Florida Supreme Court Decision: Arbitration and the Statute of Limitations
Recently, the Florida Supreme Court concluded that the Legislature intended to subject arbitration proceedings to the statute of limitations. An arbitration proceeding is an “action” broadly defined in § 95.011 to encompass any “civil action or proceeding,” including arbitration proceedings. Raymond James Financial Services, Inc. v. Barbara J. Phillips, SC11-2513 (Fla. May 16, 2013). The case came to the Florida Supreme Court for review in the form of a certified question by the Second District Court of Appeal. The Florida Supreme Court restated the question as follows:
DOES SECTION 95.011, FLORIDA STATUTES, APPLY TO ARBITRATION?
Answering the certified question in the affirmative, it was held that Florida’s statute of limitations applies to arbitration proceedings because an arbitration proceeding is within the statutory term “civil action or proceedings” found in section 95.011.
Florida Officer-Director Liability for Business Torts
Generally, a director or officer of a corporation does not incur personal liability for [the corporation’s] torts merely by reason of his official character; he is not liable for torts committed by or for the corporation unless he has participated in the wrong. Indeed, Florida courts have found that it is well established that an officer of a corporation who commits or participates in a tort, whether or not it is in furtherance of corporate business and whether or not it is by authority of the corporation, is liable to the injured party whether or not the corporation is also liable. Courts have rationalized this finding by noting that a contrary rule would enable a director or officer of a corporation to perpetrate flagrant injuries and escape liability behind the shield of his representative character, even though the corporation might be insolvent or irresponsible. Florida courts have additionally found that a corporate officer is potentially individually liable for his tortious acts even though such acts were committed in the scope of his employment by the corporation.
Landmark Florida Supreme Court Decision: Florida’s Economic Loss Rule
In Tiara Condominium Association, Inc. v. Marsh & McLennan Companies, Inc., the Florida Supreme Court held, in a five-to-two decision, that the economic loss rule is limited to products liability cases. Tiara Condominium Association, Inc. v. Marsh & McLennan Companies, Inc., 2013 WL 828003 (Fla. Mar. 7, 2013). The case came to the Florida Supreme Court for review in the form of a certified question by the United States Court of Appeals for the Eleventh Circuit. The Eleventh Circuit certified a question to the Florida Supreme Court, which was restated by the Florida Supreme Court as follows:
DOES THE ECONOMIC LOSS RULE BAR AN INSURED'S SUIT AGAINST AN INSURANCE BROKER WHERE THE PARTIES ARE IN CONTRACTUAL PRIVITY WITH ONE ANOTHER AND THE DAMAGES SOUGHT ARE SOLELY FOR ECONOMIC LOSSES?
Answering the certified question in the negative, it was held that “the application of the economic loss rule is limited to products liability cases.”
The Relation Back Doctrine
The relation back doctrine set forth in Florida Rule of Civil Procedure 1.190(c) provides that an amended pleading relates back to the date of the original pleading when it arises “out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading…” The rule allows amendments to relate back even though the statute of limitations has run in the interim. Lopez-Loarca v. Cosme, 76 So. 3d 5 (Fla. 4th DCA 2011). The original pleading must give fair notice of the general fact situation out of which the claim or defense arises. Flores v. Riscomp Indus., Inc., 35 So. 3d 146 (Fla. 3d DCA 2010). Two recent district court of appeal opinions discussed the relation back doctrine.
Standing: An Affirmative Defense to Mortgage Foreclosure
To have standing to foreclose, it must be demonstrated that the plaintiff holds the note and mortgage in question. Mazine v. M & I Bank, 67 So. 3d 1129, 1132 (Fla. 1st DCA 2011). The plaintiff must prove that it had standing to foreclose when the complaint was filed. McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012).
In Lindsey v. Wells Fargo Bank, N.A., No. 1D12-2406 (Fla. 1st DCA 2013), Lindsey appealed final summary judgment entered in favor of Wells Fargo for mortgage foreclosure. The First District Court of Appeal reversed and remanded because Wells Fargo failed to establish its standing to foreclose.
A Breach of a Fiduciary Duty Claim May be Waived
A dispute arose between Band and Libby regarding the development and construction of a luxury condominium. Band, the managing general partner of the development and an attorney, contacted Libby to invite him to become an investor. Band and his former law firm had previously represented Libby on numerous matters. Libby made an initial investment of about $140,000 in exchange for a ten percent interest in the project. Libby received, signed, and returned conflict waiver/disclosure letters relating to the project from Band’s law firm.
Relief from Judgment under Florida Rule of Civil Procedure 1.540
Florida Rule of Civil Procedure 1.500(b) provides that “[w]hen a party against whom affirmative relief is sought has failed to plead or otherwise defend as provided by these rules or any applicable statute or any order of court, the court may enter a default against such party.”
In Yale Mortgage Corporation v. Blot, 3D12-1894 (Fla. 3d DCA 2013), Yale Mortgage filed a mortgage foreclosure complaint against Blot. The complaint was served August 26, 2011. In October 2011, the trial court entered a default against Blot who failed to respond to the complaint. The trial court entered a final judgment of foreclosure against Blot on January 12, 2012. Shortly after the property was sold in May of 2012, Blot filed a motion to vacate the default and default final judgment and requested that the trial court vacate the sale. The trial court granted Blot’s motions.
The Third District Court of Appeal reversed the trial court’s order finding in part that Blot failed to show any excusable neglect for failure to answer the complaint. Blot waited until seventy days after Yale Mortgage served the complaint and over two weeks after the default had been entered. A movant seeking relief from a judgment must show that his failure to respond was the result of excusable neglect, the existence of a meritorious defense, and that the movant acted with due diligence in seeking relief. Fla. R. Civ. P. 1.540(b) (2012).
Re-weighing Evidence on Appeal
In Demida Miami Gardens, LLC v. Master Excavators, Inc., the appellants, Demida Miami Gardens, LLC and David Paul appealed a final judgment in the amount of $933,617.43 which was a result of an action to enforce a personal guarantee provided to Master Excavators by Paul. On appeal, two arguments were asserted: one, that the guarantee was unenforceable because there was no consideration, and two, that Master failed to satisfy conditions precedent to its enforcement.
On appeal, both of these arguments were rejected. The court found that while the record contained testimony and evidence supporting the appellants’ arguments, it also contained other competent and substantial testimony and evidence that directly contradicted them. Citing to G & G Fashion Design, Inc. v. Garcia, the Third District Court of Appeal noted that re-weighing the evidence and credibility of the witnesses is not a function ascribed to the appellate courts. G & G Fashion Design, Inc. v. Garcia, 870 So. 2d 870, 873 (Fla. 3d DCA 2004).
Treble Damages Not Assessed Against Representative Who Was Not a Party to the Contract
In Home Construction Management, LLC v. Comet, Inc., 4D11-4022 & 4D12-21 (Fla. 4th DCA 2013), Home Construction Management, LLC. (“HCM”) and representative Abraham Omer appealed a final judgment and damage award for claims relating to providing unlicensed contracting services. HCM was contacted by Comet, Inc. (“Comet”) to complete the construction of a single-family residence in Lantana, Florida. The parties entered into a written contract for completion of the project. Omer represented HCM throughout HCM’s relationship with Comet; neither Omer nor HCM was a licensed contractor. Comet sued for disgorgement of overcharges and treble damages under Fla. Stat. §768.0425(2). The trial court entered a final judgment, which trebled damages in the amount of $41,747.58 in overbillings, making Omer and HCM jointly and severally liable up to the damage amount of $125,242.74.
The Fourth District Court of Appeal affirmed all issues except the application of §768.0425 against Omer individually. §768.0425(1) defines “contractor” as “any person who contracts to perform any construction or building service which is regulated by any state or local law, including, but not limited to, chapters 489 and 633.” As the trial court found that Omer was not a party to the written contract between HCM and Comet, the Fourth District Court of Appeal reasoned that Omer did not “contract to perform” any service as required by §768.0425.
Our attorneys have a vast knowledge of Florida law. We are able to assist our clients in developing creative and cost-effective solutions to contractor related issues.
Aircraft Financing Commission Dispute – Implied Contract Theory
A contract implied in law, or quasi contract, operates where there Is no contract in place to provide a remedy where one party is unjustly enriched, and where that party received a benefit under circumstances that made it unjust to retain it without giving compensation. The plaintiff n Associated Leasing International Corp. v. Alpha Capital Services, Inc. utilized this theory in an attempt to recover a commission on aircraft financing transaction. Associated Leasing International Corp. v. Alpha Capital Services, Inc., 992 So. 2d 283 (Fla. 4th DCA 2008).
An abridged version of the extensive facts of the case is as follows: Herbert Beck (“Beck”) was the owner of Jet Travel, a charter jet service. Beck approached John Casserly (“Casserly”), who was an aircraft broker doing business as Alpha Capital, Inc., and sought his assistance for securing refinancing for a Lear 55 jet. Casserly was successful and received a broker’s fee. Thereafter, in 1995, Beck again approached Casserly regarding refinancing of the Lear 55. Casserly introduced Beck to Associated Leasing (“Associated”) to provide the refinancing. However, before any determination was made by Associated, Jet Travel filed for bankruptcy, and Associated was unable to fund the refinancing.
