Yost v. American Nat. Bank

• Decision Date: 16 October 1990
• Docket Number: 89-1583,Nos. 89-355,s. 89-355
• Citation: 570 So.2d 350
• Parties: 15 Fla. L. Weekly D2625 Wallace C. YOST, Allen J. Miller and Florida Pottery Stores of Panama City, Inc., Appellants, v. AMERICAN NATIONAL BANK, Appellee.
• Court: Florida District Court of Appeals

Page 350

570 So.2d 350

15 Fla. L. Weekly D2625

Wallace C. YOST, Allen J. Miller and Florida Pottery Stores of Panama City, Inc., Appellants, v. AMERICAN NATIONAL BANK, Appellee.

Nos. 89-355, 89-1583.

District Court of Appeal of Florida,

First District.

Oct. 16, 1990.

Rehearing Denied Dec. 27, 1990.

David L. Fleming, Robin A. Kobacker, Pensacola, for appellants.

Larry A. Bodiford, Bill R. Hutto, of Hutto, Nabors and Bodiford, Panama City, for appellee.

JOANOS, Judge.

These consolidated appeals are taken from two orders of the trial court. The first appeal is from an order awarding final judgment to appellee American National Bank (ANB), in its action to foreclose a promissory note against appellants Wallace C. Yost, Allen J. Miller, and Florida Pottery Stores of Panama City, Inc. The second appeal is from an order granting a motion to dismiss count two of appellants' amended counterclaim, in which appellants sought cancellation of a personal guarantee and recovery of incidental and consequential damages. We reverse the order which is the subject of the first appeal, and dismiss the second appeal as taken from a non-final, non-appealable order.

On September 7, 1988, ANB filed a complaint alleging that appellants were in default under the terms of a promissory note executed by Florida Pottery of Panama City, Inc., and guaranteed by Yost and Miller. The complaint also alleged that the due date of the promissory note was extended by three extension agreements. On October 28, 1988, appellants filed an answer and affirmative defenses. ANB filed a response, denying the defenses offered by appellants.

On December 20, 1988, appellants filed a motion for continuance of the trial scheduled for that date, a motion for leave to file an amended answer, defenses, and counterclaim, together with the amended answer, defenses and verified counterclaim. At the hearing held on that same date, ANB's counsel argued that appellants' defenses concerning course of dealing and timely payment of installments due were no longer viable because the note had become due and payable by its terms. ANB's counsel further asserted that the defense of fair dealing between the parties was not a defense "to the suit at law on the note." Appellants' counsel argued that the claim and counterclaim should be tried together, because "the actions are not independent." Appellants' counsel further stated:

But the key connection is that one of the defenses is the right of set off and if these defendants are entitled to a judgment against the bank for $100,000 and the bank is entitled to $400,000, then that would be off set against the obligation to the bank. So, that you can't separate them from each other particularly when they're arise [sic] out of the same transaction.

ANB's counsel argued that set off is not a defense under the rules. The trial court announced its intention to bifurcate the counterclaim from the main action on the note, and to leave the counterclaim pending for subsequent determination.

As the hearing went forward, ANB's counsel objected to Mr. Yost's testimony as to conversation with Mr. Norris, the former president of ANB, regarding proposed restructuring of the loan when the term of the latest renewal ended. The objection was sustained, and Mr. Yost's testimony was proffered. At the conclusion of the hearing, the trial court orally announced its intention to enter final judgment in favor of ANB, with the final judgment to reflect retention of jurisdiction on the question of attorney's fees and the counterclaim. However, the final judgment entered on the same date as the hearing makes no mention that a counterclaim was still pending. On the same date, December 20, 1988, the trial court entered a written order denying appellants' motion for continuance, but granting the motion to file an amended answer, defenses, and counterclaim.

On February 1, 1989, ANB filed a motion to dismiss appellants' counterclaim, on grounds that (1) the counterclaim failed to state a cause of action, (2) ANB owed no duty to appellants to loan any more money than required by the note, and (3) the guarantors guaranteed the indebtedness reflected by the note "and thus, have no standing to maintain this action."

On February 14, 1989, appellants filed a verified petition for writ of mandamus, seeking stay of execution of the final judgment entered by ANB. The motion was denied without prejudice to appellants' right to obtain an automatic stay pursuant to Florida Rule of Appellate Procedure 9.310(b). In addition, the court treated the petition as a notice of appeal from the order.

On March 30, 1989, the trial court entered an order denying ANB's motion to dismiss the amended counterclaim with respect to Florida Pottery Stores of Panama City, Inc., but granted dismissal as to the guarantors Yost and Miller. On April 13, 1989, appellants filed an amended counterclaim. On April 17, 1989, appellant Yost filed a supersedeas bond. On May 22, 1989, the trial court granted ANB's motion to dismiss appellants' amended counterclaim, again with leave to amend. On June 12, 1989, appellants filed a second amended counterclaim and a notice of appeal from the May 22, 1989, order.

Appellants raise three issues in connection with the appeal from the final judgment entered in favor of ANB. Our reversal of the order granting final judgment in favor of ANB is predicated on the trial court's erroneous severance of appellants' counterclaim from ANB's suit on the note, and the entry of final judgment without disposition of the counterclaim. Since our action in this regard will require a new trial, we find it unnecessary to address the other issues raised by appellants concerning their defenses of waiver and estoppel, and set-off or recoupment.

A compulsory counterclaim is a defendant's cause of action arising out of the transaction or occurrence that formed the subject matter of the plaintiff's claim. Fla.R.Civ.P. 1.170(a); City of Mascotte v. Florida Municipal Liability Self Insurers Program, 444 So.2d 965, 966 (Fla. 5th DCA 1983), review denied, 451 So.2d 847 (Fla.1984). It is termed compulsory because the claim will be barred unless raised by the defendant in the original suit. Cherney v. Moody, 413 So.2d 866, 867 (Fla. 1st DCA 1982), approved by Allie v. Ionata, 503 So.2d 1237 (Fla.1987); City of Mascotte, 444 So.2d at 966; Trawick, Florida Practice and Procedure § 12-3 (1985). In City of Mascotte, observing that Florida's rules regarding counterclaims are patterned after the federal rules, see also Wilson v. Clark, 414 So.2d 526, 531 (Fla. 1st DCA 1982), the court adopted the transaction or occurrence test set forth in Roberts v. National School of Radio and Television Broadcasting, 374 F.Supp. 1266, 1270 (N.D.Ga.1974):

(1) Are the issues of fact and law raised by the claim and counterclaim largely the same?

(2) Would res judicata bar the subsequent suit on defendant's claim absent the compulsory counterclaim rule?

(3) Will substantially the same evidence support or refute plaintiff's claim as well as defendant's counterclaim?

(4) Is there any logical relation between the claim and the counterclaim?

The court noted that an affirmative answer to any of the foregoing questions would mean that the counterclaim is compulsory. See also Rudner v. Cabrera, 455 So.2d 1093, 1095 (Fla. 5th DCA 1984).

Separate trials are appropriate only when a joint trial may prejudice a party, or cause inconvenience. Travelers Express, Inc. v. Acosta, 397 So.2d 733, 737 (Fla. 3d DCA 1981); Roberts v. Keystone Trucking Co., 259 So.2d 171, 174 (Fla. 4th DCA 1972); Trawick, Florida Practice and Procedure, § 20-3 (1985). Although a severance for separate trial is within the discretion of the trial court, Travelers Express v. Acosta, 397 So.2d at 737; Comment to Fla.R.Civ.P. 1.270(b), unless a proper showing of prejudice or inconvenience has been made, a single trial is...