Case Name: Misael OTERO, Appellant, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1992-10-02
Citations: 606 So. 2d 443
Docket Number: No. 92-00718
Parties: Misael OTERO, Appellant, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Appellee.
Judges: PARKER, A.C.J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 606
Pages: 443–446

Head Matter:
Misael OTERO, Appellant, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Appellee.
No. 92-00718.
District Court of Appeal of Florida, Second District.
Oct. 2, 1992.
Rehearing Denied Oct. 29, 1992.
Jeffrey B. Bock of Maney, Damsker & Arledge, P.A., Tampa, for appellant.
Douglas M. Fraley of Mitchell & Carter, P.A., Tampa, for appellee.

Opinion:
PATTERSON, Judge.
Misael Otero appeals from a posttrial order which vacates a final judgment and the underlying default upon which it is predicated. We reverse.
Otero was a passenger in a truck operated by Minerva Bollin. The truck was struck by another vehicle, resulting in personal injuries to Otero. Bollin was insured by the appellee, Government Employees Insurance Company (GEICO).
On March 21, 1990, Otero's counsel sent a letter to GEICO demanding settlement of his personal injury claim under the provisions of Bollin's uninsured/underinsured insurance coverage. GEICO did not respond. In June 1990, Otero and his wife, Milagnos, filed suit against GEICO and the following transpired:
June 21, 1990 — GEICO served by insurance commissioner.
August 8, 1990 — Default entered against GEICO for failure to serve or file a response.
September 12, 1990 — GEICO served with request to produce.
September 12, 1990 — GEICO served with interrogatories.
October 5, 1990 — GEICO served by Judge Gallagher with order setting cause for jury trial and pretrial conference.
January 7, 1991 — GEICO served with plaintiffs' preliminary witness list.
February 20, 1991 — GEICO served with plaintiffs' pretrial statement.
February 26, 1991 — GEICO served by Judge Gilbert with pretrial conference order.
March 5, 1991 — GEICO served with notice •that Milagnos Otero dismissed her derivative cause of action.
March 6, 1991 — Final judgment for plaintiff signed by Judge Gilbert.
GEICO does not contend that it was improperly served with the initial pleading. In fact, it has no explanation for its failure to respond to the complaint or to pursue the other documents which it received. Jon Wolfe, a GEICO representative, testified to the internal procedures which GEICO uses to identify and follow up documents which it receives and are not readily identifiable. He could offer no explanation as to why GEICO did not use these procedures, or, if GEICO followed its procedures why this lawsuit was not brought to GEICO's attention. The matter, however, did not go totally unnoticed. Upon receipt of Otero's pretrial statement, someone in the GEICO organization generated a form letter and returned the document to Otero's counsel with a request for additional information. Wolfe could offer no explanation why this procedure did not trigger an investigation as to the source of the document or result in some form of follow-up procedure when additional information was not forthcoming.
The case proceeded to jury trial on the issue of damages, and the jury returned a verdict in Otero's favor for $107,700. The trial court, after deducting $9,742.27 in PIP benefits paid to Otero, entered a final judgment for $97,957.73. Otero's counsel mailed a copy of the final judgment to GEICO on March 6, 1991. The receipt of this judgment did not prompt GEICO to react. Only after counsel for GEICO in a related case learned of the judgment and pursued the matter did GEICO move for relief on May 3, 1991. Its motion asserted that the lawsuit had "slipped through the cracks" as a result of mishandling or misfiling of suit papers by GEICO's clerical staff and that it had a meritorious defense, i.e., that Otero had not suffered a permanent injury.
After knowledge of the default, the defaulted party must move diligently to set the default aside. In doing so, the moving party must show both excusable neglect in permitting the default to occur and the existence of a meritorious defense. Canney v. Canney, 453 So.2d 179 (Fla. 2d DCA 1984). In regard to businesses having an internal policy for handling lawsuits, Florida courts have frequently held that the inadvertent failure to follow that policy constitutes excusable neglect. See Marshall Davis, Inc. v. Incapco, Inc., 558 So.2d 206 (Fla. 2d DCA 1990); Carter, Hawley, Hale Stores, Inc. v. Whitman, 516 So.2d 83 (Fla. 3d DCA 1987); Somero v. Hendry Gen. Hosp., 467 So.2d 1103 (Fla. 4th DCA), review denied, 476 So.2d 674 (Fla.1985). As the court in Somero observed:
[Wjhere inaction results from clerical or secretarial error, reasonable misunderstanding, a system gone awry or any other of the foibles to which human nature is heir, then upon timely application accompanied by a reasonable and credible explanation the matter should be permitted to be heard on the merits.
476 So.2d at 1106.
On the other side of the coin is the established principle that gross negligence cannot constitute excusable' neglect. Fischer v. Barnett Bank of South Florida, N.A., 511 So.2d 1087 (Fla. 3d DCA 1987); Winter Park Arms, Inc. v. Akerman, 199 So.2d 107 (Fla. 4th DCA 1967). GEICO is not a mom-and-pop business confronted by an occasional lawsuit. It is a large corporate entity whose business includes engaging in litigation on a regular basis. When confronted with a continuing shower of legal pleadings naming it as the defendant, including a notice of trial, GEI-CO did nothing. This inaction clearly constitutes gross negligence barring GEICO from relief. It was therefore a gross abuse of discretion to vacate the final default judgment and the underlying default.
The order of the trial court is reversed with instructions to reinstate the final judgment in favor of Otero.
PARKER, A.C.J., concurs.
ALTENBERND, J., concurs in part and dissents in part with opinion.