IN THE SUPREME COURT OF THE STATE OF FLORIDA CASE NO: SC ********************************************** EDWARD HOWLAND, Petitioner, vs.

Transcription

1 IN THE SUPREME COURT OF THE STATE OF FLORIDA CASE NO: SC ********************************************** EDWARD HOWLAND, Petitioner, vs. BARRY S. SCHRAGER, Respondent, ********************************************** ON DISCRETIONARY REVIEW FROM THE FOURTH DISTRICT COURT OF APPEAL CASE NO: 4D ********************************************** PETITIONER S JURISDICTIONAL BRIEF FILED ON BEHALF OF EDWARD HOWLAND PETITIONER ********************************************************* PETER E.S. WALLIS WALLIS & WALLIS, P.A. Federal Tower Building 1600 South Federal Highway, Suite 600 Pompano Beach, Florida COUNSEL FOR PETITIONER EDWARD HOWLAND

2 TABLE OF CONTENTS CERTIFICATE OF COMPLIANCE.ii TABLE OF AUTHORITIES iii STATEMENT OF THE CASE AND FACTS...1 SUMMARY OF THE ARGUMENT. 4 ARGUMENT. 4C ONCLUSION 10 I. PETITIONER S SWORN AFFIDAVIT DEMONSTRATING EXCUSABLE NEGLECT, MERITORIOUS DEFENSE, AND DILIGENCE COMPORTS WITH THE LEGAL REQUIRMENTS FOR SETTING ASIDE A DEFAULT JUDGMENT ESTABLISHED IN THE STATE OF FLORIDA....4 II. HOWLAND HAD NOT RECEIVED NOTICE PRIOR TO THE ENTRY OF DEFAULT FINAL JUDGMENT..9 i

3 CERTIFICATE OF COMPLIANCE THE UNDERSIGNED HEREBY CERTIFIES, that Appellant s initial Brief complies with the font requirements of Rule 9.210(2)of the Rules of Appellate Procedure. Respectfully submitted this 5 th day of November Wallis & Wallis Professional Association Federal Tower Building 1600 South Federal Highway, Suite 600 Pompano Beach, Florida Phone: Fax: By: /s Peter E.S. Wallis Peter E.S. Wallis Florida Bar No: Counsel for Appellant ii

4 TABLE OF AUTHORITIES Rules: Fla. R. Civ. P (b)(1),...5 Fla. R. App. P (a)(2)(A)(iv) Constitutions: Art. V, 3(b)(3), Fla. Const Cases: Church of Christ Written in Heaven, Inc., v. Church of Christ Written in Heaven Of Miami, Inc., 947 So.2d 557 (Fla. 3d DCA 2006)... 6, 7, 8 Cinkat Transp., Inc. v. Maryland Cas. Co., 596 So.2d 746 (Fla. 3d DCA 1992)...9 Coggin v. Barfield, 150 Fla. 551, 8 So.2d 9 (Fla. 1942)...7 Commonwealth Federal Savings and Loan Ass n v. Tubero, 569 So.2d 1271 (Fla. 1990)....1 County Nat. Bank of North Miami Beach v. Sheridan, Inc.,...8, 9 Dade County v. Lambert, 334 So.2d 844 (Fla. 3d DCA 1976)...6 Espinosa v. Racki, 324 So.2d 105 (Fla. 3d DCA 1975)... 5, 6, 7 Florida Inv. Enterprises, Inc. v. Kentucky Co., 160 So.2d 733 (Fla. 1 st DCA 1964)...9 Geer v. Jacobsen, 880 So.2d 717 (Fla. 2d DCA 2004)...6 Howland v. Schrager, 964 So.2d 751 (Fla. 4 th DCA 2007)...4, 5, 9, 10 iii

5 J.B. v. Florida Dept. of Children and Family Services, 768 So.2d 1060 (Fla. 2000) 9 Knight v. Gainer, 310 So.2d 58 (Fla. 1 st DCA 1975)...7 Knowles v. State, 848 So. 2d 1055 (Fla. 2003)...5 North Shore Hospital, Inc. v. Barber, 143 So.2d 849 (Fla. 1962)... 6, 7, 9 Ryan's Furniture Exchange v. McNair, 120 Fla. 109, 162 So. 483 (Fla. 1935).9 Sanchez v. Horrell, 660 So.2d 366 (Fla. 4 th DCA 1995)...6 Viets v. American Recruiters Enterprises, 922 So.2d 1090 (Fla. 4 th DCA 2006).....9, 10 Wale v. Barnes, 278 So. 2d 601 (Fla. 1973)...5 iv

6 STATEMENT OF THE CASE AND FACTS Respondent, Barry S. Schrager ( Schrager ) sued Petitioner, Edward Howland ( Howland ) for fraudulent transfer of a London, UK property ( Property ) in January The Property was allegedly fraudulently transferred from Deborah Schrager Howland to Howland (Deborah Schrager Howland is both the ex-wife of Schrager and Howland, however, the transfer occurred prior to her marriage to Howland). Howland was a Pro Se defendant after the withdrawal of counsel in February Simply, Schrager did not diligently prosecute his claims against Howland and the case went close to procedurally nowhere until December After Howland had failed to appear for deposition, for which he had not received a notice, and Schrager s motion for contempt, the trial court entered a default order taking the extraordinary step of striking Howland s pleadings. However, the trial court s default order did not find that Howland had acted in willful disregard or gross indifference as is required under Florida law, and is thus defective. See Commonwealth Federal Savings and Loan Ass n v. Tubero, 569 So.2d 1271 (Fla. 1990). Another eight-months of extended period of prosecutorial inactivity would pass until August 2005 when Schrager s motion for final judgment was heard. As an after thought, the final judgment contained willfulness as the trial court s basis for striking Howland s pleadings. This Court in Tubero clearly stated that it is the default order that must contain an explicit finding of willful noncompliance. 569 So.2d 1271 at Here, the finding of willful noncompliance was required in the December 2 nd 2004 default order and not in the 1

7 August 16 th 2005 final judgment as an after thought. Howland discovered the final judgment while conducting a routine credit check he is an executive in finance subject to the Sarbanes-Oxley Act. Howland timely filed a motion to set aside the default final judgment. Following some Pro Se procedural missteps, that nevertheless stayed the procedural clock, Howland s motion to set aside was heard on March 30 th Howland filed a sworn affidavit with the motion wherein he set forth facts explaining the excusable neglect and/or inadvertence as to why he had not responded to Schrager s deposition request. Howland s sworn statements included that he had been out of state, indeed, out of the country on business repeatedly for periods of time and that he had not received notices in the case since February 2003 until he had discovered the final judgment in August 2005 Howland had diligently provided forwarding addresses with the USPS throughout this period. Howland acted within 14- days of the entry of the final judgment to have it set aside. Exacerbating the whole situation was Schrager s adversarial procedure against Deborah Schrager Howland in her Bankruptcy case over the alleged fraudulent transfer of the Property to Howland. Schrager also filed an appeal in the Federal District Court of Appeals after losing in the Bankruptcy court, and lost again. Schrager s cases against Deborah Schrager Howland occurred concurrently with his case against Howland which may be the reason why Schrager did not diligently pursue the case against Howland. In 2003, Sonya Salkin, Bankruptcy Trustee in Deborah Schrager Howland s case, intervened as a party plaintiff below, but later disavowed interest in the Schrager claims 2

8 and case when the Deborah Schrager Howland Bankruptcy court decided that the Property had not been transferred fraudulently. Important here is that Schrager had not diligently prosecuted the claim against Howland; however, Schrager did diligently seek the same or similar relief against Deborah Schrager Howland and had twice failed the Bankruptcy and Federal Appeals courts determined that the Property transfer was not fraudulent. And though not a named party in Schrager s proceedings against Deborah Schrager Howland, Howland was a key deposed witness in those cases. As a result, Howland reasonably believed Schrager s case against him was subject to equitable estoppel, and thus moot and dismissed. He was surprised to find a final judgment against him after such lengthy periods of inactivity and having received no notices. When Howland s motion to set aside was heard, the trial court stated: A lot of things you have to show for excusable neglect, all of which I considered, including meritorious defense. Obviously the timeliness is way over. (Initial Brief, Appendix Q, P.7, L.23 P.8, L.1). (emphasis added). Timeliness, was in fact, not an issue. Howland acted on August 30 th 2005, within 14-days of entry of the final judgment. Indeed, the procedural clock was stayed until Howland s motion to set aside was heard. Despite clear statements of excusable neglect in Howland s sworn affidavit the trial court concluded not to vacate the final judgment and set aside the default because timeliness is way over. (Initial Brief, Appendix Q, P.7, L.23 P.8, L.1). (emphasis added). 3

9 The 4 th District Court in its written opinion held: We find no abuse of discretion in the trial court s order denying appellant s motion to vacate the default judgment given that appellant failed to demonstrate excusable neglect or inadvertence. Howland v. Schrager, 964 So.2d 751 (Fla. 4 th DCA 2007). Apart from the 4 th District s failure to address the issue that the final judgment was void under Florida law because the default was defective, the 4 th District s opinion is in direct conflict with other district court opinions and those of the Supreme Court. SUMMARY OF THE ARGUMENT The opinion of the 4 th DCA expressly and directly conflicts with decisions of district courts of appeal and the Supreme Court regarding the long established requirements for seeking to set a default judgment aside. Furthermore, the decision of the 4 th DCA is in conflict with the evidence in the record below. ARGUMENT I. PETITIONER S SWORN AFFIDAVIT DEMONSTRATING EXCUSABLE NEGLECT, MERITORIOUS DEFENSE, AND DILIGENCE COMPORTS WITH THE LEGAL REQUIRMENTS FOR SETTING ASIDE A DEFAULT JUDGMENT ESTABLISHED IN THE STATE OF FLORIDA. This Court has discretionary jurisdiction to review a district court decision that expressly and directly conflicts with a decision of other District Courts of Appeal or the Supreme Court on the same issue of law. Art. V, 3(b)(3), Fla. Const. and Rule Fla. R. App. P.9.030(a)(2)(A)(iv). Decisional conflict may be created by conflict in legal principles appearing on the face of the decision or the misapplication of a specific holding 4

10 previously announced by this Court. See Knowles v. State, 848 So. 2d 1055 (Fla. 2003) (accepting jurisdiction based on a conflict created by misapplication of decisional law); Wale v. Barnes, 278 So. 2d 601 (Fla. 1973). The 4 th DCA below held: [w]e find no abuse of discretion in the trial court s order denying appellants motion to vacate the judgment, given that appellant failed to demonstrate excusable neglect or inadvertence. Howland, 964 So.2d 751 at 752. (emphasis added). The trial court concluded that, timeliness is way over. (Initial Brief, Appendix Q, P.7, L.23 P.8, L.1). (emphasis added). The facts and evidence in the case below are in stark contrast with these decisions and in conflict with Florida law as expressed by this Honorable Court and District Courts. Florida law states that a trial court has broad authority under Rule 1.540(b)(1) to vacate or set aside a default judgment based on mistake, inadvertence, surprise or excusable neglect; indeed setting aside defaults and allowing trial on the merits is one of liberality. Espinosa v. Racki, 324 So.2d 105 (Fla. 3d DCA 1975). It is the facts of a case that are of singular importance in determining whether a default judgment should be set aside. Id. at 107. It is fundamental that a court should set aside a default judgment where the movant shows excusable neglect, a meritorious defense, and reasonable diligence. Sanchez v. Horrell, 660 So.2d 366 (Fla. 4 th DCA 1995). A long line of cases clearly states that the underlying legal requirements for setting aside a default judgment is the presentation of a motion and a supporting affidavit demonstrating excusable neglect, meritorious defense and that the movant acts diligently 5

11 in seeking to set the default judgment aside. Church of Christ Written in Heaven, Inc., v. Church of Christ Written in Heaven Of Miami, Inc., 947 So.2d 557 (Fla. 3d DCA 2006); citing North Shore Hospital, Inc. v. Barber, 143 So.2d 849 (Fla. 1962); Geer v. Jacobsen, 880 So.2d 717 (Fla. 2d DCA 2004); Dade County v. Lambert, 334 So.2d 844 (Fla. 3d DCA 1976). The element of excusable neglect must be proven by sworn statements or affidavits, and demonstrate the existence of a meritorious defense. A party's failure to satisfy these requirements is fatal to the success of a motion to vacate. See Geer, 880 So.2d at A sworn affidavit is a self-proving document unless defeated by other evidence or testimony. There was no refutation of Howland s sworn affidavit, indeed Schrager did not appear at the hearing. Howland filed a seven-page sworn affidavit detailing his excusable neglect with his motion to set aside. Howland presented a meritorious defense that the Property had not been fraudulently transferred and that other courts had made that determination involving the same or similar claims involving the Property. Howland acted within 14-days of finding entry of the default judgment to set it aside. The trial court was grossly wrong in its conclusion that Obviously the timeliness is way over. And the 4 th DCA was fragmentary in its opinion that Howland failed to demonstrate excusable neglect or inadvertence in concluding the trial court did not abuse its discretion, and otherwise inconsistent with Florida law. It is the liberal policy of Florida courts that where there is reasonable doubt; the trial court s discretion should be exercised in favor of granting a motion to set aside and 6

12 determine the controversy on the merits. See Coggin v. Barfield, 150 Fla. 551, 8 So.2d 9 (Fla. 1942). The entry of a default judgment is not intended to provide an advantage; however, it is intended to prevent a dilatory or procrastinating defendant from impeding procedure. North Shore, 143 So.2d 849 at Howland was not dilatory and did not procrastinate, and is prepared to proceed immediately. Knight v. Gainer, 310 So.2d 58 (Fla. 1 st DCA 1975). In Espinosa, the court held: We find that the failure of plaintiff's attorney to forward the medical records as agreed, the disappearance of the diary, the large volume of cases, and the fact that Resources Insurance Company in January 1975 was adjudged insolvent thereby making Eduardo and Angel Espinosa liable for the $42,000 judgment (without having their day in court), to be sufficient grounds to set aside the judgment. 324 So.2d 105 at 107. However, in the Church of Christ case, the court there stated: The local Miami church's motion to vacate contained no evidence of excusable neglect or meritorious defense. The local Miami church s motion to vacate contained only a bare allegation of excusable neglect and meritorious defense. The motion was unverified and it did not contain any accompanying affidavit in support. The motion was thus legally insufficient. 947 So.2d 557 at 559. Howland has presented and demonstrated each element. Howland should not be denied a chance to have the case heard on the merits inasmuch as the evidence is strongly in his favor meritorious defenses (including collateral estoppel that may very well be applicable in that other courts have determined that the transfer of the Property was not fraudulent) here are those that can defeat the claim. Furthermore, Howland is potentially 7

13 liable for a $100,000 judgment for non-fraudulently transferred Property. Giving Schrager an incongruous judgment, not meritoriously won, is a distinct injustice which is repugnant to the concepts of substantial justice and having the case heard on the merits is of no prejudice to Schrager he can present to case he would have presented, and if he can win where he has not before, that allow the trial court to make that determination. There is excusable neglect here and it is sworn to. In County Nat. Bank of North Miami Beach v. Sheridan, Inc., the facts of excusable neglect were a series of human foibles that were explained in detail in a motion and sworn affidavits. 403 So.2d 502 (Fla. 4 th DCA 1981). Judge Anstead concludes in Sheridan, that the sworn undisputed facts should be considered with liberality where an unintentional mistake may be excused when no substantial prejudice to the plaintiff has resulted. Id. at 504. (emphasis added). And here, as to the issue of prejudice, placing the instant case back before the trial court to be heard on the merits would place Schrager back where he sought to be by filing the action originally. Schrager should be required to win his claim on the merits, and not benefit from Howland s excusable neglect, which in some part was due the Schrager s failure to diligently prosecute his action against Howland. Florida courts have long maintained that greater leniency is granted in cases not decided upon the merits. Cinkat Transp., Inc. v. Maryland Cas. Co., 596 So.2d 746 (Fla. 3d DCA 1992); Florida Inv. Enterprises, Inc. v. Kentucky Co., 160 So.2d 733 (Fla. 1 st DCA 1964); North Shore Hospital, Inc. v. Barber, 143 So.2d 849 (Fla. 1962). II. HOWLAND HAD NOT RECEIVED NOTICE PRIOR TO THE ENTRY OF DEFAULT FINAL JUDGMENT. 8

14 The 4 th DCA also held that Howland:.... was not given proper notice before the trial court entered final judgment awarding damages based solely on appellee s affidavit. Howland, 964 So.2d 751 at 752. (emphasis added). In Viets v. American Recruiters Enterprises, the 4 th DCA states: A violation of the due process guarantee of notice and an opportunity to be heard renders a judgment void. Generally, due process requires fair notice and an opportunity to be heard and defend in an orderly procedure before judgment is entered. 922 So.2d 1090 (Fla. 4 th DCA 2006). (emphasis in original); see also J.B. v. Florida Dept. of Children and Family Services, 768 So.2d 1060 (Fla. 2000); and Ryan's Furniture Exchange v. McNair, 120 Fla. 109, 162 So. 483 (Fla. 1935). The 4 th DCA held that Howland was not properly noticed before the trial court entered final judgment. Howland, 964 So.2d at 752. However, in citing the Viets case on that point, the 4 th DCA ignored the fundamental of American juris prudence that the Viets case stands for the proposition that due process requires fair notice and a real opportunity to be heard and defend. 922 So.2d 1090 at Viets was entered eightdays before Howland s motion was heard by the trial court. Howland was entitled to fair notice across the board, and since the 4 th DCA concluded that Howland was not given proper notice on one aspect of the default final judgment, Howland could not possibly have received notice at all. The 4 th DCA s opinion in Howland v. Schrager on notice is in direct and express conflict with the opinions of this Honorable Court and its own opinion in Viets. CONCLUSION 9

15 Procedurally and substantively Howland has met his burden to have the trial court set aside the default judgment; but the 4 th DCA s disjointed opinion on the trial court s abuse of discretion and the trial courts failure to act in accordance with Florida law are inconsistent and expressly and directly in conflict with Florida law. Furthermore, Howland had not received proper or fair notice prior to entry of the final, which is inconsistent and expressly and directly in conflict with Florida law. Howland respectfully request this Honorable Court accept Jurisdiction. 10

16 Respectfully submitted, this 5 th day of November CERTIFICATE OF SERVICE /s Peter E.S. Wallis Peter E.S. Wallis, FBN: I HEREBY CERTIFY that a true and correct copy of the forgoing was mailed to: Steven H. Meyer, Esq., counsel of record for Appellee, 2295 N.W. Corporate Blvd., Ste. 117, Boca Raton, Florida this 5 th day of November Wallis & Wallis Professional Association Federal Tower Building 1600 South Federal Highway, Suite 600 Pompano Beach, Florida Phone: Fax: By: /s Peter E.S. Wallis Peter E.S. Wallis Florida Bar No: Counsel for Appellant 11