Szucs v. QUALICO DEVELOPMENT, INC.

• Decision Date: 23 February 2005
• Docket Number: No. 2D04-2359.,2D04-2359.
• Parties: Joe SZUCS, Appellant, v. QUALICO DEVELOPMENT, INC., a Florida corporation, Richard Traynor, and Adrian C.F. Jenkins, Appellees.
• Court: Florida District Court of Appeals

893 So.2d 708

Joe SZUCS, Appellant, v. QUALICO DEVELOPMENT, INC., a Florida corporation, Richard Traynor, and Adrian C.F. Jenkins, Appellees.

No. 2D04-2359.

District Court of Appeal of Florida, Second District.

February 23, 2005.

Neal A. Sivyer and J. Carlton Mitchell of Sivyer, Barlow & Watson, P.A., Tampa, for Appellant.

Gale M. Bobenhausen of Kimpton, Burke & Bobenhausen, P.A., Clearwater, for Appellees.

STRINGER, Judge.

Joe Szucs seeks review of a final judgment for damages rendered in conjunction with the circuit court's order denying his motion to vacate clerk's default in this lawsuit among shareholders of Qualico Development, Inc.¹ Because Szucs did not demonstrate excusable neglect or due diligence in obtaining relief after learning of the default, we affirm the order denying motion to vacate default. We reverse, however, the damages element of the final judgment and remand for further proceedings.

Qualico filed the original complaint against Szucs and Pittway Plaza Associates, Ltd., on February 11, 2002, seeking an accounting from Pittway and declaratory relief against Pittway and Szucs. The first amended complaint filed July 8, 2002, was similar to the first in parties and causes of action. The second amended complaint filed September 29, 2003, however, dropped Pittway and alleged two causes of action for breach of fiduciary duty and civil theft against Szucs.

Szucs was originally served with the complaint in February 2002. He was served with the statutory civil theft notice on July 1, 2003, which he signed on July 16, 2003. The clerk entered a default against Szucs on October 31, 2003. Qualico settled with Pittway in November 2003 and voluntarily dismissed claims against it. On February 4, 2004, Qualico filed a motion for summary judgment together with supporting affidavits. Finally, on March 1, 2004, Szucs filed an answer and affirmative defenses, an affidavit in opposition to the motion for summary judgment, and a motion to vacate the default.

Szucs averred in his affidavit supporting his motion to vacate default that he had been aware of the pendency of the action since he was served in February 2002, but that because the first two complaints did not seek money damages against him, he was unaware of the ramifications of a default. Further, only when he received the motion for summary judgment did he become aware that Qualico was seeking money from him. At the hearing, his attorney pointed out that Szucs had allowed the other parties to litigate the matter early in the lawsuit, and only after the motion for summary judgment did he retain counsel on February 25, 2004.

On appeal, Szucs attacks the order denying his motion to vacate default, the subsequent entry of summary judgment and the final judgment's adjudication of damages.

Motion to Vacate Default

The standard of review for an order denying a motion to vacate default is whether the trial court abused its discretion. Finkel Outdoor Prods., Inc. v. Lasky, 529 So.2d 317, 318 (Fla. 2d DCA 1988). When ruling on a motion to vacate a default a court must consider whether the moving party (1) has shown excusable neglect, (2) has a meritorious defense to the opposing party's claims, and (3) has exercised due diligence in obtaining relief after learning of the default. Allstate Ins. Co. v. Ladner, 740 So.2d 42, 43 (Fla. 1st DCA 1999). All reasonable doubts should be resolved in favor of setting aside the default. Id.

Szucs contends that his failure to answer was the result of excusable neglect from understandable confusion resulting from the plaintiffs' relative indifference toward him in the litigation and their extended settlement negotiations for monetary damages against Pittway. He cites cases that involved the pendency of two or more cases involving the same or related parties. See Okeechobee Imports, Inc. v. Am. Sav. & Loan Ass'n of Fla., 558 So.2d 506, 507 (Fla. 3d DCA 1990); Zwickel v. KLC, Inc., 464 So.2d 1280, 1280 (Fla. 3d DCA 1985). Okeechobee Imports and Zwickel involved multiple lawsuits, misfilings, and confusion over similar transactions and case numbers, facts not present here. No multiple lawsuits exist in this case. Qualico filed three complaints in this single action, but the first two were very similar. Only when Szucs realized that he could suffer monetary damages did he eventually seek counsel to proceed. A defendant's failure to retain counsel or to understand the legal consequences of his inaction is not excusable neglect. Joe-Lin, Inc. v. LRG Rest. Group, Inc., 696 So.2d 539, 541 (Fla. 5th DCA 1997).

Szucs also asserts that seeking counsel three weeks after the motion for summary judgment demonstrated his due diligence in seeking to vacate the default. Once he obtained counsel, he explains that he expediently filed the appropriate motions. But the court is called upon to consider due diligence upon learning of the entry of the default, not four months later when the plaintiffs filed a motion for summary judgment. See Ladner, 740 So.2d at 43

. Szucs' assertions of excusable neglect and due diligence fall short of the examples he cites. See, e.g., Mims v. Miller, 513 So.2d 1120 (Fla. 2d DCA 1987) (reversing trial court's refusal to vacate default when the defendant assumed that the personal representative would be defending the suit on her behalf and, in any event, filed a motion to vacate the default within seven days of the default when she learned otherwise); Edwards v. Najjar, 748 So.2d 1101, 1103 (Fla. 3d DCA 2000) (reversing the denial of a motion to vacate default when the defendant, through a myriad of misfilings, a multiplicity of lawsuits, and personal family issues, exercised due diligence and promptly responded to the court's order setting the matter for trial one month after the default had been entered). We conclude that Szucs failed to demonstrate excusable neglect or due diligence in obtaining relief after learning of the default. The fact that Szucs misunderstood that the plaintiffs were seeking a money judgment and did not seek counsel until after they sought a judgment is not a legal excuse to vacate a default. See Goldome v. Davis, 567 So.2d 909 (Fla. 2d DCA 1990) (holding defendant's misunderstanding that plaintiffs were seeking money judgment until after bank sought writ of garnishment was not legal excuse to vacate judgment); Claffey v. Serafino, 338 So.2d 270 (Fla. 2d DCA 1976) (holding that misunderstanding of the significance of service of process is not excusable neglect warranting a vacating of a default).

Because Szucs failed to demonstrate excusable neglect, we need not decide whether he established a meritorious defense. See Joe-Lin, Inc., 696 So.2d at 541. It cannot be said that the court abused its discretion in refusing to vacate the default.

Summary Judgment

The standard of review of a final summary judgment is de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla.2000). A party against whom a default is entered admits the truth of the well-pleaded allegations. Hooters of Am., Inc. v. Carolina Wings, Inc., 655 So.2d 1231, 1233 (Fla. 1st DCA 1995). The allegations of the second amended complaint, exhibits, and affidavits support the claims of Szucs' breach of fiduciary duty, conversion, and civil theft. There are no material, disputed facts to bar entry of summary judgment.

Szucs cites Reserve Insurance Co. v....