PALMER JOHNSON, INC., APPELLANT,
v.
WILLIAM E. BUXTON, APPELLEE
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Palmer Johnson, Inc. appeals a default judgment entered against it while the parties were engaged in good-faith arbitration efforts to resolve their yacht purchase dispute. The court reverses, finding the default was taken against a defendant who reasonably believed arbitration was ongoing and thus excused from filing an answer.
The court held that the default judgment should be vacated because Palmer Johnson demonstrated excusable neglect. The defendant's failure to file an answer was excused because the plaintiff had initiated and encouraged arbitration proceedings, which reasonably led the defendant to believe litigation was not necessary.
[1] A default judgment may be vacated upon a showing of excusable neglect.
[2] A party's active pursuit of alternative dispute resolution, such as arbitration, can constitute excusable neglect for failing to file a timely responsive pleading in a pe…
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Join FLexlaw to unlock all legal intelligence“The defendant, in seeking to vacate the default, clearly showed excusable neglect. Buxton himself had led the way in efforts to resolve the matter by arbitration. His correspondence suggested not the slightest reason why the defendant ought to divert its attention from arbitration to litigation”
Establishes that excusable neglect exists when the opposing party has encouraged arbitration and given no indication that litigation will proceed
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Join FLexlaw to unlock all legal intelligenceBuxton purchased a 55-foot sailing yacht from Palmer Johnson, Inc., built to specifications and delivered to a Clearwater yard. Buxton disputed whethe…
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Buxton bought from Palmer Johnson, Inc., a 55-foot sailing yacht, to be built in Finland to Sparkman & Stephens, Inc., specifications. It was taken, upon importation, to a Clearwater yard for commissioning and delivery. Buxton, who had paid most of the purchase price, had some dispute about alleged failure to meet specifications, and while Parsons, vice president of defendant corporation, was in Clearwater to confer with Buxton this action was instituted, not only for specific performance and damages, but for an injunction to prevent removal of the yacht from the jurisdiction.
While the temporary injunction remained in effect the parties began negotiations. Buxton, learning that Parsons had called from the corporation’s office in Wisconsin, wrote to suggest that the matter be submitted to arbitration by Olin Stephens of New York. Buxton and Parsons went to New York, and in fact many, but not all, of their differences were resolved by Mr. Stephens’ findings.
Meanwhile, back at the Court House, no answer had been filed. Plaintiff’s lawyer *893filed praecipe for default and default judgment was entered. When the defendant learned of the entry of judgment, it promptly engaged Tampa counsel who filed a petition to vacate, asserting excusable neglect. The praecipe for default was filed one day prior to Buxton’s writing Parsons and asking that the second meeting with Olin Stephens be cancelled “for the time being.” Buxton executed an affidavit asserting that he owed the defendant only $5,643.15, although it is clear that the defendant had asserted certain claims for extra compensation and that the parties contemplated a subsequent meeting with Stephens, whose services as an arbitrator were not curtailed by any act of Buxton’s.
The defendant, in seeking to vacate the default, clearly showed excusable neglect. Buxton himself had led the way in efforts to resolve the matter by arbitration. His correspondence suggested not the slightest reason why the defendant ought to divert its attention from arbitration to litigation, and the major effect of the pending action was to enjoin the removal of the yacht. We think the order appealed from, denying vacation of the default judgment, was clear error.
We reversed an improvident entry of default in Cowen v. Knott, Fla.App.2d 1971, 252 So.2d 400, and there, at pp. 402-403, discussed why the cases on which ap-pellee relies are inapposite.1
The situation, though resting upon an interpretation of Fla.R.Civ.P. 1.540(b), 31 F.S.A., is analogous to our recent decisions respecting the propriety of dismissal for failure to prosecute, which construed “good cause” as that phrase is used in Fla.R.Civ.P. 1.420(e), 30 F.S.A. In Fleming v. Florida Power Corporation, Fla.App.2d 1971, 254 So.2d 546, and Whitney v. Whitney, Fla.App.2d 1970, 241 So.2d 436, we held that activity of the parties or their lawyers off the record which, but for cooperation, would have appeared of record, would justify an apparent failure to prosecute.
Buxton’s conduct in this case might reasonably have led the defendant to think that, unless arbitration failed, he might never need a lawyer at all. Our guild is not so clannish that every defendant so lulled into a sense of security is obligated to hire one of our profession to proceed within twenty days to file something as a token of defendant’s distrust.
What merit there may. be in the defendant’s claims remains for ultimate determination by the trier of fact. There may indeed be none, but this default was wrongly taken against a defendant who thought arbitration was in progress.
Reversed and remanded with directions to vacate the default and allow defendant to answer.
LILES, A. C. J., and McNULTY, J., concur.
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Scott v. Premium Dev., Inc., 328 So. 2d 557 (Fla. 1st DCA 1976)…calf v. Langston, 296 So. 2d 81 (Fla.App. 1st), cert. dism. 302 So. 2d 414 (Fla.1974); Wesley Constr. Co. v. Yarnell, 268 So. 2d 454 (Fla.App. 4th, 1972). Contrast Knight v. Gainer, 310 So. 2d 58 (Fla.App. 1st, 1975); Palmer Johnson, Inc. v. Buxton, 262 So. 2d 892 (Fla.App. 2d, 1972) ; Florida Inv. Ent., Inc. v. Kentucky Co., supra. See also Wright and Miller, supra, § 2697. AFFIRMED. McCORD, Acting C. J., and FULLER, RICHARD S., Associate Judge, concur.…
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Rubenstein v. Richard Fidlin Corp. & Richard Fidlin, 346 So. 2d 89 (Fla. 3d DCA 1977)…gment. Under these circumstances, we believe it was unconscionable for the plaintiff to take advantage of the defendants’ failure to file responsive pleadings by obtaining a default judgment without notice to the defendants. See: Johnson v. Buxton, 262 So. 2d 892 (Fla.2d DCA 1972). The law is well-settled that a party is estopped from asserting legal rights to the detriment of another party when to do so would be unconscionable. See: Davis v. Evans, 132 So. 2d 476 (Fla. 1st DCA 1961). We, therefore, hold th…
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Am. Republic Ins. Co. v. Westchester Gen. Hosp., 414 So. 2d 1163 (Fla. 3d DCA 1982)…ns.... Under these circumstances, we believe it was unconscionable for the plaintiff to take advantage of the defendants’ failure to file responsive pleadings by obtaining a default judgment without notice to the defendants. See: Johnson v. Buxton, 262 So. 2d 892 (Fla. 2d DCA 1972). The law is well-settled that a party is estopped from asserting legal rights to the detriment of [*1164] another party when to do so would be unconscionable. See: Davis v. Evans, 132 So. 2d 476 (Fla. 1st DCA 1961). We, therefore…
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
- N. Shore Hosp., Inc. v. Barber, 143 So. 2d 849 (Fla. 1962)
- Whitney v. Whitney, 241 So. 2d 436 (Fla. 2d DCA 1970)
- Fleming v. Fla. Power Corp., 254 So. 2d 546 (Fla. 2d DCA 1971)
- Cowen v. Knott, 252 So. 2d 400 (Fla. 2d DCA 1971)