Pleadings stricken, default entered, and fees awarded to Bernhard Law Firm. This week, a Miami court granted Bernhard Law Firm’s motion to enter the harshest sanctions available in a property management dispute out of a Key Biscayne luxury condominium resort. (Florida Bar disclaimer: results may not be typical. You may not have as beneficial a result). Bernhard Law Firm had filed suit on behalf of a Venezuelan and Dutch property investment group against a Key Biscayne property manager who had stolen property management funds. After the property manager’s repeated refusals to comply with discovery and investigation requests, the Miami court struck her pleadings and entered default against her, entitling Bernhard Law Firm’s client to a default judgment of civil theft. See a copy of the order here: ord-grant-mot-sanc-9-14-16-pdf_redacted. If you have questions about property management disputes, please contact Bernhard Law Firm at 786-871-3349, firstname.lastname@example.org; www.bernhardlawfirm.com.
As garnered from the pleadings, Bernhard Law Firm initially filed suit for civil theft, fraud, and unjust enrichment, stemming from the property manager’s theft of the investment group’s wire transfers, rent, and security deposits. The property manager misrepresented herself to be the investment group’s liaison, real property manager, and escrow agent in Miami. After gaining the investment group’s trust, the property manager pilfered tenant rent transfers addressed to the investment group while stealing the group’s tax payments dedicated to Miami-Dade County. The investment group sought to unveil this fraud and recoup its losses at the hands of the property manager.
However, the property manager repeatedly refused to respond to investigation requests, as required by Florida’s procedural rules. The property manager failed to appear at her July deposition despite being duly noticed and mutually coordinated; refused to pay the sanction fine ordered in June; and failed to timely respond to every single discovery request, including Bernhard Law Firm’s request for admissions, request for production, interrogatories, and requests to finish depositions. Bernhard Law Firm brought and the Court heard four prior motions to compel discovery and sanction, repeatedly admonished the property manager and her attorney, and entered sanctions against her. The property manager still failed to comply with discovery rules and deadlines, at significant cost to the investment group. Bernhard Law Firm argued that the property manager simply did not respect the court’s authority or the legal process, demanding a Kozel hearing to determine the most appropriate sanctions.
A Kozel hearing requires a factual showing under a six-part test as to why a harsh sanction should be imposed, including: 1) whether the attorney’s disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience; 2) whether the attorney has been previously sanctioned; 3) whether the client was personally involved in the act of disobedience; 4) whether the delay prejudiced the opposing party through undue expense, loss of evidence, or in some other fashion; 5) whether the attorney offered reasonable justification for noncompliance; and 6) whether the delay created significant problems of judicial administration. Kozel v. Ostendorf, 629 So. 2d 817 (Fla. 1993).
After Bernhard Law Firm‘s argument at the Kozel hearing, the Court found that:
“The Kozel factors weigh in favor of strong sanctions, including striking Defendant’s answer and entering default, as follows:
- Defendant’s disobedience of discovery orders is willful after four orders, and despite these orders, Defendant did not notify Plaintiff of her non-appearance at deposition or provide any excuse thereafter;
- The Court has repeatedly admonished and sanctioned Defendant;
- Defendant was personally involved in disobeying discovery orders and rules, including personally failing to appear for deposition without notification or excuse;
- The delay has prejudiced Plaintiff by allowing Defendant to hold and use Plaintiff’s money for an extended period, despite admitting in interrogatories that she owes the money to Plaintiff;
- Defendant cannot justify the repeated noncompliance, failed to notify Plaintiff that she would not appear at deposition or hearings, and has provided no excuse; and
- This delay and repeated court hearings are causing problems of judicial administration, creating multiple unnecessary hearing and preventing discovery and due process.
Thus, Florida law supports strong sanctions, including striking Defendant’s answer and entering default. Kozel at 818.”
The Kozel factors weigh in favor of strong sanctions, including striking Defendant’s answer and entering default
On that finding, the Court granted Bernhard Law Firm’s attorney’s fees for the multiple court appearances and motions on the property manager’s discovery failures, struck the property manager’s answer, and entered a default against the property manager. This ruling entitled Bernhard Law Firm’s client to entry of a default judgment of civil theft, triple damages, and fees and costs. If you have questions about property management disputes, please contact Bernhard Law Firm at 786-871-3349, email@example.com; www.bernhardlawfirm.com.