AMY FARIELLO HANSEN and DONALD F. HANSEN v. MDLV, LLC d/b/a ONE SOTHEBY'S INTERNATIONAL REALTY and THOMAS BOOTHE ( 2022 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
AMY FARIELLO HANSEN and DONALD F. HANSEN,
Appellants,
v.
MDLV, LLC d/b/a ONE SOTHEBY’S INTERNATIONAL REALTY and
THOMAS BOOTHE,
Appellees.
No. 4D22-397
[November 2, 2022]
Appeal from the County Court for the Fifteenth Judicial Circuit, Palm
Beach County; Frank Castor, Judge; L.T. Case No. 50-2021-CC-005885-
XXXX-MB.
Robin F. Hazel of Hazel Law, P.A., Hollywood, for appellants.
Christine Cohen and Steven Serle of The Law Offices of Steven Serle,
P.A., Boca Raton, for appellee Thomas Boothe.
DAMOORGIAN, J.
Appellants, Amy and Donald Hansen (“Sellers”), appeal the final order
denying their verified motion to set aside judicial default. The judicial
default and subsequent default final judgment were entered against
Sellers for failure to respond to Appellee, Thomas Boothe’s (“Buyer”),
amended crossclaim. We reverse because, despite Sellers having actively
defended the suit, the trial court failed to provide Sellers an opportunity
to be heard before entry of the judicial default or default final judgment.
The underlying action arose out of a dispute over the parties’ respective
claims to a deposit that Buyer tendered under the terms of a real estate
contract. Relevant to this appeal are the actions taken by Sellers’ attorney
after the escrow agent holding the deposit filed an interpleader action in
the county court. In the ensuing litigation, Buyer filed his answer to the
interpleader action as well as a crossclaim against Sellers for the return of
his deposit. In response, Sellers’ attorney filed a notice of appearance and
moved for enlargement of time to respond to the outstanding claims.
Thereafter, the parties’ attorneys engaged in significant communication
regarding discovery and other pre-trial matters. Notably, Sellers and the
escrow agent separately moved to dismiss Buyer’s crossclaim. After a
hearing on the escrow agent’s motion, Buyer’s crossclaim was dismissed
with leave to amend. In due course, Buyer timely served his amended
crossclaim on Sellers’ attorney.
Twenty-seven days later, after Sellers failed to file a motion or
responsive pleading to the amended crossclaim, Buyer filed and served on
Sellers’ attorney a motion for judicial default pursuant to Florida Rule of
Civil Procedure 1.500(b). Within three hours of the filing of Buyer’s motion
and without further notice, the trial court entered the order granting
Buyer’s motion. The following day, Buyer filed and served a motion for
entry of default final judgment. Less than one hour later, Sellers filed a
verified motion to set aside judicial default. Notwithstanding Sellers’
pending motion, the trial court entered the default final judgment that
same day. Ultimately, a hearing was held on Sellers’ motion to set aside
the judicial default. During the hearing, Sellers’ attorney averred he failed
to file the response to the crossclaim because of “excusable mistake, mis-
calendaring.” Sellers also argued that because they had actively
participated in the litigation, they were entitled to a hearing before entry
of judicial default and default final judgment. The court denied the
motion, concluding “[t]he Motion fail[ed] to allege sufficient facts to
establish excusable neglect for failing to file an answer or responsive
pleading to the Amended Crossclaim.” This appeal follows.
On appeal, Sellers argue that because they actively defended and
participated in the litigation, rule 1.500(b) required the trial court to
properly notice and hold a hearing on Buyer’s motion for judicial default
before entering the default. Consequently, Sellers argue the default and
resulting final judgment are void. We agree.
Florida Rule of Civil Procedure 1.500(b) provides that where a “party
has filed or served any document in the action, that party must be served
with notice of the application for default.” In Hendrix v. Department Stores
National Bank, this Court clarified that where a party “files substantive
papers in the action, rule 1.500(b)’s notice requirement also requires a
hearing.” 177 So. 3d 288, 290 (Fla. 4th DCA 2015) (emphasis added). We
further held the failure to conduct the required hearing renders the
default, and derivatively the default final judgment, void. Id. at 291. In so
holding, we distinguished Fierro v. Lewis, 388 So. 2d 1361 (Fla. 5th DCA
1980) and Picchi v. Barnett Bank of South Florida, N.A., 521 So. 2d 1090(Fla. 1988), which held that no hearing on a motion for default is required
when a party files only a notice of appearance, noting those cases “are
factually distinguishable from this case, where the [defendant] filed
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substantive papers before the motion for default was filed.” Id. at 290; see
also Cardet v. Resol. Tr. Corp., 563 So. 2d 167, 169 (Fla. 3d DCA 1990)
(concluding “Picchi should be confined to the situation there specifically
discussed,” namely to situations where a notice of appearance is filed for
purposes of delay).
Here, as in Hendrix, Sellers filed substantive papers before the motion
for default was filed, including a motion to dismiss Buyer’s original
crossclaim. Moreover, the record reflects the parties engaged in significant
communication regarding discovery and other pre-trial matters.
Accordingly, Sellers were entitled to a hearing and the opportunity to be
heard before entry of the default. See Hendrix, 177 So. 3d at 291 (because
the defendant filed substantive papers, namely a motion to dismiss, the
trial court was required to conduct a hearing on the plaintiff’s motion for
judicial default); see also Clark v. Perlman, 599 So. 2d 710, 712 (Fla. 1st
DCA 1992) (by responding to the original complaint, defendant evidenced
her intent to defend and, “under the liberal construction accorded rule
1.500(b), she was entitled to notice of the application for default, and an
opportunity to be heard . . . .”). As “the judicial default was entered without
first affording [Sellers] the required opportunity to be heard under rule
1.500(b)[,] . . . the default, and derivatively the final judgment, is void.”
Hendrix, 177 So. 3d at 291.
Based upon the foregoing, we reverse and remand for a hearing on
Buyer’s motion for judicial default. See id. (remanding for noticed hearing
on motion for default, and remarking the purpose of the default rule is to
expedite litigation towards conclusion on the merits); Cano v. Cano, 321
So. 3d 237, 238 (Fla. 4th DCA 2021) (“Where a default has been improperly
entered, the resulting final judgment must be set aside regardless of
whether the defendant has established excusable neglect or a meritorious
defense.”); see also Fla. R. Civ. P. 1.500(c) (“A party may plead or otherwise
defend at any time before default is entered.”); Azure-Moore Invs. LLC v.
Hoyen, 300 So. 3d 1268, 1269 (Fla. 4th DCA 2020) (“Under the plain
language of Florida Rule of Civil Procedure 1.500(c), an answer filed prior
to entry of default precludes the entry of default final judgment.”).
Reversed and remanded.
GROSS and FORST, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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