42
Fla. L. Weekly D1967aTop of Form

Civil
procedure — Default — Opportunity to contest damages — Trial court erred in
failing to vacate final default judgment as void for failure to afford
defendant an opportunity to contest damages where, because plaintiff’s motion
for final judgment after default was seemingly “unopposed” according to
language in its motions, the trial court entered final default judgment without
holding a hearing, but immediately after the final default judgment was
entered, defendant, under the guidance of new counsel, advised the trial court
that plaintiff’s motion was, in fact, opposed — Defendant was deprived of his
right to contest damages — Remand for evidentiary hearing on plaintiff’s
contested motion for entry of judgment after default

IMAN EMAMI, Appellant, v.
PROGRESSIVE BRANDS, INC., Appellee. 3rd District. Case No. 3D16-2227. L.T. Case
No. 13-36703. September 6, 2017. An Appeal from the Circuit Court for
Miami-Dade County, Monica Gordo, Judge. Counsel: Weiss Serota Helfman Cole
& Bierman, P.L., and Roger S. Kobert, for appellant. Gerson M. Joseph,
P.A., and Gerson M. Joseph (Weston), for appellee.

(Before ROTHENBERG, C.J., and SUAREZ
and SCALES, JJ.)

(SCALES, J.) Appellant, defendant
below, Iman Emami appeals a final default judgment entered in favor of
appellee, plaintiff below, Progressive Brands, Inc. (“Progressive”). Because
the trial court failed to give Emami an opportunity to contest damages before
entering the final default judgment, we hold that the judgment is void and
reverse.

Relevant
Facts and Procedural Background

In November 2013, Progressive filed
the instant action against several defendants in the Miami-Dade Circuit Court,
including Emami. As the case progressed, Progressive dismissed one defendant;
another corporate defendant, Eastgate Tobacco Company, LLC, stipulated to entry
of a $247,620.88 judgment against it. The only claims then remaining were
Progressive’s claims against Emami for fraud (count II) and to impose
individual liability on Emami by piercing the corporate veil of Eastgate (count
IV).1 Emami’s initial lawyer withdrew from
the case in August 2014, and in November 2014, Emami’s new lawyer, Kramer Huy,
P.A. (“Kramer”) filed an Answer and Affirmative Defenses to Progressive’s
Amended Complaint.

In July 2015, Progressive served
Emami with interrogatories, requests for admissions and requests for
production. Pursuant to Florida Rule of Civil Procedure 1.080(a) and Florida
Rule of Judicial Administration 2.516(b),2 Progressive served Emami with this
discovery by serving Kramer. The record reflects that Kramer forwarded the
discovery to Emami via e-mail.3 The record also reflects that
Progressive’s counsel requested Kramer to provide dates for Emami’s deposition.
No discovery responses were ever provided to Progressive, and Kramer never
provided deposition dates to Progressive’s counsel.

On September 2, 2015, Kramer
informed Progressive’s counsel of Kramer’s intent to withdraw from
representation of Emami. That same day, Progressive filed a motion to compel
discovery and for sanctions, noting therein that Kramer intended to withdraw as
Emami’s counsel, and that Progressive would not set the September 2 motion for
hearing until after Kramer had a reasonable time both to inform Emami of
Progressive’s September 2 motion, and to file his motion to withdraw. On
September 21, 2015, Progressive served Kramer with a notice setting an October
5, 2015 hearing date on its September 2 motion. Also on September 21, Kramer
filed his motion to withdraw as Emami’s counsel, but did not set that motion
for hearing.

On October 2, 2015, Progressive’s
counsel purportedly sent Kramer an e-mail asking if Emami would be opposing
Progressive’s September 2 motion, and Kramer purportedly responded to this
e-mail notifying Progressive that Emami would not be opposing Progressive’s
September 2 motion.4 Based on Kramer’s representation,
Progressive’s counsel dispensed with the October 5, 2015 hearing, and, instead
submitted to the trial court an Agreed Order Granting Plaintiff’s Motion to
Compel. This order, signed by the trial court on October 5, required Emami to provide
the discovery responses and deposition dates to Progressive’s counsel within
ten days. No sanctions were imposed in this October 5 Agreed Order.

Having received neither the
discovery responses nor deposition dates from Emami (or Kramer), on October 21,
2015, Progressive moved for a default against Emami as a sanction for failing
to comply with the trial court’s October 5 Agreed Order. That same day,
Progressive noticed its October 21 motion for default for a November 2, 2015
hearing.

Prior to the November 2 hearing, on
October 29, 2015, Progressive’s counsel sent Kramer an e-mail asking whether
Kramer will be setting his motion to withdraw for hearing, and whether Kramer
will be attending the November 2, 2015 hearing to oppose Progressive’s motion.
Later on October 29, Kramer’s office responded to the e-mail by stating: “Mr.
Kramer will not be attending Monday’s hearing and he has no objection to your
motion for default.”

At the November 2, 2015 hearing,5 the trial court entered an order
granting Progressive’s motion for default, therein (i) finding Emami’s conduct
was deliberate and contumacious, (ii) entering a default against Emami,6 (iii) stating that damages would be
determined separately at a hearing to be held on a later date, and (iv)
inviting Progressive to file the appropriate motion to fix damages so that a
final default judgment could be entered.7

Later on November 2, 2015,
Progressive filed a Motion for Final Judgment after Default, in which
Progressive sought $263,287.04 in damages, plus costs and interests.
Progressive’s November 2 motion also included an affidavit of damages (and
other allegations) from Progressive’s principal. That same day, Progressive
noticed its November 2 motion for hearing on November 9, 2015.

For reasons that are not clear from
the record, the following day, on November 3, 2015, Progressive filed a second
Motion for Final Judgment after Default that is identical to the motion
Progressive filed the prior day, except that the word “UNOPPOSED” was added as
the first word to the motion’s caption. Similarly, on November 4, 2015, for
reasons that are again unclear, Progressive filed a third, identical Motion for
Final Judgment after Default that also included the word “UNOPPOSED” as the
caption’s first word. Based on Kramer’s October 29 email to Progressive’s
counsel, in each of its three motions seeking final default judgment,
Progressive characterized its October 21 motion for default as “unopposed.”

On November 5, 2015, without
conducting the hearing which had been set for November 9 — the one expressly
referenced in its November 2 order granting Progressive’s motion for default —
the trial court entered a final default judgment against Emami in the principal
amount of $263,287.04, plus costs and interests. While the judgment contains no
insight as to why the previously noticed November 9 hearing was cancelled, the
trial court apparently dispensed with the November 9 hearing after being
“informed” of the alleged “UNOPPOSED” nature of the final default judgment.

Later that same day, Emami’s new
counsel, Weiss Serota Helfman Cole & Bierman, P.L. (“Weiss Serota”), filed
its notice of appearance as Emami’s co-counsel. Weiss Serota’s notice also
included a letter to the trial judge informing her that Emami had never
authorized Kramer to consent to entry of any orders, including an order
granting a default against Emami. Apparently unaware that the trial court had
already signed the final default judgment provided to her by Progressive, the
letter further urged the trial court “not to enter the proposed ‘unopposed’
judgment against Mr. Emami” as Progressive’s Unopposed Motion for Judgment
after Default was, indeed, opposed.

On November 20, 2015, Emami, through
his new counsel, Weiss Serota,8 filed a motion seeking rehearing and
to vacate the November 5, 2015 final default judgment. This motion argued that
the final default judgment should be vacated because it was the result of
excusable neglect. The motion also stressed that “Progressive’s motion for
final [default] judgment was entered just hours before undersigned counsel
could file a notice of appearance and submit a letter via e-courtesy imploring
the Court not to enter the contested judgment . . . .” Emami’s affidavit was
appended to the motion. In it, Emami asserted, among other things, that, “I did
not know or understand until very recently, when I received a motion by Mr.
Kramer to withdraw as my lawyer, that an order punishing me was signed by this
Court. I also did not know that I was being punished for failing to answer
questions, or that that was even a possibility. None of this was explained to
me, as far as I know.”

On June 6, 2016, the trial court
conducted a hearing on Emami’s November 20, 2015 rehearing/vacatur motion at
which Emami’s counsel argued, for the first time, that the final default
judgment was void because Kramer lacked the authority to consent to the entry
of either the November 2, 2015 default or the November 5, 2015 final default
judgment. The trial court ordered additional briefing on this issue, and, on
August 23, 2016, entered an order denying Emami’s motion for rehearing and to
vacate the November 5, 2015 final default judgment.

Emami appeals both the final default
judgment and the trial court’s denial of his motion for rehearing and to vacate
same.

Standard
of Review

This Court reviews the denial of a
motion to vacate a final judgment for an abuse of discretion; however, where the
final judgment is void, the lower court has no discretion and is obligated to
vacate the judgment. See Vercosa v. Fields, 174 So. 3d 550, 552
(Fla. 4th DCA 2015). Whether a judgment is void is a question of law reviewed
de novo. Infante v. Vantage Plus Corp., 27 So. 3d 678, 680 (Fla. 3d DCA
2009) (“The standard of review of an order that vacates a final judgment by
default as void for a complaint’s failure to state a cause of action is de
novo.”).

Analysis

It is well settled in Florida that a
defaulting party shall be afforded the opportunity to contest damages. See
Fla. R. Civ. P. 1.440(c) (“In actions in which the damages are not liquidated,
the order setting an action for trial shall be served on parties who are in
default in accordance with rule 1.080.”); Ciprian-Escapa v. City of Orlando,
172 So. 3d 485, 488 (Fla. 5th DCA 2015) (“[I]t is fundamental error to set
unliquidated damages without the notice, proof, and hearing required by rule
1.440(c).”); Belcourt v. Haraczka, 987 So. 2d 175, 176 (Fla. 1st DCA
2008) (“A defaulting party has a due process entitlement to notice and an
opportunity to be heard as to the presentation and evaluation of evidence
necessary to a judicial determination of the amount of unliquidated damages.”
(quoting Sec. Bank, N.A. v. BellSouth Adver. & Publ’g Corp., 679 So.
2d 795, 800 (Fla. 3d DCA 1996))). In furtherance of this well-established
principle, this Court finds the final default judgment is void as a matter of
law because Emami was not afforded an opportunity to contest damages prior to
its entry.

The trial court entered its default
order on November 2, 2015, ostensibly on the basis that the default was
unopposed. The trial court’s November 2 order expressly and unambiguously
conditioned entry of a judgment on Progressive’s submission of an appropriate
motion.9 That same day, accepting the trial
court’s invitation, Progressive moved for a final default judgment, attaching
an affidavit of damages, and noticed the motion for a hearing. For unclear
reasons, Progressive then filed two, identical “UNOPPOSED” motions, which
purported to negate the necessity of holding a hearing. Because Progressive’s
Motion for Final Judgment after Default was seemingly “UNOPPOSED,” the trial
court understandably entered a final default judgment without holding the
previously scheduled November 9 hearing.

Immediately after the final default
judgment was entered, Emami, under the guidance of new counsel, advised the
lower court that Progressive’s motion was, in fact, opposed, and moved for
rehearing and to vacate the final default judgment. Under these circumstances,
we hold that the trial court reversibly erred by failing to vacate the final
default judgment as void. Immediately upon being informed that Emami opposed
the entry of the final default judgment, the trial court should have taken the
steps necessary to protect Emami’s due process rights and rescheduled the
hearing on damages that had previously been set for November 9, 2015.

While obviously unintended, and
presumably based on a misunderstanding, Emami was deprived of his right to
contest damages under Florida law. See Krueger v. Ponton, 6 So.
3d 1258, 1261 (Fla. 5th DCA 2009) (“A defaulting party has a due process entitlement
to receive notice and an opportunity to be heard as to the presentation and
evaluation of evidence necessary to a judicial determination of the amount of
unliquidated damages.”); Boulus v. Yung Sheng Xiamen Yong Chem. Indus. Co.,
855 So. 2d 665, 667 (Fla. 4th DCA 2003) (finding that, after a default was
entered against the defendant as to liability in a breach of contract action,
the “trial court erred in denying [the defendant’s] motion to set aside the
default final judgment on the issue of unliquidated damages”); see also Premise,
Inc. v. Withlacoochee River Elec. Coop., Inc., 215 So. 3d 123, 124 (Fla. 2d
DCA 2017) (providing that Florida Rule of Civil Procedure 1.440(c) requires an
evidentiary hearing on claims for unliquidated damages against parties in
default).

Conclusion

Under these facts, we hold that the
final default judgment is void for failure to afford Emami an opportunity to
contest damages. We therefore vacate the November 5, 2015 final default
judgment, reverse, and remand this cause for an evidentiary hearing on
Progressive’s contested November 2, 2015 Motion for Entry of Judgment after
Default.10

Judgment vacated; reversed and
remanded for further proceedings consistent with this opinion.

__________________

1Progressive’s
Amended Complaint alleged that Emami was a member, and is now the manager, of
Eastgate. Emami denied this allegation in his Answer, later averring by
affidavit that he is the president of a French company, which is the parent
company of a Florida corporation, which is the parent company of Eastgate.

2These
rules provide that, when service is required to be made upon a party represented
by an attorney, service must be made upon the attorney, unless otherwise
ordered by the trial court. See Fla. R. Civ. P. 1.080(a); Fla. R. Jud.
Admin. 2.516.

3The record
reflects that, at all times material, Emami resided in France.

4Neither
Progressive’s October 2, 2015 e-mail, nor Kramer’s alleged response to same,
are in the record on appeal.

5There is
no transcript from this hearing.

6While not
explicit in this order, the trial court implicitly must have stricken Emami’s
November 2014 Answer and Affirmative Defenses in order to enter the default
against Emami.

7The two
claims against Emami for fraud (count II) and to pierce the corporate veil of
Eastgate (count IV) were pending when default was entered. While it is unclear
both from the November 2 default order, and Progressive’s ensuing Motion for
Final Judgment after Default, which claims were resolved in these proceedings,
we presume that the trial court defaulted Emami on both claims in its November
2 order.

8On
November 16, 2015, the trial court held a hearing on Kramer’s September 21,
2015 motion to withdraw, and granted the motion without objection.

9The
November 2 default order states, “Plaintiff’s Motion for Default Against
Defendant Emami is GRANTED, Damages to be determined separately at a hearing
on a Motion for Final Judgment against Defendant Emami.”

10We do not
disturb the trial court’s November 2 default order. We agree with the trial
court that Kramer’s October 29, 2015 email stating “he has no objection to your
motion for default” is significantly different from a party’s attorney’s
unauthorized stipulations and settlements rejected in Noeling v. State,
87 So. 2d 593 (Fla. 1956), Kramer v. City of Lakeland, 38 So. 2d 126
(Fla. 1948), Pardo v. The Decoplage Condominium Ass’n, 833 So. 2d 782
(Fla. 3d DCA 2002), Cross-Aero Corp. v. Cross-Aero Service Corp., 326
So. 2d 249 (Fla. 3d DCA 1976), Bursten v. Green, 172 So. 2d 472 (Fla. 2d
DCA 1965), and Palm Beach Royal Hotel, Inc. v. Breese, 154 So. 2d 698
(Fla. 2d DCA 1963).