NATIONSBANK, N.A., APPELLANT,
v.
REGENCY CENTERS, INC., A FLORIDA CORPORATION, SUCCESSOR IN INTEREST TO UNIVERSITY MARKET PLACE, A FLORIDA GENERAL PARTNERSHIP, AND SQUIGGLES & GIGGLES, INC., A FLORIDA CORPORATION, AND STATE OF FLORIDA DEPARTMENT OF REVENUE, APPELLEES
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NationsBank appealed a default judgment for foreclosure of a landlord's lien obtained by Regency Centers. The court reversed the trial court's order denying NationsBank's motion to set aside the default judgment, finding excusable neglect and a meritorious defense warranted vacating the default so the case could be decided on its merits.
The court held that NationsBank demonstrated excusable neglect, a meritorious defense, and due diligence sufficient to warrant vacating the default judgment under Florida Rule of Civil Procedure 1.540(b)(1). Florida policy strongly favors deciding cases on their merits, and any reasonable doubt should be resolved in favor of granting relief from default judgments.
[1] A default judgment may be set aside upon a showing of excusable neglect, a meritorious defense, and due diligence in seeking to vacate the judgment.
[2] Mistakenly forwarding lawsuit papers to an incorrect department within a corporation can constitute excusable neglect justifying relief from a default judgment.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“The record demonstrates excusable neglect, a meritorious defense, and due diligence in seeking to vacate the default final judgment under Florida Rule of Civil Procedure 1.540(b)(1).”
Establishes the three-prong test for granting relief from default and applies it favorably to NationsBank.
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Join FLexlaw to unlock all legal intelligenceNationsBank was served with a lawsuit filed by Regency Centers regarding a landlord's lien on personalty. NationsBank's legal department mistakenly fo…
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PER CURIAM.
We reverse the order denying appellant Nationsbank’s motion to set aside a default final judgment of foreclosure of a landlord’s lien obtained by appellee, Regency Centers, Inc. (Regency). The clerk entered a default on November 12, 1997. Through both parties’ involvement in a bankruptcy case where the debtor was Regency’s tenant and from letters sent by Nationsbank’s attorney to Regency’s attorney, Regency was aware that Nationsbank intended to defend-its security interest against Regency’s claim that its landlord’s lien took priority over other interests in the debtor’s personalty. Nonetheless, Regency’s attorney did not notify Nations-bank’s attorney of the filing of the lawsuit or of the applications for default and judgment.
After being served with the lawsuit, Nationsbank inadvertently forwarded the suit papers to its foreclosure department in Kentucky on the mistaken belief that the action dealt with a mortgage on real property held by the bank. That department neglected to forward the papers to the bank’s counsel for a response. Regency served its motion for default and notices of hearings on the corporation. Nationsbank’s attorney first became aware of the final judgment when Regency’s lawyer gave him a copy after Nati-onsbank filed a replevin action against Regency concerning the property which was the subject of the foreclosure action. The final judgment was entered on January 28, 1998. The motion to vacate the judgment was filed on February 18,1998.
The record demonstrates excusable neglect, a meritorious defense, and due diligence in seeking to vacate the default final judgment under Florida Rule of Civil Procedure 1.540(b)(1). See North Shore Hosp., Inc. v. Barber, 143 So. 2d 849, 852-53 (Fla.1962); General Motors Acceptance Corp. v. Thomberry, 629 So. 2d 292 (Fla. 3d DCA 1993). Since Florida policy dictates a preference that cases be decided on their merits, if there is any reasonable doubt as to whether to vacate a default, it should be resolved in favor of granting relief from a default judgment so that a matter may be tried on the merits. See North Shore, 143 So. 2d at 853; Cinkat Transp., Inc. v. Maryland Cas. Co., 596 So. 2d 746 (Fla. 3d DCA 1992).
This case most resembles General Motors Acceptance Corp. v. Thornberry. In that case GMAC’s legal department mistakenly forwarded suit papers to a Miami office not handling the account on which the suit was based. As a result, the summons and complaint were not forwarded to the insurance carrier for a defense. The Miami office telephoned the legal department to advise it of the mistake. Each party to the conversation mistakenly believed that the other party would notify the insurance carrier to provide a defense. After the delay which resulted from the confusion, a default was entered. The trial court denied a motion to vacate the default, finding that there was no excusable neglect. On appeal, the third district found that excusable neglect had been shown, citing other cases in which comparable misroutings of suit papers had been held to justify relief from a default. Id. at 293 (citing North Shore; Atlantic Asphalt & Equip. Co. v. Mairena, 578 So. 2d 292, 293 (Fla. 3d DCA 1991); Hialeah, Inc. v. Adams, 566 So. 2d 350, 350-51 (Fla. 3d DCA 1990)).
REVERSED AND REMANDED.
STONE, C.J., and GROSS, J., concur. GROSS, J., concurs specially with opinion.
GUNTHER, J., dissents without opinion.
GROSS, J.,
concurring specially.
I concur in the majority opinion. I write to note that another factor that supports setting aside the default in this ease is that Regency took a default with actual knowledge of Nationsbank intent to litigate the issue of which creditor had priority with respect to the debtor’s assets. See Sklar v. Brawley, 651 So. 2d 1314 (Fla. 3d DCA 1995); Gulf Maintenance & Supply, Inc. v. Barnett Bank of Tallahassee, 543 So. 2d 813 (Fla. 1st DCA 1989). Deference to the value of collegiality suggests that Regency’s attorney should have contacted the attorney known to be representing Nationsbank in the bankruptcy proceeding concerning the property that was the focus of this lawsuit, before causing a default and judgment to be entered. See Cardet v. Resolution Trust Corp., 563 So. 2d 167, 169 n. 2 (Fla. 3d DCA 1990) (quoting Gulf Maintenance & Supply, Inc., at 816).
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Shurgard Storage Ctrs., Inc. v. Marcelle Parker, 755 So. 2d 695 (Fla. 4th DCA 1999)…96] administrative mishandling and misrouting of the complaint between corporate offices in Denver and Miami such that a clear case of excusable neglect as a result of a system gone awry has been shown.1 See Nationsbank, N.A. v. Regency Ctrs., Inc., 725 So. 2d 439 (Fla. 4th DCA 1999); General Motors Acceptance Corp. v. Thornberry, 629 So. 2d 292 (Fla. 3d DCA 1993). This court has previously stated that “[w]here inaction results from clerical or secretarial error, reasonable misunderstanding, a system gone awr…
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U.S. Bank Nat'l Ass'n v. Lloyd, 981 So. 2d 633 (Fla. 2d DCA 2008)…to the Bank by serving the Awer-bach firm before applying for the entry of a default.5 See Geraci v. Preferred Capital Mkts., Inc., 802 So. 2d 479, 482 (Fla. 3d DCA 2001); Nat’l Union, 799 So. 2d at 379-80; Nationsbank, N.A. v. Regency Ctrs., Inc., 725 So. 2d 439, 441 (Fla. 4th DCA 1999) (Gross, J., concurring specially); Rapid Credit Corp. v. Sunset Park Ctr., Ltd., 566 So. 2d 810, 811 (Fla. 3d DCA 1990). V. CONCLUSION For the foregoing reasons, the circuit court abused its discretion in denying the Bank’…
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Shiloh Toler and Troy Toler v. Bank OF Am., 78 So. 3d 699 (Fla. 4th DCA 2012)…we considered their argument to be one invoking excusable neglect, the motion would still be without merit. Excusable neglect requires showing excusable neglect, a meritorious defense, and due diligence. See Nationsbank, N.A. v. Regency Ctrs., Inc., 725 So. 2d 439, 440 (Fla. 4th DCA 1999). Even assuming the defenses the Tolers mention are meritorious, they failed to make any allegations on excusable neglect and due diligence.…
Authorities Cited (11 total)
- N. Shore Hosp., Inc. v. Barber, 143 So. 2d 849 (Fla. 1962)
- Gulf Maint. & Supply, Inc. v. Barnett Bank OF Tallahassee, 543 So. 2d 813 (Fla. 1st DCA 1989)
- Cash v. State, 596 So. 2d 746 (Fla. 1st DCA 1992)
- Hialeah, Inc. v. Adams, 566 So. 2d 350 (Fla. 3d DCA 1990)
- Cinkat Transp., Inc. v. Md. Cas. Co., 596 So. 2d 746 (Fla. 3d DCA 1992)
- Gen. Motors Acceptance Corp. v. Thornberry, 629 So. 2d 292 (Fla. 3d DCA 1993)
- Cardet v. Resolution Tr. Corp., 563 So. 2d 167 (Fla. 3d DCA 1990)
- Vidal v. State, 578 So. 2d 292 (Fla. 3d DCA 1991)
- Atl. Asphalt & Equip. Co., Inc. v. Feliciano Moreno Mairena, 578 So. 2d 292 (Fla. 3d DCA 1991)
- State v. Lietzau, 651 So. 2d 1314 (Fla. 3d DCA 1995)