Tuesday, March 31, 2009

Plaintiff in ERISA Action Not Entitled to Fees Incurred During Stay For Voluntary Claim Reassessment

In KAHANE v. UNUM LIFE INSURANCE COMPANY OF AMERICA, No. 08-15022 (11th Cir. March 31, 2009), the Eleventh Circuit held a plaintiff who agrees to a stay in ERISA litigation in order to participate in a voluntary claim reassessment process is not entitled to fees for work done during the stay. The court allowed fees for all work done prior to the voluntary stay. The Health Plan Law Blog has a post about this case here.

In this appeal, we consider whether a Plaintiff who agreed to stay litigation brought pursuant to the Employee Retirement and Income Security Act (ERISA), 29 U.S.C. § 1132(a)(1)(B), and participate in a voluntary claim reassessment process with a Defendant insurer, is entitled to recover attorney’s fees for work done in that process. We conclude that the claim reassessment process at issue in this appeal is substantially similar to the pre-litigation administrative proceedings required by ERISA. Because we conclude that attorney’s fees and costs are not recoverable for pre-litigation administrative procedures under 29 U.S.C. § 1132(g)(1), they are not available for this claim reassessment process. We also conclude that the district court did not abuse its discretion in limiting the amount of the Plaintiff’s recovery of attorney’s fees and costs for preparation of the motion for fees and costs.

Judgment as to Liability Only is Not a Final Order

Today, in Singleton v. Realty Land Investments Inc. (08-86069), the First DCA dismissed the case for lack of jurisdiction and held that a final judgment as to liability but reserving jurisdiction as to damages is not a final appealable order.

because the instant order does not bring an end to the litigation below, this order is not final. See Caufield v. Cantele, 837 So. 2d 371, 375 (Fla. 2002) (reaffirming traditional test of finality that a "final judgment is one which ends the litigation between the parties and disposes of all issues involved such that no further action by the court will be necessary."); Hernando County v. Leisure Hills, Inc., 648 So. 2d 257 (Fla. 5th DCA 1994) (holding that issue of damages is so intertwined with substance of a claim as to render an order reserving jurisdiction to determine damages nonfinal).

Sunday, March 29, 2009

Questions Presented to Supreme Court this Term

From the SCOTUS Blog, the post at the following link [OT08 Questions Presented] provides "a document of all the questions presented in the cases argued or to be argued [before the Supreme Court] this Term. The file also contains links to the issued opinions." Earlier this month, they posted "statistics on the Court’s docket and decisions [from this term]." For statistics dating back to the 1995 term, click here.

Equitable Esoppel Bars Debtor From Challenging Pre-Petition Obligation in Bankruptcy Court

In this opinion from Judge Ray in the Bankruptcy Court for the Southern District of Florida, the court granted the summary judgment motion and dismissed the debtor's complaint on several grounds. The debtor sued to cancel/disallow the mezzanine lenders' entire $17 million mezzanine loan debt as usurious, or to equitably subordinate the claim under 510(c). The main basis for granting the motion was that the debtor was equitably estopped from challenging the validity/enforceability of the mezzanine lenders' notes due to the debtors pre-petition conduct in treating the mezzanine lenders' claims as valid debt obligations. The debtor delivered a legal opinion letter authored by its counsel at the mezzanine loan closing that acknowledged the loan agreement was a valid debt instrument and actually made payments under the note. The order is can be downloaded here.
*Disclaimer: GrayRobinson, P.A. was involved in the above-referenced action.

Saturday, March 28, 2009

Power of Attorney Did Not Provide Authority to Agree to Arbitration

In Carrington Place of St. Pete, LLC v. The Estate of Jennie Milo (2D08-2679), the Second District affirmed the circuit court's order denying a motion to compel arbitration. When the patient was admitted to a nursing home the required admission documents, which included an arbitration provision, were signed by the administrator of her estate. The patient had previously signed a power of attorney in favor of the administrator. The nursing home argued that the arbitration provision was binding based upon the properly executed power of attorney. The court held that the power of attorney did not give the administrator legal authority to enter into an arbitration agreement:
Examining the POA executed here by Milo, we conclude that the language specifically refers to the rights, duties, and powers that Brito may exercise on behalf of Milo. But the language does not "unambiguously make[] a broad, general grant of authority" to Brito. See id. Our review of the language of the POA seemingly indicates that it specifically granted authority to Brito related solely to Milo's property interests. Accordingly, McKibbin controls, and we must affirm the trial court's denial of appellants' motion to compel arbitration.

Lawsuit Improper Prior to Appraisal of Hurricane Damage

On March 26, 2009, the Eleventh Circuit issued its opinion in the case of Moore v. Travelers Companies, Inc. (08-15842). The court affirmed the district court's decision that the insured failed to state a claim because the insured did not participate in the appraisal process prior to the filing of the lawsuit. The eleventh circuit stated:

Moore’s request for twenty percent general contractor costs in the calculation of actual cash value is a request for an increase in the determination of the loss. It does not relate to coverage in addition to the loss. Therefore, under the terms of the homeowners policy, Moore must first comply with the appraisal provision to determine his amount of loss. He is contractually bound to do so. At that time, he may or may not establish that “twenty percent general contractor costs” be included in the “actual cash value” of his damages.

As no appraisal has as yet taken place to resolve this matter, Moore’s complaint fails to state a claim upon which relief can be granted. The judgment of the district court is Affirmed.

Out of State Lawyers Subject to Florida's Personal Jurisdiction

On March 25, 2009, the Fourth District reversed the circuit court and held two New York lawyers are subject to personal jurisdiction in Florida. The lawyers performed almost all of the legal work in New York, however, filed corporate documents for the client with the Secretary of State. When the client alleged the two lawyers committed malpractice by filing the documents, the lawyers should have reasonably anticipated being "haled" into the Florida courts relating to the transaction. The case was Beta Drywall Acquisition, LLC v. Mintz & Fraade, P.C. (4D08-1688) and the court stated:

Under Becker, the tort of legal malpractice in the instant case accrued in Florida where Beta, a Florida corporation, alleges it suffered $750,000 in damages as a direct result of Mintz and Fraade’s negligence. Though Mintz and Fraade performed most of the necessary legal services from a New York office, they caused allegedly faulty Acquisition Articles to be filed in Florida which caused injury to Beta. Thus, Mintz and Fraade committed a tortious act in Florida within the meaning of section 48.193(1)(b), Florida Statutes, and their actions are within the ambit of the long-arm statute.

Mintz and Fraade also have sufficient minimum contacts with Florida to satisfy the due process requirement. This prong is satisfied “if the defendant purposefully directs activities at Florida and litigation arises out of those activities, or the defendant purposefully avails himself of the privilege of conducting activities within the forum state.” Achievers Unlimited, Inc. v. Nutri Herb, Inc., 710 So. 2d 716, 719 (Fla. 4th DCA 1998). Mintz and Fraade performed the necessary legal work for the formation of two Florida LLCs created for the purpose of acquiring the assets of an existing Florida corporation. Beta claims Mintz and Fraade were negligent in their performance, and thus, that they are liable for legal malpractice and breach of fiduciary duty. Beta’s claims arise from the activity Mintz and Fraade directed into the state of Florida. A reasonable person having conducted the activities conducted by Mintz and Fraade in the present case would reasonably foresee being haled into court in Florida should an issue regarding the very formation of Beta arise.

Consent Required for Special Magistrate

On March 25, 2009, the Third District released an opinion in the case of GIELCHINSKY V. VIBO CORP (08-2614). The court held a party can withdraw its consent to the use of a special magistrate at any time:

Consent of the parties is required to refer any matter to a special magistrate. See Fla. R. Civ. P. 1.490(c). See also Pesut v. Miller, 773 So. 2d 1185 (Fla. 2d DCA 2000); Miller v. Lifshutz, 558 So. 2d 195 (Fla. 4th DCA 1990). Concomitantly, if a party withdraws his consent, as Gielchinsky did here with good cause due to financial reasons, then it logically follows that the matter is no longer appropriate for a special magistrate.

Sunday, March 15, 2009

Eleventh Circuit Affirms District Court's Dismissal In ERISA Botox Case

In Kaplan v. Blue Cross and Blue Shield of Florida, Inc., 07-11699, 2008 WL 4926623, 07-11699 (11th Cir. Nov. 19, 2008), the Eleventh Circuit held the district court correctly found that BCBSF did not misinterpret the language of the Kaplan’s health insurance plan when it denied their claims."   The opinion is below:

Kaplan v. Blue Cross and Blue Shield of Florida, Inc., 07-11699, 2008 WL 4926623, 07-11699 (11th Cir. Nov. ...

*Disclaimer: Jeffrey Kuntz and/or GrayRobinson, P.A. were involved in the above-referenced action.

ERISA Case Dismissed For Missing Statute Of Limitation

This ERISA case, Merriken v. Am. Maritime Off. Vacation Plan, et al, 08-60687, 2008 WL 4899126, (S.D. Fla. Sept. 29, 2008), was dismissed based upon the controlling statute of limitations.  The decision is below:

Merriken v. Am. Maritime Off. Vacation Plan, Et Al, 08-60687, 2008 WL 4899126, (S.D. Fla. Sept. 29, 2008)

*Disclaimer: Jeffrey Kuntz and/or GrayRobinson, P.A. were involved in the above-referenced action.

Injunction Reversed for Improper Notice

In a proceeding supplementary case, the Third DCA in Wavestone Props., LLC v. Fortune Dev. Sales Corp., 978 So.2d 830 (Fla. 3d DCA 2008) "reverse[d] the temporary injunction against 17315, and the order impressing the judgment lien upon the property owned by 17315. We do so because the request for this relief had not been noticed for hearing, and there was a timely objection on this ground." The court also held that it was improper to enter an injunction when the relief was not requested in a motion.

As to piercing the corporate veil, which was reversed for the procedural issues discussed above, the court gave no opinion other than to state that any attempt to pierce the corporate veil "must satisfy the standards of Dania Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114 (Fla. 1984)."

The decision is below:

Wavestone Props., LLC v. Fortune Dev. Sales Corp., 978 So.2d 830 (Fla. 3d DCA 2008)

The oral argument that took place in this appeal is below:

Argument 
video

Response
video

Rebuttal
video

*Disclaimer: Jeffrey Kuntz and/or GrayRobinson, P.A. were involved in the above-referenced action.

Thursday, March 12, 2009

Removing Party Entitled to Correct Procedural Defect in Removal Petition

In Corporate Management Advisors v. Artjen Complexus (08-14606), the Eleventh Circuit reversed the District Court's sua sponte remand order. The defendant removed the case from state court to federal court, however, only alleged the residency of the plaintiff as opposed to the citizenship of the plaintiff. Based upon the defect in the removal petition, the District Court remanded the case. The Eleventh Circuit reversed and held that failure to properly establish citizenship in the removal petition is a procedural defect and the districts court cannot remand a matter based upon a procedural defect absent a motion timely filed by a party. Further, the court instructed the district court to allow the defendant to correct the procedural defect on remand.

Tuesday, March 10, 2009

Eleventh Circuit Certifies Five Insurance Questions

Yesterday, the Eleventh Circuit certified five questions to the Florida Supreme Court. The Eleventh Circuit's opinion in Chalfonte Condominium Apartment Assoc., Inc. v. QBE Insurance Corp. (08-10009) can be found here and the five questions are below.

(1) Does Florida law recognize a claim for breach of the implied warranty of good faith and fair dealing by an insured against its insurer based on the insurer’s failure to investigate and assess the insured’s claim within a reasonable period of time?

(2) If Florida law recognizes a claim for breach of the implied warranty of good faith and fair dealing based on an insurer’s failure to investigate and assess its insured’s claim within a reasonable period of time, is the good faith and fair dealing claim subject to the same bifurcation requirement applicable to a bad faith claim under Fla. Stat. § 624.155?

(3) May an insured bring a claim against an insurer for failure to comply with the language and type-size requirements established by Fla. Stat. § 627.701(4)(a)?

(4) Does an insurer’s failure to comply with the language and type-size requirements established by Fla. Stat. § 627.701(4)(a) render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable?

(5) Does language in an insurance policy mandating payment of benefits upon “entry of a final judgment” require an insurer to pay its insured upon entry of judgment at the trial level?

Appraisal, Overhead and Profit and Fees

In Goff v. State Farm Florida Ins. Co., 999 So. 2d 684 (Fla. 2d DCA 2008), the Second District addressed a number of issues that constantly appear in the Florida appellate courts. Goff filed a lawsuit and State Farm moved to compel appraisal. Among the court's holdings were:
1.) Confirmation of an appraisal award is not necessary after payment has been made;
2.) Attorneys fees against an insurer can be awarded even if no judgment is entered;
3.) "Actual cash value includes overhead and profit where the insured is reasonably likely to need a general contractor for repairs.";
4.) An insurer is entitled to withhold the depreciated amount of overhead and profit until the repairs are actually completed.

Confirmation of Appraisal Award Does Not Determine Liability

In State Farm Florida Ins. Co. v. Hill, 1 So.3d 1272 (Fla. 2d DCA 2009), the Second DCA vacated a circuit court order that purported to be a final judgment after the confirmation of an appraisal award. The court held the order did not clearly dispose of all issues in the case. Confirmation of an appraisal award merely determines the amount of loss and does not determine whether the insurer is liable for the damages. Therefore, judgment should not be entered based upon the confirmation of an appraisal award if coverage challenges exist.

Insurer Entitled to Deduct Prior Payment and Deductible from Appraisal Award

In Citizens Property Insurance Corp. v. Cuban Hebrew Congregation of Miami, Inc. (3D08-1325), the Third DCA reviewed the circuit court's order that determined Citizens was not entitled to deduct prior payments or the deductible from an appraisal award. The Third DCA reversed and concluded that an insurer is entitled to deduct those amounts from the amount paid to the insured. The court stated:
Where, as here, the appraisers set the overall amount of the loss, but do not reduce the award for prior payments or the deductible, the insurer is entitled to make those deductions.

Thursday, March 5, 2009

Untimely Bad Faith Claim

An action for bad faith cannot be brought prior to the conclusion of the underlying first party insurance claim. In North Pointe Ins. Co. v. Tomas, 999 So.2d 728 (Fla. 3d DC 2008), the Third DCA held "[w]e grant the petition for writ of certiorari and quash the order below on grounds that the action for breach of contract, which remains pending below for a determination of damages relating to the allegations of North Pointe's breach of the insurance contract, renders premature the cause of action for bad faith."

Wednesday, March 4, 2009

Good Faith Efforts Required By Plaintiff's Counsel Prior to Filing Suit

The Eleventh Circuit affirmed the denial of attorneys fees to the prevailing party even though fees were provided for by statute because the plaintiff's attorneys did not contact opposing counsel prior to suit-"And the lawyer for Plaintiff made absolutely no effort -- no phone call; no email; no letter"- [click for opinion]. While the opinion may have limited application, the introductory paragraph is very broad and states "[t]his appeal is about the power of a district court to supervise the work of the lawyers who practice before it."