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.

Florida's 2011 Statutory Interest Rate Is 6% Per Annum Or .0001644 Per Day

The Florida Department of Financial Services announced that the Statutory Interest Rate for 2011 will be 6% per annum or .0001644 per day.  That is the same rate that applied in 2010.  The interest rate for each year from 1981 through 2011 is below.
2011 Statutory Rate of Interest - Florida Department of Financial Services



A post when the 2010 statutory rate of interest was announced can be viewed HERE.

Fourth District On Invited Error And Jurisdiction To Review Rehearing Orders

In Rodrigo v. JPMorgan Chase Bank, N.A. (4D10-1787), the Fourth District affirmed the trial court's decision in part and dismissed the appeal in part for lack of jurisdiction.  The court stated that "Appellant appeals a non-final order granting her motion to restore possession of her home but with the condition that she turn on the water and air conditioning to her unit."

First, the trial court's order was affirmed because "During the hearing on appellant’s motion to restore  possession of  property,  appellant’s counsel  agreed  to these conditions.  Having invited the alleged error, appellant cannot now be heard  to complain."  Therefore, the order was affirmed. 

The Appellant also sought review of an order on a motion for rehearing of the order, now affirmed, above.  The court stated: "A non-final order denying a motion for relief from a non-final order is not reviewable on appeal....Accordingly, we dismiss the appeal as to the order denying the motion for relief."

The opinion is below:
Rodrigo v. JPMorgan Chase Bank Nat. Ass'n., - So. 3d - (Fla. 4th DCA 2010)

*Disclaimer: Jeffrey Kuntz and/or GrayRobinson, P.A. were involved in the above-referenced action.

Party Sanctioned For Failure To Appear At Appellate Mediation

In Mash v. Lugo (5D10-2256), the Fifth District sanctioned one of the appellees for failure to appear at appellate mediation.  The appellant moved for sanctions after the appellee failed to appear.  The court stated:

In response to Mash's motion, appellees' counsel filed affidavits averring that Lugo's and Irizarry's insurer, Aequicap Insurance Company, held the exclusive right to decide to defend or settle any claim or suit within policy limits, that Lugo and Irizarry did not have the authority to bind the insurer to any settlement, and that attorney Muniz had full settlement authority on behalf of the insurer. We grant the motion.

Florida Rule of Appellate Procedure 9.720(a) provides that unless excused by the court, a party is deemed to appear at a mediation conference if the following persons are physically present or appear electronically upon agreement of the parties:

(1) The party or its representative having full authority to settle without further consultation.

(2) The party's trial or appellate counsel of record, if any. If a party has more than one counsel, the appearance of only one counsel is required.

(3) A representative of the insurance carrier for any insured party who is not such carrier's outside counsel and who has full authority to settle without further consultation.

Here, neither appellee appeared, nor did any representative of their insurance carrier. These individuals' appearance was not excused by court order, nor was there an agreement that they could appear electronically.

Appellees' counsel's claim that he had full authority to settle the case on behalf of the insurer does not excuse the failure to attend of the appellees and a representative of their insurer. (By its express terms, subsection (a)(3) excludes an insurer's outside counsel from being considered the insurance carrier's representative.)

The court ordered the appellee that failed to appear to pay the entire cost of the mediation plus the reasonable attorneys fees and costs for the appellant incurred in preparing for and attending the appellate mediation and filing the motion for sanction

Service of Process Statutes Require Strict Compliance

In the past week the Third District has released two opinions relating to service of process.  In both cases a final judgment was reversed because service of process had not been accomplished.  The message is clear, if it wasn't before, service statutes must be strictly complied with.  Both decisions are discussed below.

Opella v. Bayview Loan Servicing, LLC (3D09-2921)

The appellant appealed a summary judgment of foreclosure claiming that he had never been served.  The court stated: "Because the record unequivocally confirms that Opella was neither served with process nor waived service, we reverse."

While Bayview made a number of attempts to serve Opella individually and on behalf of 21 NW 59th Street, Inc., it never managed to serve process on him....Despite the fact that neither Opella  nor 21 NW 59th Street, Inc. had been served with process, Bayview moved for summary judgment against both, expressly alleging that “[s]ervice of process has been properly perfected upon the Defendants herein.”  Following a hearing on this motion, a final summary judgment of foreclosure was entered in pertinent part upon a finding that “[s]ervice of process has been duly and regularly obtained over NW 59TH STREET, INC., [and] STEVEN R. OPELLA . . . .

The Third District disagreed and stated "Because the record unequivocally confirms that no service of any kind was had on Opella, we agree [with Opella]." The court also stated:

We also reject Bayview’s argument that Opella and 21 NW 59th Street, Inc. failed to raise, and thereby waived, sufficiency of service of process in their “pro se answer.”  We reject this argument, first because neither Opella nor 21 NW 59th Street, Inc. filed a pro se answer or otherwise made an appearance in the court below.  Rather, one month after  it moved for summary judgment,  Bayview’s attorney, Brian L. Rosaler, concededly without agreement or authorization from Opella or 21 NW 59th Street, Inc., filed  a “Notice of Filing Defendant’s Pro Se Answer,” notifying the court below that Bayview was filing Opella and 21 NW 59th Street, Inc.’s pro se answer.  Attached to this notice was an undated letter that Opella purportedly sent to  Rosaler, Bayview’s attorney, offering to settle the parties’ dispute over the subject mortgage.  On these facts, we see no basis on which to conclude that Opella and 21 NW 59th Street,  Inc. either expressly or indirectly waived service of process or otherwise subjected themselves to the jurisdiction of the courts....

Second, the purported “answer” filed by Brian L. Rosaler, Bayview’s attorney, is nothing more than an undated letter to counsel for one of the litigants.  This document does not remotely resemble an answer which under Florida Rule of Civil Procedure 1.100(c) must “have a caption containing the name of the court, the file number, the name of the first  party on each side with an appropriate indication of other parties, and a designation identifying the party filing it and its nature or the nature of the order, as the case may be.”  

Bennett v. Christiana Bank & Trust Company (3D09-2653)

As with the Opella case above, the Third District reversed a judgment based upon the failure to serve the defendant with the complaint.  The court stated:

The plaintiff’s attorneys, Golson Felberbaum Law Firm, hired Pro-Vest LLC, a process service company, to serve Ms. Bennett.  Christopher P. Mas, a Pro-Vest employee, filed a verified return of service on December 29, 2008.  The return indicated that individual service was accomplished on December  20 at 4:13 p.m.  The return further indicated that “DEFENDANT REFUSED TO DISCLOSE MILITARY STATUS; PROPERTY IS NOT A MOBILE HOME.  I  asked the person spoken to if the person served is married and I received a negative reply.”.....However, the front and reverse sides of the summons attached to the return were covered with the process server’s notes.  These notes reflected the server’s attempts to serve Ms. Bennett at her house to no avail....

Ms. Bennett never filed a responsive pleading in the case.  Christiana Bank filed motions for default and for summary judgment.  In May 2009, Christiana Bank obtained an order granting default and a final foreclosure judgment.  The sale was scheduled for September 4, 2009.   

On September 2, Ms. Bennett, through counsel, filed a motion to vacate the judgment and to stay the foreclosure sale.  The trial court denied the motion to stay the sale, but granted Ms. Bennett a hearing on the motion to vacate.....After the hearing, the court entered an order  finding that the service was “questionable,” but that there was no meritorious defense to the foreclosure.  The court denied the motion to vacate.

With regard to the law, the court stated:

A process server’s return which is regular on its face is presumed valid absent clear and convincing evidence to the contrary....Moreover, a simple denial is insufficient to impeach the validity of service....However, in this case, Ms. Bennett raised more than her own sworn denial.  The process server’s own notes, an admission against the interest of his principal, see § 90.803(18)(d), Fla. Stat. (2009), prove the insufficiency of service.  The process server’s last entry reflects that he “Saw Curtains Move, Read Aloud Docs, SVP Docs at Door.” 

Christiana Bank argues that there is no testimony to explain what “SVP” means, but “Docs at Door” is quite self-explanatory.  Curtains may move because of the wind or curious cats, and not just because some prospective defendant is attempting to avoid service.  The pertinent statute is clear...The process server’s notes contain  no evidence of compliance with these requirements.  Rather, the notes squarely conflict with his attestation that Ms. Bennett herself refused to disclose a military status.  As to Ms. Bennett’s marital status, the process server stated: “I asked the person spoken to if the person served is married and I received a negative reply.”  That recitation avoided an identification of the “person spoken to” and again implies that “the person served” was personally handed the papers.  

Far more troubling is the fact that Christiana Bank and its attorneys ignored this discrepancy in the return of service.  In its motion for summary judgment Christiana Bank alleges that the “Defendant(s) were duly and regularly served with process.”  The Bank’s proposed Final Judgment of Foreclosure, prepared by its attorneys, stated: “Service of process having been duly and regularly obtained over DEBBIE BENNETT ....”

***

Once a defect in the return of service is shown, the burden of demonstrating regular service is on the party seeking to invoke the court’s jurisdiction....That burden was not met here.....Where no in personam jurisdiction is obtained over a defendant, the defendant is not required to demonstrate  a meritorious defense to set aside the default.....The trial court should not have required Ms. Bennett to demonstrate a meritorious defense to the action once it became clear that the summons and complaint were never properly served.

Justice Stevens on the Death Penalty

Justice Stevens wrote a book review about the death penalty and was interviewed by 60 Minutes.  The book review was published by The New York Review of Books, is titled "On the Death Sentence" and can be viewed HERE.  The interview can be viewed HERE and HERE. 

Order Allowing Discovery Of Claim File Prior To Determination On Liability Quashed

In State Farm Mutual Automobile Insurance Co. v. Tranchese (4D10-2940), the Fourth District granted a petition for certiorari and quashed a trial court's order relating to a bad faith claim prior to the adjudication of the underlying claim.  The court stated:

We grant the petition as to the abatement, because the final determination of coverage and damages for the underlying claim has not been made, which must precede a statutory bad faith action...Where causes of action for both the underlying damages and bad faith are brought in the same action, the appropriate step is to abate the bad faith action until coverage and damages have been determined.

With regard to the discovery the trial court allowed, the Fourth District stated:

As to the requests for admissions regarding business practices and claims policy procedures, we grant the petition, holding that until the obligation to provide coverage and damages has been determined, a party is not entitled to discovery related to the claims filed or to the insurer’s business policies or practices regarding handling of claims.  

Order Compelling Appraisal Reversed Because Insured Did Not Cooperate In Claim Investigation

In Citizens Property Ins. Corp. v. Galeria Villas Condominium Association, Inc. (3D10-0807), the Third District reversed an order compelling appraisal and remanded the case to the trial court "to require Galeria to establish that it has (a) provided certain records requested by Citizens as it considered Galeria’s claim and (b) provided Citizens’ adjuster or “loss consultant” reasonable  rights of access to, and inspection of, the property damage detailed in Galeria’s claim."

After Galeria sustained damage from Hurricane Wilma:

Galeria submitted a sworn proof of loss that was investigated by a Citizens adjuster.  Citizens’ estimate of damages did not exceed the deductible for the property, and therefore Citizens made no payment to Galeria.  Citizens did not dispute that a covered loss had occurred....Thereafter, Galeria retained a public adjuster, Preferred Claim Solutions, Inc., and Preferred prepared detailed construction cost estimates broken out by building, line item, quantities, and unit costs.  Contractor’s overhead and profit and sales tax were also itemized for each of the 16 buildings, and a separate total for all of the repairs was included.  The total  estimate for repairs for the October 24, 2005, windstorm loss was $1,886,054.86.  These detailed cost estimates, all dated April 8, 2009, were provided to Citizens with an initial demand for appraisal in May 2009.  

In a letter of May 28, 2009, Citizens acknowledged receipt of the Preferred repair estimates, reserved various rights, and requested a final, signed and sworn proof of loss as well as copies of 13 categories of documents.  Galeria provided the signed and sworn proof of loss in July 2009.  On August 10, 2009, Citizens acknowledged receipt of the proof of loss but claimed there were inconsistencies with the earlier estimates prepared by Preferred.  Citizens also renewed its request for the 13 categories of documents identified in its May 28 letter and complained that Citizens’ loss consultant “has not been provided an opportunity to inspect this property since the initial inspection in 2005.”

With regard to the law, the court addressed the a number of issues.  First, the court addressed Citizens requests for documents:

While Citizens’ requests may seem broad, the types of documents that were not provided by Galeria may (and typically do) contain information bearing directly on the claim and the respective obligations of the insurer, the insured, and the homeowners living within the insured units....All such records may identify individuals with pertinent knowledge so that they can be contacted during the investigation of the claim.  And these records were and are required to be kept by Galeria as a matter of Florida law.

The court next addressed Galeria's refusal to allow Citizens to inspect the property:

Nor may an insured refuse access to the damaged properties to an insurer’s “loss consultant,” insisting instead that the insurer send in an “adjuster.”  The postloss duty in section E.3.a.(6) of the policy obligated Galeria to, “[a]s often as may be reasonably required, permit [Citizens] to inspect the property proving the loss or damage.”  Citizens acts through employees and agents, and an insured ordinarily recognizes that the sooner the insurer’s  representative (irrespective of title) is allowed to inspect the areas of claimed damage, the sooner the claim will be adjusted, appraised, or otherwise brought to resolution.  Finally, and as we observed in Romay, “[t]hese obligations are not unduly burdensome or arbitrary.”

Based upon the issue relating to the documents and access to the property, the court stated:

Until these conditions are met and the  insurer has a reasonable opportunity to investigate and adjust the claim, there is no “disagreement” (for purposes of the appraisal provision in the policy) regarding the value of the property or the amount of loss.  Only when there is a “real difference in fact, arising out of an actual and honest effort to reach an agreement  between the insured and the insurer,” is an appraisal warranted.  We therefore reverse the order compelling appraisal and remand for what we anticipate will be complete and immediate cooperation by Galeria in affording access to the property and the remaining records, and a prompt response to the claim by Citizens after its prompt investigation.

(emphasis from opinion).  Finally, the court addressed trial court's order staying the case pending appraisal:

Citizens also argued that the appraisal order was in error because it failed to reserve jurisdiction on any coverage issues.  Although this issue is moot because of our determination that the order compelling appraisal was premature, this court has  previously addressed Citizens’ argument.  Once the trial court determines that a demand for appraisal is ripe, the court has the discretion to control the order in which an appraisal and coverage determinations proceed.

Eleventh Circuit Holds Claims Against NFL & NFLPA By Former Player Preempted

In Atwater v. National Football League (09-12556), the Eleventh Circuit released a published decision finding the plaintiff/appellant's claims to be preempted by the Labor-Management Relations Act (“LMRA”), 29 U.S.C. § 185.  Tenth Circuit Judge David M. Ebel, sitting by designation, wrote the opinion for the Court.  The court described the background facts as follows:

Plaintiffs include several former NFL players, the spouse of one of the players, and several investment entities controlled by them. During 2004 and 2005, Plaintiffs invested approximately $20 million with Kirk Wright and Nelson “Keith” Bond, who along with others operated an investment company, International Management Associates (“IMA”). Unbeknownst to Plaintiffs, Wright was actually conducting a Ponzi scheme through which he stole most of the money Plaintiffs invested with IMA. IMA eventually sought bankruptcy relief. Wright was convicted on a number of federal felony charges and thereafter killed himself.

In this litigation, Plaintiffs sued the NFL and the NFLPA, alleging Plaintiffs would not have invested money with IMA had Defendants given them accurate information about Wright, Bond and IMA. More specifically, Plaintiffs complained that the NFLPA listed Wright and Bond with the NFLPA’s Financial Advisors Program without first conducting a proper investigation. As for the NFL, Plaintiffs asserted that several Plaintiffs requested, and the NFL provided, background checks on Wright, Bond and IMA that were inadequate. Based upon these allegations, Plaintiffs invoked the federal courts’ diversity jurisdiction, see 28 U.S.C. § 1332, asserting claims against the NFL and NFLPA under Georgia law for negligence, negligent misrepresentation, and breach of fiduciary duty.

The NFL and the NFLPA argued that § 301 of the LMRA preempted Plaintiffs’ state-law claims because these claims arose from, or were substantially dependent upon an interpretation of, the CBA between the NFL’s Management Council (“NFLMC”) and the NFLPA.

With regard to the law, the court stated that "in order to insure the uniform interpretation of collective bargaining agreements throughout the nation, § 301(a) completely preempts state-law claims, including state tort claims, that require the interpretation or application of a CBA."  The court continued:

If the state-law claim either arises out of a CBA or is dependent upon the meaning of a CBA, “the application of state law (which might lead to inconsistent results since there could be as many state-law principles as there are States) is pre-empted and federal laborlaw principles—necessarily uniform throughout the Nation—must be employed to resolve the dispute.”

***

In determining whether § 301 preempts Plaintiffs’ state-law claims, we consider the elements of each of those claims in turn.....

***

For these reasons, we uphold the district court’s determination that § 301 preempts Plaintiffs’ state-law claims. We, therefore, affirm the district court’s decision granting the NFL and NFLPA summary judgment on those claims. In light of that determination, we need not consider Plaintiffs’ challenge on appeal to the alternate basis on which the district court granted the NFLPA summary judgment—that the disclaimer contained in the NFLPA’s Financial Advisors Program regulations precluded Plaintiffs’ claims against it.