Pleading and the Many Faces of Waiver

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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.

Dead End by Dineen Pashoukos Wasylik All Rights Reserved

Is it Appealable? July 2018 edition

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A street sign that displaying "dead end"

Is it appealable, or a dead end? Several district court decisions from this month answer that question in different ways.

Appealable or not?  The courts decide…

The immediate reaction to an adverse ruling is often “I want to appeal that!” But not all orders are immediately appealable, as several cases this month have shown. And sometimes, an order is immediately appealable even if the case continues for other reasons, and you can waive your rights to appeal if you don’t act immediately. The district courts of appeal have issued a number of decisions this month regarding appellate jurisdiction to review a trial court’s order, which usually comes down to the question “Is this a final order?” Below we’ve summarized just a few of the cases discussing finality and appealability the courts issued in July, grouping them by type of order. As always, if you have any questions regarding the finality or appealability of an order, contact us and we’d be glad to talk about your situation with you!

Orders on fees.

FCCI Commercial Insurance Co. v. Empire Indemnity Insurance Co., 2D17-1749 (Fla. 2d DCA July 13, 2018)[.pdf]

FCCI intervened in a pending case against its insureds after the trial court disqualified the attorney FCCI had retained on its insureds’ behalf and awarded attorneys’ fees to Empire based on that attorney’s misconduct. When FCCI appeared, the trial court imposed the award of those fees upon FCCI based on its finding that FCCI had directed the disqualified attorneys’ actions.  FCCI appealed that order.

On appeal, Empire argued the appellate court did not have jurisdiction over the appeal, presumably because there were proceedings still pending in the trial court.  The court disagreed, holding “Not only is the order awarding Empire attorney’s fees an executable judgment against FCCI concluding a portion of the litigation ancillary to Empire’s ongoing litigation against [FCCI’s insureds and other defendants], . . . but FCCI’s limited intervention solely for the purpose of addressing fees demonstrates that the conclusion of the attorney fees proceeding ended judicial labor as to FCCI,” citing Florida Rule of Appellate Procedure 9.110(k)(review of partial final judgments) and a number of cases.

Yampol v. Turnberry Isle South Condominium Association, Inc., 3D17-2752 (Fla. 3d DCA July 5, 2018)[.pdf]

After dismissing a case in the trial court, both parties (Yampol and Turnberry) moved for attorney’s fees.  The trial court entered an order that denied Turnberry’s fees and granted Yampol entitlement to fees.  Upon a motion for reconsideration, the trial court changed its mind, granting Turnberry entitlement to fees and denying Yampol’s motion.  Yampol appealed.

Turnberry moved to dismiss the appeal, arguing that the order was not yet final because it found only entitlement, and not amount, as to its award of fees.  The appellate court determined “[t]he issue before us in this appeal is whether an order that grants one party’s entitlement to fees and denies the other party’s entitlement to fees ins an appealable final order.”

Ultimately, the court ruled the order was appealable because an “order denying a party’s claim for entitlement to attorney’s fees . . . is an appealable final order,” even if an order granting attorney’s fees as to entitlement but not to amount is not appealable.  The trial court ended all litigation as to Yampol’s fees in its second order so the order was final and appealable as to Yampol. This is a great example of how the same order can be final and appealable for one party but not another.

Orders to show cause.

Torres v. Lefler, 2D17-2741 (Fla. 2d DCA July 13, 2018)[.pdf]

The trial court ordered Mr. Torres to show cause within ten days why he should not be sanctioned for repeatedly filing frivolous lawsuits, failing which, sanctions would be imposed.  Mr. Torres filed a notice of appeal before the ten days was up.  The appellate court dismissed the appeal from that order, holding that the trial court merely reserved jurisdiction to impose sanctions and thus the order was not final or appealable.

Amended temporary orders while an appeal is pending.

Duryea v. Bono, 2D17-4314, 2D17-4422 (consolidated) (Fla. 2d DCA July 13, 2018)[.pdf]

In this family law appeal, the trial court rendered a Temporary Order for Timesharing on October 27, 2017.  Duryea filed a notice of appeal.  Then the trial court rendered an Amendment to the Temporary Order for Timesharing on November 2, 2017, substantively modifying the October 27, 2017, order.  Duryea filed another notice of appeal.

The appellate court affirmed the October 27, 2017, order.  However, it held that the November 2, 2017, order was a nullity because it was entered while the appeal from the prior order was pending and was substantive in nature.  Consequently, the court remanded with directions to vacate the November 2, 2017 order.

Orders granting partial summary judgment incorporating injunctive relief.

Woodfield Community Association, Inc. v. Ortiz, 2D18-341 (Fla. 2d DCA July 13, 2018)[.pdf]

The Ortizes sued their homeowner’s association.  In count 1, they sought a declaration that parking restrictions were void and unenforceable.  They moved for partial summary judgment, which the trial court granted.  The court declared prior fines void and enjoined the homeowner’s association from imposing further fines.  The association appealed.

The appellate court recognized that “Generally, orders that merely grant partial summary judgment, such as the one before us, are considered nonfinal, nonappealable orders.”  “However, Florida Rule of Appellate Procedure 9.130(a)(3)(B) provides us jurisdiction to review the portion of the order enjoining the association from enforcing the recorded declaration.”  The appellate court dismissed all other portions of the association’s appeal that did “not pertain to injunctive relief,” without prejudice to raising those issues in a later final appeal.

Timeliness of Notice of Appeal.

Elmouki v. Department of Transportation, 1D18-0715 (Fla. 1st DCA July 9, 2018)[.pdf]

The Commercial Motor Vehicle Review Board issued a letter rejecting Elmouki’s challenge to a citation he received while operating a commercial motor vehicle.  The letter was dated January 18, 2018, but included a timestamp showing it was filed with the clerk of the Department of Transportation on January 17, 2018.  Elmouki filed his notice of appeal on Monday, February 19.

The appellate court held that the 30-day time period for Elmouki to file his notice of appeal ran from the date the letter was rendered, which was the date it was filed with the Department.  Consequently, the time for Elmouki to file his notice of appeal expired on Friday, February 16, and Elmouki’s February 19 notice was untimely.

The appellate court dismissed the appeal without prejudice to Elmouki petitioning the Review Board to vacate and reissue the letter so that he could appeal.

In rem vs. personal jurisdiction.

Patel v. Wilmington Savings Bank, FSB, 5D17-1900 (Fla. 5th DCA July 6, 2018)[.pdf]

The trial court denied the Patels’ motion to quash constructive service of process, ruling that it had in rem jurisdiction.  The Patels appealed, presumably pursuant to Florida Rule of Appellate Procedure 9.130(a)(3)(C)(i), which authorizes an appeal from a non-final order that determines the jurisdiction of the person.

However, the trial court did not determine the jurisdiction of the person, it only ruled on jurisdiction in rem, or over the property at issue.  Consequently, the appellate court held that rule 9.130(a)(3)(C)(i) did not provide a non-final appeal from the trial court’s order and thus dismissed the appeal.

Mootness.

Mitchell v. Brogden, 1D16-5849 (Fla. 1st DCA July 16, 2018)[.pdf]

Mitchell appealed a stalking injunction that expired by its own terms while the appeal was pending.  “Nonetheless, [the court held,] we cannot dismiss the appeal as moot because ‘collateral legal consequences flowing from such an injunction outlast the injunction itself.'” (citation omitted).

Preservation by motion for rehearing.

Mahoney v. Mahoney, 1D17-2071 (Fla. 1st DCA July 9, 2018)[.pdf]

Former Husband waived arguments for appeal regarding lack of written findings on trial support and some arguments regarding the cut-off date for the identification of a retirement plan as a marital asset by failing to include those arguments in a trial court motion for rehearing.

Looking for more?

Check out our past blog posts on rendition, timing of your notice of appeal, and post-judgment tolling motions, and check out our Florida Bar Journal article on how trial court motions for rehearing affect preservation on appeal.  Or scroll through the blog for more!

Blurred Lines and Appellate Preservation

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Gaye Family lead counsel Richard Busch (left) explains the surprising preservation issues.

The higher the stakes in the litigation, the more important it is to have an appellate nerd in your corner, because you can’t make your arguments to the appellate court if you haven’t preserved them at trial. Most folks who follow copyright law are aware that the Ninth Circuit late last month upheld the jury verdict in favor of Marvin Gaye’s family holding that the song Blurred Lines infringed the copyright in Marvin Gaye’s Got to Give it Up. See Williams v. Gaye, 885 F. 3d 1150 (9th Cir. 2018) [.pdf]. And while there are a lot of fascinating copyright issues there, even more important are the appellate preservation issues — the lawyers representing Thicke and Williams tanked large portions of their appeal before they even got there by failing to speak up at two important points at the trial: At the close of plaintiff’s evidence, and before the jury was dismissed after rendering its verdict.

Failure to make a Rule 50(a) Motion

In Federal Court, the rule that covers judgment as a matter of law (also sometimes called judgment notwithstanding the verdict or JNOV from the Latin judgment non obstante veredicto) requires that in a jury trial the Defendant must make a motion at the close of plaintiff’s evidence (Rule 50(a)) and then renew that motion at the end of the case (Rule 50(b)) in order to preserve a challenge to the sufficiency of the evidence. The Defendants were left with arguing that “a colloquy between their counsel and the district court regarding jury instructions and verdict forms qualifies as an “ambiguous or inartfully made” Rule 50(a) motion,” and should suffice for preservation purposes, but but the Court found that colloquy fell “far short” of even an inartful motion, and found sufficiency of the evidence unpreserved. Ouch. Williams v. Gaye, 885 F. 3d 1150, n.21 (9th Cir. 2018). In Florida, the equivalent requirement is for a motion for directed verdict.

Failure to Object to Jury’s Verdict

Defendant’s waived their objection to an alleged inconsistency in the jury’s verdict by failing to object before the jury was discharged. And this was not a controversial point — it was a pretty black letter rule that the court mentioned with citation to two older cases and moved on quickly. That objection must, must be made before the jury is discharged.

It can be very hard in the heat of battle — and trial can be a battle — to remember every possible preservation issue. That’s why we recommend you have an appellate specialist on your trial team. What you don’t want is to blur the lines of preservation.

Thank you to the panelists at the Florida Bar Business Law Section’s 9th Annual Intellectual Property Symposium for their fascinating presentations!