Kb Home Fort Myers LLC v. Taishan Gypsum Co., Ltd., F/K/A Shandong Taihe Dongxin Co., Ltd.
CourtDistrict Court of Appeal of Florida
Date FiledApril 13, 2022
Docket2D21-0384
StatusPublished
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Full Opinion
DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT
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.
No. 2D21-384
April 13, 2022
Appeal from the Circuit Court for Charlotte County; Geoffrey H.
Gentile, Judge.
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).1
1 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
2
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.
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.
3
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
4
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)2
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).
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.
2 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.
5
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
6
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
7
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
8
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).3 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
3 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).
9
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)).
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
10
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
11
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)
12
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
13
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
14
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.").4 Thus, "as a matter of law," the trial court could not
4 Conversely, "a voidable judgment is a judgment that has
been entered based upon some error in procedure that allows a
15
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.
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
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.
16
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
17
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
18
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
19
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
20
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
21
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
22
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–
23
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
24
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),5 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
5 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.
25
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.6
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
6 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.
26
to prove a factual predicate for its motion to vacate7—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.8 In short, the only relationship between the MDL and this
case is that both involve defective Chinese drywall.
7 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.").
8 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
27
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.
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.
28
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, 8 So. 2d 9, 11 (Fla. 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 discretion9 by vacating the clerk's defaults and the
resultant adoption order.
9 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
29
3. KB's Failure to Notify Hogan Lovells of the
Default Damages Proceedings Did Not Render
the Adoption Order Void
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 dama