Opinion
No. 2D21-384
04-13-2022
KB HOME FORT MYERS LLC, a Delaware Limited Liability Company, Appellant, v. TAISHAN GYPSUM CO., LTD., f/k/a Shandong Taihe Dongxin Co., Ltd., and Tai'an Taishan Plasterboard Co., Ltd., Appellees.
Chris W. Altenbernd of Banker Lopez Gassler P.A., Tampa; Eleanor Sills of Banker Lopez Gassler P.A., Tallahassee; and Joseph H. Lang, Jr. of Carlton Fields, P.A., Tampa, for Appellant. Enjoliqué Aytch Lett of Greenberg Traurig, P.A., Miami; and Christina Hull Eikhoff, Matthew D. Lawson, and David Venderbush of Alston & Bird, Atlanta, Georgia, for Appellee.
Chris W. Altenbernd of Banker Lopez Gassler P.A., Tampa; Eleanor Sills of Banker Lopez Gassler P.A., Tallahassee; and Joseph H. Lang, Jr. of Carlton Fields, P.A., Tampa, for Appellant.
Enjoliqué Aytch Lett of Greenberg Traurig, P.A., Miami; and Christina Hull Eikhoff, Matthew D. Lawson, and David Venderbush of Alston & Bird, Atlanta, Georgia, for Appellee.
LABRIT, Judge. Plaintiff KB Homes Fort Myers, LLC (KB), appeals an order granting a motion to vacate an $18 million default judgment. The trial court concluded that KB improperly obtained clerk's defaults against Defendants Taishan Gypsum Co. and Tai'an Taishan Plasterboard Co. (collectively "Taishan") and that the resulting final judgment was void. We reverse because the judgment was not void—at worst, it was voidable—and Taishan waited over seven years to seek relief from it.
Background
More than a decade ago, lawsuits over hundreds of millions of square feet of defective Chinese drywall besieged federal and state courts. See In re Chinese Manufactured Drywall Prods. Liab. Litig. , 894 F. Supp. 2d 819, 829–30 (E.D. La. 2012).
As the district judge explained:
During approximately 2005 to 2008, hundreds-of-millions of square feet of [defective Chinese drywall] were exported to the United States, primarily along the East Coast and Gulf South, as a result of an exceptionally high demand for building supplies in the aftermaths of Hurricanes Rita and Katrina, as well as a general new-housing boom. The Chinese drywall was then installed in newly-constructed and reconstructed properties. After installation of this drywall, owners and occupants of the properties began noticing unusual odors, blackening of silver and copper items and components, and the failure of appliances, including microwaves, refrigerators, and air-conditioning units. Some also experienced health problems, such as skin and eye irritation, respiratory issues, nose bleeds, and headaches. As a result, these property owners began filing suit in both state and federal courts against those involved with Chinese drywall, including the installers, homebuilders, suppliers, importers, exporters, and manufacturers, as well as their insurers and sureties.
In re Chinese Manufactured Drywall Prods. Liab. Litig. , 894 F. Supp. 2d at 829–30.
This is one of those lawsuits. In 2011, KB sued Taishan, alleging that Taishan sold defective Chinese drywall to KB which KB used to construct homes in Florida; KB sought to recover the costs it incurred repairing homes where it had installed Taishan's defective drywall. KB obtained service of process on Taishan pursuant to the Hague Convention, but Taishan refused to accept the documents. Taishan did not file or serve any document in the action, and in late 2012, KB moved for clerk's defaults. Shortly after those defaults issued, KB moved for a final default judgment. KB served the motions for clerk's defaults and for final judgment on Taishan by mail.
The trial court referred KB's motion for final judgment to a magistrate; the referral order—which the court mailed to Taishan—contained detailed provisions on objecting to the referral and other matters pertinent to the litigation, such as the magistrate's authority to conduct evidentiary proceedings. Pursuant to the referral order and a notice of hearing that KB mailed to Taishan, the magistrate held a hearing in June 2013. Taishan didn't file or serve any documents and didn't appear for the hearing. In July 2013, the magistrate issued a report and recommendation, finding that KB was entitled to judgment against Taishan for approximately $18 million in damages. In October 2013, the trial court issued an order adopting the magistrate's findings and recommendations; that order, like the magistrate's report and recommendation, was mailed to Taishan.
Nearly seven years later, in August 2020, Taishan appeared in the action and filed a "motion to vacate default orders." Arguing that the clerk's defaults, the magistrate's report and recommendation, and the order adopting the report and recommendation (the "adoption order") were "void," Taishan sought vacatur of all the foregoing orders. Taishan primarily asserted that the trial court lacked personal jurisdiction over it because service of process was deficient. Alternately, Taishan contended that the clerk's defaults were entered in violation of its due process rights because KB didn't serve Taishan's "known counsel" (Hogan Lovells) with notice of its applications for the defaults. Taishan also argued that the adoption order was "void" because it was "entered without notice" to Hogan Lovells and therefore should be vacated under Florida Rule of Civil Procedure 1.540(b)(4).
Hogan Lovells had appeared as counsel for Taishan in some cases that were part of the multidistrict litigation in In re Chinese Manufactured Drywall , 894 F. Supp. 2d at 819 (the MDL). KB also was a party to the MDL, and Carlton Fields represented KB.
KB submitted a memorandum opposing Taishan's motion on all fronts. KB argued that Taishan was properly served with initial process and subsequently properly served with notice of the default proceedings. KB also argued that it was not required to notify Hogan Lovells of the default proceedings because Hogan Lovells ignored KB's multiple attempts to communicate about this suit, so there was no reason to believe that Hogan Lovells would defend Taishan in this suit.
KB submitted extensive evidence, including several affidavits, one of which was from Lannie Hough, a Carlton Fields lawyer. Mr. Hough's affidavit reflected that—before filing this action—he sent the Hogan Lovells attorneys who were Taishan's counsel of record in the MDL a letter (via facsimile and certified mail/return receipt requested) notifying them of the claims KB ultimately asserted in this suit. Mr. Hough's affidavit attached the verification of fax transmission and the certified mail receipt. Mr. Hough attested that no Hogan Lovells lawyer ever responded to his letter or to his several subsequent attempts to communicate with Hogan Lovells lawyers about KB's claims against Taishan. Mr. Hough's affidavit also reflected that Carlton Fields sent over a hundred presuit notices concerning KB's claims to Taishan's Chinese headquarters, but Taishan refused delivery of most of those letters and responded to none of them.
Taishan submitted no evidence to support its motion and no evidence to counter KB's submissions. Following a hearing, the trial court entered an order in which it (1) denied Taishan's request to quash service of process and concluded that Taishan had been properly served and (2) vacated the then eight-year-old clerk's defaults, the magistrate's report and recommendation, and the adoption order.
The court reasoned that KB was required to notify Hogan Lovells of the default proceedings against Taishan because (1) KB and Taishan were both defendants in the "related" MDL and (2) Hogan Lovells was Taishan's counsel of record in the MDL. The trial court found that KB "demonstrated" its "actual knowledge" that Hogan Lovells represented Taishan "in drywall litigation" by sending Hogan Lovells the presuit letter.
Despite Mr. Hough's uncontroverted testimony that Hogan Lovells ignored the letter and his subsequent attempts to communicate with them about KB's claims, the court determined that a "duty of civility and professionalism" required KB to notify Hogan Lovells of its applications for clerk's defaults. Because KB didn't do so, the court concluded that the defaults were "improperly entered" and ruled that their "invalid entry" rendered the adoption order "void." The court also declared the adoption order void because (1) KB didn't notify Hogan Lovells of the default damages proceedings before the magistrate and (2) the damages amount wasn't fixed by a jury although KB's complaint included a jury trial demand.
This appeal ensued.
Discussion
I. Jurisdiction
We have jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(b)(1)(B), which authorizes district courts to review "nonfinal orders of circuit courts as prescribed by rule 9.130"—including "[o]rders entered on an authorized and timely motion for relief from judgment." Fla. R. App. P. 9.130(a)(5). In this case, the order on review vacated the adoption order, which had explicitly adopted the magistrate's recommendation to issue an $18 million judgment in KB's favor.
Taishan challenges this court's jurisdiction, arguing (1) that the adoption order is not a "judgment" within the meaning of rule 9.130(a)(5) and (2) that the trial court's judicial labor hadn't concluded because proceedings were ongoing with respect to another defendant (Ocean Construction, Inc.). We disagree.
First, the adoption order is a final judgment. It "ratified and approved" the magistrate's report and recommendation, and it adopted "each and every finding and recommendation" in the report "as the [o]rders of this [c]ourt, as if fully set forth herein and made a part hereof." By "specifically designating the report and recommendation[ ] as its own order ," the trial court "effectively entered an order in accordance with the [magistrate's] recommendation[ ]." Norris v. Norris , 28 So. 3d 953, 955 (Fla. 2d DCA 2010) (emphasis added). Furthermore, the magistrate's report and recommendation contains sufficient language of finality to constitute a final judgment. See Getman v. Tracey Constr., Inc. , 62 So. 3d 1289, 1291 (Fla. 2d DCA 2011) ("[A] final order or judgment is one which evidences on its face that it adjudicates the merits of, and disposes of, the matter before the court and leaves no judicial labor to be done."). Specifically, the magistrate's report stated that "KB ... shall recover from [Taishan] ... the sum of $11,361,325.23" and "the sum of $7,315,628.18, for which sum let execution issue forthwith ." (Emphasis added.) This is clear and unequivocal language of finality. See id. ; Willis v. Red Reef, Inc. , 921 So. 2d 681, 684–85 (Fla. 4th DCA 2006) ("While case law does not require the traditional language ‘for which let execution issue ,’ as a practical matter, including the same will eliminate any issue [as to finality]." (emphasis added) (citation omitted)).
Taishan argues that Norris is distinguishable because it involved a marriage dissolution, not default proceedings in a civil case. This distinction is unavailing. Regardless of the nature of the underlying suit, an order is final if it "disposes of the cause on its merits leaving no questions open for judicial determination except for execution and enforcement of the decree if necessary." See Touchton v. Woodside Credit , LLC , 316 So. 3d 392, 394 (Fla. 2d DCA 2021). Norris identifies one way a trial court can dispose of a case and conclude judicial labor—by issuing an order adopting a magistrate's report and recommendation as its own order—and the reasoning of Norris applies with equal force here. Cf. Ruozzi v. Wulff , 305 So. 3d 333, 334 (Fla. 3d DCA 2020) (holding that an order that "ratified and adopted" magistrate's report and recommendation but stated that a "separate money judgment shall be entered" later was nonfinal).
Second, Taishan's argument with respect to Ocean Construction is meritless. Because the adoption order fully resolved all of KB's claims against Taishan, it ended judicial labor with respect to those claims. See Getman , 62 So. 3d at 1291. That the case continued for some time before KB dismissed its claim against Ocean Construction does not affect finality of the adoption order as to Taishan. See Gator Boring & Trenching, Inc. v. Westra Constr. Corp. , 210 So. 3d 175, 180 (Fla. 2d DCA 2016) (holding that an order disposing of all claims as to one party is final as to that party); see also Fla. R. App. P. 9.110(k) (instructing that a judgment that "totally disposes of an entire case as to any party ... must be appealed within 30 days of rendition").
In sum, the adoption order was a final judgment against Taishan, and we have jurisdiction to review the order vacating it pursuant to rules 9.030(b)(1)(B) and 9.130(a)(5).
II. Standard of Review
As Taishan acknowledges, the trial court's decision to vacate the adoption order is reviewed de novo. See Regions Bank v. Big Bend Invs. Grp. of Fla., LLC , 311 So. 3d 181, 184 (Fla. 2d DCA 2020) ("Determining whether a judgment is void poses a question of law that we review de novo."); State Farm Mut. Auto. Ins. Co. v. Statsick , 231 So. 3d 528, 532–33 (Fla. 2d DCA 2017) (discussing de novo standard of review applicable to orders entered pursuant to rule 1.540(b)(4) ); see also MacDonnell v. U.S. Bank N.A. , 293 So. 3d 585, 588 (Fla. 2d DCA 2020) ("[T]he trial court lacks discretion when a final judgment is void; thus, the issue of whether a judgment is void is subject to de novo review.").
However, Taishan maintains that the court's decision to vacate the clerk's defaults should be reviewed separately for abuse of discretion. It is true that we generally review a decision on a motion to set aside a clerk's default for abuse of discretion. See, e.g. , Coquina Beach Club Condo. Ass'n v. Wagner , 813 So. 2d 1061, 1064 (Fla. 2d DCA 2002). Here, the trial court was legally precluded from vacating the clerk's default because rule 1.540(b)(4) —the only procedural vehicle under which Taishan sought relief—does not authorize vacatur of a voidable judgment. And the adoption order was voidable, not void. Thus, the "two-step" review Taishan urges should be unnecessary. But to the extent the trial court made factual findings to support its decision to vacate the clerk's defaults, the court abused its discretion because such findings are unsupported by, and are indeed contradicted by, the only evidence in this record.
III. Erroneous Vacatur of the Clerk's Defaults and Resulting Adoption Order
The trial court erred legally by declaring the adoption order void. Because the order was—at worst—voidable, Taishan was required to challenge it within a year of its entry. As a matter of law, Taishan's failure to do so precluded any later challenge to the clerk's defaults that preceded the adoption order.
A. Purpose and Limitations of Rule 1.540(b)
The "general purpose" of rule 1.540(b) is
"to enable the court to grant relief against an unjust decree ...." "As an exception to the rule of finality," [r]ule 1.540's application is "narrow[ ]" and is constrained by the time restrictions contained in the rule. Such limitations conform
the rule to the Florida Supreme Court's mandate that [r]ule 1.540 never " ‘serve as a substitute for the new trial mechanism prescribed by [r]ule 1.530 nor as a substitute for appellate review of judicial error.’ "
Tannenbaum v. Shea , 133 So. 3d 1056, 1060 (Fla. 4th DCA 2014) (citations omitted) (quoting multiple authorities, including Curbelo v. Ullman, 571 So. 2d 443, 444 (Fla. 1990) ); see also Bank One, N.A. v. Batronie , 884 So. 2d 346, 348 (Fla. 2d DCA 2004) ("After rendition of a final judgment, the trial court loses jurisdiction over the case except to enforce the judgment and except as provided by rule 1.540.").
The grounds to seek relief under rule 1.540(b) are "narrow" and "strictly limited to an enumerated list." Balmoral Condo. Ass'n v. Grimaldi , 107 So. 3d 1149, 1152 (Fla. 3d DCA 2013). This list is limited to "mistake, inadvertence, surprise, [and] excusable neglect" (subsection (b)(1)), "newly discovered evidence" (subsection (b)(2)), "misconduct of an adverse party" (subsection (b)(3)), that the judgment is "void" (subsection (b)(4)), and that the judgment either has been satisfied or "it is no longer equitable that the judgment ... should have prospective application" (subsection (b)(5)). Fla. R. Civ. P. 1.540(b). With the exception of a motion brought under subsection (b)(4) or (b)(5), the motion "shall be filed ... not more than [one] year after the judgment ... was entered." Id. The time limits of rule 1.540(b) are jurisdictional and "may not be extended for any reason." Batronie , 884 So. 2d at 349 (explaining that once a judgment is "beyond the reach of rule 1.540(b)," it passes "into the unassailable realm of finality").
Taishan's sole challenge to the adoption order was that it was "void"; so Taishan's motion—which was filed seven years after entry of the adoption order—was necessarily grounded in rule 1.540(b)(4). A party may challenge a void judgment pursuant to subsection (b)(4) at any time, but "this rule does not permit vacating a judgment that is merely ‘voidable.’ " Alekseyev v. U.S. Bank Nat'l Ass'n , 189 So. 3d 935, 937 (Fla. 4th DCA 2016). As this court has explained, a "voidable judgment can be challenged by motion for rehearing or appeal and may be subject to collateral attack under specific circumstances, but it cannot be challenged at any time as void under rule 1.540(b)(4)." Sterling Factors Corp. v. U.S. Bank Nat'l Ass'n , 968 So. 2d 658, 665 (Fla. 2d DCA 2007) ; see also Estrada v. Estrada , 274 So. 3d 426, 430 (Fla. 3d DCA 2019) ("[P]ursuant to Florida Rules of Civil Procedure 1.540(b)(1), 1.540(b)(2), and 1.540(b)(3), voidable judgments must be challenged by motion no later than one year after entry of judgment.").
B. The Adoption Order was Voidable
The central question, then, is whether the adoption order was void or merely voidable. KB maintains that the adoption order was voidable, and we agree.
It is well settled that where a court is legally organized and has jurisdiction of the subject matter and the adverse parties are given an opportunity to be heard, then errors, irregularities or wrongdoing in proceedings, short of illegal deprivation of opportunity to be heard, will not render the judgment void.
Curbelo , 571 So. 2d at 445 ; see also Statsick , 231 So. 3d at 531–32 (collecting cases) ("A judgment is void when it is entered by a court lacking jurisdiction over the subject matter of the case or jurisdiction over the person ... or where there is a violation of due process."). Thus, "as a matter of law," the trial court could not declare the adoption order void "absent allegations and proof that it had [(1)] no subject matter or [(2)] personal jurisdiction ... or [(3)] that [Taishan] was not given notice or an opportunity to be heard." See Statsick , 231 So. 3d at 532.
Conversely, "a voidable judgment is a judgment that has been entered based upon some error in procedure that allows a party to have the judgment vacated, but the judgment has legal force and effect unless and until it is vacated." Sterling Factors Corp. , 968 So. 2d at 665.
Taishan advanced two "voidness" theories below. It principally challenged personal jurisdiction and secondarily argued that its due process rights were violated because KB did not notify Taishan's "known counsel" (Hogan Lovells) of KB's applications for clerk's defaults and the subsequent default proceedings. The trial court concluded that Taishan was properly served with process. Taishan has not appealed that ruling, nor has it challenged subject matter jurisdiction.
Since jurisdiction is not in question, the only way the adoption order could be "void" is if it was the product of a due process violation. "Generally, due process requires fair notice and a real opportunity to be heard and defend in an orderly procedure before judgment is rendered." Viets v. Am. Recruiters Enters., Inc. , 922 So. 2d 1090, 1095 (Fla. 4th DCA 2006) (citing J.B. v. Fla. Dep't of Child. & Fam. Servs. , 768 So. 2d 1060, 1063 (Fla. 2000) ).
1. Entry of the Clerk's Defaults Did Not Violate Taishan's Due Process Rights
Florida Rule of Civil Procedure 1.500 governs defaults. Subsection (a) permits entry of a clerk's default without notice to the opposing party where that party "has failed to file or serve any document in the action." Fla. R. Civ. P. 1.500(a). However, when the opposing party "has filed or served any document in the action" but "has failed to plead or otherwise defend," a default may be issued only by the court and only after the opposing party has been "served with notice of the application for default." Fla. R. Civ. P. 1.500(b) (emphasis added). If a final judgment consequent to a default has been entered, "the court may set it aside in accordance with rule 1.540(b)." Fla. R. Civ. P. 1.500(d).
In this case, the clerk's defaults were above-board. KB properly served Taishan with the complaint, and Taishan "failed to file or serve any document in the action." Fla. R. Civ. P. 1.500(a). So KB was within its rights to seek entry of clerk's defaults pursuant to rule 1.500(a). KB went further and complied with rule 1.500(b) by notifying Taishan of the motions for entry of clerk's defaults. Taishan submitted no evidence suggesting that it didn't receive the subsequent default filings—including KB's applications for clerk's defaults, KB's motion for entry of final judgment, the magistrate's report, and the adoption order—all of which were mailed to Taishan at its service addresses. Consequently, Taishan unquestionably had notice and an opportunity to be heard before the adoption order was rendered. See, e.g. , Estrada , 274 So. 3d at 430 ; see also Regions Bank , 311 So. 3d at 185 ("Due process requires only that a person be afforded the opportunity to be heard. It does not require more than one opportunity where a party declines to take advantage of that opportunity ....").
2. KB's Failure to Notify Hogan Lovells of the Default Proceedings Did Not Violate Taishan's Due Process Rights
Even though Taishan has not disputed that KB sent it notices of the default proceedings, Taishan argued below that it was deprived of due process because KB didn't send those notices to Hogan Lovells as well. And the trial court agreed. KB challenges this conclusion, arguing that (1) its failure to notify Hogan Lovells was not a due process violation and (2) Taishan submitted no evidence to establish the factual predicate for this theory.
KB is correct. First, Taishan itself had notice of the action and the default proceedings but took no action to defend, so KB's failure to notify Hogan Lovells of the default proceedings was not a due process violation; it was, at most, "a procedural defect occurring before the entry of judgment" which "does not render a judgment void." Sterling Factors Corp. , 968 So. 2d at 666 (explaining in-depth that procedural errors render a judgment voidable—not void); accord Contreras v. Mendez , 194 So. 3d 396, 397 (Fla. 3d DCA 2016). At worst, if there was a notice deficiency attendant to entry of the clerk's defaults, such deficiency would have rendered the adoption order voidable. So long as a defendant has actual notice of a proceeding, a judgment entered consequent to a default is voidable, not void. See Armet S.N.C. di Ferronato Giovanni & Co. v. Hornsby , 744 So. 2d 1119, 1120 (Fla. 1st DCA 1999) (citing, inter alia, Myrick v. Walters , 666 So. 2d 249, 250 (Fla. 2d DCA 1996) ).
Moreover, the trial court did not expressly find that entry of the clerk's defaults without notice to Hogan Lovells violated Taishan's due process rights. Instead, the court relied on U.S. Bank National Ass'n v. Lloyd , 981 So. 2d 633 (Fla. 2d DCA 2008), Makes & Models Magazine, Inc. v. Web Offset Printing Co. , 13 So. 3d 178 (Fla. 2d DCA 2009), and National Union Fire Insurance Co. of Pittsburgh v. McWilliams ex rel. Estate of Meyer , 799 So. 2d 378 (Fla. 4th DCA 2001), to conclude that the adoption order was "void" because the clerk's defaults were "invalid." These cases stand for the proposition that "[w]hen the plaintiff is aware that the defendant is represented by counsel and intends to defend on the merits," a defendant's due process rights are violated unless the plaintiff complies with the notice requirement of rule 1.500(b) before seeking entry of a default. See Lloyd , 981 So. 2d at 640 (citing Gulf Maint. & Supply, Inc. v. Barnett Bank of Tallahassee , 543 So. 2d 813, 817 (Fla. 1st DCA 1989) ); accord Makes & Models , 13 So. 3d at 181 ; McWilliams , 799 So. 2d at 380.
In these cases, the way that plaintiff gained "actual knowledge" that the defendant was represented by counsel and intended to defend the action was that the same parties were already involved in ongoing litigation over the same subject matter. See Lloyd , 981 So. 2d at 641–43 ; Makes & Models , 13 So. 3d at 181–82 ; McWilliams , 799 So. 2d at 380. Lloyd featured two ongoing suits between identical parties over the same subject matter—a foreclosure action and a quiet title action involving the same real property. See Lloyd , 981 So. 2d at 635–36. Lloyd did "not even suggest that [he] did not have actual knowledge of the Bank's intent to defend the quiet title action," and "the undisputed evidence establishe[d] that Lloyd did have actual knowledge that the Bank was represented by counsel with respect to Lloyd's claim." Id. at 641–42. Accordingly, this court reversed denial of the Bank's motion to vacate the default and resultant final judgment, holding that Lloyd was required to notify the Bank's counsel before applying for entry of the default. Id. at 643 ; accord Jacaranda, LLC v. Green Tree Servicing, LLC , 203 So. 3d 964, 965–66 (Fla. 2d DCA 2016).
Similarly, in Makes & Models , the parties initiated parallel lawsuits over the same subject matter (a dispute over a magazine printing contract); while both parties were "actively participating" in the first case, the printing company obtained a clerk's default against the magazine company in the second case. Makes & Models , 13 So. 3d at 179–81. Because the printing company did "not even suggest[ ] that it did not have knowledge of [the magazine company's] intent to defend the [second] lawsuit or that it did not have knowledge that [the magazine company] was represented by counsel," this court held that the printing company was required to notify the magazine company before applying for entry of a default. Id. at 181–82 ; see also McWilliams , 799 So. 2d at 379–80 (reversing denial of motion to vacate clerk's default in action contesting domestication of foreign judgment against appellees’ predecessor where appellees "failed to contact appellant's Florida counsel before seeking default, even though they knew that [appellant] was represented by counsel in Florida and intended to defend on the merits").
These cases are factually distinguishable because the common element underlying all of them was that "the two parties simultaneously participate[d] in another lawsuit which involve[d] the same dispute." Jacaranda, LLC , 203 So. 3d at 966. Those facts are not present here; this record demonstrates only that KB and Taishan were among thousands of diverse parties to hundreds of different lawsuits that comprised the MDL. And the claims KB asserted against Taishan in this action cannot be said to be "related" to any dispute between Taishan and KB in the MDL because there is no evidence that there were any claims between KB and Taishan in the MDL. In short, the trial court's reliance on Lloyd and its progeny was misplaced, and the court erred by concluding that the MDL and this case were sufficiently "related" to implicate the "notice to known counsel" requirement of Lloyd and its progeny.
Taishan relies heavily on statements in Lloyd and Makes & Models that "[w]hen the plaintiff is aware that the defendant is represented by counsel and intends to defend on the merits" but fails to notify defendant's counsel of an application for a clerk's default, the default is "invalid and renders a resulting judgment void." Lloyd , 981 So. 2d at 640 ; Makes & Models , 13 So. 3d at 182 (same). However, as KB correctly argues, neither Lloyd nor Makes & Models involved a rule 1.540(b)(4) motion. In both of those cases, the motion was filed within weeks of entry of judgment. See Makes & Models , 13 So. 3d at 179–81 ; Lloyd , 981 So. 2d at 638–39. And it is clear from context that the movants’ arguments in those cases were rooted in rule 1.540(b)(3), which authorizes relief from judgment where the movant establishes "misconduct of an adverse party" and files the motion within a year of the judgment's entry. Fla. R. Civ. P. 1.540(b)(3) ; see Makes & Models , 13 So. 3d at 179–81 ; Lloyd , 981 So. 2d at 638–39. Taishan has cited no Florida appellate decision—and our research has revealed none—holding that relief from judgment may be granted eight years after a clerk's default was entered against a defendant that was properly served with initial process and all subsequent default filings but made no attempt to defend or timely seek relief from judgment. We decline to extend the law to encompass such a proposition.
Because Taishan had notice of the proceedings and the clerk's defaults were properly entered, the defaults did not constitute a due process violation and they could not—eight years later—form the basis of a decision to vacate the seven-year-old adoption order as "void." See Bank of N.Y. Mellon v. Condo. Ass'n of La Mer Ests. , 175 So. 3d 282, 286 (Fla. 2015) (holding that default judgment entered after defendant was notified of proceedings but failed to respond was "voidable" and "could not be collaterally attacked one and one-half years later"); Estrada , 274 So. 3d at 430 ("[P]ursuant to Florida Rules of Civil Procedure 1.540(b)(1), 1.540(b)(2), and 1.540(b)(3), voidable judgments must be challenged by motion no later than one year after entry of judgment."); see also Sterling Factors Corp. , 968 So. 2d at 666 ("Procedural defects not affecting jurisdiction must be addressed by a timely motion for rehearing, an appeal, or a timely motion for relief from judgment pursuant to rule 1.540(b)(1), (2), or (3).").
i. Taishan Did Not Prove that Lloyd and its Progeny Applied
KB further argues, and we agree, that Taishan failed to prove the factual predicate to obtaining relief under the "known counsel" theory. To grant relief under Lloyd and its progeny, the trial court was required to conduct "a two-part inquiry" to determine if KB had "actual knowledge" that Taishan (1) "was represented by counsel" and (2) "intended to defend" this lawsuit. See Jacaranda , 203 So. 3d at 966. Thus, even assuming (as the trial court did) that Hogan Lovells represented Taishan in drywall litigation beyond the MDL (a dubious proposition at best), Taishan failed to prove (indeed, didn't even try to prove) that KB had "actual knowledge" that Taishan intended to defend this lawsuit. And the uncontroverted evidence in this record establishes that neither Taishan nor Hogan Lovells intended to defend this lawsuit, a conclusion solidly reinforced by Taishan's steadfast failure to respond to the multitude of filings that were properly served upon it, all of which Taishan continuously and consistently ignored.
The record reveals that Hogan Lovells’ defense of Taishan in the MDL was limited to challenging personal jurisdiction in a handful of cases; after that challenge failed, Hogan Lovells withdrew from representation of Taishan.
Taishan resists this conclusion by arguing that "where notice to an attorney is required, notice to the client is not an acceptable substitute for the required notice to opposing counsel." The authorities upon which Taishan relies confirm that notice to a client is not a substitute for notice to counsel when counsel is "an attorney of record," meaning that counsel has filed a paper or otherwise affirmatively appeared in the action. See Miami-Dade County v. Cribbs , 937 So. 2d 1215, 1216 (Fla. 3d DCA 2006) (holding that notice to counsel for the county, not just the county itself, was required where the county attorney filed the answer); Tufo v. Oxford Res. Corp. , 603 So. 2d 112, 113 (Fla. 4th DCA 1992) (holding that notice to the defendant was insufficient where the defendant's attorney had appeared in action by attending the case management conference on behalf of the defendant). Taishan's argument is unavailing because Hogan Lovells undisputedly never filed any paper or otherwise appeared in this action.
To the extent the trial court's decision rested on a factual finding that KB's claims in this case were sufficiently "related" to the MDL to implicate Lloyd , any such finding is unsupported by competent substantial evidence and is thus an abuse of discretion. See Statsick , 231 So. 3d at 532–33. Taishan—which was burdened to prove a factual predicate for its motion to vacate —established only that KB and Taishan were parties to some of the "hundreds of lawsuits involving thousands of plaintiffs and defendants" that comprised the MDL. See In re Chinese Manufactured Drywall Prods. Liab. Litig. , 894 F. Supp. 2d at 830. There is zero evidence that the MDL—which principally featured multiple class actions by homeowners seeking damages associated with manufacture and installation of defective drywall—involved any direct claims between KB and Taishan. There is likewise no evidence that KB was adverse to Taishan in any MDL case, nor is there any evidence that KB and Taishan were coparties to any of the "hundreds" of lawsuits in the MDL. In short, the only relationship between the MDL and this case is that both involve defective Chinese drywall.
See Johnson v. State, Dep't of Revenue ex rel. Lamontagne , 973 So. 2d 1236, 1238 (Fla. 1st DCA 2008) (noting that a movant must "carry his burden of proof" in moving "for relief from judgment" pursuant to rule 1.540(b)(4) ); see also Bank of N.Y. Mellon v. Peterson , 208 So. 3d 1218, 1222 (Fla. 2d DCA 2017) ("If the moving party fails to present evidence supporting a legal ground for relief from the judgment, it is an abuse of the trial court's discretion to vacate that judgment.").
At oral argument, Taishan's counsel suggested otherwise, referring to a putative class action in the MDL that another homebuilder brought against Taishan; the record evidence Taishan's counsel offered to support his contention was the district court's 132-page order that resolved a multitude of jurisdictional disputes in In re Chinese Manufactured Drywall , 894 F. Supp. 2d at 819. The class action was brought by The Mitchell Co. on behalf of unnamed homebuilders in four states. Id. at 832. The order identifies homebuilders that actively participated in the Mitchell action, but KB is not one of them. See id. at 865–66, nn.7, 8. In fact, the order doesn't mention KB at all.
Importantly, Taishan proffered no evidence that KB ever communicated with Hogan Lovells about the claims at issue in the MDL. The only evidence of any communication between KB and Hogan Lovells is the affidavit of KB's counsel, Mr. Hough, attesting to his several attempts to determine whether Hogan Lovells intended to defend KB's claims in this action. Faced with Hogan Lovells’ radio silence (and Taishan's complete failure to defend itself), the only logical conclusion KB could draw was that neither Hogan Lovells nor Taishan intended to defend this action. Put differently, this record is utterly bereft of any "indicia that [Taishan or Hogan Lovells] intended to defend [this] action." Robles v. Fed. Nat'l Mortg. Ass'n , 255 So. 3d 986, 989 (Fla. 3d DCA 2018) (emphasis omitted). This is precisely the circumstance and purpose for which a default is proper and authorized by rule 1.500. See id. at 988 ("The true purpose of the entry of a default is to speed the cause of action and to prevent a dilatory or procrastinating defendant from impeding the plaintiff in the establishment of his claim." (citing Coggin v. Barfield , 150 Fla. 551, 8 So. 2d 9, 11 (1942) )); accord Lloyd , 981 So. 2d at 640.
In sum, the trial court's finding that KB had "actual knowledge" that Hogan Lovells represented Taishan in drywall litigation beyond the MDL is unsupported by competent substantial evidence. Even more, uncontroverted evidence affirmatively establishes that neither Hogan Lovells nor Taishan intended to defend this lawsuit. As a result, the trial court erred legally and abused its discretion by vacating the clerk's defaults and the resultant adoption order. 3. KB's Failure to Notify Hogan Lovells of the Default Damages Proceedings Did Not Render the Adoption Order Void
Taishan suggests the trial court's decision to vacate the clerk's defaults is reviewed for a gross abuse of discretion. To begin with, this standard is rather amorphous. See Allstate Floridian Ins. Co. v. Ronco Inventions, LLC , 890 So. 2d 300, 302 (Fla. 2d DCA 2004) ("[W]e have no definition of what a ‘gross’ abuse of discretion includes or how it differs from an abuse of discretion. We can only assume that it is more egregious than a typical abuse of discretion." (footnote omitted)); Emmer v. Brucato , 813 So. 2d 264, 265 n.1 (Fla. 5th DCA 2002) ("It is, however, unclear to us the difference between ‘gross abuse of discretion’ and ‘abuse of discretion,’ although some courts have recognized, though not defined, a difference."). In any event, the trial court grossly abused its discretion because Taishan presented zero evidence to support the court's factual findings and the only evidence that was submitted contradicted its findings.
KB argues that the trial court erred by concluding that the adoption order "[wa]s invalid and void" because KB didn't notify Hogan Lovells of the default damages proceedings before the magistrate. We agree for two reasons. First, as discussed above, KB wasn't required to notify Hogan Lovells of the default damages proceedings. Second, Taishan undisputedly was notified of the default damages proceedings. Even if such notice were deficient, failure to notify a defaulted party of a damages hearing before judgment is entered renders the judgment voidable—not void. See Sterling Factors Corp. , 968 So. 2d at 666. For the reasons discussed above, and because Taishan waited seven years to challenge the adoption order, the trial court lacked authority to grant relief on this ground.
4. The Trial Court's Failure to Hold a Jury Trial on Damages Did Not Render the Adoption Order Void
Lastly, KB challenges the trial court's conclusion that "even if entry of the default had been valid, the amounts entered as damages would still be invalid because they were not fixed by jury trial." Taishan concedes—and we agree—that the court's failure to hold a jury trial on damages didn't render the adoption order void. See Curbelo , 571 So. 2d at 445 (holding that "the trial court's error in permitting a non-jury determination of damages when the right to jury trial had not been waived" didn't render the damage judgment void); see also Specialty Sols., Inc. v. Baxter Gypsum & Concrete, LLC , 325 So. 3d 192, 200 (Fla. 5th DCA 2021) (en banc) (concluding "that a final summary judgment awarding unliquidated damages against a defaulted defendant, when entered after proper notice and based on timely-filed summary judgment evidence," rendered the final judgment voidable).
For these reasons, we reverse and remand with instructions for the trial court to reinstate the adoption order as a final judgment in favor of KB.
Reversed and remanded.
SLEET, J., Concurs.
KELLY, J., Concurs in result only.