GREG HOWARD v. DAVID GUALT ( 2018 )


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  •           DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
    FOURTH DISTRICT
    GREG HOWARD,
    Appellant,
    v.
    DAVID GUALT,
    Appellee.
    No. 4D18-1451
    [October 31, 2018]
    Appeal of non-final order from the Circuit Court for the Seventeenth
    Judicial Circuit, Broward County; Raag Singhal, Judge; L.T. Case No.
    CACE13-025083 (21).
    Matthew R. Simring, Lauderdale By The Sea, for appellant.
    Glenn J. Webber, Stuart, for appellee.
    MAY, J.
    A guarantor appeals a non-final order denying his verified motion to
    vacate a default judgment in an underlying mortgage foreclosure action.
    He argues the trial court erred in denying the motion because he acted
    with due diligence in moving to set aside the default and has meritorious
    defenses, while the plaintiff failed to exercise due diligence to personally
    serve him. We agree and reverse.
    The plaintiff sued for breach of a guarantee related to a mortgage note
    issued to a corporation. The guarantor signed the note in his capacity as
    the corporation’s managing member and as an individual. In 2013, a
    summons was issued to 2000 Banks Road, Margate, Florida, 33063, the
    corporation’s address. The plaintiff did not personally serve the guarantor,
    but did make two other attempts at service after utilizing Sunbiz.org to
    find businesses with which the guarantor was affiliated.
    Plaintiff’s counsel filed an “affidavit in support of service by
    publication,” stating that a diligent search and inquiry had been made to
    locate the guarantor’s residence. Following court-ordered approval, the
    plaintiff then published notice of the action in the Sun-Sentinel.
    The plaintiff filed an amended motion for entry of default final
    judgment. The trial court entered the default final judgment in the
    principal amount on June 21, 2016. On April 20, 2017, the guarantor
    filed a verified motion to vacate default final judgment, asserting that he
    first became aware of the lawsuit when a process server came to his house
    on April 1, 2017 to serve him with a “subpoena for deposition in aid of
    execution of the default final judgment.”
    He alleged the plaintiff failed to conduct a diligent search to personally
    serve him. He argued that he did not attempt to conceal his whereabouts
    and has lived in Florida his entire adult life. The plaintiff responded to the
    motion, listing the three attempts made to serve him.
    At the hearing on the motion, the trial court noted the preference to
    resolve cases on the merits and that the plaintiff was able to serve the
    guarantor in 2017 for a deposition. The guarantor indicated that he was
    living at a different address in 2013. The plaintiff responded that under
    public records, the guarantor’s prior address did not show up.
    The trial court denied the motion to set aside, finding the “[p]laintiff
    made attempts to serve the guarantor at three separate addresses”, and
    ultimately served the guarantor by publication based on a trial court’s
    order. From this order, the guarantor appeals.
    We review such orders for an abuse of discretion. See SunTrust Bank
    v. Puleo, 
    76 So. 3d 1037
    , 1038 (Fla. 4th DCA 2011). When there is a
    challenge to constructive service, “the trial court has the duty of
    determining not only if the affidavit of diligent search is legally sufficient
    but also whether the plaintiff conducted an adequate search to locate the
    defendants.” Giron v. Ugly Mortg., Inc., 
    935 So. 2d 580
    , 582 (Fla. 3d DCA
    2006).
    The guarantor argues the trial court erred in denying the motion to
    vacate the default judgment because the plaintiff failed to conduct a
    diligent search to locate him. The guarantor maintains that the plaintiff’s
    use of a Sunbiz.org search was not a reasonably diligent effort. Finally,
    the guarantor argues that he has meritorious defenses to the action and
    exercised due diligence in moving to vacate the default judgment.
    The plaintiff responds that he conducted a diligent search, and the trial
    court’s order denying the motion to vacate is supported by competent
    substantial evidence.
    Substitute service is unauthorized if personal service could be obtained
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    through reasonable diligence. The test is “whether the complainant
    reasonably employed knowledge at his command, made diligent inquiry,
    and exerted an honest and conscientious effort appropriate to the
    circumstances, to acquire the information necessary to enable him to
    effect personal service on the defendant.” Green Emerald Homes, LLC v.
    Bank of N.Y. Mellon, 
    204 So. 3d 512
    , 514 (Fla. 4th DCA 2016) (citations
    omitted); 
    Fla. Stat. § 49.021
     (2014).
    The plaintiff’s affidavit of diligent search provided:
    A diligent search and inquiry has been made to locate the
    residence of [the guarantor] . . . despite our diligent search
    and inquiry, attempts to locate [the guarantor] have been
    unsuccessful. The current address of [the guarantor] is
    unknown to the affiant. On information and belief [the
    guarantor] is concealing his whereabouts so that process
    cannot be personally served and I believe there is no person
    in Florida upon whom service of process would bind [the
    guarantor].
    The affidavit appears legally sufficient, despite being conclusory,
    because it need only allege that a diligent search and inquiry was made.
    See Floyd v. Fed. Nat’l Mortg. Ass’n, 
    704 So. 2d 1110
    , 1112 (Fla. 5th DCA
    1998). However, the underlying facts must show that “the complainant
    reasonably employed the knowledge at his command, made diligent
    inquiry and exerted an honest and conscientious effort appropriate to the
    circumstance to acquire the information necessary to enable him to effect
    personal service on the defendant.” Green Emerald Homes, LLC, 204 So.
    3d at 514.
    Here, the plaintiff maintained that the guarantor’s business addresses
    remained the same and he was listed as the registered agent, but the
    address listed in the guarantor’s motion did not show up at the property
    appraiser’s office because he was only a tenant. Plaintiff’s counsel argued
    that his client hired an investigator who could not find the guarantor.
    The guarantor responds that the plaintiff’s use of Sunbiz.org, instead
    of “skip trace” or something comparable, did not constitute a diligent
    search. He further argues that because plaintiff’s counsel’s affidavit
    concerning attorney’s fees only reflected 2.85 hours of work, he essentially
    conducted no search, let alone a diligent one.
    In Southeast & Associates, Inc. v. Fox Run Homeowners Ass’n, 
    704 So. 2d 694
    , 696 (Fla. 4th DCA 1997), we held that a diligent search was
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    conducted when evidence showed the plaintiff’s affidavit listed “nine
    attempts at personal service, the contact with the neighbors, the two skip
    traces, and the trip to a retail establishment where the process server
    learned that the lessee had moved out in the middle of the night.”
    In First Home View Corp. v. Guggino, 
    10 So. 3d 164
    , 164 (Fla. 3d DCA
    2009), the Third District held that due diligence was satisfied when a
    lender hired an investigator, who discovered the homeowner had two New
    York addresses, but attempts to personally serve him there failed. The
    investigator also searched his credit information, employment, and
    checked the motor vehicle department, postal service, and telephone
    companies before serving the homeowner by publication. 
    Id. at 164-65
    ;
    see also Gans v. Heathgate-Sunflower Homeowners Ass’n, 
    593 So. 2d 549
    ,
    552 (Fla. 4th DCA 1992).
    Here, the plaintiff argues the guarantor could not be served at the
    address provided to the Secretary of State, and was not listed as the
    property owner on the Broward County Property Appraiser’s website at the
    address where he was actually living because he was a tenant. Following
    a Sunbiz.org search, three attempts were made to serve him. However,
    the record does not reflect any attempt to use a skip trace or a comparable
    method, any search of phone bills, credit information, or the DMV, etc.—
    as took place in First Home View Corp. And, the plaintiff was ultimately
    able to serve the guarantor at his home address with the subpoena duces
    tecum in aid of execution. Plaintiff’s counsel did not explain how he later
    found the guarantor for service of the subpoena.
    In short, neither the plaintiff nor his counsel appear to have diligently
    searched for the guarantor before resorting to notice by publication. Here,
    the record reflects only three attempts at service at addresses located
    through Sunbiz.org. The record is silent as to any follow-up investigation.
    As the guarantor points out, plaintiff’s counsel spent only spent 2.85 total
    hours on the case.
    Florida law provides a strong preference for determining lawsuits on
    the merits, and “courts should liberally set aside defaults under
    appropriate circumstances.” Geer v. Jacobsen, 
    880 So. 2d 717
    , 720 (Fla.
    2d DCA 2004). Once a default judgment is entered, it is the moving party’s
    burden to demonstrate “excusable neglect, a meritorious defense, and due
    diligence in order for the trial court to vacate the default and the
    judgment.” 
    Id.
     (citations omitted).
    Here, the trial court found (and the plaintiff agreed) the guarantor was
    diligent in moving to vacate the default final judgment and may have a
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    meritorious defense. The guarantor filed an Answer and Affirmative
    Defenses, demonstrating the possibility of that meritorious defense.
    And the court seemed to indicate the age of the case mattered. “[I]f this
    was a [2017] situation, I would guarantee that [I’d want to resolve the case
    on the merits], my only worry is it’s a [2013] case.” The age of the case is
    not a factor to consider in determining whether to set aside a default.
    The guarantor was served with notice of a deposition on April 1, 2017,
    which was the first time he learned of the suit. The guarantor moved to
    vacate the default 19 days later. Because the guarantor acted with due
    diligence to set aside the default, and demonstrated a potential meritorious
    defense, we reverse. See Miami-Dade County v. Coral Bay Section C
    Homeowners Ass’n, 
    979 So. 2d 318
    , 324 (Fla. 3d DCA 2008).
    We therefore reverse and remand the case for the trial court to set aside
    the default judgment, and for further proceedings consistent with this
    opinion.
    GERBER, C.J., and GROSS, J. concur.
    *          *        *
    Not final until disposition of timely filed motion for rehearing.
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