Specialty Solutions, Inc. v. Baxter Gypsum & Concrete, LLC

• Decision Date: 17 June 2021
• Docket Number: Case No. 5D19-1559
• Parties: SPECIALTY SOLUTIONS, INC., Appellant, v. BAXTER GYPSUM & CONCRETE, LLC, Appellee.
• Court: Florida District Court of Appeals

325 So.3d 192

SPECIALTY SOLUTIONS, INC., Appellant,

v.BAXTER GYPSUM & CONCRETE, LLC, Appellee.

Case No. 5D19-1559

District Court of Appeal of Florida, Fifth District.

Opinion filed June 17, 2021

Doryk "Rusty" B. Graf, Jr., of Moody & Graf, P.A., Maitland, for Appellant.

Andrew P. Thompson and Anthony Jaglal, of Thompson, Jaglal and Sutton, P.A., Orlando, for Appellee.

EN BANC

LAMBERT, J.

The issue that we address in this appeal is whether a final summary judgment awarding unliquidated damages in favor of a plaintiff against a defaulted defendant, following a motion for summary judgment filed under Florida Rule of Civil Procedure 1.510 and a properly-noticed hearing, is void as a matter of law.¹

BACKGROUND—

Appellee, Baxter Gypsum & Concrete, LLC ("Baxter"), is a limited liability company that installs concrete and provides waterproofing services. Baxter became aware that three of its former employees were now employed by Appellant, Specialty Solutions, Inc. ("SSI"), a local competitor. These employees had each executed Non-Compete Agreements with Baxter that Baxter believed were being breached as a result of the employees working for SSI. Baxter sent a "cease and desist" letter to its former employees and to SSI, indicating that it intended to file suit if the purported breaches of the agreements were not immediately remedied. SSI thereafter retained counsel who responded by letter to Baxter's cease and desist letter.

Unsatisfied with the response received from SSI's counsel, Baxter promptly filed suit against its former employees and SSI. Baxter sought injunctive relief and monetary damages against SSI under section 542.335, Florida Statutes (2018), as well as the Florida Uniform Trade Secrets Act, codified in chapter 688 of the Florida Statutes.

SSI was served with process at its principal place of business. When SSI did not file an answer or another response to the complaint within twenty days of service, as required under Florida Rule of Civil Procedure 1.140(a), Baxter moved for a default, which was entered by the clerk of court. Baxter then moved for the entry of a default final judgment against SSI and sent a copy of its motion to SSI at the same address where SSI had been served with process. Two days before a scheduled hearing on this motion, SSI's president sent an email to Baxter's attorney, confirming receipt of the motion for entry of the final judgment. This email also advised Baxter's counsel that SSI had "ceased operating" as of December 31, 2016, and had "dissolved" as of December 31, 2017.²

At the hearing, the trial court granted Baxter's motion for default judgment. The next day, the court entered a final default judgment against SSI, enjoining it from "using confidential, proprietary information of Baxter's on SSI's ongoing projects and future projects" and from otherwise using and disseminating Baxter's confidential, proprietary information. The court also reserved jurisdiction in the judgment to determine the amount of damages to be awarded in favor of Baxter against SSI.

SSI's attorney then sent another letter to Baxter's counsel. From the context of this letter, counsel appears to have been unaware that the trial court had, that same day, entered the aforementioned final default judgment. In her letter, SSI's counsel stated, among other things, that "if and when the court agrees to enter your second, proposed final judgment, it will be against a company that is no longer doing business, an inactive corporation."

Undeterred by this letter, Baxter filed a motion for summary judgment for damages. Attached to this motion was an affidavit executed by Baxter's president, averring that as a direct result of SSI's actions described in the complaint, Baxter had sustained lost profits in the sum of $817,465. SSI was served with the motion for summary judgment by certified mail at its principal place of business. The motion was also provided to SSI through the e-filing portal. Baxter's summary judgment motion was separately noticed for hearing consistently with the time requirements of Florida Rule of Civil Procedure 1.510(c), with the notice being sent to SSI by U.S. mail to the same principal place of business where it had been served with process.

SSI did not attend the summary judgment hearing, nor did it file any type of response to Baxter's motion. The trial court entered a written order that same day granting Baxter's summary judgment motion. Seven days later, the court entered an amended final judgment awarding damages to Baxter, consistent with its summary judgment motion, in the sum of $817,465. SSI did not move for rehearing or file an appeal of this amended final judgment.

Baxter then took steps to collect on its judgment. Twenty-eight days after the amended final judgment was rendered, an alleged debtor of SSI that had been served with a writ of garnishment answered the writ, stating that it was retaining the sum of $32,813.67 that it owed to Specialty Solutions Southeast , Inc., but that it did not have in its possession or control any deposits, accounts, or property of SSI. That same day, an attorney, different from the one who, on behalf of SSI, had sent the previously-described pre-suit and post-suit letters to Baxter, filed a notice of appearance as counsel of record for SSI.³

SSI'S RULE 1.540 MOTION—

Thirty-five days after the amended final summary judgment for damages was rendered against it, SSI, by its new counsel, moved under Florida Rule of Civil Procedure 1.540(b) for relief from the judgment. This rule provides, in pertinent part, that upon motion, a court may relieve a party from a judgment for one of the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial or rehearing;

(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

(4) that the judgment, decree, or order is void; or

(5) that the judgment, decree, or order has been satisfied, released, or discharged, or a prior judgment, decree, or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment, decree, or order should have prospective application.

Fla. R. Civ. P. 1.540(b). The rule further provides that the motion shall be filed within a reasonable time, and for subsections (1), (2), and (3), not more than one year after the judgment, decree, order, or proceeding was entered or taken. Id.

SSI's rule 1.540 motion was filed under subsection (b)(4) of this rule. It argued that because the amended final judgment awarding Baxter unliquidated damages⁴ was entered following a motion for summary judgment, instead of after a properly-noticed trial set pursuant to Florida Rule of Civil Procedure 1.440(c),⁵ the judgment is void and must be vacated.⁶

TRIAL COURT'S RULING—

The trial court disagreed and denied the motion. As to this aspect of the motion, the court, citing to Andrade v. Andrade , 720 So. 2d 551, 552 (Fla. 4th DCA 1998), explained that in order to set aside a final judgment under rule 1.540(b), SSI had the burden to show: (1) excusable neglect in not responding to the complaint; (2) a meritorious defense to the suit; and (3) that it had acted with due diligence in moving to set aside the judgment. The court specifically found in its order denying SSI's motion that SSI had failed to establish either excusable neglect or a meritorious defense. This appeal ensued.

APPEAL—

SSI argues here that, contrary to the trial court's reasoning, where a party asserts under rule 1.540(b)(4) that a final judgment is void, it is "not required to demonstrate excusable neglect, a meritorious defense, or due diligence in moving to set aside the judgment." See Vercosa v. Fields , 174 So. 3d 550, 552 (Fla. 4th DCA 2015). SSI is correct. That, however, does not end our analysis. While the trial court's reasoning for denying SSI's motion was erroneous, the question remains whether the court nevertheless correctly denied the motion because, contrary to SSI's argument, the amended final summary judgment awarding damages was not void. See Redmond v. First Guar. Mortg. Corp. , 268 So. 3d 918, 920 (Fla. 5th DCA 2019) (affirming the denial of a rule 1.540(b) motion for relief from judgment under the "Tipsy Coachman" doctrine because while the trial court's reasoning in denying the motion was erroneous, it nevertheless reached the correct result when it denied the motion).

WHEN IS A FINAL JUDGMENT VOID?—

"Generally, a [final] judgment is void if: (1) the trial court lacks subject matter jurisdiction; (2) the trial court lacks personal jurisdiction over the party; or (3) if, in the proceedings leading up to the judgment, there is a violation of the due process guarantee of notice and an opportunity to be heard." Nationstar Mortg., LLC v. Diaz , 227 So. 3d 726, 729 (Fla. 3d DCA 2017) (citing Tannenbaum v. Shea , 133 So. 3d 1056, 1061 (Fla. 4th DCA 2014) ). Here, no argument has been made that the trial court lacked subject matter jurisdiction. Moreover, as previously indicated, we have rejected SSI's separate argument that the trial court lacked personal jurisdiction over it.⁷

Accordingly, the issue to be resolved appears to be whether the amended final judgment for damages is void because the proceedings leading up to its entry violated SSI's due process rights to both notice and an opportunity to be heard. If so, then the judgment must be vacated. See Phenion Dev. Grp., Inc. v. Love , 940 So. 2d 1179, 1181 (Fla. 5th DCA 2006) (holding that when a final judgment is void, a trial court has no discretion and must vacate the judgment (citing State, Dep't of Transp. v. Bailey , 603 So. 2d 1384, 1386–87 (Fla. 1st DCA 1992) )); Lamoise Grp., LLC v. Edgewater S. Beach Condo. Ass'n , 278 So. 3d 796, 798 (Fla. 3d DCA 2019) ("[I]f a judgment previously entered is void, the trial court must vacate the...