Neglect? Yes. Excusable? No. Florida Court Reinstates Ruling Over Defendant No-Show
The $43,000 judgment against a New York mortgage lender had been vacated on grounds of excusable neglect, but the Fourth District Court of Appeal ruled that was a mistake.
July 18, 2019 at 03:09 PM
3 minute read
It's not enough for a company on the wrong end of a lawsuit to forward the matter to a compliance officer without following up, according to the Fourth District Court of Appeal, which revived a $43,000 judgment Wednesday against New York-based mortgage lender Franklin First Financial Ltd. for doing just that.
Broward Circuit Judge Sandra Perlman had vacated the judgment, based on testimony from the company's chief financial officer. But that was a gross abuse of discretion, according to the appellate panel, because the defendant couldn't prove what happened to the complaint, or whether it even made it to the intended person.
Broward software developer Chetu sued the mortgage lender for breach of contract and unjust enrichment in March 2017, claiming it owed $42,300 for developing and maintenance work.
Franklin FIrst was served but didn't respond, according to the per curiam opinion. After weeks of tumbleweed, Chetu moved for a default final judgment and a June 22 hearing. When Franklin First was a no-show, the trial court ruled in Chetu's favor.
The company's CFO Doug Sanderson claimed he only learned about the judgment in late September and ”immediately” hired a lawyer, but the Fourth DCA pointed out that the motion to vacate wasn't filed until December.
“This unexplained two-month delay in seeking relief precludes a finding of due diligence,” the opinion said.
Coral Springs lawyers Gary S. Rosner of Ritter Chusid filed the motion to vacate, claiming that the sudden departure of the company's in-house counsel led to ”a combination of mishaps.” He is no longer listed as counsel in the online case filed and did not respond to a request for comment by deadline.
Fort Lauderdale attorney Joey L. Lampert of Perlman, Bajandas, Yevoli & Albright represented Chetu with Paul D. Turner and Benjamin L. Reiss. Lampert said his client is thrilled with the ruling.
“In these situations, there is usually neglect by defendants,” Lampert said. “The question is whether or not it was excusable.”
To vacate the judgment, the defendant would have had to prove excusable neglect, offer a meritorious defense and show that it acted with due diligence in seeking relief, according to the opinion. Instead, Sanderson testified that court filings had been sent to the right address but didn't present any evidence to explain why nothing was done.
“You have to timely act to protect your rights,” Lampert said. ”The court has discretion, but there is a standard that must be met.”
Franklin First has since gone out of business, according to its website. The company did not respond to the email address listed.
Read the opinion:
More appeals stories:
'Dear Florida Supreme Court: We Need Your Help,' 11th Circuit Writes in SOS About Damages
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