Emami v. Progressive Brands, Inc. , 2017 Fla. App. LEXIS 12849 ( 2017 )

Third District Court of Appeal
State of Florida
Opinion filed September 6, 2017.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D16-2227
Lower Tribunal No. 13-36703
________________
Iman Emami,
Appellant,
vs.
Progressive Brands, Inc.,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Monica Gordo,
Judge.
Weiss Serota Helfman Cole & Bierman, P.L., and Roger S. Kobert, for
appellant.
Gerson M. Joseph, P.A., and Gerson M. Joseph (Weston), for appellee.
Before ROTHENBERG, C.J., and SUAREZ and SCALES, JJ.
SCALES, J.
Appellant, defendant below, Iman Emami appeals a final default judgment
entered in favor of appellee, plaintiff below, Progressive Brands, Inc.
(“Progressive”). Because the trial court failed to give Emami an opportunity to
contest damages before entering the final default judgment, we hold that the
judgment is void and reverse.
Relevant Facts and Procedural Background
In November 2013, Progressive filed the instant action against several
defendants in the Miami-Dade Circuit Court, including Emami. As the case
progressed, Progressive dismissed one defendant; another corporate defendant,
Eastgate Tobacco Company, LLC, stipulated to entry of a $247,620.88 judgment
against it. The only claims then remaining were Progressive’s claims against
Emami for fraud (count II) and to impose individual liability on Emami by
piercing the corporate veil of Eastgate (count IV).1 Emami’s initial lawyer
withdrew from the case in August 2014, and in November 2014, Emami’s new
lawyer, Kramer Huy, P.A. (“Kramer”) filed an Answer and Affirmative Defenses
to Progressive’s Amended Complaint.
In July 2015, Progressive served Emami with interrogatories, requests for
admissions and requests for production. Pursuant to Florida Rule of Civil
1 Progressive’s Amended Complaint alleged that Emami was a member, and is
now the manager, of Eastgate. Emami denied this allegation in his Answer, later
averring by affidavit that he is the president of a French company, which is the
parent company of a Florida corporation, which is the parent company of Eastgate.
2
Procedure 1.080(a) and Florida Rule of Judicial Administration 2.516(b),2
Progressive served Emami with this discovery by serving Kramer. The record
reflects that Kramer forwarded the discovery to Emami via e-mail.3 The record
also reflects that Progressive’s counsel requested Kramer to provide dates for
Emami’s deposition. No discovery responses were ever provided to Progressive,
and Kramer never provided deposition dates to Progressive’s counsel.
On September 2, 2015, Kramer informed Progressive’s counsel of Kramer’s
intent to withdraw from representation of Emami. That same day, Progressive
filed a motion to compel discovery and for sanctions, noting therein that Kramer
intended to withdraw as Emami’s counsel, and that Progressive would not set the
September 2 motion for hearing until after Kramer had a reasonable time both to
inform Emami of Progressive’s September 2 motion, and to file his motion to
withdraw. On September 21, 2015, Progressive served Kramer with a notice
setting an October 5, 2015 hearing date on its September 2 motion. Also on
September 21, Kramer filed his motion to withdraw as Emami’s counsel, but did
not set that motion for hearing.
2 These rules provide that, when service is required to be made upon a party
represented by an attorney, service must be made upon the attorney, unless
otherwise ordered by the trial court. See Fla. R. Civ. P. 1.080(a); Fla. R. Jud.
Admin. 2.516.
3 The record reflects that, at all times material, Emami resided in France.
3
On October 2, 2015, Progressive’s counsel purportedly sent Kramer an e-
mail asking if Emami would be opposing Progressive’s September 2 motion, and
Kramer purportedly responded to this e-mail notifying Progressive that Emami
would not be opposing Progressive’s September 2 motion.4 Based on Kramer’s
representation, Progressive’s counsel dispensed with the October 5, 2015 hearing,
and, instead submitted to the trial court an Agreed Order Granting Plaintiff’s
Motion to Compel. This order, signed by the trial court on October 5, required
Emami to provide the discovery responses and deposition dates to Progressive’s
counsel within ten days. No sanctions were imposed in this October 5 Agreed
Order.
Having received neither the discovery responses nor deposition dates from
Emami (or Kramer), on October 21, 2015, Progressive moved for a default against
Emami as a sanction for failing to comply with the trial court’s October 5 Agreed
Order. That same day, Progressive noticed its October 21 motion for default for a
November 2, 2015 hearing.
Prior to the November 2 hearing, on October 29, 2015, Progressive’s
counsel sent Kramer an e-mail asking whether Kramer will be setting his motion to
withdraw for hearing, and whether Kramer will be attending the November 2, 2015
hearing to oppose Progressive’s motion. Later on October 29, Kramer’s office
4 Neither Progressive’s October 2, 2015 e-mail, nor Kramer’s alleged response to
same, are in the record on appeal.
4
responded to the e-mail by stating: “Mr. Kramer will not be attending Monday’s
hearing and he has no objection to your motion for default.”
At the November 2, 2015 hearing,5 the trial court entered an order granting
Progressive’s motion for default, therein (i) finding Emami’s conduct was
deliberate and contumacious, (ii) entering a default against Emami,6 (iii) stating
that damages would be determined separately at a hearing to be held on a later
date, and (iv) inviting Progressive to file the appropriate motion to fix damages so
that a final default judgment could be entered.7
Later on November 2, 2015, Progressive filed a Motion for Final Judgment
after Default, in which Progressive sought $263,287.04 in damages, plus costs and
interests. Progressive’s November 2 motion also included an affidavit of damages
(and other allegations) from Progressive’s principal. That same day, Progressive
noticed its November 2 motion for hearing on November 9, 2015.
5 There is no transcript from this hearing.
6 While not explicit in this order, the trial court implicitly must have stricken
Emami’s November 2014 Answer and Affirmative Defenses in order to enter the
default against Emami.
7 The two claims against Emami for fraud (count II) and to pierce the corporate
veil of Eastgate (count IV) were pending when default was entered. While it is
unclear both from the November 2 default order, and Progressive’s ensuing Motion
for Final Judgment after Default, which claims were resolved in these proceedings,
we presume that the trial court defaulted Emami on both claims in its November 2
order.
5
For reasons that are not clear from the record, the following day, on
November 3, 2015, Progressive filed a second Motion for Final Judgment after
Default that is identical to the motion Progressive filed the prior day, except that
the word “UNOPPOSED” was added as the first word to the motion’s caption.
Similarly, on November 4, 2015, for reasons that are again unclear, Progressive
filed a third, identical Motion for Final Judgment after Default that also included
the word “UNOPPOSED” as the caption’s first word. Based on Kramer’s October
29 email to Progressive’s counsel, in each of its three motions seeking final default
judgment, Progressive characterized its October 21 motion for default as
“unopposed.”
On November 5, 2015, without conducting the hearing which had been set
for November 9—the one expressly referenced in its November 2 order granting
Progressive’s motion for default—the trial court entered a final default judgment
against Emami in the principal amount of $263,287.04, plus costs and interests.
While the judgment contains no insight as to why the previously noticed
November 9 hearing was cancelled, the trial court apparently dispensed with the
November 9 hearing after being “informed” of the alleged “UNOPPOSED” nature
of the final default judgment.
Later that same day, Emami’s new counsel, Weiss Serota Helfman Cole &
Bierman, P.L. (“Weiss Serota”), filed its notice of appearance as Emami’s co-
6
counsel. Weiss Serota’s notice also included a letter to the trial judge informing
her that Emami had never authorized Kramer to consent to entry of any orders,
including an order granting a default against Emami. Apparently unaware that the
trial court had already signed the final default judgment provided to her by
Progressive, the letter further urged the trial court “not to enter the proposed
‘unopposed’ judgment against Mr. Emami” as Progressive’s Unopposed Motion
for Judgment after Default was, indeed, opposed.
On November 20, 2015, Emami, through his new counsel, Weiss Serota,8
filed a motion seeking rehearing and to vacate the November 5, 2015 final default
judgment. This motion argued that the final default judgment should be vacated
because it was the result of excusable neglect. The motion also stressed that
“Progressive’s motion for final [default] judgment was entered just hours before
undersigned counsel could file a notice of appearance and submit a letter via e-
courtesy imploring the Court not to enter the contested judgment . . . .” Emami’s
affidavit was appended to the motion. In it, Emami asserted, among other things,
that, “I did not know or understand until very recently, when I received a motion
by Mr. Kramer to withdraw as my lawyer, that an order punishing me was signed
by this Court. I also did not know that I was being punished for failing to answer
8On November 16, 2015, the trial court held a hearing on Kramer’s September 21,
2015 motion to withdraw, and granted the motion without objection.
7
questions, or that that was even a possibility. None of this was explained to me, as
far as I know.”
On June 6, 2016, the trial court conducted a hearing on Emami’s November
20, 2015 rehearing/vacatur motion at which Emami’s counsel argued, for the first
time, that the final default judgment was void because Kramer lacked the authority
to consent to the entry of either the November 2, 2015 default or the November 5,
2015 final default judgment. The trial court ordered additional briefing on this
issue, and, on August 23, 2016, entered an order denying Emami’s motion for
rehearing and to vacate the November 5, 2015 final default judgment.
Emami appeals both the final default judgment and the trial court’s denial of
his motion for rehearing and to vacate same.
Standard of Review
This Court reviews the denial of a motion to vacate a final judgment for an
abuse of discretion; however, where the final judgment is void, the lower court has
no discretion and is obligated to vacate the judgment. See Vercosa v. Fields, 174
So. 3d 550, 552 (Fla. 4th DCA 2015). Whether a judgment is void is a question of
law reviewed de novo. Infante v. Vantage Plus Corp., 27 So. 3d 678, 680 (Fla. 3d
DCA 2009) (“The standard of review of an order that vacates a final judgment by
default as void for a complaint’s failure to state a cause of action is de novo.”).
Analysis
8
It is well settled in Florida that a defaulting party shall be afforded the
opportunity to contest damages. See Fla. R. Civ. P. 1.440(c) (“In actions in which
the damages are not liquidated, the order setting an action for trial shall be served
on parties who are in default in accordance with rule 1.080.”); Ciprian-Escapa v.
City of Orlando, 172 So. 3d 485, 488 (Fla. 5th DCA 2015) (“[I]t is fundamental
error to set unliquidated damages without the notice, proof, and hearing required
by rule 1.440(c).”); Belcourt v. Haraczka, 987 So. 2d 175, 176 (Fla. 1st DCA
2008) (“A defaulting party has a due process entitlement to notice and an
opportunity to be heard as to the presentation and evaluation of evidence necessary
to a judicial determination of the amount of unliquidated damages.” (quoting Sec.
Bank, N.A. v. BellSouth Adver. & Publ’g Corp., 679 So. 2d 795, 800 (Fla. 3d
DCA 1996))). In furtherance of this well-established principle, this Court finds the
final default judgment is void as a matter of law because Emami was not afforded
an opportunity to contest damages prior to its entry.
The trial court entered its default order on November 2, 2015, ostensibly on
the basis that the default was unopposed. The trial court’s November 2 order
expressly and unambiguously conditioned entry of a judgment on Progressive’s
submission of an appropriate motion.9 That same day, accepting the trial court’s
9 The November 2 default order states, “Plaintiff’s Motion for Default Against
Defendant Emami is GRANTED, Damages to be determined separately at a
hearing on a Motion for Final Judgment against Defendant Emami.”
9
invitation, Progressive moved for a final default judgment, attaching an affidavit of
damages, and noticed the motion for a hearing. For unclear reasons, Progressive
then filed two, identical “UNOPPOSED” motions, which purported to negate the
necessity of holding a hearing. Because Progressive’s Motion for Final Judgment
after Default was seemingly “UNOPPOSED,” the trial court understandably
entered a final default judgment without holding the previously scheduled
November 9 hearing.
Immediately after the final default judgment was entered, Emami, under the
guidance of new counsel, advised the lower court that Progressive’s motion was, in
fact, opposed, and moved for rehearing and to vacate the final default judgment.
Under these circumstances, we hold that the trial court reversibly erred by failing
to vacate the final default judgment as void. Immediately upon being informed
that Emami opposed the entry of the final default judgment, the trial court should
have taken the steps necessary to protect Emami’s due process rights and
rescheduled the hearing on damages that had previously been set for November 9,
2015.
While obviously unintended, and presumably based on a misunderstanding,
Emami was deprived of his right to contest damages under Florida law. See
Krueger v. Ponton, 6 So. 3d 1258, 1261 (Fla. 5th DCA 2009) (“A defaulting party
has a due process entitlement to receive notice and an opportunity to be heard as to
10
the presentation and evaluation of evidence necessary to a judicial determination of
the amount of unliquidated damages.”); Boulus v. Yung Sheng Xiamen Yong
Chem. Indus. Co., 855 So. 2d 665, 667 (Fla. 4th DCA 2003) (finding that, after a
default was entered against the defendant as to liability in a breach of contract
action, the “trial court erred in denying [the defendant’s] motion to set aside the
default final judgment on the issue of unliquidated damages”); see also Premise,
Inc. v. Withlacoochee River Elec. Coop., Inc., 215 So. 3d 123, 124 (Fla. 2d DCA
2017) (providing that Florida Rule of Civil Procedure 1.440(c) requires an
evidentiary hearing on claims for unliquidated damages against parties in default).
Conclusion
Under these facts, we hold that the final default judgment is void for failure
to afford Emami an opportunity to contest damages. We therefore vacate the
November 5, 2015 final default judgment, reverse, and remand this cause for an
evidentiary hearing on Progressive’s contested November 2, 2015 Motion for
Entry of Judgment after Default.10
10 We do not disturb the trial court’s November 2 default order. We agree with the
trial court that Kramer’s October 29, 2015 email stating “he has no objection to
your motion for default” is significantly different from a party’s attorney’s
unauthorized stipulations and settlements rejected in Noeling v. State, 87 So. 2d
593 (Fla. 1956), Kramer v. City of Lakeland, 38 So. 2d 126 (Fla. 1948), Pardo v.
The Decoplage Condominium Ass’n, 833 So. 2d 782 (Fla. 3d DCA 2002), Cross-
Aero Corp. v. Cross-Aero Service Corp., 326 So. 2d 249 (Fla. 3d DCA 1976),
Bursten v. Green, 172 So. 2d 472 (Fla. 2d DCA 1965), and Palm Beach Royal
Hotel, Inc. v. Breese, 154 So. 2d 698 (Fla. 2d DCA 1963).
11
Judgment vacated; reversed and remanded for further proceedings
consistent with this opinion.
12