Court Opinion

ID: 4401256
Source: CourtListenerOpinion
Date Created: 2019-05-29 15:03:26.857608+00
Date Added: 2024-06-11T13:32:21.806487
License: Public Domain

Third District Court of Appeal
                               State of Florida

                           Opinion filed May 29, 2019.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                               No. 3D18-1277
                         Lower Tribunal No. 17-20533
                             ________________

                  Benefit Administrative Systems, LLC,
                                    Appellant,

                                        vs.

              West Kendall Baptist Hospital, Inc., et al.,
                                    Appellees.

      An Appeal from the Circuit Court for Miami-Dade County, Abby Cynamon,
Judge.

     Phelps Dunbar LLP, and Michael S. Hooker and Guy P. McConnell
(Tampa), for appellant.

     Isicoff Ragatz, and Matthew L. Lines and Eric D. Isicoff, for appellees.

Before EMAS, C.J., and LOGUE and HENDON, JJ.

     EMAS, C.J.
      INTRODUCTION

      Benefit Administrative Systems, LLC (BAS) appeals the trial court’s denial

of its motion to set aside a default judgment on the basis of excusable neglect.

Because the trial court did not abuse its discretion, we affirm.

      FACTS AND PROCEDURAL BACKGROUND

      West Kendall Hospital and South Miami Hospital (the Hospitals) sued BAS

to recover for underpaid claims in the amount of $327,114.16. The summons and

complaint were served on BAS’s registered agent, Corporation Service Company

(CSC), “a national provider of registered agent services.” When BAS did not file

an answer, the Hospitals sought, and the trial court entered, a default final

judgment against BAS for $327,114.16. The Hospitals maintained (and provided

evidence below) that their attorney mailed a copy of the default judgment, regular

mail, to BAS’s Illinois headquarters on October 16, 2017—the same day the trial

court entered the default judgment. BAS denied that it received the summons and

complaint or the default judgment.

      On February 23, 2018, the Hospitals sought to domesticate the default

judgment in an Illinois court, and to freeze BAS’s assets through issuance of a

“Third Party to Discover Assets” to BAS’s bank. BAS contends that its “receipt of

these documents was the first time [] it became aware of the Hospital’s lawsuit and

the default judgment.” These documents were mailed to BAS’s corporate

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headquarters in Illinois—the same location to which counsel had mailed a copy of

the default judgment four months earlier.

      On March 7 (nearly five months after the default judgment was entered),

BAS filed the underlying motion to quash service and set aside judgment, alleging:

(1) that it was not served; and (2) if it was served, the failure to respond was due to

excusable neglect, i.e., misfiling of the served documents. During an evidentiary

hearing, BAS’s CEO (James Connell) testified that BAS was never served with the

summons and complaint in this case. The Hospitals presented evidence that BAS

was properly served (including testimony from the process server), and evidence

that counsel for the Hospitals mailed the judgment to BAS’s corporate office the

same day default was entered.

      Following the evidentiary hearing, the trial court denied the motion, finding

the return of service was proper on its face and presumptively valid, and that (1)

BAS “failed to offer evidence from which the Court [could] find excusable

neglect”; and (2) BAS failed to act with due diligence where it filed its motion

nearly five months after the Hospitals mailed (and BAS received) a copy of the

default judgment. This appeal followed.

      DISCUSSION

      Florida Rule of Civil Procedure 1.540(b)(1) authorizes a trial court to relieve

a party from a final judgment on the basis of, inter alia, excusable neglect. A trial

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court is accorded broad discretion in determining whether to grant such relief, and

we review the trial court’s order for an abuse of that broad discretion. Tikhomirov

v. Bank of New York Mellon, 223 So. 3d 1112, 1116 (Fla. 3d DCA 2017).

However, “in case of doubt, discretion is to be exercised in favor of vacating the

default.” Miami-Dade Cty. v. Coral Bay Section C Homeowners Ass’n, Inc., 979

So. 2d 318, 323 (Fla. 3d DCA 2008) (quotation omitted).                 Because the

circumstances constituting excusable neglect are not precisely defined, “the facts

of each case are of singular importance in determining whether relief should be

granted.” Id. at 322. A court has discretion to set aside a default judgment if the

moving party establishes: “(1) excusable neglect in failing to timely file a

response; (2) a meritorious defense; and (3) due diligence in seeking relief after

discovery of the default.” Santiago v. Mauna Loa Invs., LLC, 189 So. 3d 752, 758

(Fla. 2016). Failure to satisfy any one of these elements will result in denial of the

motion to vacate.1 Id.

      1. Excusable Neglect

      We hold that the trial court did not abuse its discretion in denying BAS’s

motion. While clerical errors and “failure to follow established policy” may

constitute excusable neglect, Coral Bay, 979 So. 2d at 324, the only position

advanced by BAS and supported by evidence was its assertion that the summons

1Because BAS failed to satisfy the excusable neglect and due diligence prongs, we
do not address whether BAS established a meritorious defense.

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and complaint were never served upon BAS. Nevertheless, BAS’s evidence was

contradicted by the Hospitals’ evidence, as well as the presumption of valid service

arising from the return of service that was regular on its face. See Robles-Martinez

v. Diaz, Reus & Targ, LLP, 88 So. 3d 177 (Fla. 3d DCA 2011). The trial court

weighed the evidence, made credibility determinations, and concluded that BAS

failed to show it was never served with the summons and complaint.

      Alternatively, BAS sought to advance a second, inconsistent position: if the

trial court concluded that the summons and complaint were served upon BAS, the

“only explanation” was that the summons and complaint were misfiled, and thus

the failure to respond was the result of excusable neglect. This second position

was advanced based solely upon counsel’s argument and without any supporting

evidence for the claim that BAS in fact misfiled the summons and complaint.

There is probably good reason for this failure of proof by BAS: any evidence it

presented to establish that BAS misfiled the summons and complaint would

presumably weaken (if not fully undermine) its primary argument that it was never

served with the summons and complaint.

      Given BAS’s failure to present evidence to support its position that the

summons and complaint were “misfiled,” the trial court properly rejected this

argument. Rivera v. Dep’t of Revenue ex rel. Rivera, 899 So. 2d 1265 (Fla. 2d

DCA 2005) (holding that excusable neglect under rule 1.540(b) cannot be

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established without evidence to support a finding of a legal excuse for defendant’s

failure to comply with the rules of civil procedure). The trial court did not abuse

its discretion in finding that BAS failed to establish excusable neglect.

      2. Due Diligence

      We likewise conclude that the trial court did not abuse its discretion in

finding that BAS failed to act with due diligence upon learning of the default

judgment. While BAS contended it never received a copy of the default judgment,

this contention was challenged by the Hospitals’ introduction of evidence that, on

the day default was entered, counsel’s office mailed the judgment to BAS’s

corporate headquarters—the same address where the Hospitals mailed the motion

to domesticate and freeze BAS’s assets (motions which BAS concedes it received).

This evidence also included a certificate of service indicating that the Hospitals

served BAS with a copy of the judgment by mail on October 16, 2017. See Fla. R.

J. Admin. 2.516(f) (providing that a “certificate is taken as prima facie proof of

such service in compliance with this rule”); JPMorgan Chase Bank, Nat’l Ass’n v.

Bigley, 120 So. 3d 1265, 1267 (Fla. 3d DCA 2013) (holding that “the date set forth

by counsel in the certificate of service ‘creates a rebuttable presumption which

may be overcome by competent evidence to the contrary’”) (quoting Migliore v.

Migliore, 717 So. 2d 1077, 1079 (Fla. 4th DCA 1998)).

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      The competing evidence introduced by the parties simply created an issue of

fact for the trial court to resolve at the evidentiary hearing. Depelisi v. Wishner, 15

So. 3d 808, 811 (Fla. 4th DCA 2009). The trial court rejected BAS’s evidence on

this issue in favor of the Hospitals’ evidence (and the accompanying presumption),

and concluded that BAS did receive a copy of the default judgment near the date it

was mailed by the Hospitals (October 16, 2017).             Based on these factual

determinations, the trial court did not abuse its discretion in concluding that BAS

failed to act with due diligence in filing its motion to set aside the judgment nearly

five months after the Hospitals mailed (and BAS received) a copy of the default

judgment. See e.g., Techvend, Inc. v. Phoenix Network, Inc., 564 So. 2d 1145,

1146 (Fla. 3d DCA 1990) (finding a lack of due diligence where moving party did

not seek relief until “more than three months after” it became aware of the default).

      Affirmed.

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