August 1, 2023

You’ve Been Served, Move Quickly or You May Lose (A Gentle Reminder)

By: Danielle Spradley

KK Takeaway: 

When a person or entity is sued, they are served with the summons and complaint.  Upon being served, that person or entity must file a response to the complaint within 20 days or a default may be entered against them.  If a default is entered against that person or entity, a motion to vacate may be filed, but if the Court finds that the party’s delay was not excusable, the default cannot be vacated.  

It is not uncommon for banks, servicers and investors to get sued and included in lawsuits.  Unfortunately, there are situations where upon being served, the right persons, or departments are not notified about the lawsuit.  This can result in a judgment being entered and wiping out the existence of a lien.  Therefore, the amount of time it takes to file the motion to vacate the default could be the difference between having the motion granted and denied.   


Bequer v. National City Bank, 16 So.3d 1199 (Fla. 4th DCA 2010)  

National City Bank was served with a third-party complaint on September 22, 2009.  On November 19, 2009, a default was entered against the bank for their failure to file a response to the complaint.  After the complaint was served, counsel for the Third-Party Plaintiff continued to mail pleadings to National City Bank.  On January 20, 2010, a Default Final Judgment was entered against National City Bank.  On February 9, 2010, National City Bank filed a motion to vacate default and default final judgment.  In support of the motion, National City Bank also submitted an affidavit which outlined their policies and procedures to ensure the timely response to lawsuit.  In-house counsel for National City Bank attested that he found out about the lawsuit on February 3, 2010, and immediately retained counsel.   The trial court granted the motion to vacate the default and default final judgment and the decision was appealed. 

Pursuant to Florida Rules of Civil Procedure 1.540(b)(1), the Court may relieve a party from an order of default if they demonstrate (1) excusable neglect in failing to respond; (2) meritorious defenses; and (3) due diligence in seeking relief. 

In this case, the Court only addressed the element of excusable neglect as the Court found that trial court erred in vacating the default, so that is what will be discussed here.   

“Excusable neglect occurs “where inaction results from clerical or secretarial error, reasonable misunderstanding, a system gone awry or any other of the foibles to which human nature is heir.” Citing Elliott v. Aurora Loan, Servs., LLC, 31 So.3d 304, 306 (Fla. 4th DCA 2010). Here, the default was entered on November 19, 2009, and appellee did not file a motion to vacate until February 9, 2010. Appellee claims that it did not find out about the lawsuit until February 3, 2010; yet the record also includes substantial correspondence from appellants to appellee informing it of the default on November 20, 2009, December 15, 2009, and January 7, 2010.”  Bequer v. National City Bank, 16 So.3d 1199, 1201 (Fla. 4th DCA 2010).  

The appeals Court was also bothered by National City Bank’s failure to explain what happened to the correspondence advising of the default, as they insisted that when they learned about the lawsuit, outside counsel was immediately retained.  The Court concluded that [w]hile appellee’s inaction to respond to the complaint alone might have constituted excusable neglect given the system appellees had in place, the failure to respond to the complaint, when coupled with the correspondence sent on three different occasions, constitutes gross negligence. Missing the complaint and the correspondence is not evidence of a “system gone awry” but rather a defective system altogether.” Id. at 1202. 

While it may be difficult to determine how much time is reasonable to constitute excusable neglect, the Court in Fl Capital Investment 19, LLC v. South Florida Title Associates, LLC, 353 So.3d 657 (Fla. 4th DCA 2023) citing Elliott, 31 So.3d 304 at 308 stated that “due diligence must be established with evidence, which includes a sworn affidavit….It has been held that six-day, seven-day, and fifteen-day time lapses between discovery of a default and the filing of a motion to vacate default showed due diligence.”  

It is imperative that proper procedures are followed when served with a lawsuit so that the legal department is notified and can retain counsel for proper representation.  Otherwise, the consequence can be dire. 

Danielle M. Spradley
Attorney, Real Estate
Kelley Kronenberg-Fort Lauderdale, FL.
(954) 370-9970