Third District Court of Appeal State of Florida
Opinion filed May 29, 2019. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D18-1277 Lower Tribunal No. 17-20533 ________________
Benefit Administrative Systems, LLC, Appellant,
vs.
West Kendall Baptist Hospital, Inc., et al., Appellees.
An Appeal from the Circuit Court for Miami-Dade County, Abby Cynamon, Judge.
Phelps Dunbar LLP, and Michael S. Hooker and Guy P. McConnell (Tampa), for appellant.
Isicoff Ragatz, and Matthew L. Lines and Eric D. Isicoff, for appellees.
Before EMAS, C.J., and LOGUE and HENDON, JJ.
EMAS, C.J. INTRODUCTION
Benefit Administrative Systems, LLC (BAS) appeals the trial court’s denial
of its motion to set aside a default judgment on the basis of excusable neglect.
Because the trial court did not abuse its discretion, we affirm.
FACTS AND PROCEDURAL BACKGROUND
West Kendall Hospital and South Miami Hospital (the Hospitals) sued BAS
to recover for underpaid claims in the amount of $327,114.16. The summons and
complaint were served on BAS’s registered agent, Corporation Service Company
(CSC), “a national provider of registered agent services.” When BAS did not file
an answer, the Hospitals sought, and the trial court entered, a default final
judgment against BAS for $327,114.16. The Hospitals maintained (and provided
evidence below) that their attorney mailed a copy of the default judgment, regular
mail, to BAS’s Illinois headquarters on October 16, 2017—the same day the trial
court entered the default judgment. BAS denied that it received the summons and
complaint or the default judgment.
On February 23, 2018, the Hospitals sought to domesticate the default
judgment in an Illinois court, and to freeze BAS’s assets through issuance of a
“Third Party to Discover Assets” to BAS’s bank. BAS contends that its “receipt of
these documents was the first time [] it became aware of the Hospital’s lawsuit and
the default judgment.” These documents were mailed to BAS’s corporate
2 headquarters in Illinois—the same location to which counsel had mailed a copy of
the default judgment four months earlier.
On March 7 (nearly five months after the default judgment was entered),
BAS filed the underlying motion to quash service and set aside judgment, alleging:
(1) that it was not served; and (2) if it was served, the failure to respond was due to
excusable neglect, i.e., misfiling of the served documents. During an evidentiary
hearing, BAS’s CEO (James Connell) testified that BAS was never served with the
summons and complaint in this case. The Hospitals presented evidence that BAS
was properly served (including testimony from the process server), and evidence
that counsel for the Hospitals mailed the judgment to BAS’s corporate office the
same day default was entered.
Following the evidentiary hearing, the trial court denied the motion, finding
the return of service was proper on its face and presumptively valid, and that (1)
BAS “failed to offer evidence from which the Court [could] find excusable
neglect”; and (2) BAS failed to act with due diligence where it filed its motion
nearly five months after the Hospitals mailed (and BAS received) a copy of the
default judgment. This appeal followed.
DISCUSSION
Florida Rule of Civil Procedure 1.540(b)(1) authorizes a trial court to relieve
a party from a final judgment on the basis of, inter alia, excusable neglect. A trial
3 court is accorded broad discretion in determining whether to grant such relief, and
we review the trial court’s order for an abuse of that broad discretion. Tikhomirov
v. Bank of New York Mellon, 223 So. 3d 1112, 1116 (Fla. 3d DCA 2017).
However, “in case of doubt, discretion is to be exercised in favor of vacating the
default.” Miami-Dade Cty. v. Coral Bay Section C Homeowners Ass’n, Inc., 979
So. 2d 318, 323 (Fla. 3d DCA 2008) (quotation omitted). Because the
circumstances constituting excusable neglect are not precisely defined, “the facts
of each case are of singular importance in determining whether relief should be
granted.” Id. at 322. A court has discretion to set aside a default judgment if the
moving party establishes: “(1) excusable neglect in failing to timely file a
response; (2) a meritorious defense; and (3) due diligence in seeking relief after
discovery of the default.” Santiago v. Mauna Loa Invs., LLC, 189 So. 3d 752, 758
(Fla. 2016). Failure to satisfy any one of these elements will result in denial of the
motion to vacate.1 Id.
1. Excusable Neglect
We hold that the trial court did not abuse its discretion in denying BAS’s
motion. While clerical errors and “failure to follow established policy” may
constitute excusable neglect, Coral Bay, 979 So. 2d at 324, the only position
advanced by BAS and supported by evidence was its assertion that the summons
1Because BAS failed to satisfy the excusable neglect and due diligence prongs, we do not address whether BAS established a meritorious defense.
4 and complaint were never served upon BAS. Nevertheless, BAS’s evidence was
contradicted by the Hospitals’ evidence, as well as the presumption of valid service
arising from the return of service that was regular on its face. See Robles-Martinez
v. Diaz, Reus & Targ, LLP, 88 So. 3d 177 (Fla. 3d DCA 2011). The trial court
weighed the evidence, made credibility determinations, and concluded that BAS
failed to show it was never served with the summons and complaint.
Alternatively, BAS sought to advance a second, inconsistent position: if the
trial court concluded that the summons and complaint were served upon BAS, the
“only explanation” was that the summons and complaint were misfiled, and thus
the failure to respond was the result of excusable neglect. This second position
was advanced based solely upon counsel’s argument and without any supporting
evidence for the claim that BAS in fact misfiled the summons and complaint.
There is probably good reason for this failure of proof by BAS: any evidence it
presented to establish that BAS misfiled the summons and complaint would
presumably weaken (if not fully undermine) its primary argument that it was never
served with the summons and complaint.
Given BAS’s failure to present evidence to support its position that the
summons and complaint were “misfiled,” the trial court properly rejected this
argument. Rivera v. Dep’t of Revenue ex rel. Rivera, 899 So. 2d 1265 (Fla. 2d
DCA 2005) (holding that excusable neglect under rule 1.540(b) cannot be
5 established without evidence to support a finding of a legal excuse for defendant’s
failure to comply with the rules of civil procedure). The trial court did not abuse
its discretion in finding that BAS failed to establish excusable neglect.
2. Due Diligence
We likewise conclude that the trial court did not abuse its discretion in
finding that BAS failed to act with due diligence upon learning of the default
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Third District Court of Appeal State of Florida
Opinion filed May 29, 2019. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D18-1277 Lower Tribunal No. 17-20533 ________________
Benefit Administrative Systems, LLC, Appellant,
vs.
West Kendall Baptist Hospital, Inc., et al., Appellees.
An Appeal from the Circuit Court for Miami-Dade County, Abby Cynamon, Judge.
Phelps Dunbar LLP, and Michael S. Hooker and Guy P. McConnell (Tampa), for appellant.
Isicoff Ragatz, and Matthew L. Lines and Eric D. Isicoff, for appellees.
Before EMAS, C.J., and LOGUE and HENDON, JJ.
EMAS, C.J. INTRODUCTION
Benefit Administrative Systems, LLC (BAS) appeals the trial court’s denial
of its motion to set aside a default judgment on the basis of excusable neglect.
Because the trial court did not abuse its discretion, we affirm.
FACTS AND PROCEDURAL BACKGROUND
West Kendall Hospital and South Miami Hospital (the Hospitals) sued BAS
to recover for underpaid claims in the amount of $327,114.16. The summons and
complaint were served on BAS’s registered agent, Corporation Service Company
(CSC), “a national provider of registered agent services.” When BAS did not file
an answer, the Hospitals sought, and the trial court entered, a default final
judgment against BAS for $327,114.16. The Hospitals maintained (and provided
evidence below) that their attorney mailed a copy of the default judgment, regular
mail, to BAS’s Illinois headquarters on October 16, 2017—the same day the trial
court entered the default judgment. BAS denied that it received the summons and
complaint or the default judgment.
On February 23, 2018, the Hospitals sought to domesticate the default
judgment in an Illinois court, and to freeze BAS’s assets through issuance of a
“Third Party to Discover Assets” to BAS’s bank. BAS contends that its “receipt of
these documents was the first time [] it became aware of the Hospital’s lawsuit and
the default judgment.” These documents were mailed to BAS’s corporate
2 headquarters in Illinois—the same location to which counsel had mailed a copy of
the default judgment four months earlier.
On March 7 (nearly five months after the default judgment was entered),
BAS filed the underlying motion to quash service and set aside judgment, alleging:
(1) that it was not served; and (2) if it was served, the failure to respond was due to
excusable neglect, i.e., misfiling of the served documents. During an evidentiary
hearing, BAS’s CEO (James Connell) testified that BAS was never served with the
summons and complaint in this case. The Hospitals presented evidence that BAS
was properly served (including testimony from the process server), and evidence
that counsel for the Hospitals mailed the judgment to BAS’s corporate office the
same day default was entered.
Following the evidentiary hearing, the trial court denied the motion, finding
the return of service was proper on its face and presumptively valid, and that (1)
BAS “failed to offer evidence from which the Court [could] find excusable
neglect”; and (2) BAS failed to act with due diligence where it filed its motion
nearly five months after the Hospitals mailed (and BAS received) a copy of the
default judgment. This appeal followed.
DISCUSSION
Florida Rule of Civil Procedure 1.540(b)(1) authorizes a trial court to relieve
a party from a final judgment on the basis of, inter alia, excusable neglect. A trial
3 court is accorded broad discretion in determining whether to grant such relief, and
we review the trial court’s order for an abuse of that broad discretion. Tikhomirov
v. Bank of New York Mellon, 223 So. 3d 1112, 1116 (Fla. 3d DCA 2017).
However, “in case of doubt, discretion is to be exercised in favor of vacating the
default.” Miami-Dade Cty. v. Coral Bay Section C Homeowners Ass’n, Inc., 979
So. 2d 318, 323 (Fla. 3d DCA 2008) (quotation omitted). Because the
circumstances constituting excusable neglect are not precisely defined, “the facts
of each case are of singular importance in determining whether relief should be
granted.” Id. at 322. A court has discretion to set aside a default judgment if the
moving party establishes: “(1) excusable neglect in failing to timely file a
response; (2) a meritorious defense; and (3) due diligence in seeking relief after
discovery of the default.” Santiago v. Mauna Loa Invs., LLC, 189 So. 3d 752, 758
(Fla. 2016). Failure to satisfy any one of these elements will result in denial of the
motion to vacate.1 Id.
1. Excusable Neglect
We hold that the trial court did not abuse its discretion in denying BAS’s
motion. While clerical errors and “failure to follow established policy” may
constitute excusable neglect, Coral Bay, 979 So. 2d at 324, the only position
advanced by BAS and supported by evidence was its assertion that the summons
1Because BAS failed to satisfy the excusable neglect and due diligence prongs, we do not address whether BAS established a meritorious defense.
4 and complaint were never served upon BAS. Nevertheless, BAS’s evidence was
contradicted by the Hospitals’ evidence, as well as the presumption of valid service
arising from the return of service that was regular on its face. See Robles-Martinez
v. Diaz, Reus & Targ, LLP, 88 So. 3d 177 (Fla. 3d DCA 2011). The trial court
weighed the evidence, made credibility determinations, and concluded that BAS
failed to show it was never served with the summons and complaint.
Alternatively, BAS sought to advance a second, inconsistent position: if the
trial court concluded that the summons and complaint were served upon BAS, the
“only explanation” was that the summons and complaint were misfiled, and thus
the failure to respond was the result of excusable neglect. This second position
was advanced based solely upon counsel’s argument and without any supporting
evidence for the claim that BAS in fact misfiled the summons and complaint.
There is probably good reason for this failure of proof by BAS: any evidence it
presented to establish that BAS misfiled the summons and complaint would
presumably weaken (if not fully undermine) its primary argument that it was never
served with the summons and complaint.
Given BAS’s failure to present evidence to support its position that the
summons and complaint were “misfiled,” the trial court properly rejected this
argument. Rivera v. Dep’t of Revenue ex rel. Rivera, 899 So. 2d 1265 (Fla. 2d
DCA 2005) (holding that excusable neglect under rule 1.540(b) cannot be
5 established without evidence to support a finding of a legal excuse for defendant’s
failure to comply with the rules of civil procedure). The trial court did not abuse
its discretion in finding that BAS failed to establish excusable neglect.
2. Due Diligence
We likewise conclude that the trial court did not abuse its discretion in
finding that BAS failed to act with due diligence upon learning of the default
judgment. While BAS contended it never received a copy of the default judgment,
this contention was challenged by the Hospitals’ introduction of evidence that, on
the day default was entered, counsel’s office mailed the judgment to BAS’s
corporate headquarters—the same address where the Hospitals mailed the motion
to domesticate and freeze BAS’s assets (motions which BAS concedes it received).
This evidence also included a certificate of service indicating that the Hospitals
served BAS with a copy of the judgment by mail on October 16, 2017. See Fla. R.
J. Admin. 2.516(f) (providing that a “certificate is taken as prima facie proof of
such service in compliance with this rule”); JPMorgan Chase Bank, Nat’l Ass’n v.
Bigley, 120 So. 3d 1265, 1267 (Fla. 3d DCA 2013) (holding that “the date set forth
by counsel in the certificate of service ‘creates a rebuttable presumption which
may be overcome by competent evidence to the contrary’”) (quoting Migliore v.
Migliore, 717 So. 2d 1077, 1079 (Fla. 4th DCA 1998)).
6 The competing evidence introduced by the parties simply created an issue of
fact for the trial court to resolve at the evidentiary hearing. Depelisi v. Wishner, 15
So. 3d 808, 811 (Fla. 4th DCA 2009). The trial court rejected BAS’s evidence on
this issue in favor of the Hospitals’ evidence (and the accompanying presumption),
and concluded that BAS did receive a copy of the default judgment near the date it
was mailed by the Hospitals (October 16, 2017). Based on these factual
determinations, the trial court did not abuse its discretion in concluding that BAS
failed to act with due diligence in filing its motion to set aside the judgment nearly
five months after the Hospitals mailed (and BAS received) a copy of the default
judgment. See e.g., Techvend, Inc. v. Phoenix Network, Inc., 564 So. 2d 1145,
1146 (Fla. 3d DCA 1990) (finding a lack of due diligence where moving party did
not seek relief until “more than three months after” it became aware of the default).
Affirmed.