Court Opinion

ID: 9876590
Source: CourtListenerOpinion
Date Created: 2023-09-27 15:04:16.995517+00
Date Added: 2024-06-11T12:46:26.632568
License: Public Domain

DISTRICT COURT OF APPEAL OF FLORIDA
                       SECOND DISTRICT

                   SYNERGY CONTRACTING GROUP,
                     INC. a/a/o JAMES McGINITY,

                               Appellant,

                                   v.

                HOMEOWNERS CHOICE PROPERTY &
               CASUALTY INSURANCE COMPANY, INC.,

                               Appellee.

                             No. 2D22-125

                          September 27, 2023

Appeal from the Circuit Court for Pinellas County; Thomas Ramsberger,
Judge.

Madysen Scott-Cavitt and Jason A. Herman of Herman & Wells, P.A.,
Pinellas Park, for Appellant.

Francesca Stein and Mark D. Tinker of Cole, Scott & Kissane, P.A.,
Tampa, for Appellee.

MORRIS, Judge.
     Synergy Contracting Group, Inc., as assignee of rights under James
McGinity's homeowners insurance policy, appeals a final judgment
dismissing Synergy's complaint against Homeowners Choice Property
and Casualty Insurance Company, Inc. (Homeowners), for fraud upon
the court. Because the facts of this case do not meet the stringent
standard for such a harsh sanction, we reverse.
     I.    Background
     James McGinity and his wife insured their home with Homeowners.
In January 2018, the home suffered water damage in the kitchen from a
broken pipe. McGinity notified Homeowners and retained Synergy to
perform the repair work. McGinity executed an assignment of benefits
with Synergy. Synergy submitted estimates to Homeowners, which
Homeowners refused to pay in full. Synergy filed a complaint against
Homeowners for breach of contract. Homeowners answered that Synergy
had "been fully indemnified with no insurance benefits . . . due and
owing."
     Homeowners served Synergy with interrogatories and deposed
McGinity. After the deposition, Homeowners served Synergy with a
request for admissions, in answer to which Synergy specifically denied
that there were "line items on the estimates . . . that were not performed
at the subject property" or "that were already paid for in full" by
McGinity. Homeowners moved for dismissal based on fraud upon the
court, arguing that the evidence showed that by submitting certain
estimates, Synergy was seeking payment for services that Synergy knew
had already been paid for or that had not been performed. Synergy
responded that there was no evidence to meet the heightened standard
necessary for dismissal for fraud upon the court and that any allegation
of improper conduct or misrepresentation could be adequately addressed
through cross-examination.
     The trial court conducted a nonevidentiary hearing, after which the
trial court granted Homeowners' motion to dismiss. The trial court found
that through McGinity's deposition and Synergy's responses to the

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request for admissions, Synergy "set into motion an unconscionable
scheme calculated to interfere with the judicial system's ability and
partiality to adjudicate a matter by improperly influencing the trier of
fact or unfairly hampering the presentation of opposing party's claim or
defense." The trial court found that Synergy had perpetrated a fraud on
the court through its false estimates and its false representations of
having performed work or services that were not performed. The trial
court entered a written order memorializing its ruling and entered
judgment in favor of Homeowners.
     II.   Analysis
     "[A] trial court has the inherent authority to dismiss an action as a
sanction when the plaintiff has perpetrated a fraud on the court." Ramey
v. Haverty Furniture Cos., 993 So. 2d 1014, 1018 (Fla. 2d DCA 2008)
(alteration in original) (quoting Morgan v. Campbell, 816 So. 2d 251, 253
(Fla. 2d DCA 2002)).
     A "fraud on the court" occurs where it can be demonstrated,
     clearly and convincingly, that a party has sentiently set in
     motion some unconscionable scheme calculated to interfere
     with the judicial system's ability impartially to adjudicate a
     matter by improperly influencing the trier or unfairly
     hampering the presentation of the opposing party's claim or
     defense.
Id. (quoting Jacob v. Henderson, 840 So. 2d 1167, 1169 (Fla. 2d
DCA 2003)).
     A dismissal for fraud on the court is a sanction that "should be
exercised cautiously and sparingly, and only upon a clear showing of
fraud, pretense, collusion, or similar wrongdoing." Id. (quoting Tri Star
Invs., Inc. v. Miele, 407 So. 2d 292, 293 (Fla. 2d DCA 1981)). "When
reviewing a case for fraud, the court should 'consider the proper mix of
factors' and carefully balance a policy favoring adjudication on the merits

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with competing policies to maintain the integrity of the judicial system."
Cox v. Burke, 706 So. 2d 43, 46 (Fla. 5th DCA 1998) (quoting Aoude v.
Mobile Oil Corp., 892 F.2d 1115, 1117-18 (1st Cir. 1989)).
     "Because 'dismissal sounds the "death knell of the lawsuit," courts
must reserve such strong medicine for instances where the defaulting
party's misconduct is correspondingly egregious.' " Id. (quoting Aoude,
892 F.2d at 1118). "[D]ismissal is the most severe of all possible
sanctions" and, therefore, "should be employed only in extreme
circumstances." Id. (first citing Kornblum v. Schneider, 609 So. 2d 138,
139 (Fla. 4th DCA 1992); and then citing Bird v. Hardrives of Delray, Inc.,
644 So. 2d 89, 90 (Fla. 4th DCA 1994)). "Misconduct that falls short of
the rigors of this test, including inconsistency, nondisclosure, poor
recollection, dissemblance and even lying, is insufficient to support a
dismissal for fraud, and, in many cases, may be well-managed and best
resolved by bringing the issue to the jury's attention through cross-
examination." Perrine v. Henderson, 85 So. 3d 1210, 1212 (Fla. 5th DCA
2012) (first citing Bologna v. Schlanger, 995 So. 2d 526, 528 (Fla. 5th
DCA 2008); then citing Granados v. Zehr, 979 So. 2d 1155, 1158 (Fla.
5th DCA 2008); and then citing Gehrmann v. City of Orlando, 962 So. 2d
1059, 1062 (Fla. 5th DCA 2007)); see also Cross v. Pumpco, Inc., 910 So.
2d 324, 328 (Fla. 4th DCA 2005) ("Except in the most extreme cases,
where it appears that the process of trial has itself been subverted,
factual inconsistencies, and even false statements, are well managed
through the use of impeachment and traditional discovery sanctions.").
     We review the trial court's decision for abuse of discretion; however,
"the trial court's discretion is narrower and our review is more stringent
than it would be in other cases evaluated under an abuse of discretion
standard because dismissal is regarded as an extreme remedy that

                                     4
should be reserved for extreme cases." Duarte v. Snap-on Inc., 216 So. 3d
771, 775 (Fla. 2d DCA 2017) (citing Howard, 959 So. 2d at 310).
Moreover, we give " 'less deference when' there is no evidentiary hearing
and the trial court's decision is 'based on the same cold document record
that is before the reviewing court.' " Ramey, 993 So. 2d at 1018 (quoting
Jacob, 840 So. 2d at 1170).
     In support of its motion to dismiss, Homeowners relied primarily on
McGinity's deposition testimony, which was taken approximately two
years after the work had been done, as well as Synergy's estimates of
costs submitted to Homeowners, Synergy's answers to interrogatories,
and Synergy's request for admissions. At his deposition, McGinity
testified that during the work, he and his wife took the opportunity to
make upgrades to their property, understanding that they were
personally responsible for the additional costs of the upgrades. McGinity
did not recall "what was part of [the] upgrade and what's the obligation of
the insurance company," but he paid out of pocket for the upgrades.
     Homeowners claimed that Synergy improperly included cabinets,
flooring, electrical work, and countertops in its estimates to
Homeowners, when McGinity testified that he himself paid out of pocket
for those. But as for the cabinets, flooring, and electrical work, McGinity
testified that he paid for the upgrades, and it is not clear from McGinity's
testimony whether he paid only for the upgraded portion of the work and
whether Synergy, as the contractor, was responsible for paying for the
standard work.
     The estimate for the countertops is more questionable. Synergy
sought an amount to replace the tile countertops. McGinity testified that
Synergy removed the old tile countertops but that Synergy did not install
the new countertops. McGinity "went out and got [his] own countertops."

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He "found a separate company, paid for [the countertops], and [the
company] actually did the installation." Thus it appears that Synergy
was seeking payment for a line item that was not performed by or paid
for by Synergy.
     Homeowners further relied on McGinity's testimony, when
compared to the estimates, to show that Synergy sought payment for
work in the living room that was not actually performed by Synergy. The
estimate included ten line items. McGinity stated that Synergy did not
paint the walls, but he also stated that it was possible that Synergy had
performed seven of the items but that Synergy had not performed the
last three. The painting of the walls was one of the seven items that
McGinity stated that Synergy may have performed. Thus it is not clear
from McGinity's testimony that this work was not performed by Synergy.
     Homeowners also claimed that Synergy sought payment in its
estimate relating to packing items and services that Homeowners claimed
were not actually performed by Synergy. Homeowners relied on
McGinity's testimony that Synergy did not "perform any services relating
to packing out the contents of [his] home, putting things in boxes," as
well as Synergy's interrogatory response that Synergy "did not handle
contents." However, it is clear that McGinity's kitchen was completely
remodeled. Yet there is no indication of who handled the contents of the
kitchen before and after the remodel, who provided the materials used to
pack the contents, and what was meant by the term "handle contents."
     We recognize that there are some inconsistencies between the
estimates submitted by Synergy, McGinity's testimony, and Synergy's
interrogatory responses and answers to request for admissions. There
may even be false statements. But after reviewing the cold record, we are
unconvinced that the inconsistencies or the false statements in the

                                    6
evidence are enough to demonstrate clearly and convincingly that
Synergy set into motion an unconscionable scheme calculated to
interfere with the judicial system's ability impartially to adjudicate a
matter by improperly influencing the trier of fact or unfairly hampering
the presentation of the opposing party's claim or defense. Two years had
passed between the remodel and McGinity's testimony, and McGinity's
testimony was not explicitly clear on how payment was made for most of
the upgrades and whether certain services were performed. In addition,
McGinity testified that there were three project managers during the
project, making it difficult for him to communicate about the upgrades.
While Homeowners followed up the interrogatories and deposition with a
request for admissions, the language of the request was general and did
not address the specific discrepancies revealed by McGinity's testimony.
And Homeowners did not depose Synergy's project managers or record
keepers, and no evidentiary hearing was held at which Synergy could
explain the discrepancies in the evidence. Cf. Ramey, 993 So. 2d at
1020 (affirming dismissal for fraud on the court where plaintiff "was
given a full opportunity at the evidentiary hearing to explain the
discrepancies between his sworn responses in discovery and the
pertinent medical records," "which provided an evidentiary basis for the
trial court's assessment of the veracity of the deposition testimony and
interrogatory responses"); Morgan, 816 So. 2d at 253 (concluding that
trial court did not abuse its discretion in dismissing case for fraud on the
court where plaintiff gave "false testimony [that] was directly related to
the central issue in the case," medical records showed plaintiff's
testimony to be false, and "trial court assessed the credibility of
[plaintiff's] testimony at the evidentiary hearing in light of the record
evidence and found her explanations for the discrepancies not credible").

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     We conclude that the facts of this case fall short of the stringent
standard required to dismiss a case for fraud on the court. See Duarte,
216 So. 3d at 778 ("The limited documentary record before the trial court
was not sufficient to justify a decision that dismissal, rather than
impeachment at trial or a traditional discovery sanction, was the
appropriate remedy for [the plaintiff's] conduct."). The inconsistencies in
the limited evidence did not unfairly hamper Homeowners' defense and
can be dealt with through impeachment or traditional discovery
sanctions. See Amato v. Intindola, 854 So. 2d 812, 815-16 (Fla. 4th DCA
2003) (distinguishing cases affirming dismissals for fraud on the court as
"examples of knowing deception intended to prevent the defense from
discovery essential to defending the claim"). The trial court thus abused
its discretion, and we accordingly reverse the final judgment entered in
favor of Homeowners and remand for further proceedings.
     Reversed.

BLACK and SMITH, JJ., Concur.

Opinion subject to revision prior to official publication.

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