Wiggins v. Tigrent, Inc.

• Decision Date: 30 July 2014
• Docket Number: No. 2D13–4033.,2D13–4033.
• Citation: 147 So.3d 76
• Parties: K. Mitchell WIGGINS, Appellant, v. TIGRENT, INC., f/k/a Whitney Information Network, Inc., a Colorado corporation, Appellee.
• Court: Florida District Court of Appeals

147 So.3d 76

K. Mitchell WIGGINS, Appellant

v.TIGRENT, INC., f/k/a Whitney Information Network, Inc., a Colorado corporation, Appellee.

No. 2D13–4033.

District Court of Appeal of Florida, Second District.

July 30, 2014.

Victor Kline and Dariel Abrahamy of Greenspoon Marder, P.A., Orlando, for Appellant.

Daniel J. DeLeo and Michael J. Labbee of Shumaker, Loop & Kendrick, LLP, Sarasota, for Appellee.

Opinion

WALLACE, Judge.

K. Mitchell Wiggins appeals the circuit court's order denying his motion to vacate the final judgment entered against him in favor of Tigrent, Inc., f/k/a Whitney Information Network, Inc., a Colorado corporation (Tigrent). Mr. Wiggins also asked the circuit court to dismiss the action as to him. Because the circuit court lacked personal jurisdiction over Mr. Wiggins, the judgment against Mr. Wiggins was void. Accordingly, the circuit court erred in denying Mr. Wiggins' motion to vacate the judgment in accordance with Florida Rule of Civil Procedure 1.540(b)(4).

I. THE FACTS AND PROCEDURAL HISTORY

Tigrent is a Colorado corporation with its headquarters in Cape Coral, Florida. Western Clearing Corp., a Nevada limited liability company (WCC), has its offices in the State of Washington, which is where Mr. Wiggins lived and worked. In 2003, Tigrent and WCC entered into a written contract whereby WCC agreed to process electronic payments made by Tigrent's customers and to transfer the funds to Tigrent's bank accounts in Florida on a regular basis. The parties' dispute arose in March 2011, when WCC allegedly failed to forward approximately $356,000 in funds belonging to Tigrent.

In July 2011, Tigrent filed a complaint against WCC and Mr. Wiggins, who it identified as “an individual manager” of WCC. In its complaint, Tigrent alleged five claims for relief: count I, breach of contract; count II, unjust enrichment; count III, breach of the implied covenant of good faith and fair dealing; count IV, breach of fiduciary duty; and count V, conversion. The complaint's first four counts named only WCC as a defendant; the fifth count for conversion named both WCC and Mr. Wiggins. In its claim for conversion, Tigrent alleged that Mr. Wiggins had withheld Tigrent's funds and had “utilized those funds to offset a separate corporate liability of WCC.”

Mr. Wiggins was served with the summons and a copy of the complaint in the State of Washington on July 15, 2011. However, neither he nor WCC filed an appearance in the action or otherwise responded to the complaint, and they were defaulted. On November 14, 2011, the circuit court entered a final judgment against WCC and Mr. Wiggins, jointly and severally, for $368,169.99. The circuit court also reserved jurisdiction to enter an award of attorney's fees.

In March 2013, approximately fifteen months later, Mr. Wiggins filed a motion to vacate the final judgment against him in accordance with Florida Rule of Civil Procedure 1.540(b).¹ In support of his motion, Mr. Wiggins alleged that the circuit court did not have personal jurisdiction over him and, for that reason, the judgment was void as to him and must be vacated. Mr. Wiggins also requested that he be dismissed from the action. In response, Tigrent argued that the circuit court had properly exercised personal jurisdiction over Mr. Wiggins and, in any event, Mr. Wiggins “no longer ha[d] standing to raise his jurisdictional defense after the expiration of the one-year window provided by Florida Rule of Civil Procedure 1.540(b).”

II. THE CIRCUIT COURT'S RULING

Although the circuit court did not explain its reasoning in the order denying Mr. Wiggins' motion, we have the benefit of a transcript of the motion hearing. In the hearing, the circuit judge made several statements that provide insight into the rationale for his ruling. Addressing Mr. Wiggins' attorney, the circuit judge said:

Certainly if, let's just say your client [Mr. Wiggins] dilly-dallied for whatever reason and had some excusable neglect, and then with all due diligence has meritorious defenses, files a proposed answer, motion to dismiss, et cetera, I don't think he's [opposing counsel] saying that your client necessarily is precluded from getting the judgment set aside and potentially challenging jurisdiction.

But you've not provided the Court here today any type of issue relative to his failure to respond or anything of that sort.

You've basically jumped straight to the chase saying, here's my factual assertion that I don't have any connections or ties to Florida, ergo not withstanding my default to the factual allegations, we should set aside the judgment and throw everything out.

Later, the circuit judge commented:

How do we get over the allegations, though, that they've alleged that it's personal jurisdiction, your client was duly served and then failed to contest that prior to entry into A, the default, and then B, the final default judgment[?]

My question is, what would preclude as he's argued any defendant in any case to come in 19 years later and say, I defaulted to those allegations. But you know what, here's my affidavit. I had no connections nor had any to the State [and undo] it all 19 years after the fact?

After both parties had completed their arguments on the motion, the circuit judge announced his ruling as follows:

In review of the Complaint there do appear to be two factual assertions or allegations to claim personal jurisdiction, and there was proper service, and that was not disputed, nor was otherwise admitted here ... today.

Having considered the relative arguments presented by the parties as well as the respective motions, the memorandums in opposition as well as the affidavits, I do find that Tigrent's position is well taken.

After the hearing, the circuit court entered an order denying Mr. Wiggins' motion. This appeal followed.

III. FRAMING THE ISSUES

The circuit judge's comments and conclusions help us to frame the issues before us into two distinct questions. First, did the circuit court have long-arm jurisdiction over Mr. Wiggins under section 48.193, Florida Statutes (2011)? Second, did Mr. Wiggins waive his right to object to personal jurisdiction by failing to raise the issue until after the circuit court entered a default judgment against him? Because a conclusion that a waiver occurred would make it unnecessary to reach the issue of personal jurisdiction, we will consider the issue of waiver first.

IV. THE STANDARD OF REVIEW

The issue of whether Mr. Wiggins waived his right to object to personal jurisdiction by failing to raise the issue until after the entry of a default judgment is a question of law that we review de novo. See Kaaa v. Kaaa, 58 So.3d 867, 869 (Fla.2010) (as revised on denial of rehearing). The de novo standard of review also applies to the review of an order determining whether a final judgment by default is void for lack of personal jurisdiction over the defendant. See Wendt v. Horowitz, 822 So.2d 1252, 1256 (Fla.2002) ; Schwartzberg v. Knobloch, 98 So.3d 173, 180 (Fla. 2d DCA 2012), review denied, 116 So.3d 383 (Fla.2013) ; Infante v. Vantage Plus Corp., 27 So.3d 678, 680 (Fla. 3d DCA 2009).

V. DISCUSSION

A. Waiver

The first question that we are called upon to decide is whether a nonresident defendant, who has been properly served with process, may ignore the proceeding until after a default judgment is entered and then move to vacate the judgment as void based on a lack of personal jurisdiction. Stated differently, the question is whether a nonresident defendant, who has been properly served, waives the defense of lack of personal jurisdiction by failing to raise the issue in a timely responsive pleading.

Tigrent argues that because Mr. Wiggins failed to respond timely to the complaint and essentially ignored the proceedings until after the circuit court entered a default judgment against him, he waived his right “to object to the trial court's personal jurisdiction over him nearly two years later.” Mr. Wiggins responds that his failure to respond timely to the complaint does not result in a waiver. According to Mr. Wiggins, as long as his “first step” in the case was to challenge the circuit court's personal jurisdiction over him—even though he took that first step after the entry of the default judgment—he could still properly raise the issue of personal jurisdiction.

Before analyzing the parties' arguments, it will be helpful to review a few basic principles regarding the difference between void and voidable judgments and the effect of the entry of a judgment by a court that lacked personal jurisdiction of the defendant. This court has previously described the difference between a judgment that is “void” and one that is “voidable” as follows:

A void judgment is so defective that it is deemed never to have had legal force and effect. In contrast, a voidable judgment is a judgment that has been entered based upon some error in procedure that allows a party to have the judgment vacated, but the judgment has legal force and effect unless and until it is vacated.

Sterling Factors Corp. v. U.S. Bank Nat'l Ass'n, 968 So.2d 658, 665 (Fla. 2d DCA 2007) (citations omitted). A judgment that is entered against a defendant over whom the court lacks personal jurisdiction is a void judgment. Id. There is no time limitation on setting aside a void judgment. Johnson v. State, Dep't of Revenue, ex rel. Lamontagne, 973 So.2d 1236, 1238 (Fla. 1st DCA 2008). On the contrary, a void judgment may be collaterally attacked at any time. Gibson v. Progress Bank of Fla., 54 So.3d 1058, 1061 (Fla. 2d DCA 2011) ; Rodriguez–Faro v. M. Escarda Contractor, Inc., 69 So.3d 1097, 1098 (Fla. 3d DCA 2011). A decision whether or not to vacate a void judgment is not within the ambit of a trial court's discretion; if a judgment previously entered is void, the trial court must vacate the judgment. Horton v. Rodriguez Espaillat y Asociados, 926 So.2d 436, 437 (Fla. 3d DCA 2006) (quoting Dep't of Transp. v. Bailey, 603 So.2d 1384, 1386–87 (Fla. 1st DCA 1992) ).

Tigrent...