Security Bank, N.A. v. BellSouth Advertising & Pub. Corp.

• Decision Date: 24 July 1996
• Docket Number: No. 94-2166,94-2166
• Citation: 679 So.2d 795
• Parties: 21 Fla. L. Weekly D1673 SECURITY BANK, N.A., Appellant, v. BELLSOUTH ADVERTISING & PUBLISHING CORPORATION, Appellee.
• Court: Florida District Court of Appeals

Page 795

679 So.2d 795

21 Fla. L. Weekly D1673

SECURITY BANK, N.A., Appellant, v. BELLSOUTH ADVERTISING & PUBLISHING CORPORATION, Appellee.

No. 94-2166.

District Court of Appeal of Florida,

Third District.

July 24, 1996.

Rehearing Denied Oct. 9, 1996.

Fitzgerald & Portuondo and Michael M. Hernandez, Miami, for appellant.

Howard W. Mazloff, Miami, for appellee.

Before JORGENSON, ^* COPE and GREEN, JJ.

COPE, Judge.

Security Bank, N.A., appeals the denial of its motion to set aside a final judgment. We affirm in part and reverse in part.

BellSouth Advertising & Publishing Corporation obtained a judgment against Garfield & Associates, P.A., for $36,576. Garfield was a customer of Security Bank. BellSouth served the Bank with a writ of garnishment, seeking any funds of Garfield which the Bank was holding. BellSouth obtained a default against the Bank. Without any further notice to the Bank the court entered judgment against it for $36,576--the same amount as BellSouth's underlying judgment against Garfield. Two days after the filing of judgment, the Bank served a motion to set aside the final judgment. The trial court denied the motion, and this appeal follows.

I.

The Bank argues that the trial court erred by denying the motion to set aside the default entered against it. The Bank contends that it has satisfied all of the requirements for setting aside a default, namely, by showing (a) that the default was entered on account of excusable neglect, (b) that the Bank has a meritorious defense, and (c) that the Bank acted with due diligence in moving to set aside the default. ¹ The Bank argues that both the default and final judgment must be set aside.

We find no error in the trial court's refusal to set aside the default on liability. In order to obtain relief from the default, it was necessary for the Bank to show, among other things, excusable neglect. See Lacore v. Giralda Bake Shop, Inc., 407 So.2d 275, 276 (Fla. 3d DCA 1981). With certain exceptions not applicable here, a party must set forth the facts demonstrating excusable neglect in an affidavit or by other sworn proof. See Santucci Armando, S.C.L. v. Plazza, 658 So.2d 1169 (Fla. 2d DCA 1995); Blimpie Capital Venture, Inc. v. Palms Plaza Partners, Ltd., 636 So.2d 838, 840 (Fla. 2d DCA 1994); Inter-Atlantic Insurance Services, Inc. v. Hernandez, 632 So.2d 1069, 1070 (Fla. 3d DCA 1994); Vanguard Group, Inc. v. Vanguard Security, Inc., 409 So.2d 1219 (Fla. 3d DCA 1982); B.C. Builders Supply Co., Inc. v. Maldonado, 405 So.2d 1345, 1348 (Fla. 3d DCA 1981); T.I.E. Communications, Inc. v. Toyota Motors Center, Inc., 391 So.2d 697, 698 (Fla. 3d DCA 1980); Metcalf v. Langston, 296 So.2d 81, 85-86 (Fla. 1st DCA), cert. dismissed, 302 So.2d 414 (Fla.1974); GACL, Inc. v. Zeger, 276 So.2d 552, 553 (Fla. 3d DCA 1973). ² Here the facts constituting excusable neglect were set forth only in an unsworn motion, and were unsupported by any affidavit or other proof. "[T]he trial court properly refused to set aside the defendants' default where the motion seeking such relief consisted of mere representations of counsel unsupported by proof showing any excusable neglect...." Vanguard Group, Inc., 409 So.2d at 1219. We therefore affirm the refusal to set aside the default on the issue of liability.

II.

Although the default on liability will stand undisturbed, the Bank's motion should have been granted insofar as it sought to set aside the final judgment on damages.

A.

By its writ of garnishment plaintiff BellSouth sought to obtain from the Bank whatever money Garfield, the bank customer, had on deposit there. The writ sought, in other words, to recover an unliquidated sum from the Bank. It is well settled that when a plaintiff obtains a default in a suit for unliquidated damages, the default only establishes liability. It remains necessary for the plaintiff to prove its damages at a hearing after notice to the defaulting party.

It is clear from examination of the record that the plaintiff and the court treated the garnishment writ as if it sought a liquidated sum, not an unliquidated sum. Upon default, the court simply entered an ex parte final judgment in favor of plaintiff for the full amount of plaintiff BellSouth's judgment against Garfield--$36,576. The record contains no proof by plaintiff of the amount of Garfield's funds the Bank was holding, nor does the record reflect any notice to the Bank of the final hearing on damages. The plaintiff and the court assumed that the legal effect of a default in garnishment was to make the garnishee Bank automatically liable for the full amount of the plaintiff's $36,576 judgment against debtor Garfield.

B.

The garnishment statute allows plaintiff BellSouth to satisfy its judgment against debtor Garfield by garnishing any of Garfield's money or property which is held by the garnishee Bank. § 77.06(1) Fla.Stat. (1993). The statute states:

77.06 Writ; effect.--

(1) Service of the writ shall make garnishee liable for all debts due by him to defendant and for any tangible or intangible personal property of defendant in his possession or control at the time of the service of the writ or at any time between the service and the time of his answer.

Id. (emphasis added). Under the statute, the garnishee Bank is only responsible for any of Garfield's funds the Bank actually had in its possession.

For one hundred years, Florida courts have said that a garnishment plaintiff (BellSouth) is properly viewed as standing in the shoes of the original defendant debtor (Garfield). BellSouth cannot recover more from the Bank than could Garfield if Garfield sued the Bank for the same funds. Writing in a default garnishment context, the Florida Supreme Court has said:

Judgment creditors derive their right to proceed against a garnishee only by virtue of the fact that the garnishee holds money or property owed to the judgment debtor. Trial judges should exercise their discretion in such a way as to insure that the judgment creditor receives no greater rights against a garnishee than would have been available to the judgment debtor in a proceeding against the garnishee. Reeves v. Don L. Tullis and Assoc.,Inc., 305 So.2d 813 (Fla. 1st DCA 1975).

United Presidential Life Insurance Co. v. King, 361 So.2d 710, 713 (Fla.1978).

The garnishee is not, by service of the writ, to be placed in any worse condition than if the defendant, his creditor, had brought suit upon the claim which is garnished. As to the garnishee, the plaintiffs take the shoes of the defendant, the principal debtor, and can assert only the rights of the latter.

Howe v. Hyer, 36 Fla. 12, 17 So. 925, 926 (1895). Accord Foxbridge, Inc. v. Tartan-Laver Delray, Inc., 528 So.2d 1255, 1257 (Fla. 4th DCA 1988); Carpenter v. Benson, 478 So.2d 353, 354 (Fla. 5th DCA 1985), review denied, 488 So.2d 829 (Fla.1986).

C.

The next question is how to analyze the garnishment proceeding when there is a default. The statute and Form 1.907(a) of the Florida Rules of Civil Procedure both specify the text which must be set forth in a writ of garnishment. The writ directs the garnishee Bank to serve an answer stating, among other things, "whether the garnishee is indebted to defendant GARFIELD & ASSOCIATES, P.A., ... at the time of the answer or was indebted at the time of service of the writ, or at any time between such times...." ³ By service of the writ plaintiff BellSouth was trying to find out how much of Garfield's money the Bank was holding, and to obtain payment of it.

Clearly BellSouth's garnishment claim against the Bank was for an unliquidated sum, not a liquidated sum. As explained in Bowman v. Kingsland Development, Inc., 432 So.2d 660 (Fla. 5th DCA 1983):

A default also admits the plaintiff's entitlement to liquidated damages due under the pleaded cause of action, but not unliquidated damages. Damages are liquidated when the proper amount to be awarded can be determined with exactness from the cause of action as pleaded, i.e., from a pleaded agreement between the parties, by an arithmetical calculation or by application of definite rules of law.... However, damages are not liquidated if the ascertainment of their exact sum requires the taking of testimony to ascertain facts upon which to base a value judgment.... A defaulting party has a due process entitlement to notice and opportunity to be heard as to the presentation and evaluation of evidence necessary to a judicial determination of the amount of unliquidated damages. Protection of this right is provided by Florida Rule of Civil Procedure 1.080(h)(1) and the last sentence in Rule 1.440(c).

Id. at 662-63 (emphasis in original, citations omitted) ⁴; see also Tand v. C.F.S. Bakeries, Inc., 559 So.2d 670, 671 (Fla. 3d DCA 1990); Gulf Maintenance & Supply, Inc.v. Barnett Bank, 543 So.2d 813, 818 (Fla. 1st DCA 1989); Buffington v. Torcise, 504 So.2d 490, 491 (Fla. 3d DCA 1987); 33 Fla.Jur.2d Judgments and Decrees § 275 (1994). The setting of unliquidated damages without the required notice and without proof is regarded as fundamental error. Bowman, 432 So.2d at 663-64.

What, then, was the proper procedure for BellSouth to follow once it obtained entry of default on its unliquidated garnishment claim against the Bank? The required procedure was the same as in any suit for an unliquidated sum where there has been a default. Notice of trial on damages had to be given to the Bank as required by Rules 1.080(h)(1), 1.440(c), and 1.500(e). Bowman, 432 So.2d at 663; Hauser v. Dr. Chatelier's Plant Food Co., 350 So.2d 548, 549-50 (Fla. 2d DCA 1977). ⁵

We are in general agreement with the analysis of this point in Trawick's Florida Practice and Procedure. After default, "[n]o judgment can be entered against the garnishee in excess of the amount remaining unpaid on the judgment against the garnishment defendant or in excess of the garnishee's liability to the garnishment defendant." Henry P. Trawick, Jr., Trawick's Florida Practice and...