CFLB MANAGEMENT, LLC v. DIAMOND BLUE INTERNATIONAL, INC.

C
      Third District Court of Appeal
                               State of Florida

                       Opinion filed February 10, 2021.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                             No. 3D20-1034
                       Lower Tribunal No. 16-26865
                          ________________


                      CFLB Management, LLC,
                                  Appellant,

                                     vs.

             Diamond Blue International, Inc., et al.,
                                 Appellees.


    An Appeal from the Circuit Court for Miami-Dade County, Abby
Cynamon, Judge.

     Kozyak Tropin & Throckmorton, and Corali Lopez-Castro, Dwayne A.
Robinson and Michael R. Lorigas, for appellant.

     Ava J. Borrasso, P.A., and Ava J. Borrasso, for appellees.


Before SCALES, HENDON and GORDO, JJ.

     SCALES, J.
      CFLB Management, LLC, a co-defendant below, appeals a June 24,

2020 final order denying its Florida Rule of Civil Procedure 1.540(b)(5)

motion. CFLB Management’s motion sought to vacate a June 20, 2019 post-

judgment order (“Attorney’s Fees Judgment”) awarding prevailing party

attorney’s fees to the appellees Diamond Blue International, Inc. and

Fundacion Lemar, the plaintiffs in the lower proceeding. The trial court

concluded that it lacked jurisdiction to adjudicate CFLB Management’s rule

1.540(b)(5) motion because: (1) this Court affirmed the entry of final

summary judgment as to CFLB Management in Conrad FLB Management,

LLC v. Diamond Blue International, Inc., 

300 So. 3d 716

(Fla. 3d DCA 2019)

(appellate case number 3D18-2540); and (2) CFLB Management did not

timely appeal the Attorney’s Fees Judgment while appellate case number

3D18-2540 was pending. Because we conclude, as a matter of law, that the

trial court had jurisdiction to adjudicate appellant’s rule 1.540(b)(5) motion,

we reverse and remand for further proceedings.

      I.    FACTS

       In October 2016, the appellees brought the instant action for breach

of two promissory notes against CFLB Management, as borrower, and two

other co-defendants who were alleged to also be liable on the unpaid notes.

On December 17, 2018, the trial court entered an amended final summary



                                      2
judgment finding all named defendants jointly and severally liable on both

unpaid notes, concluding that “[the appellees] may collect this judgment

against any one or more Defendants in this action but there shall be no

double recovery.” The amended final summary judgment further determined

that the appellees were entitled to recover prevailing party attorney’s fees

and costs from the defendants, reserving jurisdiction to assess the amount

of attorney’s fees and costs at a later date. CFLB Management and the two

co-defendants appealed the December 17, 2018 amended final summary

judgment to this Court (3D18-2540).

      While the appeal was pending, on June 12, 2019, the trial court held

an evidentiary hearing to set the amount of prevailing party attorney’s fees

and costs. Consistent with the fee provisions found in the notes, the trial

court entered a June 20, 2019 Attorney’s Fees Judgment that awarded the

appellees nearly $200,000 in attorney’s fees and costs, plus interest,

“against all Defendants” and provided that “[the appellees] may collect this

judgment against any one or more Defendants in this action but there shall

be no double recovery.” Neither CFLB Management, nor either of its co-

defendants, appealed the Attorney’s Fees Judgment.

     Nearly five-and-a-half months later, this Court affirmed the entry of the

amended final summary judgment as to CFLB Management, but reversed



                                      3
the entry of judgment as to the two co-defendants and remanded for further

proceedings. See Conrad FLB Mgmt., 

LLC, 300 So. 3d at 721

. With the

judgment against them reversed, the two co-defendants then filed a rule

1.540(b)(5)1 motion to vacate the derivative Attorney’s Fees Judgment. The

trial court granted the co-defendants’ motion and vacated the Attorney’s

Fees Judgment against them.

      Sixty-six days after the trial court vacated the Attorney’s Fees

Judgment as to its co-defendants, CFLB Management then filed its own rule

1.540(b)(5) motion seeking to vacate the Attorney’s Fees Judgment against

it. Therein, CFLB Management argued that because the Attorney’s Fees

Judgment “imposed joint and several liability against [all defendants] for all

attorney’s fees incurred by [the appellees]” and “includes fees that are based

on time [the appellees] spent prosecuting their now unsuccessful claims



1
 Rule 1.540(b)(5) provides limited jurisdiction for a trial court to revisit a final
order when, inter alia, the judgment upon which the final order is based has
been reversed. The rule reads, in pertinent part:

      On motion and upon such terms as are just, the court may relieve
      a party . . . from a final judgment, decree, [or] order . . . for the
      following reasons:

      (5) that . . . a prior judgment, decree, or order upon which it is
      based has been reversed or otherwise vacated . . . .

Fla. R. Civ. P. 1.540(b)(5).

                                         4
against [the two co-defendants],” the Attorney’s Fees Judgment should be

vacated and a new evidentiary hearing held “to establish . . . what portion of

the attorney’s fees awarded previously are attributable to time spent

establishing the liability of [CFLB] Management under the notes.”

      On June 17, 2020, the trial court conducted a hearing on CFLB

Management’s rule 1.540(b)(5) motion. The transcript of that hearing reveals

that the trial court was concerned that CFLB Management’s motion was not

cognizable under the rule because this Court had affirmed, rather than

reversed, the trial court’s entry of final summary judgment as to CFLB

Management. Thus, according to the trial court, prevailing party attorney’s

fees were properly awarded against CFLB Management and, if CFLB

Management had any objection with respect to the Attorney’s Fees

Judgment, CFLB Management should have appealed the judgment.

      Ultimately, the trial court entered the challenged June 24, 2020 order

denying CFLB Management’s rule 1.540(b)(5) motion, the operative portion

of which reads as follows:

             ORDERED AND ADJUDGED that the Motion is DENIED.
      Defendant did not appeal the June 20, 2019 Attorney’s Fees
      Judgment. The Court further finds that it lacks jurisdiction to
      consider the Motion. See Penalba v. Penalba, 

616 So. 2d 165

      (Fla. 3d DCA 1993).[2]

2
  In Penalba, this Court determined that the trial court lacks jurisdiction to
grant rehearing, on its own initiative, beyond the time limit prescribed in

                                      5
CFLB Management timely appeals this order.

      II.   ANALYSIS3

      “[W]hen a merits judgment is reversed or vacated, a judgment for

attorneys’ fees flowing from that judgment should be reversed, too, and the

mechanism for relief is rule 1.540(b)(5).” 

Harrington, 187 So. 3d at 885

.

Thus, the issue presented here is whether the Attorney’s Fees Judgment is

“based” upon a “prior judgment” that has been “reversed or otherwise

vacated.” Fla. R. Civ. P. 1.540(b)(5). If it is, then rule 1.540(b)(5) provides

the trial court jurisdiction, “upon such terms as are just,” to “relieve” CFLB

Management of that judgment.

Id. The Attorney’s Fees

Judgment is plainly based on the December 17,

2018 amended final summary judgment. It awards the appellees all of the

fees that they incurred in pursuing their claims against all three defendants

in the lower proceeding. Because the Attorney’s Fees Judgment also found


Florida Rule of Civil Procedure 

1.530(d). 616 So. 3d at 166

. Penalba’s
relevance to the issue of whether rule 1.540(b)(5) provided the trial court with
jurisdiction to adjudicate CFLB Management’s motion is not readily apparent
from the record before us.
3
  While this Court generally reviews an order denying a rule 1.540 motion for
abuse of discretion, when, as occurred in this case, the trial court rules on
the motion as a matter of law on a pure question of law – i.e., whether it had
jurisdiction to adjudicate the motion – our review is de novo. Travelers Com.
Ins. Co. v. Harrington, 

187 So. 3d 879

, 884 (Fla. 1st DCA 2016).

                                       6
that all three defendants were jointly and severally liable for the fee award,

the judgment did not differentiate, as to each defendant, the fees incurred by

the appellees in pursuing their claims. As we reversed the final summary

judgment as to CFLB Management’s two co-defendants, and because the

Attorney’s Fee Judgment was plainly “based” on the summary judgment that

we reversed, rule 1.540(b)(5) provides the trial court with express jurisdiction

to revisit the Attorney’s Fee Judgment and, if justice requires, to “relieve”

CFLB Management from the judgment. That this Court, in 3D18-2540, did

not reverse the merits judgment as to CFLB Management, and that CFLB

Management did not appeal the Attorney’s Fees Judgment, is of no moment

to the trial court’s jurisdiction to adjudicate CFLB Management’s rule

1.540(b)(5) motion.

      III.   CONCLUSION

      Because the attorney’s fees awarded against CFLB Management in

the Attorney’s Fee Judgment flow from a prior merits judgment (the

December 17, 2018 amended final summary judgment) that was reversed

by this Court, the trial court has jurisdiction to consider and adjudicate CFLB

Management’s rule 1.540(b)(5) motion seeking to vacate the Attorney’s Fee




                                       7
Judgment. We, therefore, reverse the June 24, 2020 final order denying

CFLB Management’s rule 1.540(b)(5) and remand for further proceedings. 4

      Reversed and remanded.




4
  The appellees suggest that, even if the trial court erred by determining it
lacked jurisdiction, we can nevertheless affirm the order denying CFLB
Management’s rule 1.540(b)(5) motion because, according to the appellees:
(i) the motion was untimely (i.e., not filed within a reasonable time), and (ii)
the fees incurred in prosecuting the claims against CFLB Management are
inextricably intertwined with the fees incurred in prosecuting the claims
against the other defendants, therefore making it impossible for the trial court
to differentiate the fees attributable solely to prosecuting the claims against
CFLB Management. We decline the appellees’ invitation to adjudicate these
issues in the first instance.

                                       8

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