ROBERT DAVIS, APPELLANT,
v.
M & M AIRCRAFT ACQUISITIONS, INC., A DELAWARE CORPORATION, AND AEROVISION, LLC, A NEW HAMPSHIRE LIMITED LIABILITY COMPANY, APPELLEES
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A non-party to a declaratory judgment action sought to vacate the judgment under Florida Rule of Civil Procedure 1.540(b), claiming it was obtained by fraud. The court held that the non-party has standing to challenge the judgment when it directly affects his rights, and reversed the trial court's dismissal for lack of standing.
A non-party to an action has standing under Rule 1.540(b) to move for vacation of a judgment when the judgment was obtained by fraud or collusion and directly affected that person's rights. On the facts presented, Davis, as a 40% owner with managing authority in Aerovision, had standing to challenge the judgment, though the trial court must consider on remand whether Davis's interests were affected following settlement of the federal action.
[1] A non-party has standing under Florida Rule of Civil Procedure 1.540(b) to challenge a judgment procured by fraud or collusion if the judgment directly affects the non-pa…
[2] A final declaratory judgment directly affects a party's rights when it impacts their ownership interest and authority to manage a business entity.
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Join FLexlaw to unlock all legal intelligence“[A] stranger to the action has standing under the rule to move for vacation of the judgment when that judgment was obtained by fraud or collusion and directly affected the rights of that person.”
Establishes the legal standard for non-party standing to challenge judgments under Rule 1.540(b)
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Join FLexlaw to unlock all legal intelligenceRobert Davis owned 40% of Aerovision, LLC, with Daniel McCue owning 60%. When McCue sold his interest to M & M Aircraft, Davis filed a federal action …
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The issue in this appeal is whether appellant, a non-party to the original action, has standing under Florida Rule of Civil Procedure 1.540(b) to challenge a final declaratory judgment allegedly procured by “fraud” or “collusion.” We find that the final judgment directly affected appellant’s rights such that he has standing to be heard on the merits of his motion.
Appellant and Daniel McCue respectively owned 40% and 60% of appellee Aerovision, LLC. When McCue sold his interest in Aerovision to appellee M & M Aircraft, Inc., appellant filed an action for declaratory relief against McCue in federal district court, seeking a judgment affirming that appellant was the only member authorized to manage Aerovision. The same day McCue filed his answer, M & M sought *1067declaratory relief against Aerovision. M & M and Aerovision, through McCue, jointly requested the trial court to issue a declaratory judgment establishing that McCue “is the authorized representative of [Aerovision] for all matters.” The trial court issued a final judgment finding that McCue was Aerovision’s “sole managing member.” Neither appellee informed the trial court of appellant’s asserted interests in Aerovision. The Canadian government, with whom Aerovision contracted, informed appellant that it would rely on the final judgment.
Appellant moved to vacate the final judgment pursuant to Florida Rule of Civil Procedure 1.540(b), alleging it was obtained by fraud. Appellees moved to strike appellant’s motion, arguing that appellant lacked standing to assail the judgment. The parties stipulated at the hearing on the issue of appellant’s standing that appellant owned a 40% interest in Aerovision, that appellant had authority to manage Aerovision, and that the final judgment was fraudulently obtained. The trial court determined that appellant lacked standing, finding that the judgment “does not directly affect [appellant’s] rights,” and that appellant was not “in any way bound by the judgment.” This appeal followed.
“[A] stranger to the action has standing under the rule to move for vacation of the judgment when that judgment was obtained by fraud or collusion and directly affected the rights of that person.” State Airlines, Inc. v. Menut, 511 So.2d 421, 424 (Fla. 4th DCA 1987) (quoting Pearlman v. Pearlman, 405 So.2d 764, 766 (Fla. 3d DCA 1981)).
We find, on the facts of this case, that the allegations in appellant’s motion combined with the facts stipulated by the parties at the hearing were sufficient to establish that the final judgment directly affected appellant’s rights. See generally Chaluts v. Nagar, 862 So.2d 925 (Fla. 2d DCA 2004); Woginiak v. Kleiman, 523 So.2d 1209 (Fla. 3d DCA 1988). Since the parties stipulated to appellant’s ownership interest and managing authority, we conclude that the trial court’s view of the effect of the judgment on appellant’s rights was too narrow. However, on remand, appellees may introduce evidence which tends to prove that appellant no longer owns an interest in Aerovision.1
Reversed and remanded for proceedings consistent with this opinion.
STEVENSON, HAZOURI and LEVINE, JJ., concur.
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Citator
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Gotham Ins. Co. v. Matthew, 179 So. 3d 437 (Fla. 5th DCA 2015)…n Pearlman, the Third District Court held that a non-party had standing to attack the judgment [*441] by motion under rule 1.540(b)(3), the same rule at issue in the instant case. Id. at 767. Similarly, in Davis v. M & M Aircraft Acquisitions, Inc., 76 So. 3d 1066, 1067 (Fla. 4th DCA 2011), the Fourth District Court held that a nonparty to the original action had. standing under rule 1.540(b) for the merits of the motion to be heard. We choose to follow this case precedent and hold that rule 1.540(b) confers…
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Carlisle v. U.S. Bank, 225 So. 3d 893 (Fla. 3d DCA 2017)…-party insurer had standing to move to vacate judgment as the insurer’s rights were directly affected by fraudulently amended judgment which could have a preclusive effect on insurer in later proceedings); Davis v. M & M Aircraft Acquisitions, Inc., 76 So. 3d 1066, 1066 (Fla. 4th DCA 2011) (finding that non-party minority shareholder had standing to vacate final judgment fraudulently obtained by parties and which directly affected minority shareholder's rights); Chaluts v. Nagar, 862 So. 2d 925, 927 (Fla. 2d…
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Clerk v. State (Fla. 2d DCA 2023)…ing such relief.1 See, e.g., Meyer v. Scutieri, 539 So. 2d 602, 603 (Fla. 3d DCA 1989) (reversing trial court's refusal under rule 1.540(b) to vacate an order requiring nonparties to pay attorney's fees); Davis v. M & M Aircraft Acquisitions, Inc., 76 So. 3d 1066, 1066–67 (Fla. 4th DCA 2011) (holding that nonparty to original action had standing to be heard on the merits of a rule 1.540(b) motion to vacate a final judgment procured by collusion between the parties because "the final judgment directly affecte…
Authorities Cited
- Helene Pearlman v. Pearlman, 405 So. 2d 764 (Fla. 3d DCA 1981)
- State Airlines, Inc. v. Menut, 511 So. 2d 421 (Fla. 4th DCA 1987)
- Roli Woginiak v. Kleiman, 523 So. 2d 1209 (Fla. 3d DCA 1988)
- Chaluts v. Nagar, 862 So. 2d 925 (Fla. 2d DCA 2004)