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FLORIDA LAW WEEKLY

VOLUME 44, NUMBER 39

CASES FROM THE WEEK OF SEPTEMBER 27, 2019

TRIAL COURT ERRED IN DENYING MOTION FOR REHEARING WHEN MOTION STATED A COLORABLE ENTITLEMENT TO RELIEF BASED ON EXCUSABLE NEGLECT.

Fast Funds, Inc. v. Aventura Orthopedic Care Center, 44 Fla. L. Weekly D2352 (Fla. 4th DCA September 18, 2019):

An accident victim filed a petition for declaratory judgment seeking to determine the equitable distribution of a bodily injury award entered in his favor after a personal injury arbitration. The respondents were the medical providers who treated the plaintiff as well as funding companies that provided monetary advances to him based on his claim. The appellant in the case was one of the funding companies that had sought repayment and interest for the amounts it loaned to the victim plaintiff.

The appellant was served with a petition and a separate notice of the hearing on the petition, set for a date several months into the future.

Due to a calendaring error, the funding company appellant did not attend the hearing. The court had announced at the hearing that only those present would be considered as part of the equitable distribution. An attorney for the funding company then received an email from another attorney who had attended the hearing, which alerted counsel that the hearing had occurred.

On that same day, and prior to entry of any order by the trial court, the appellant funding company filed a motion for the trial court to reconsider its ore tenus ruling that only those stakeholders who appeared would be considered for final decision, noting the mistake they made in diarying, and further noting that the victim’s counsel had been contacted and would not agree because the victim would be prejudiced by requiring a new hearing.

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After the court entered an order based upon the interests of those present at the hearing, the funding company filed a motion seeking rehearing pursuant to Rule 1.530. The trial court denied the motion based on the failure to seek relief under Rule 1.540(b).

The Fourth District noted that though this was error under Rule 1.530, a party may move for rehearing of a final order to give the trial court opportunity to consider matters which it overlooked or failed to consider. Because the funding company had filed a 1.530 motion for rehearing timely and noted that counsel’s absence was due to a clerical error, the Fourth District concluded that the motion stated a colorable entitlement to relief based on excusable neglect and that the trial court erred in denying the motion for rehearing.

DUE DILIGENCE REQUIREMENT NEEDED TO VACATE A DEFAULT JUDGMENT APPLIES TO SUCCESSIVE MOTIONS TO VACATE.

Fernandez v. Difiore, 44 Fla. L. Weekly D2349 (Fla. 4th DCA September 18, 2019):

In a lawsuit for an unpaid promissory note, the defendant failed to serve or file any responsive papers. The court entered a final default judgment.

A week later, the defendant filed an answer, affirmative defenses, and a counterclaim, while also moving to vacate the default judgment alleging excusable neglect, due diligence, and a meritorious defense. Defense counsel had attached an affidavit stating that his legal assistant had been ill, and was confused as to the correct date for filing, based upon the multiple lawsuits that were going on between the parties.

After a hearing, the trial court denied the motion without prejudice. On the following day, the defendant filed an affidavit of defense counsel’s legal assistant stating the same facts as were set forth in the defense counsel’s affidavit.

Sixty-five days later, the defendant filed a second motion to vacate the default judgment. There were no new grounds alleged, and the plaintiff filed no opposition. At the hearing on the second motion, neither party presented testimony or evidence and defense counsel argued that correcting the affidavit was the critical issue that had stopped the default judgment from being set aside. Plaintiff argued that defendant had not exercised due diligence in filing the second motion (which was filed more than two months later), and argued that the motion should be denied.

Reminding us that Florida’s public policy does favor the setting aside of defaults so that controversies can be decided on their merits, the court noted how the trial judge denied the second motion to vacate the default for failure to exercise due diligence, finding that there had been an initial motion to vacate within a week of the default judgment which was denied without prejudice, and that the defendant an opportunity to file a sufficient motion and an affidavit.

The court reversed the trial judge’s denial of the defendant’s second motion to vacate the default final judgment based on due diligence. It then remanded for consideration of the other elements necessary to vacate a default judgment (excusable neglect and a meritorious defense).

LEGAL MALPRACTICE CLAIMS ARE GENERALLY NOT RIPE UNTIL THE UNDERLYING LITIGATION IS RESOLVED TO DETERMINE WHETHER THE PLAINTIFF SUFFERED ANY DAMAGES AS A PROXIMATE RESULT OF THE ALLEGED INSTANCE OF MALPRACTICE.

Kasowitz Benson Torres, v. Mariano, 44 Fla. L Weekly D2353 (Fla. 4th DCA September 18, 2019):

A plaintiff and his company sold shares of stock to certain hedge fund investors. The investors later sued the plaintiff and his company. The plaintiff then sued his attorneys for legal malpractice, claiming that the firm negligently drafted documents related to the transaction and failed to adequately warn him of the risks and that another lawyer negligently drafted the affirmative defenses and failed to advise him of viable claims against the other lawyers for malpractice.

Both law firm defendants moved to stay or abate the action, arguing that the claim for legal malpractice was premature because the underlying litigation was still ongoing. The trial court denied those motions.

A claim of legal malpractice generally does not accrue until the underlying litigation is resolved with an adverse outcome to the client. If a client files a complaint while the underlying litigation is pending, the case should be abated upon a showing that the outcome of the underlying litigation will determine whether the client incurred any damages as a proximate cause of the malpractice.

Here, the plaintiff’s claim should have been abated because of the ongoing litigation, and the trial court’s refusal to do so was error.