Florida’s Fourth DCA: Default Judgment Based Upon Complaint that Fails to State a Claim is Only Voidable, Not Void; Stage Set for Florida Supreme Court Review
In Florida, judgments that are deemed void can be set aside upon motion made at any time. In contrast, judgments that are merely voidable must be attacked by motion under Florida Rule of Civil Procedure 1.540(b) no later than one year after entry. Florida’s First, Third, and Fourth District Courts of Appeal have previously held that a default judgment based upon a complaint which fails to state a claim is void, not voidable, and therefore can be set aside on motion made at any time. Rhodes v. O. Turner & Co., 117 So. 3d 872, 875 (Fla. 4th DCA 2013); Neuteleers v. Patio Homeowners Ass’n, 114 So. 3d 299, 301 (Fla. 4th DCA 2013) (citing Lee & Sakahara Assocs. AIA, Inc. v. Boykin Mgmt. Co., 678 So. 2d 394, 396 (Fla. 4th DCA 1996)); Se. Land Developers, Inc. v. All Fla. Site & Utils., Inc., 28 So. 3d 166, 168 (Fla. 1st DCA 2010); Moynet v. Courtois, 8 So. 3d 377, 378-79 (Fla. 3d DCA 2009) (citing Becerra v. Equity Imps., Inc., 551 So. 2d 486 (Fla. 3d DCA 1989), and Ginsberg v. Lennar Fla. Holdings, Inc., 645 So. 2d 490, 493 (Fla. 3d DCA 1994)).
More recently, however, the Fourth District changed course in Condominium Association of La Mer Estates, Inc. v. The Bank of New York Mellon Corporation, Case No. 4D13-17, holding that such default judgments are merely voidable—not void—and therefore motions to vacate them under Rule 1.540(b) must be filed no later than one year after entry. In doing so, the Fourth District receded from its prior case law and certified conflict with decisions from the First District (Se. Land Developers, Inc.) and Third District (Moynet), setting the stage for possible review by the Florida Supreme Court.
In Le Mer Estates, a condominium association had taken title to a unit after foreclosing a claim of lien for unpaid assessments. The Association later filed an action to quiet title to the property, contending that the mortgage of Bank of New York Mellon was a cloud on title and that the Bank had no bona fide interest in the property. The Bank was served with process, but did not respond to the Complaint and was defaulted by the clerk of the court. The Bank was also given notice and opportunity to be heard on the Association’s motion for final judgment, but failed to appear at that hearing as well. The trial court entered judgment in favor of the Association quieting title to the property.
More than one and a half years later, the Bank filed a motion to vacate the default judgment under Rule 1.540(b), arguing that the default judgment was void because the complaint on which it was based filed to state a cause of action. The trial court agreed that the judgment was void and therefore concluded that the one year time limitation in Rule 1.540(b) did not bar the Bank’s motion.
On appeal, the Association argued that the trial court erred because the default judgment was merely voidable, and the Bank’s motion to vacate was therefore untimely under Rule 1.540(b). Receding from its prior decisions, the Fourth District agreed with the Association:
The motion for relief in this case provided no other reason for vacating the judgment other than arguing that the complaint failed to state a cause of action. We hold that these allegations would render the judgment voidable, not void. The bank was properly notified of the proceedings, notified of the hearing on final judgment, and notified of the entry of the final judgment. It could have appeared in the proceedings and raised the pleading defects, or it could have raised the issue on direct appeal. “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, 968 So. 2d at 665.
To rule that a judgment affecting title to property is void if the complaint on which it is based failed to state a cause of action could cloud a title for years and years, rendering it unsellable. What title insurance company would hazard insuring a title containing a default final judgment in its chain if that judgment could be vacated at any time even though the defaulted party had notice of the proceedings? The uncertainty generated by declaring such judgments void is magnified when one considers that courts may differ as to what constitutes sufficient allegations to state a cause of action.
We thus reverse the order vacating the final judgment and remand for its reinstatement. By receding from our prior case law in this opinion, we are following the older supreme court holdings, as we have found no recent cases from the supreme court revising the definition of a void judgment. To the contrary, in Curbelo v. Ullman, 571 So. 2d 443 (Fla. 1990), the court used the same definition of a void judgment as in its prior cases. Id. at 445 (“[W]here 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.”). We also certify express and direct conflict with Southeast Land Developers, Inc. v. All Florida Site and Utilities, Inc., 28 So. 3d 166, 168 (Fla. 1st DCA 2010), and Moynet v. Courtois, 8 So. 3d 377, 378-79 (Fla. 3d DCA 2009). Because of the importance of this issue to the finality of judgments and the stability of property titles, we also believe that this is an issue of statewide importance.
It remains to be seen whether the Association will appeal this decision to the Florida Supreme Court, and also whether the high court will accept discretionary review under Florida Rule of Appellate Procedure 9.030(a)(2)(A)(iv) (“The discretionary jurisdiction of the supreme court may be sought to review . . . decisions of district courts of appeal that . . . expressly and directly conflict with a decision of another district court of appeal or of the supreme court on the same question of law”). Unless and until the Florida Supreme Court resolves the issue once and for all, clients and counsel alike should err on the side of caution and promptly move to vacate default judgments based on complaints that fail to state a claim.
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