Court Opinion

ID: 4417428
Source: CourtListenerOpinion
Date Created: 2019-07-17 15:03:56.80969+00
Date Added: 2024-06-11T14:49:35.267323
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                                  FOURTH DISTRICT

                                   CHETU, INC.,
                                    Appellant,

                                         v.

                   FRANKLIN FIRST FINANCIAL, LTD.,
                              Appellee.

                                  No. 4D18-2428

                                  [ July 17, 2019 ]

  Appeal of nonfinal order from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Sandra Perlman, Judge; L.T. Case No.
CACE17-004319.

   Paul D. Turner, Benjamin L. Reiss and Joey L. Lampert of Perlman,
Bajandas, Yevoli & Albright, Fort Lauderdale, for appellant.

   No brief filed for appellee.

PER CURIAM.

    Chetu, Inc. appeals an order granting Franklin First Financial, Ltd.’s
motion to vacate a default final judgment. We find that the court abused
its discretion in granting the motion because Franklin First did not show
that its failure to file a responsive pleading was the result of excusable
neglect or that it acted with due diligence in seeking relief from the final
judgment. We therefore reverse and remand with instructions to reinstate
the judgment.

    Chetu filed a complaint against Franklin First seeking damages for
breach of contract and unjust enrichment. Franklin First was served with
the complaint on March 13, 2017, but it failed to file a responsive pleading.
A clerk’s default was entered on April 7, 2017. Chetu moved for a default
judgment and noticed a hearing for June 22, 2017. Franklin First failed
to appear at the hearing, and the court entered a final judgment against it
for over $43,000.

   Almost six months later, on December 6, 2017, Franklin First moved
to vacate the final judgment. The company’s CFO, Doug Sanderson,
testified that he accepted service of the complaint and forwarded it to a
compliance officer, but he never followed up on the case. He conceded
that the clerk’s default and subsequent filings were mailed to the correct
address, but he did not know whether they were actually received. He
testified that he first learned about the final judgment in late September
or early October 2017 and “immediately” hired outside counsel to handle
the case. Based on this testimony, the court granted the motion and
vacated the judgment. This appeal followed.

    We review an order granting a motion to vacate a default final judgment
for a gross abuse of discretion. Bequer v. Nat’l City Bank, 46 So. 3d 1199,
1201 (Fla. 4th DCA 2010). A party seeking to vacate a default final
judgment must show: (1) its failure to file a responsive pleading was the
result of excusable neglect, (2) it has a meritorious defense, and (3) it acted
with due diligence in seeking relief upon learning of the final judgment.
Id.; Hepburn v. All Am. Gen. Const. Corp., 954 So. 2d 1250, 1251-52 (Fla.
4th DCA 2007). The court in this case abused its discretion in vacating
the judgment because Franklin First did not show excusable neglect in
failing to file a responsive pleading or due diligence in seeking relief.

   As for excusable neglect, Franklin First did not present any evidence to
show why it failed to file a responsive pleading, much less evidence that
would amount to excusable neglect. Sanderson testified that he accepted
service of the complaint and forwarded it to a compliance officer, but there
was no evidence to show what the compliance officer did with the
complaint. Likewise, Sanderson conceded that the clerk’s default and
subsequent filings were mailed to the correct address, but there was no
evidence to show that they were not received or to explain why no action
was taken if they were received. In the absence of any evidence to show
why Franklin First failed to file a responsive pleading, the court abused its
discretion in finding excusable neglect. See Frady v. Deringer, 76 So. 3d
1024 (Fla. 4th DCA 2011) (reversing an order vacating a default judgment
because the moving party did not offer any evidence to support his claim
that he did not receive any mail related to the case); Bequer, 46 So. 3d at
1201-02 (reversing an order vacating a default judgment because the
moving party failed to explain what happened to the complaint or the
subsequent correspondence advising of the default).

   As for due diligence, Sanderson testified that he learned about the final
judgment in late September or early October and “immediately” hired
outside counsel to handle the case. But counsel did not actually file the
motion to vacate until December 6th, and Franklin First did not present
any evidence to explain the delay. This unexplained two-month delay in
seeking relief precludes a finding of due diligence. See Hepburn, 954 So.

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2d at 1252 (reversing an order vacating a default judgment because the
moving party did not introduce any evidence to explain a four-month delay
in seeking relief); Lazcar Int’l, Inc. v. Caraballo, 957 So. 2d 1191, 1192-93
(Fla. 3d DCA 2007) (holding that a six-week delay in seeking relief, absent
competent substantial evidence of some exceptional circumstance,
constitutes a lack of due diligence as a matter of law); cf. Fla. Eurocars,
Inc. v. Pecorak, 110 So. 3d 513, 516-17 (Fla. 4th DCA 2013) (reversing an
order denying a motion to vacate because the moving party’s counsel filed
an affidavit setting forth a “reasonable and credible explanation” for the
delay in seeking relief).

   Because Franklin First did not show excusable neglect in failing to file
a responsive pleading or due diligence in seeking relief, we conclude that
the trial court grossly abused its discretion in vacating the default final
judgment. We therefore reverse and remand for the court to reinstate the
judgment.

   Reversed and Remanded with instructions.

WARNER, TAYLOR and KUNTZ, JJ., concur.

                            *        *         *

   Not final until disposition of timely filed motion for rehearing.

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