion to dismiss does not allow for their consideration in deciding the motion. See Kidwell Grp. LLC v. Fla. Farm Bureau Cas. Ins. Co., 348 So.3d 1239, 1241 (Fla. 2d DCA 2022) (quoting Enlow v. E.C. Scott Wright, P.A., 274 So.3d 1192, 1193 (Fla. 5th DCA 2019)).
Nor may judicial notice be used to side-step the four-corners rule. See Schneiderman, 334 So.3d at 330; see also Papa John's Int'l, Inc. v. Cosentino, 916 So.2d 977, 983 (Fla. 4th DCA 2005) (); Norwich, 882 So.2d at 537 (). There are exceptions to this rule, however, such as where the defendant properly requests the court take judicial notice and the parties stipulate that it may do so. See Schneiderman, 334 So.3d at 330.
No such stipulation occurred in this case. Nonetheless, the trial court took judicial notice of the Okeechobee Judgment, which was not attached to the pleadings, and then expressly relied on that judgment to determine Appellants could not prevail on their claims because the loan documents were not rendered invalid by the Okeechobee litigation. In doing so, the trial court impermissibly looked beyond the four corners of the third-party complaint and relied on extraneous material to resolve issues of ultimate fact. This was error. Regardless of whether the law firm can ultimately prevail given the Okeechobee Judgment, which we do not decide today, it was premature for the trial court to rely on that document and resolve these issues on a motion to dismiss. See Chaluts, 213 So.3d at 1080 ().
Rhoades defends the order below by arguing the trial court properly considered the Okeechobee...
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