Order Denying Motion To Vacate Judgment Reversed & Remanded For Evidentiary Hearing

In Palacio v. Alaska Seaboard Partners Limited Partnership, et al (1D10-2690), the First District reversed the trial court's order denying a motion to set aside judgment and remanded the case so that the trial court can conduct an evidentiary hearing.

Appellants were served with a foreclosure complaint in February 2009, to which they did not file a response due to what they understood to be assurances by the loan servicer representative.  Appellants alleged they contacted  the loan servicer representative  immediately after being served with the complaint.  Appellants  were assured  by the loan service representative  that the foreclosure proceeding would be abated pending application for, and approval of, a loan modification agreement.  Appellants alleged that they faxed the application for the loan modification agreement on April 7, 2009.  In support of this assertion, Appellants attached affidavits and the facsimile cover sheet  to their motion  to set aside and vacate a default judgment.

The court held that those facts were sufficient to require an evidentiary hearing.  The court stated:

It is the trial court’s failure to conduct an evidentiary hearing that warrants reversal of the denial of Appellants’ motion to set aside the default judgment.  This court has held that a trial court is required to conduct an evidentiary hearing before entering an order denying a motion to set aside a judgment.  See Seal v. Brown, 801 So. 2d 993, 994-95 (Fla. 1st DCA 2001).  Furthermore, if a moving party’s allegations raise a colorable entitlement to relief, a formal evidentiary hearing and appropriate discovery is required.  Id.  at 995.

As in the proceedings below, Appellees do not contest Appellants’ factual assertions; rather,  they  essentially  argue that Appellants’ allegations  are facially insufficient to warrant entitlement to setting aside a default judgment.  We disagree.  Appellants’ allegations and supporting documents make a colorable case for their assertion that their failure to respond to the foreclosure complaint was due to their settlement negotiations and complying with what they understood to be a modified mortgage agreement, all of which may reasonably have led them to believe that the foreclosure action was abated. 

Judge Thomas wrote the opinion and Judge Hawkes concurred.  Judge Davis concurred in the result only.