Pleading and the Many Faces of Waiver

A drawing of a man running with a football on the cover of Colliers Magazine 1901


Don’t drop the ball
on pleading and waiver issues!

Image courtesy The Miriam and Ira D. Wallach Division of Art, Prints and Photographs: Art & Architecture Collection, The New York Public Library Digital Collections. 1890 – 1907.


We won! Today in Derouin v. Universal American Mortgage Company, LLC, Case No. 2D17-1002 (Fla. 2d DCA August 22, 2018)(.pdf), we earned a total victory for our clients the Derouins, reversing the foreclosure judgment entered against them after trial and ordering entry of an involuntary dismissal of the claims against them.

Beyond the wonderful result for our clients, the 15-page opinion is chock full of great appellate nuggets that have implications for all trial lawyers and their clients on issues of pleading requirements, waiver, trial by consent, and the right of a client to direct communication through his or her attorney. Here’s a breakdown of the take away lessons.

Pleading and Avoiding Conditions Precedent

Like many contracts, the mortgage in this case contained notice provisions that create a condition precedent to suit — that is, the party seeking to enforce the contract must first do some act before filing suit in order to maintain suit. Here, that condition precedent was compliance with a pre-suit “face-to-face” meeting requirement imposed by Federal law on certain kinds of mortgages and incorporated by reference into the mortgage. Generally, a plaintiff is permitted to allege generally in the complaint that “all conditions to suit have been met or waived.” The burden is then on the defendant to specifically deny that general allegation. Some cases on this issue send a mixed message as to whether failing to specifically deny the allegation, but pleading the same issue in your defenses, or making a specific denial but not also pleading as an affirmative defense, is sufficient to make compliance with conditions precedent an issue at trial. The Court here discussed the unsettled law and decided it didn’t need to make a definitive holding on this issue, since the Derouins had done both. Still, the Court placed the burden on plaintiff to prove it complied with the conditions precedent, and then found that plaintiff had not made that proof.

Practice Tip: Always deny conditions precedent with specificity in the answer and, in an abundance of caution, also plead failure to comply as a defense. Maintain it is the plaintiff’s burden, and argue as such at the close of plaintiff’s case.

Pleading Avoidances in a Reply

The plaintiff’s argued that the Derouins waived their objection to compliance with the face-to-face counseling condition precedent for two reasons we’ll discuss in detail in the next section. But aside from the merits of the waiver argument, the appeal court concluded that “Because Universal failed to address the waiver issue by reply to an affirmative defense, the trial court could not award Universal relief on such a basis.”

Practice Tip: Remember to plead any “defense to a defense,” whether legal or factual, as an avoidance in a reply. You will waive your waiver arguments (or other avoidances) if you do not plead them.

Trial by Consent

Even though the Bank failed to plead waiver, it argued that the issue of waiver was tried by consent, citing Fla. R. Civ. P. 1.190(b). A party tries an issue by consent when it fails to object to the admission of evidence supporting the un-pleaded argument. The Court found that evidence that came in was relevant to other issues in the case, and so its admission without objection was not a waiver. The Court also noted that the Derouin’s counsel expressly stated in opening argument that the Bank never raised any excuse for non-compliance in its pleadings. The Derouins also expressly made the argument in a written post-trial memoranda ordered by the trial court. The Court therefore rejected the notion that the issue had been tried by consent.

Practice Tip: Mention in your opening statement that you object to trying issues by consent. And if not relevant to your defenses, object to testimony coming in to support any issues outside of the pleadings. The proper objection is to relevance, and if you can, also state “outside the scope of the pleadings.” Bring the argument home during oral or written closing arguments.

Waiver

The trial court found that the Derouins had waived their right to face-to-face counseling in two ways. First, the trial court found that Mrs. Derouin advising someone who called to discuss the issue “that I contacted an attorney and they should direct all questions to the attorney” indicated that the Derouins rejected a face-to-face meeting. Second, the trial court found that the Derouin’s refusal to agree to mediation after suit had been filed also constituted a waiver of the right to pre-suit counseling.

The Second District rejected both of these rulings. The Court found that “There was no evidence Universal or its servicer was prohibited from asking the Derouins for a face-to-face meeting through their attorney, nor was there any evidence that the Derouins would not participate in one if asked.” Derouin at 11. The Court also rejected the notion that a post-suit action could indicate a waiver of pre-suit requirements, reinforcing an important older Florida Supreme Court case holding that a party’s right to sue “must be measured by the facts as they exist when the suit was instituted.” Derouin at 11, citing Voges v. Ward, 123 So. 785, 793 (Fla. 1929).

Practice Tip: Argue only the facts at the time of suit when arguing compliance with conditions precedent. Also, clients may defer to their attorneys without waiving their rights.

Great job to Dan Rock as trial co-counsel for getting that record preserved. The appeal was a true team effort, with Jared Krukar writing the majority of the briefing and Dineen Wasylik conducting oral argument.

30 Days Means 30 Days When It Comes To Proposals For Settlement

(1917) Going-Going-Gone!. United States, 1917. [Photograph] Retrieved from the Library of Congress, https://www.loc.gov/item/2002695576/.

Since 2016, the Second and Fifth Districts have been in conflict as to whether a motion for extension of time to respond to a proposal for settlement (PFS) under section 768.79, Florida Statutes, and Florida Rules of Civil Procedure 1.090  and 1.442 [.pdf] will toll the time to respond while the motion remains pending.  The Supreme Court in  Koppel v. Ochoa [.pdf] has now settled the conflict, holding that no motion will toll time for responding to a PFS.

The Conflict between the Second and Fifth Districts.

In 1997, the Fifth District in Goldy v. Corbett Crane Services held that a motion to enlarge time to respond to a proposal for settlement tolled the responsive period until the motion could be heard.  The court noted that there was no prejudice by applying this rule, because the offerror “always has the power to withdraw the offer at any time before acceptance if the [offeror’s] position changes.”

In 2016’s Ochoa v. Koppel [.pdf], the Second District considered a situation where a party accepted a proposal for settlement after 30 days had lapsed, but where a motion for extension of time had been filed before the 30-day mark and had not yet been heard.  The trial court enforced the settlement.  On appeal, the Second District reversed.  The court held that while a party may seek and obtain an extension of time to respond to a proposal for settlement under rule 1.090, that the motion itself did not create any tolling effect.  The Second District certified conflict with Goldy.

The Supreme Court agrees with the Second, disapproves the Fifth.

The Supreme Court took review of the conflict between Ochoa and Goldy to consider “whether the filing of a motion under Florida Rule of Civil Procedure 1.090 to enlarge the time to accept a proposal for settlement automatically tolls the 30-day deadline for accepting the proposal until the motion is decided.”  Koppel v. Ochoa.  It conducted a strict analysis of section 768.79; Rule 1.442 and Rule 1.090, refusing to consider or apply other rules because, it held, neither rule 1.090; nor 1.442; were ambiguous so the rules of construction were inapplicable.

Ultimately, the court recognized that both sides had valid concerns about abuse of the process that might support the logic of a tolling rule, but that the rules simply did not allow tolling.  It approved the Second District’s decision.

This decision impacts anyone with a PFS in a pending case in any Florida court, as well as anyone filing any extension of time in the trial court.

The Supreme Court took special care to rule that its decision would apply both prospectively and retroactively.  Thus, anyone with a pending PFS issue in the Fifth DCA that has relied on Goldy should take special note–you may have already lost your right to accept a proposal for settlement if more than 30 days has passed without a court order granting an extension.

The Supreme Court’s main ruling was also rather broad, and likely intentionally so.  It expressly stated Rules 1.090 and 1.442 do not, and did not, provide for tolling of the time periods by the filing of a motion for extension and are applicable to this and all other cases.”  Thus, no motion for extension of time will ever toll time in the trial court, whether it involves a PFS or a completely different proceeding (unless the rule specific to your proceeding provides for it).

These are dangerous traps for the unwary, both trial attorneys who are accustomed to trial judges allowing tolling as a matter of course, and for appellate practitioners in trial courts because they are accustomed to working with the Florida Rules of Appellate Procedure (which do provide for tolling on most motions on appeal, see rule 9.300.  Don’t get caught by this new trap!  If you have any concerns about how this new decision may impact your trial court case, give us a call and we can help.

Full disclosure: Jared Krukar was involved in the litigation of this case at the Second District Court of Appeal level.

Appeals 101: How do I initiate my Florida civil appeal?

The Second District Court of Appeals’ Clerk’s Office is in Lakeland, FL. But you don’t have to visit — you can file your filing fee by mail or online!

Timing of Your Notice of Appeal

In a standard civil case in Florida, one initiates an appeal by (1) filing a notice of appeal and (2) paying the filing fee.  This applies to appeals from both final (see Fla. R. App. P. 9.110) and non-final (see Fla. R. App. P. 9.130(b)) orders.  You have 30 days from the date your ordered is rendered to file your notice (stay tuned for an upcoming Appeals 101 post on what “rendered” means for appellate purposes).

Format of Your Notice of Appeal

The notice is a simple document — it does not contain argument, and it does not have to tell the court why you are appealing. Rather, it contains only basic contents — just enough to let the Court know what you are appealing and by what authority. Specifically, the notice must contain a caption, the name of the court to which the appeal is taken, the date of rendition, and the nature of the order to be reviewed. It is also critical to attach a copy of the order on appeal to the notice. The rules actually contain a sample notice to follow [.pdf].

Filing and Fees for Your Notice of Appeal

So how, and where, do you accomplish these filings?  You go to the court that issued the order you want to appeal (sometimes referred to as the “trial court” or the “lower tribunal”).  That is where you will file your notice of appeal.  As far as fees, you’ll have to pay a fee both to that court, and to the appellate court.  These days, both your notice of appeal and your filing fees to the courts can be paid online.

An example:  You are appealing to the district court of appeal a final order of the circuit court.  You must file your notice of appeal with the circuit court clerk, along with a $100 filing fee.  You may also have to pay other small handling fees, such as a $2 “certification” fee, or credit card fees.  Your notice of appeal will be sent to the district court of appeal.  Upon receipt of the notice, the district court will assign your case a new number, and will often issue an order or notice stating that its filing fee has not been paid.  You then must pay the district court an additional $300. Note that this procedure doesn’t really match up with the rules — before electronic filing, you were supposed to send your check to the circuit court clerk for both filing fees, but the rules haven’t caught up with technology, and the District Court does not take issue with you paying your filing fees after it assigns a case number, so long as you do it quickly. At that point, your appeal is fully initiated.

Filing a Notice of Appeal of a County Court Decision

The process is generally the same for appealing county court orders to the circuit courts, although the amounts of the fees vary slightly.

Filing a Notice of Cross-Appeal

And if someone else has filed a notice of appeal already and you want to file a cross-appeal, you’ll have to pay the appellate court $295.

For more information, look to the rules for final appeals and non-final appeals, and check out some of our other blog posts at flabarappellate.org.

What Happens if My Notice of Appeal is Late?

Be careful, because failing to file the notice of appeal on time will result in dismissal of your appeal for lack of jurisdiction.  A late notice of appeal is not something that can be fixed.  And while the courts are somewhat forgiving if you merely file in the wrong court or don’t pay the filing fee right away, they can still dismiss your appeal before you even get a chance to argue the merits if you don’t straighten out those defects fast.

Don’t Mess Around With Your Notice of Appeal

The rules of appellate procedure can be complicated and intimidating, but we’re here to help. Because the 30 day deadline comes fast, call our office for a consultation at 813-778-5161 if you are thinking of filing an appeal. Day 31 is too late. Count wrong, and it can be too late. Misunderstand rendition, and it can be too late. In fact, because understanding rendition can be tricky — and because your appeal can sometimes be stronger if you file a timely and authorized motion for rehearing, which has a shorter deadline — we recommend you contact appellate counsel within a day or two of learning of the order you want to appeal.

About Appeals 101

This post is part of our continuing Appeals 101 series. Click the link to find all of our posts on the basics of litigating an appeal.