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Cozzetto v. Banyan Finance, LLC

Florida Court of Appeals, Fourth District

January 10, 2018

BANYAN FINANCE, LLC, et al., Appellees.

         Not final until disposition of timely filed motion for rehearing.

         Appeal of a non-final order from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Cymonie Rowe, Judge; L.T. Case No. 502014CA005034.

          Robert C. Buschel of Buschel Gibbons, P.A., Fort Lauderdale, and Grant J. Smith of Strategysmith, P.A., Fort Lauderdale, for appellant.

         No appearance for appellees.

          GERBER, C.J.

         The defendant appeals from the circuit court's order denying his Florida Rule of Civil Procedure 1.540 motion to vacate the final default judgment entered against him. The defendant's motion primarily argued that the final default judgment was void because the plaintiff's service on the defendant through the Florida Secretary of State under section 48.181(1), Florida Statutes (2014), was insufficient. We agree with the defendant's argument and reverse.

         The plaintiff's complaint alleged, in pertinent part, as follows. The defendant is a Michigan resident who is the majority owner, managing member, and president of a Michigan corporation which provides health care services. The defendant's corporation entered into several agreements with two financing companies. Under the agreements, in exchange for an immediate advance of funds from the financing companies to the defendant's corporation, the defendant's corporation would repay the financing companies using its account receivables collected over time. The face of the agreements bear no relation to Florida.

         The financing companies later entered into agreements with the plaintiff whereby the financing companies assigned to the plaintiff the right to be paid from the account receivables of the defendant's corporation. The assignment agreements directed that payments were to be made to the plaintiff in Florida. However, the defendant's corporation was not a party to those assignment agreements.

         When the defendant's corporation allegedly failed to pay its account receivables to the plaintiff, the plaintiff filed suit in Florida against the defendant and the defendant's corporation. The complaint alleged counts for breach of contract, unjust enrichment, conversion, and breach of the duty of good faith and fair dealing. The complaint alleged that the defendant was a Michigan resident "doing business in Florida." However, the complaint did not contain any specific facts indicating how the defendant allegedly was "doing business in Florida."

         The plaintiff was able to obtain service on the defendant's corporation. However, the plaintiff was unable to obtain service on the defendant in Michigan after several attempts. The plaintiff's Michigan process servers filed affidavits opining that the defendant was avoiding service.

         The plaintiff obtained from the clerk of court an alias summons directing that service upon the defendant be made upon the Florida Secretary of State pursuant to section 48.181(1), Florida Statutes (2014), which provides, in pertinent part:

The acceptance by any person or persons . . . who are residents of any other state . . . and any person who is a resident of the state and who subsequently becomes a nonresident of the state or conceals his or her whereabouts, of the privilege extended by law to nonresidents and others to operate, conduct, engage in, or carry on a business or business venture in the state, or to have an office or agency in the state, constitutes an appointment by the persons and foreign corporations of the Secretary of State of the state as their agent on whom all process in any action or proceeding against them, or any of them, arising out of any transaction or operation connected with or incidental to the business or business venture may be served. The acceptance of the privilege is signification of the agreement of the persons . . . that the process against them which is so served is of the same validity as if served personally on the persons . . . .

         After the plaintiff served the alias summons upon the Florida Secretary of State, the plaintiff obtained a clerk's default against the defendant. The plaintiff then obtained a final default judgment against the defendant.

         The defendant later learned of the final default judgment and filed a motion to vacate the judgment pursuant to Florida Rule of Civil Procedure 1.540(b) ("On motion and upon such terms as are just, the court may relieve a party . . . from a final judgment . . . for the following reasons: . . . (4) that the judgment ...

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