Days Inns Acquisition Corp. v. Hutchinson

707 So. 2d 747, 1997 Fla. App. LEXIS 14361, 1998 WL 25684
CourtDistrict Court of Appeal of Florida
DecidedDecember 24, 1997
Docket97-0481
StatusPublished
Cited by21 cases

This text of 707 So. 2d 747 (Days Inns Acquisition Corp. v. Hutchinson) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Days Inns Acquisition Corp. v. Hutchinson, 707 So. 2d 747, 1997 Fla. App. LEXIS 14361, 1998 WL 25684 (Fla. Ct. App. 1997).

Opinion

707 So.2d 747 (1997)

DAYS INNS ACQUISITION CORPORATION, Appellant,
v.
David H. HUTCHINSON, Appellee.

No. 97-0481.

District Court of Appeal of Florida, Fourth District.

December 24, 1997.
Rehearing, Clarification and Certification Denied February 6, 1998.

*748 Ronald S. Holliday and Lonnie L. Simpson of Rudnick & Wolfe, Tampa, and Frederick L. Whitmer of Pitney, Hardin, Kipp & Szuch, Morristown, NJ, for appellant.

F. Kendall Slinkman of F. Kendall Slinkman, P.A., West Palm Beach, for appellee.

PARIENTE, BARBARA J., Associate Judge.

Appellant, Days Inns Acquisition Corporation ("Days Inns"), appeals a final declaratory default judgment entered against it in favor of appellee, David Hutchinson (plaintiff). We reverse because plaintiff's request for declaratory relief against Days Inns was predicated solely upon his claim of wrongdoing on the part of the non-defaulting co-defendant, whose liability has not yet been determined. Accordingly, it was premature to enter a final default judgment against Days Inns.

Plaintiff, by contract, acquired the use of the telephone number 800-329-7466 from the co-defendant, Transcall America Inc. (Transcall). The number corresponds with 800 "DAYS INN" on the telephone keypad. According to the allegations of plaintiff's complaint, Transcall breached its agreement by subsequently withdrawing the number from plaintiff and reassigning it to Days Inns.

Days Inns is named as a defendant in only one count of plaintiff's multi-count complaint. In that count, plaintiff sought a declaration that his right to the number was superior to Days Inns' right. This count incorporated the substantive allegations from the previous count against Transcall and additionally alleged that Transcall had assigned the number to Days Inns. The count contains no allegations of independent acts of wrongdoing by Days Inns.

Transcall filed an answer to the complaint in which it denied that it had breached its contract with plaintiff and countered that it had terminated service because plaintiff failed to pay his bills. The liability of Transcall, the non-defaulting party, has not yet been determined.

Days Inns failed to answer and a clerk's default was entered against it. The trial court denied Days Inns' subsequent motion to set aside the default. Days Inns appealed this order but in its appeal argued only that its failure to respond constituted excusable neglect and that it had exercised due diligence. This court affirmed the trial court's order. See Days Inn v. Hutchinson, 681 So.2d 290 (Fla. 4th DCA 1996).

Over Days Inns' objection, plaintiff then moved for a final default judgment against Days Inns, which the trial court granted. The final judgment set forth that "any rights that [Days Inns] has had and/or presently has [with respect to the telephone number 800 DAYS INN], are subservient to and inferior to the rights of the plaintiff."

On appeal, Days Inns raises three points. We find merit in only one[1]—that the entry of the final judgment against Days Inns was *749 premature and must await the outcome of the litigation against the co-defendant, Transcall.

The entry of a default does not automatically entitle the plaintiff to the entry of a default judgment. On entry of default, the defaulting party admits only the well-pleaded factual allegations of the complaint against it. See Ellish v. Richard, 622 So.2d 1154 (Fla. 4th DCA 1993). The defaulting party does not admit conclusions of law. See Ginsberg v. Lennar Florida Holdings, Inc., 645 So.2d 490 (Fla. 3d DCA 1994), review denied, 659 So.2d 272 (Fla.1995).

There are no well-pleaded allegations of any independent wrongdoing by Days Inns nor any allegations that Days Inns is vicariously liable for Transcall's alleged wrongdoing.[2] Because Transcall denied the allegations of the complaint, all allegations of wrongdoing in the complaint have been controverted. If Transcall was not in breach of its agreement with plaintiff, it was free to reassign the telephone number to Days Inns. Thus, the request for a declaration that plaintiff's right is superior to Days Inns' right to the telephone number is necessarily predicated on a favorable resolution of plaintiff's case against Transcall.

Florida Rule of Civil Procedure 1.500(e), governing default judgments, provides that "[f]inal judgments after default may be entered by the court at any time." The question we confront here is whether there are any limitations on the trial court's discretion to enter a default judgment where the liability of the non-defaulting co-defendant has not yet been determined.

Prior to the advent of the modern rules of civil procedure, the United States Supreme Court in Frow v. De La Vega, 82 U.S. (15 Wall) 552, 21 L.Ed. 60 (1872), held that where multiple defendants are jointly liable, it would be "incongruous" for judgment to be entered against a defaulting defendant before a decision on the merits as to the remaining defendants. To avoid inconsistent liability determinations against jointly liable defendants, where less than all defendants default, Frow held that:

The true mode of proceeding where a bill makes a joint charge against several defendants, and one of them makes default, is simply to enter a default and a formal decree pro confesso against him, and proceed with the cause upon the answers of the other defendants.... If the suit should be decided against the complainant on the merits, the bill will be dismissed as to all the defendants alike—the defaulter as well as the others. If it be decided in the complainant's favor, he will then be entitled to a final decree against all.

82 U.S. at 554.

Frow stands for the proposition that:
[I]f at trial facts are proved that exonerate certain defendants and that as a matter of logic preclude the liability of another defendant, the plaintiff should be collaterally estopped from obtaining a judgment against the latter defendant, even though it failed to participate in the proceeding in which the exculpatory facts were proved.

Farzetta v. Turner & Newall, Ltd., 797 F.2d 151, 154 (3d Cir.1986).

Some federal courts applying Frow have expanded it to situations where defendants are also jointly and severally liable, or have closely related defenses. See, e.g., Wilcox v. Raintree Inns of America, Inc., 76 F.3d 394 (10th Cir.1996); Gulf Coast Fans, Inc. v. Midwest Electronics Importers, Inc., 740 F.2d 1499, 1512 (11th Cir.1984); U.S. for Use of Hudson v. Peerless Ins. Co., 374 F.2d 942 (4th Cir.1967); see also 6 Moore's Federal Practice ¶ 55.06 at 55-49 (2d ed.1996), cited in Gulf Coast Fans. According to Wright and Miller, the "key" in deciding the application of Frow to individual cases is to "recognize *750 that [Frow] is designed to apply only when it is necessary that the relief against the defendants be consistent." Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2690 (1983-1997).

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707 So. 2d 747, 1997 Fla. App. LEXIS 14361, 1998 WL 25684, Counsel Stack Legal Research, https://law.counselstack.com/opinion/days-inns-acquisition-corp-v-hutchinson-fladistctapp-1997.