UNIVERSAL PROPERTY & CASUALTY INSURANCE COMPANY v. GUILLAUME DIMANCHE

Third District Court of Appeal
State of Florida
Opinion filed April 20, 2022.
Not final until disposition of timely filed motion for rehearing.
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Nos. 3D21-1805, 3D21-1658
Lower Tribunal No. 20-16326
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Universal Property & Casualty Insurance Company,
Appellant,
vs.
Guillaume Dimanche, et al.,
Appellees.
Appeals from the Circuit Court for Miami-Dade County, David C. Miller,
Judge.
Russo Appellate Firm, P.A., and Elizabeth K. Russo, for appellant.
No appearance for appellees. 1
Before FERNANDEZ, C.J., and LINDSEY and LOBREE, JJ.
FERNANDEZ, C.J.
1
Appellees were precluded from filing an answer brief after failing to heed
this Court’s order directing them to file same within a specified period of time.
Universal Property & Casualty Insurance Company (“Universal
Property”) appeals the trial court’s Agreed Amended Final Declaratory
Judgment in favor of Guillaume Dimanche and Marie Dimanche a/k/a Mari
Dimanche (“the Dimanches”). Because Universal Property met the Florida
law requirements for setting aside a default and for vacating a final default
judgment, we reverse the Agreed Amended Final Declaratory Judgment and
remand to the trial court so that the case can proceed on the merits.
I. BACKGROUND
This suit concerns a typical homeowners’ insurance policy issued by
Universal Property to the Dimanches. The Dimanches filed suit against
Universal Property after the Dimanches filed a claim, and Universal Property
did not issue payment. The Dimanches sought a declaration of coverage, a
decision on “the scope of coverage and the Replacement Cost Value of the
subject insurance claim”, and attorneys’ fees and costs. The Dimanches
attached an estimate to their complaint indicating a projected replacement
cost value of $65,910.87 in proposed repairs to their home.
After service of process, neither party took any action in the suit. On
May 12, 2021, the trial court entered an “Order to Take Action Based on
Eligibility for Default After Personal/Substitute Service,” stating that Universal
Property was eligible for entry of a judicial default. The trial court directed
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that within ten days of its order, the Dimanches were to file a motion for
judicial default, show good cause why a default should not be entered, or
else the case would be dismissed. The Dimanches did not file anything in
the ten-day period.
On May 12, 2021, the same day the trial court entered its order to take
action, Universal Property filed a motion to dismiss the Dimanches’
complaint for declaratory relief. On May 24, 2021, the trial court entered an
order denying Universal Property’s motion to dismiss and stating that a
default would be entered against Universal Property without a hearing if
Universal Property did not file its Answer within seven days (by May 31,
2021). Specifically, the trial court’s order stated: “This deadline may not be
extended by agreement and the mere filing of a motion to extend this
deadline will not toll the time to file the Answer. The failure to timely file
the Answer will result in the entry of a Court Default without further
notice or hearing.” (Emphasis in original). Universal Property argued that
its legal assistant mistakenly did not calendar the deadline for the answer to
the Dimanches’ complaint, and thus Universal missed the deadline. The trial
court did not hold a hearing, and on June 7, 2021, it entered a default against
Universal Property. The trial court’s order stated:
JUDICIAL DEFAULT AGAINST THE DEFENDANT
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This cause came up for review and the Court noting the
Defendant is in violation of this Court order requiring the
Defendant to file an Answer on or before 5/31/21, which has not
happened, it is therefore;
Ordered and Adjudged that a Judicial Default is hereby entered
against Universal Property and Casualty Insurance Company.
DONE and ORDERED in Chambers at Miami-Dade County,
Florida on this 7th day of June, 2021.
The next day, on June 8, 2021, Universal Property filed its Answer and
Affirmative Defenses denying that the Dimanches had sustained a covered
loss. Universal Property contended in its first affirmative defense that the
subject policy was an H08 “named peril” policy and not an “all risk” policy.
Thus, coverage was only provided for certain perils. It then outlined Section
I of the subject policy which provided the list of perils. Universal Property
stated that based on documentation received from the Dimanches, their
report, and Universal Property’s inspection of the alleged loss, there was no
coverage for the subject loss because the damages were the result of a
plumbing leak and not a “named peril.”
On the same day, Universal Property filed a Verified Motion to Set
Aside Judicial Default. It outlined its legal assistant’s error in failing to put the
due date for its Answer on the calendar and cited Florida case law regarding
clerical/secretarial errors being deemed excusable neglect when setting
aside defaults. It also argued that a meritorious defense was presented in its
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Answer and Affirmative Defenses. Finally, Universal Property contended that
it had showed due diligence in taking action to respond to the judicial default
by filing its Verified Motion to Set Aside Default with supporting exhibits and
its Answer and Affirmative Defenses the very next day after the trial court’s
order was entered.
Thereafter, on May 13, 2021, the parties scheduled an agreed hearing
date of July 6, 2021 for Universal Property’s motion to dismiss plaintiffs’
complaint for declaratory relief. When the trial court denied Universal
Property’s motion to dismiss on May 24, 2021 and entered a judicial default
on June 7, 2021, Universal Property then set its Verified Motion to Set Aside
Default for hearing on July 6, 2021, the date that had been previously set for
its motion to dismiss. On July 3, 2021, the trial court entered an “Order
Denying Motion to Set Aside Default.” Universal Property filed a motion for
reconsideration on July 9, 2021, which has not been ruled on by the trial
court.
On July 15, 2021, the Dimanches filed their “Motion for Entry of Default
Final Declaratory Judgment and to Determine Entitlement to Attorney’s Fees
and Costs.” They alleged that their claim was a covered loss under the
subject policy, the Replacement Cost Value of their claim was $65,910.87,
and they are entitled to an award of reasonable attorney’s fees and costs.
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No hearing was held on the motion. On July 19, 2021, the trial court entered
a Final Declaratory Judgment in favor of the Dimanches and against
Universal Property. In paragraph four (4) of the Final Declaratory Judgment,
the trial court required Universal Property to pay the Dimanches $65,910.87.
The trial court also ruled that the Dimanches were entitled to reasonable
attorney’s fees and costs and reserved jurisdiction to determine the amount.
On July 23, 2021, Universal Property filed a “Motion for Relief From
and/or to Vacate Final Default Judgment” pursuant to Florida Rule of Civil
Procedure 1.540(b). Universal Property contended that the default should
have been set aside because Universal Property showed excusable neglect
in not filing by the deadline, a meritorious defense as set out in its Answer
and Affirmative Defenses, and due diligence in seeking relief from the default
by filing the motion to set aside the default the day after it was entered,
accompanied by the Answer and Affirmative Defenses. It further argued that
it was not afforded due process because the trial court never held a hearing
before granting the Dimanches’ default motion and never held a hearing on
Universal Property’s motion to set aside the default. Universal Property
contended that if the trial court entered the default as a sanction against
Universal Property because it failed to comply with the trial court’s order
directing that an Answer be filed within seven days, then the trial court was
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required to make a finding that Universal Property’s non-compliance was
willful and in bad faith, which the trial court did not do. Finally, Universal
Property argued that the trial court erred in ordering Universal Property to
pay the Dimanches $65,910.87 when their complaint only sought declaratory
relief, and damages were unliquidated. The Dimanches filed their response
to the motion, then Universal Property filed the affidavit of its legal assistant
in support of Universal Property’s motion for relief and/or to vacate the final
default judgment.
The trial court held a hearing on August 12, 2021 on Universal
Property’s motion. After hearing the parties’ arguments, the trial court
reaffirmed its ruling that the final declaratory judgment against Universal
Property would stand as to the default on liability. The trial court then ordered
that paragraph four (4), directing Universal Property to pay $65,910.87 to the
Dimanches, be removed and instead, jurisdiction would be reserved for a
trial on the amount of attorney’s fees only. Universal Property then appealed
the original Final Declaratory Judgment to this Court, and thereafter
appealed the Amended Final Declaratory Judgment the trial court entered to
reflect its updated ruling. 2
2
Universal Property filed a motion with the trial court for it to enter an
Amended Final Declaratory Judgment to reflect the trial court’s amended
ruling. This Court relinquished jurisdiction for the trial court to amend the final
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II. ANALYSIS
We review the denial of a motion to vacate a default under an abuse
of discretion standard. Robles v. Fed. Nat’l Mortg. Ass’n, 255 So. 3d 986,
988 (Fla. 3d DCA 2018).
Universal Property contends that the trial court should not have
entered the default against it because the default could not be based on
Florida Rule of Civil Procedure 1.500(c), and neither was the default justified
under the trial court’s self-executing order. Universal Property further argues
that the trial court should have set the default aside, and thus the default final
declaratory judgment should be vacated. We agree. See Fla. R. Civ. P.
1.500(c). In addition, the entry of default is improper when a party has filed
a responsive pleading or otherwise defended before entry of default. Carder
v. Pelican Cove W. Homeowners Ass'n, Inc., 595 So. 2d 174, 175 (Fla. 5th
DCA 1992).
Here, the trial court entered its order on May 12, 2021 stating that the
Dimanches had to file a motion for entry of default within ten days of the trial
court’s order. They did not file anything. Also on May 12, 2021, Universal
declaratory judgment, which the trial court did on September 2, 2021. On
September 3, 2021, Universal Property filed its notice of appeal from the
Amended Final Declaratory Judgment. This Court then consolidated the two
appeals to proceed under Case No.: 3D21-1805.
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Property filed its motion to dismiss the Dimanches’ complaint. Thus, the
default entered against Universal Property was improper under Rule
1.500(c).
Accordingly, as Universal Property contends, the basis for the trial
court’s default order could only be the trial court’s May 24, 2021 order where
it ordered Universal Property to file its answer within seven days (on or
before May 31, 2022). Universal Property’s legal assistant did not calendar
the May 31, 2021 deadline. Thus, Universal Property did not file by the
required date. The trial court then entered a default on June 7, 2021.
Universal Property contends that this was a sanction by the trial court for
Universal Property’s failure to comply with the trial court’s order which was
an abuse of discretion by the trial court because Universal Property was
entitled to notice of the application for default. In addition, it argues that the
trial court’s warning in bold and underlining in the May 24, 2021 order was
insufficient notice. Universal Property is correct.
In International Energy Corporation v. Hackett, 687 So. 2d 941 (Fla. 3d
DCA 1997), this Court stated:
It is fundamental and well-established under Rule 1.500(b)
that when a party against whom affirmative relief is sought has
appeared in the action by filing or serving any papers, no default
may be entered against such party without prior notice of the
application for default. Moreover, any default entered in violation
of the due process notice requirement of Rule 1.500 must be set
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aside without any regard as to whether a meritorious defense is
presented or excusable neglect is established. . . .
The appellees do not contest the fact that International was
entitled to receive notice, but assert essentially that the court's
admonition in its Uniform Order that any noncompliance might
result in the imposition of sanctions, including dismissal, satisfied
the notice requirement under Rule 1.500(b). We disagree. Even
if the Uniform Order had specifically listed default as a
possible sanction for noncompliance, notice and
opportunity to be heard must still be given to the defending
party for a determination of whether the noncompliance was
willful or in bad faith. Neder [v. Greyhound Financial Corp., 592
So. 2d 1218 (Fla. 1st DCA 1992)], at 1218 (“Although the order
which appellant failed to comply with threatened dismissal for
noncompliance, notice must still be given.”); . . . .
Hackett, 687 So. 2d at 942-943 (emphasis added; footnotes omitted; some
internal citations omitted). Here, there was no motion for default filed by the
Dimanches. The trial court had ordered them to file one, but they did not.
Even though the trial court stated in its May 24, 2021 order that it would enter
a default if Universal Property did not comply with the deadline of May 31,
2021, Universal Property is correct that it was nonetheless entitled to notice
and a determination by the trial court on whether Universal Property’s failure
to comply with the order was willful or done in bad faith. “When a default
judgment is entered against a party for failure to obey a court order, the order
of default must contain specific findings of the noncomplying party’s willful or
deliberate refusal to obey the court order.” Deer Valley Realty, Inc. v. Beck
& Lee, P.A., 260 So. 3d 413, 415 (Fla. 3d DCA 2018). The trial court did not
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make any of these required findings. And as Universal Property correctly
contends, the trial court could not have made these findings because no
hearing was held on the issue, so there was no record or evidence for the
trial court to consider. Thus, the default against Universal Property was
incorrectly entered.
In addition, Universal Property is correct that the default against it
should have been set aside, and the default declaratory judgment should be
vacated. Florida Rule of Civil Procedure 1.500(d), “Setting aside Default,”
states: “The court may set aside a default, and if a final judgment consequent
thereon has been entered, the court may set it aside in accordance with rule
1.540(b).” Rule 1.540(b), provides, in part:
On motion and upon such terms as are just, the court may relieve
a party or a party’s legal representative from a final judgment,
decree, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
...
Fla. R. Civ. P. 1.540(b)(1). Furthermore, it is well-settled in Florida that “[a]
party moving to set aside a default must show excusable neglect, a
meritorious defense, and due diligence in moving to set aside the default.”
Lanza v. Allied Trucking of Fla., Inc., 930 So. 2d 633, 634 (Fla. 3d DCA
2006).
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This Court has found excusable neglect “where inaction results from
clerical or secretarial error, reasonable misunderstanding, a system gone
awry or any other of the foibles to which human nature is heir.” Noel v. James
B. Nutter & Co., 232 So. 3d 1112, 1115-16 (Fla. 3d DCA 2017) (internal
citations omitted); see also Somero v. Hendry Gen. Hosp., 467 So. 2d 1103,
1106 (Fla. 4th DCA 1985). The calendaring error made by Universal
Property’s legal assistant is an error commonly recognized as warranting
relief under rule 1.540(b). Barrett v. Busser, 310 So. 3d 1016, 1017 (Fla. 2d
DCA 2020); Acosta v. Deutsche Bank Nat. Trust Co., 88 So. 3d 415, 416-
417 (Fla. 4th DCA 2012). Excusable neglect must be proven by an affidavit
or other sworn statement. Gibraltar Serv. Corp., v. Lone & Assocs., Inc., 488
So. 2d 582, 584 (Fla. 4th DCA 1986). Here, the calendaring error was
supported by Universal Property’s legal assistant’s affidavit. Thus, Universal
Property met the excusable neglect requirement.
Furthermore, Universal Property also showed that it had a meritorious
defense and that it acted with due diligence in moving to set aside the default.
The due diligence requirement was met because on June 8, 2021, the very
next day after the trial court entered the default against Universal Property
on June 7, 2021, Universal Property filed its Answer and Affirmative
Defenses and its motion to set aside the default. Universal denied the
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Dimanches’ allegations that they had sustained a covered loss. It also raised
six affirmative defenses, including that the Dimanches’ claim for an
accidental discharge of water was not a listed peril in their HO8 “named
perils” policy. Thus, Universal Property met the meritorious defense
requirement. Gibraltar Service Corp., 488 So. 2d at 584 (“[A] meritorious
defense may be shown by an unverified pleading or an affidavit.”).
Accordingly, the record shows that Universal Property met the three
requirements for setting aside a default. Lanza, 930 So. 2d at 634.
For these reasons, we reverse the Amended Final Declaratory
Judgment and remand to the trial court with instructions that the trial court
set aside the judicial default against Universal Property so the case can
proceed on the merits.
Reversed and remanded with instructions.
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