Smiles v. Young

• Decision Date: 08 January 1973
• Docket Number: No. 72--717,72--717
• Citation: 271 So.2d 798
• Parties: Steven M. SMILES et al., Appellants, v. Betty McCutcheon YOUNG, as Administratrix of the Estate of Donald T. McCutcheon, Deceased, and Madeline McCutcheon, Appellees.
• Court: Florida District Court of Appeals

Page 798

271 So.2d 798

Steven M. SMILES et al., Appellants, v. Betty McCutcheon YOUNG, as Administratrix of the Estate of Donald T. McCutcheon, Deceased, and Madeline McCutcheon, Appellees.

No. 72--717.

District Court of Appeal of Florida, Third District.

Jan. 8, 1973.

Rehearing Denied Feb. 5, 1973.

Carey, Dwyer, Austin, Cole & Selwood and Steven Berger, Miami, for appellants.

Horton, Schwartz & Perse, Snyder, Young & Stern, Miami, for appellees.

Before PEARSON, CHARLES CARROLL and HENDRY, JJ.

PEARSON, Judge.

The appellants were the defendants in a personal injury action brought by the appellees. A settlement was reached through negotiation, the amount of the settlement was paid, the parties stipulated for the dismissal of the cause with prejudice to the plaintiffs, and final judgment was entered on the stipulation. Thereafter, the plaintiffs brought a motion pursuant to Rule 1.540(b)(1) and (3), RCP, 31 F.S.A., ¹ seeking relief from the judgment. The trial court, after an evidentiary hearing, granted the motion, vacated the judgment, and directed the clerk to pay over to the defendants, upon their request, the sum of $9,453.68 which the plaintiffs had deposited in the registry of the court.

This appeal by the defendants is from the order vacating the judgment. We hold that the trial court abused the discretion vested in it by Rule 1.540(b) (1) and (3), RCP, 31 F.S.A., in vacating the judgment based upon a valid settlement and we reverse.

The appellants have conceded for the purposes of this appeal that we may take as proven in the trial court each and every allegation made by the appellees as movants in their motion for relief. The motion in eleven paragraphs alleged in substance, as follows:

1. The action as filed sought recovery for personal injuries to both Mr. and Mrs. McCutcheon and derivative damages sustained by Mr. McCutcheon.

2. The plaintiff, Donald T. McCutcheon, underwent an operation for removal of his spleen and was left with minor permanent injuries.

3. The plaintiff, Madeline McCutcheon, sustained relatively minor injuries except for her neck or cervical region which gave her pain up to and including the time of the settlement.

4. The settlement negotiations were conducted in the belief that Mrs. McCutcheon's pain was caused by a sprain superimposed upon preexisting osteoarthritis. This belief was based upon the reports of Mrs. McCutcheon's treating physicians.

5. Mrs. McCutcheon is in fact suffering from a fractured odontoid process. This injury is much more serious than the sprain which plaintiffs believed existed. The existence of the fracture and its more serious consequences is set forth in the report of the court-appointed physician.

6. The defendants were aware of the existence of the more serious injury because the report of the court-appointed physician was delivered to them, and it contained a statement, 'if the patient is unaware of this situation, she should be informed, as should her treating physician.' Mrs. McCutcheon was not informed.

7. The plaintiffs and their counsel were unaware of Mrs. McCutcheon's condition because of mistake, inadvertence, or excusable neglect in reliance upon the reports of physicians who had examined Mrs. McCutcheon.

8. The mistake as to Mrs. McCutcheon's condition was unilateral because defendants' counsel had actual knowledge through the court-appointed physician's report, and the defendants and their counsel failed to reveal the contents of the report.

9. The settlement in the amount of $9,250.00 was a reasonable amount for settlement of Mr. and Mrs. McCutcheon's injuries as plaintiffs believed them to be, but is not a reasonable amount for the injuries which were actually sustained by Mrs McCutcheon. The $9,250.00 is tendered to the defendants by deposit in the registry of the court.

10. The settlement would not have been accepted by the plaintiffs but for the mistake, inadvertence, or excusable neglect of the plaintiffs and their counsel, and the conduct of the defendants and their counsel.

11. The plaintiff, Donald T. McCutcheon, died on January 8, 1972, and application is made to substitute his administratrix as a party plaintiff.

The defendants filed a motion to strike the plaintiff's motion for relief from judgment upon the ground that the motion for relief was legally insufficient. The trial court found the motion for relief legally sufficient, and after an evidentiary hearing ordered that the final judgment of dismissal be vacated. No other finding of fact was set forth. This appeal followed.

The appellants have presented two points for our review. They claim error because the trial court denied their motion to strike the appellees' motion for relief from the final judgment, and they claim error upon the entry of the order vacating the final judgment. We hold that error has been demonstrated upon each point.

Initially, it is apparent that the appellees, as the moving parties, were met in the trial court with the difficulty of asking the court to set aside a final judgment based upon an executed and presumptively valid settlement agreement. Pursuing the point further, is the settlement contract now rendered void by the trial court's order vacating the final judgment pursuant to Rule 1.540, RCP, 31 F.S.A., or is it still in force and effect? If the settlement contract has also been set aside and declared void, then Rule 1.540 has been used as a substitute for a complaint to declare a contract void upon the ground of unilateral mistake or fraud. Since it would have been clear error for the trial judge to have vacated the judgment while a valid and executed contract of settlement was outstanding, we must presume that the court meant to set aside the settlement contract as well as the judgment. This conclusion is of some importance because the principles of law to be applied in an action to set aside a contract for unilateral mistake or fraud are more stringent than the standards that have so far been established for the setting aside of a judgment pursuant to Rule 1.540 RCP, 31 F.S.A., when the judgment entered pursuant to Rule 1.540 is not based upon a settlement. See Langley v. Irons Land & Development Co., 94 Fla. 1010, 114 So. 769 (1927); Crosby v. Andrews, 61 Fla. 554, 55 So. 57 (1911).

If we examine appellees' motion upon which relief was granted, we see that they in fact assume alternative positions, each of which must be examined. First, it is urged that appellees should be relieved from the settlement and judgment because the plaintiffs and their attorneys made a mistake in fact. Further, they urge that this mistake was due to inadvertence or excusable neglect because they relied upon the reports of the several doctors who had examined Mrs. McCutcheon prior to her examination by the court-appointed physician. Appellees say that this was a 'mistake in fact' because they are now sure that Mrs. McCutcheon has a more serious injury. How this moral certainty is reached in the face of the single examination by a court-appointed physician as contrasted to the repeated examinations of the several treating physicians is not clear. Appellees' statement that there were several treating physicians and numerous examinations is confirmed by the discovery which appears even in this limited record. Nevertheless, by leaving aside the matter of the condition of this record as to the existence of the fact of Mrs. McCutcheon's more serious injury, we may accept appellees' statement that a more serious injury indeed exists. The question is: Does the appellees' motion show that the belated discovery of the more serious injury was not in fact the result of their 'inadvertence or excusable neglect?'

The axis upon which this appeal turns is the report of the court-appointed physician, so it is necessary to first analyze the rule relating to such reports. Under Rule 1.360(a), RCP, 30 F.S.A., the court may order physical examinations. Such an order was entered on August 26, 1969. The physical examination was conducted on January 29, 1971, with plaintiffs' obvious knowledge, and the court-appointed physician's report appended to plaintiffs' motion was dated August 10, 1971. The contract of settlement is dated October 6, 1971.

Rule 1.360(b), RCP, 30 F.S.A. ², makes provision for the use of court-appointed physicians' reports. It provides:

'Rule 1.360. Examination of Parties and Property

'(b) Report of Findings.

'(1) If Requested by the person examined, the party causing the examination to be made shall deliver to him a copy of a detailed written report of the examining physician or other expert, setting out his findings and conclusions. After such request and delivery the party causing the examination to be made shall be entitled upon request to receive from the party examined a like report of any examination of the same mental or physical condition previously or thereafter made. If the party...