MERRILL LYNCH MORTGAGE CAPITAL, INC., APPELLANT,
v.
HALLMARK INDUSTRIES, INC., APPELLEE
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Merrill Lynch Mortgage Capital appealed from orders denying its motion to vacate a default judgment entered in a quiet title action brought by Hallmark Industries. The court held that Merrill Lynch Mortgage satisfied all three requirements for vacating a default judgment and that the trial court abused its discretion in denying the motion.
Merrill Lynch Mortgage satisfied all three requirements for vacating a default judgment. The trial court abused its discretion by denying the motion to vacate, and the case is reversed and remanded to allow Merrill Lynch Mortgage to present its defenses.
[1] To set aside a default judgment, a party must demonstrate excusable neglect, a meritorious defense, and due diligence.
[2] A gross abuse of discretion must be shown to reverse a trial court's ruling on a motion to vacate a default judgment.
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Join FLexlaw to unlock all legal intelligence“To set aside a default, a party must demonstrate excusable neglect, a meritorious defense and due diligence.”
Establishes the three-part test for vacating a default judgment under Florida law
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Join FLexlaw to unlock all legal intelligenceHallmark Industries filed a complaint against Merrill Lynch Mortgage seeking to quiet title and declaratory judgment regarding mortgage rights. The co…
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THREADGILL, Judge.
This case involves a dispute between Merrill Lynch Mortgage Capital, Inc. (Merrill Lynch Mortgage), and Hallmark Industries, Inc. (Hallmark),. concerning their interests, as mortgagees, in real property in Florida. Hallmark filed a complaint against Merrill Lynch Mortgage seeking to quiet title and requesting a declaratory judgment as to its rights and-obligations under its mortgage. Merrill Lynch Mortgage appeals nonfinal orders denying its motions to vacate a final judgment entered upon default.
Merrill Lynch Mortgage argues that its motion to vacate the default judgment should have been granted. To set aside a default, a party must demonstrate excusable neglect, a meritorious defense and due diligence. S.B. Partners v. Holmes, 479 So. 2d 280 (Fla. 2d DCA1985), rev. denied, 488 So. 2d 68 (Fla.1986). In order to reverse a trial court’s ruling on a motion to vacate a default, a gross abuse of discretion must be shown. Id.
In the instant case, Hallmark concedes that Merrill Lynch Mortgage acted with due diligence in seeking to have the judgment vacated and default set aside.
Merrill Lynch Mortgage has also demonstrated a meritorious defense. A meritorious defense may be shown by either an unverified pleading or an affidavit. Collins v. Collins, 519 So. 2d 729, 730 (Fla. 2d DCA1988); Westinghouse Elevator Co. v. DFS Construction Co., 438 So. 2d 125 (Fla. 2d DCA1983). Merrill Lynch Mortgage’s answer to the complaint, filed with its second motion to vacate the default, alleges several affirmative defenses which satisfy this requirement.
To demonstrate excusable neglect, Merrill Lynch Mortgage filed the affidavits of two Merrill Lynch Credit Corporation employees. The affidavits establish that Merrill Lynch Credit is responsible for administering and maintaining all business records for Merrill Lynch Mortgage’s notes and mortgages in Florida. The affidavits also reflect a corporate policy whereby Merrill Lynch Credit routinely accepts service of process for Merrill Lynch Mortgage on its Florida cases. The affidavits state that if Merrill Lynch Credit had received notice of the action, the action would have been vigorously defended. Instead, however, the complaint was served on the registered agent of Merrill Lynch Mortgage in Delaware. According to counsel for Merrill Lynch Mortgage, the complaint was forwarded to a Delaware executive for Merrill Lynch where it remained on the executive’s desk. Merrill Lynch Credit did not receive notice of the action until approximately one week after the default judgment was entered. While there is little doubt that Merrill Lynch Mortgage was negligent in failing to ensure that the complaint was forwarded to the proper entity, the failure to follow an established corporate policy for handling lawsuits has been held to constitute excusable neglect. See Marshall Davis, Inc. v. Incapco, Inc., 558 So. 2d 206 (Fla. 2d DCA1990). We conclude that it was a gross abuse of discretion not to allow Merrill Lynch Mortgage to present its defenses. We therefore reverse and remand for further proceedings.
Reversed.
CAMPBELL, A.C.J., and BLUE, J., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
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Geer v. David Neal Jacobsen, Brian James Almengual, & Almengual & Warner, P.A., 880 So. 2d 717 (Fla. 2d DCA 2004)…ous defense, and due diligence in order for the trial court to vacate the default and the judgment. Coquina Beach Club Condo. Ass’n, Inc. v. Wagner, 813 So. 2d 1061, 1063 (Fla. 2d DCA 2002); Merrill Lynch Mtg. Capital, Inc. v. Hallmark Indus., Inc., 627 So. 2d 12, 13 (Fla. 2d DCA 1993). Our review of the order vacating the default and default judgment is for a gross abuse of the trial court’s discretion. See Merrill Lynch, 627 So. 2d at 13; Garcia Ins. Agency, Inc. v. Diaz, 351 So. 2d 1137, 1138 (Fla. 2d DCA…
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Mercury Marine Indus., Inc. v. Dillon, 779 So. 2d 356 (Fla. 2d DCA 2000)…Marshall Davis, 558 So. 2d at 207-08. The severity of the error in the court’s denial of appellant’s motion to set aside the default here is sufficient to require us to reverse. See Merrill Lynch Mortgage Capital, Inc. v. Hallmark Industries, Inc., 627 So. 2d 12 (Fla. 2d DCA 1993); S.B. Partners v. Holmes, 479 So. 2d 280 (Fla. 2d DCA 1985). The eases cited by appellees do not apply. In Lee v. Chung, 528 So. 2d 1313 (Fla. 2d DCA 1988), the defendant was not a corporation, so the “corporate procedure” except…
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NET ONE, LLC v. Christian Telecom Network, LLC, 901 So. 2d 417 (Fla. 5th DCA 2005)…to vacate a default judgment may not make conclusory assertions that it has a meritorious defense, but must disclose those defenses in a defensive pleading or an affidavit. See Geer; Merrill Lynch Mortgage Capital, Inc. v. Hallmark Industries, Inc., 627 So. 2d 12 (Fla. 2d DCA 1993). However, any reasonable doubt with regard to setting aside a default judgment should be resolved in favor of vacating the default and allowing trial on the merits. Allstate. There is a strong preference for lawsuits to be determ…
Previewing 3 of 6 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Westinghouse Elevator Co. v. DFS Constr. Co. & Fed. Ins. Co., 438 So. 2d 125 (Fla. 2d DCA 1983)
- Marshall Davis, Inc. v. Incapco, Inc., 558 So. 2d 206 (Fla. 2d DCA 1990)
- Kirkland v. Fla. Dep't of Corr., 2006 WL 3755195 (N.D. Fla. 2024)
- S.B. P'rs v. Holmes, 479 So. 2d 280 (Fla. 2d DCA 1985)
- Collins v. Collins, 519 So. 2d 729 (Fla. 2d DCA 1988)