Wednesday, December 21, 2011

General Allegation Of Fraud Is Not Sufficient To Set Aside Judgment

In Vilvar v. Deutsche Bank Trust Company Americas (4D11-457), the Fourth District affirmed the trial court's order refusing to vacate a judgment. In this case, soon after a final judgment was obtained the defendant filed bankruptcy. After the bankruptcy action was dismissed, the plaintiff moved to amend its judgment to include additional amounts owed and relied upon the affidavit of Cross in obtaining the amended judgment. "One day before the foreclosure sale was to have occurred, Vilvar filed a second petition in bankruptcy, which was also later dismissed. The sale was re-scheduled, but one week before the sale, Vilvar filed a motion to vacate the amended final judgment pursuant to Florida Rule of Civil Procedure 1.540(b). In her motion, Vilvar alleged that Cross’s affidavit “was inaccurate and constituted hearsay” and it “failed to include sworn or certified copies of the very business records upon which” Cross relied. The motion was denied and this appeal followed." The court stated:
What occurred in Freemon is precisely what transpired in this case. Cross’s affidavit stated that she was the assistant vice president of Saxon, which, as the loan servicer, was responsible for collection of the loan and pursuit of any delinquency in payments. Cross went on to explain that she was familiar with Saxon’s books, records, and documents relevant to the allegations in the complaint, and that all of the books, records, and documents concerning the loan were kept by Saxon in the regular course of its business. Cross’s affidavit also stated that she had personal knowledge of the facts regarding the sums due and owing to the bank, and provided a complete breakdown of those sums.
In stark contrast, Vilvar’s motion does not demonstrate fraud or show why any of the alleged facts would entitle her to relief sufficient to set aside the amended final judgment. She does not dispute that she defaulted on her mortgage, and does not allege that the amounts set forth in Cross’s affidavit or that were due and owing are incorrect. Indeed, Vilvar has not specifically alleged any fraud in connection with Cross’s statements in her affidavit regarding the amounts due. Equally as compelling is the fact that Vilvar failed to object to or appeal the final judgment and the amended final judgment. Vilvar waited over a year from the entry of the amended final judgment to take issue with Cross’s affidavit.
Citing to Freemon, Hembd v. Dauria, Flemenbaum v. Flemenbaum, Cady v. Chevy Chase Sav. & Loan, Inc., and Rule 1.120(b), the court stated: "This Court has made it abundantly clear that general allegations of fraud will not support a motion to vacate a final judgment under rule 1.540(b)(3)." 
We likewise find no merit to Vilvar’s claim that Cross’s affidavit did not constitute admissible evidence and that failure to attach any sworn or certified copies of the records upon which she relied should have made the affidavit insufficient under rule 1.510(e). Vilvar’s failure to timely object to the sufficiency of Cross’s affidavit when it was presented on motion for summary judgment is fatal to this claim.

Monday, December 19, 2011

Mandatory Mediation Program In Foreclosure Cases Ended

The Florida Supreme Court entered THIS order today and ended the mandatory mediation program in foreclosure cases. The court stated:
The program was established as a means for the court system to address the overwhelming number of mortgage foreclosure cases coming into the system. The Court has reviewed the reports on the program and determined it cannot justify continuation of the program. Accordingly, upon issuance of this administrative order, the statewide managed mediation program is terminated.
The court also noted that:
Circuit chief judges are vested under article V, section 2(d), Florida Constitution, with responsibility for the administrative supervision of their circuits. Section 43.26, Florida Statutes, authorizes circuit chief judges “to do everything necessary to promote the prompt and efficient administration of justice.” These authorities empower the circuit chief judges to adopt or employ any measures permitted by statute or court rule to manage pending and new residential mortgage foreclosure cases, including referral of cases to mediation on a case-by-case basis pursuant to section 44.102, Florida Statues, and Florida Rule of Civil Procedure 1.700(a).

Thursday, December 15, 2011

In re: Certification of Need for Additional Judges

In In re: Certification of Need for Additional Judges (No. SC11-2246), the Florida Supreme Court issued an opinion and certified the need for 23 new circuit court judges, 48 new county court judges, and one new judge in the Second District Court of Appeal. Attached to the opinion was the chart below which breaks down the trial court judge needs by county:

Wednesday, December 14, 2011

"Florida Law Update," A New Blog By Judge Ramirez

Third District Judge Juan Ramirez, Jr. started a new blog, "Florida Law Update." 
"The blog covers appellate cases as they are released from the Third District and other appellate courts in the state. It is intended merely as a mechanism for alerting busy lawyers to what Judge Ramirez considers significant or interesting cases, with a link so that you can read the entire opinion. Judge Ramirez will just report the cases in a neutral, nonjudgmental manner, particularly the Third District’s own opinions." 
The emphasis is mine. You can view the blog by clicking on the title above (in this post), or in the "Florida Legal Websites and Blogs" list located on the right of this page. On that note, there are a number of blogs and sites that may be of interest in the various lists on the right of this page or on the "Links" page of this blog.

Tuesday, December 13, 2011

Fourth District Allows For Filing Of Stipulation For Extension Of Time (As Opposed To Motions)

Effective February 1, 2012, the Fourth District will allow the parties to stipulate that they have agreed to an extension of time to file briefs. The court's administrative order is below:
Admin. Order No. 2011-2 (In re: Agreed Extensions of Time for Briefs)

Thursday, December 8, 2011

Fourth District Reverses Order Finding Non-Party Witness Waived Service Requirements

In Garfinkel v. Katzman (4D11-1354), the Fourth District reversed the trial court's order and agreed with a challenge by a non-party witness to "an order of the trial court finding she waived her objection to the court’s exercise of jurisdiction over her person by filing a motion for protective order that sought to quash the deposition subpoena for lack of service and to limit any deposition permitted on the grounds of the spousal and litigation privileges." The court held that:
A court lacks jurisdiction over a non-party and the authority to require the non-party to appear for deposition where she has not been served with the deposition subpoena....The filing of the motion for protective order, seeking to quash or limit the deposition, was defensive and not a claim for affirmative relief that resulted in a waiver of the claim of lack of service and personal jurisdiction.

Two Recent State Supreme Court Opinions In Foreclosure Cases

As discussed HERE, the Florida Supreme Court declined to accept a settlement stipulation today and will answer the question certified by the Fourth District in a foreclosure lawsuit. Therefore, I thought it was worth posting two state supreme court opinions relating to foreclosure that were sent to me in the past days/weeks. 

Previously, HERE, I noted the Maine Supreme Judicial Court's opinion in JPMorgan Chase Bank v. Harp  (Jan. 6, 2011), and the Massachusetts Supreme Judicial Court's decision in U.S. Bank National Association v. Ibanzez (Jan. 7, 2011). Two other state supreme courts were released in the last couple of weeks. The Arizona Supreme Court released THIS opinion in Vasquez v. Saxon Mortgage, Inc., and answered a certified question from the United States Bankruptcy Court.  Additionally, the Maine Supreme Judicial Court released THIS opinion in Federal National Mortgage Association v. Bradbury

In Bradbury, the Maine Supreme Judicial Court stated that "Bradbury challenges the court’s failure to find loan servicer GMAC Mortgage, LLC in contempt pursuant to M.R. Civ. P. 56(g) after sanctioning Fannie Mae for submitting a bad faith affidavit for purposes of summary judgment. She also contends that the court erred in failing to award her attorney fees and costs associated with opposing Fannie Mae’s motion for a protective order."

The court stated that "The affidavit in this case is a disturbing example of a reprehensible practice. That such fraudulent evidentiary filings are being submitted to courts is both violative of the rules of court and ethically indefensible. The conduct through which this affidavit was created and submitted displays a serious and alarming lack of respect for the nation’s judiciaries."

Notwithstanding that criticism, the court affirmed the lower court's refusal to award additional sanctions. The court stated that:
In the circumstances of this case, however, we do not disturb the sanctions fashioned by the court for the bad faith affidavit. Courts have rule-based, as well as inherent, power to hold parties in contempt.....but the decision of whether or not to do so rests in the considerable discretion of the trial court.
Our decision is supported by substantial authority—or rather, the lack thereof—from other jurisdictions. To date, no published opinion shows that a court in Maine or any other state has imposed a contempt finding pursuant to Rule 56(g) for submitting a bad faith affidavit. Further, although M.R. Civ. P. 56(g)—in effect without amendment since 1959—largely duplicates the language of Fed. R. Civ. P. 56(h)5—in effect since 1937—no federal court has ever issued a finding of contempt on this basis.

In Vasquez, the Arizona Supreme Court answered one of two certified questions from the United States Bankruptcy Court. A brief description of the case and the two certified questions are included in the court's oral argument summary which can be viewed HERE. Regarding the question it chose to answer, the court stated:
The first certified question is whether “the recording of an assignment of deed of trust [is] required prior to the filing of a notice of trustee’s sale under A.R.S. § 33-808 when the assignee holds a promissory note payable to bearer.” The answer is no; Arizona law imposes no such requirement.
The court declined to answer the second certified question because it determined that answering the question would not dispose of an issue in the case pending before it. The oral argument, held at the University of Arizona, can be viewed HERE

Florida Supreme Court Rejects Stipulation For Dismissal Of Pino v. Bank of New York

In Pino v. The Bank of New York (SC11-697), a divided Florida Supreme Court denied "the parties’ request to dismiss this proceeding." Justice Pariente, Justice Lewis, Justice Labarga, and Justice Perry concurred in the per curiam opinion. Chief Justice Canady wrote a dissenting opinion that was joined by Justice Quince and Justice Polston. The case came to the Florida Supreme Court after the Fourth District, sitting en banc, certified the following question as one of great public importance:
Pino v. Bank of New York Mellon, 57 So. 3d 950, 951 (Fla. 4th DCA 2011). The Fourth District's opinion was previously discussed HERE. Based upon the Fourth District's certified question, the Florida Supreme Court accepted jurisdiction. Pino v. Bank of New York, 58 So. 3d 261 (Fla. 2011). 

After the supreme court accepted jurisdiction, the parties settled the dispute and filed a stipulation for dismissal in the Florida Supreme Court. The Court declined to accept the stipulation for dismissal and stated:
The question certified to us by the Fourth District Court of Appeal in this case transcends the individual parties to this action because it has the potential to impact the mortgage foreclosure crisis throughout this state and is one on which Florida’s trial courts and litigants need guidance. The legal issue also has implications beyond mortgage foreclosure actions. Because we agree with the Fourth District that this issue is indeed one of great public importance and in need of resolution by this Court, we deny the parties’ request to dismiss this proceeding.
Analyzing Florida Rule of Appellate Procedure 9.350, the supreme court stated that the "language of this rule does not impose upon the appellate court a mandatory obligation to dismiss a case following the filing of a notice of dismissal before a decision on the merits has been rendered. Rather, this Court has long recognized its discretion to retain jurisdiction over a matter and proceed with an appeal notwithstanding a litigant’s timely filing of a notice of dismissal pursuant to rule 9.350, especially when the matter involves one of great public importance and is likely to recur."

Based upon that conclusion, the majority held:
Consistent with the rationale undergirding our prior precedent, we conclude that these circumstances fully support this Court’s decision to exercise its discretion to retain jurisdiction over and decide the merits of this important case. To adopt the dissent’s interpretation of rule 9.350(a)—that the act of the parties’ stipulation for dismissal is binding on the Court—would require us to recede from our past decisions recognizing just the opposite. Instead, we adhere to our precedent and, accordingly, exercise our discretion to deny the parties leave to dismiss this review proceeding.
The dissent began: 
Florida Rule of Appellate Procedure 9.350(a) provides that “[w]hen any cause pending in the court is settled before a decision on the merits, the parties shall immediately notify the court by filing a signed stipulation for dismissal.” The rule does not appear to contemplate that such a stipulation for dismissal is subject to disapproval by the Court. The very designation “stipulation for dismissal”—as opposed to “motion for dismissal”—suggests that the act of the parties is dispositive. The committee note to the rule recognizes that dismissal of the case is the clerk’s ministerial duty: “On the filing of a stipulation of dismissal, the clerk of the court will dismiss the case as to the parties signing the stipulation.”.....
Under the Florida Constitution, this Court does not have the power to reach out and grab cases that we deem worthy of our attention. Nor should we exercise the power to grasp a case which has been brought to the Court but which the parties wish to dismiss before it has ever been considered by the Court on the merits. In doing so, we step beyond the proper role of an appellate court to adjudicate those cases that are properly presented to it by a party seeking review.

Wednesday, November 30, 2011

Florida's Post-Judgment Interest Rate (Adjusted Quarterly)

Previously, Florida's Chief Financial Officer established the post-judgment interest rate on an annual basis. However, beginning July 1, 2011, the CFO sets the interest rate on December 1, March 1, June 1, and September 1 of each year. 

The interest rates for 2011 and the first quarter of 2012 are listed below by date:
  • 01/01/2011-09/30/2011: 6%
  • 10/01/2011-12/31/2011: 4.75%
  • 01/01/2012-03/31/2012: 4.75%
The image below was created by Florida's Chief Financial Officer:

A post when the 2011 statutory rate of interest was announced can be viewed HERE.
A post when the 2010 statutory rate of interest was announced can be viewed HERE.

Proceeds From Sale Of Marital Home Sold As Part Of Divorce Subject To Homestead Protection

In Kerzner v. Kerzner (3D10-3124), the Third District affirmed "an order and final judgment which determined that proceeds from the sale of a marital home, pursuant to the terms of a marital settlement agreement, were subject to homestead protection under the Florida Constitution."

En Banc Fourth DCA Vacates Panel Opinion Relating To Discovery Orders

In Alvarez v. Cooper Tire & Rubber Company (4D08-3498), the Fourth District, sitting en banc, vacated the panel opinion previously discussed HERE, and affirmed the trial court's judgment. Judge Farmer (now retired) wrote the now vacated panel opinion in which Judge Hazouri and Judge Damoorgian concurred. Judge Warner wrote the court's en banc opinion and was joined by Chief Judge May, Judge Polen, Judge Stevenson, Judge Gross, Judge Taylor, Judge Hazouri, Judge Damoorgian, Judge Ciklin, Judge Gerber, Judge Levine, and Judge Conner. There were no dissenting or concurring opinions. The opinion began:
Appellant, Mario Alvarez, as personal representative of the estate of Jose Ramon Alvarez, appeals a final judgment in favor of Cooper Tire Company in a products liability action. Alvarez complains that the trial court abused its discretion in limiting document discovery from Cooper Tire to those involving tires with the same or similar specifications. Two trial judges conducted multiple hearings and document reviews, both concluding that the limitations were appropriate. We find no abuse of discretion and affirm.
Regarding the facts, the Court stated: "In December 2000, Abraham Calel was driving his 1994 Isuzu P15 pick-up truck on the Sawgrass Expressway with Jose Alvarez, sitting in the right-side passenger seat, and Rudy Velasquez, sitting in the middle. Neither the driver nor the passengers had on their seatbelts. Without warning, the right rear tire tread completely separated from the tire but the tire remained inflated. When this happened, the driver lost control of the pick-up truck, went off the highway, and the truck rolled over. Alvarez was partially ejected from the vehicle and ended up pinned underneath the truck. He died by asphyxiation. The other passenger was also killed in the accident. The driver survived."

The court described the facts relevant to the discovery issue: "The failed tire was a Cooper Trendsetter Steel Belted Radial Tire (Cooper Trendsetter SE, P205/70R14), produced in Tupelo, Mississippi during the 15th week of 1998 pursuant to Green Tire Specification 3011. After institution of the lawsuit, Alvarez filed a multitude of discovery requests. Those requests demanded discovery of information and documents regarding all light truck tires manufactured by Cooper.........Cooper objected to the discovery based up on trade secret, burdensomeness, and that the plaintiff was entitled to discovery only for those tires which were substantially similar to the tire which was the subject of the lawsuit. Cooper maintained that those tires with the same or related GTS number, namely GTS 3011 and 3163, were the only tires substantially similar to the subject tire. Alvarez, however, claimed that the tires manufactured to other Green Tire Specifications were substantially similar in that all Cooper tires were manufactured using the same basic processes." 

There were four different discovery disputes, before two different judges in the Circuit Court.

The First Dispute Before Judge Brunson
The original trial judge, Judge Brunson, held a two day hearing in 2003. Although no live testimony was taken, the parties showed the judge a demonstration tire to explain tire construction and the manufacturing process. Both sides proffered expert affidavits and argued their respective implications........After this thorough hearing, and having taken additional time to review material submitted, Judge Brunson limited discovery 'to the subject tire and substantially similar tires which this Court defines as tires designed and manufactured according to Green Tire Specification 3011 and its Related Specification 3163.' Cooper then produced over 1,500 documents regarding those tires.
The Second Dispute Before Judge Brunson

In 2005, Alvarez filed a second motion to compel. He sought specific Cooper documents which had been produced in consolidated lawsuits in California, known as “the JCCP” (“Judicial Council Coordinated Proceeding”). This California proceeding permitted discovery to be coordinated between multiple lawsuits against Cooper, involving many different GT Specification tires, none of which included the tire specifications involved in this case. These documents were designated trade secret by the California judge. The parties obtained an order authorizing the Florida courts to inspect these documents for the purpose of this discovery dispute. Judge Brunson conducted a two-day hearing with extensive argument regarding the 139 documents.  Some of the documents were reviewed during the hearing. The judge then reviewed the remaining documents. She denied discovery, concluding that the documents were protected by trade secret and plaintiff had not shown a reasonable necessity to require their production. None of the documents included the 3011 or 3163 tire specification numbers.
First Hearing Before Judge Fine
When this case was assigned to Judge Fine in 2005, Alvarez filed another motion to compel production of the JCCP documents. This time, he pointed out that these documents had been produced in an Arizona case and again claimed that they should be produced in this case, as he claimed that the tires in the Arizona case were virtually identical. Those tires, however, had different GTS numbers. Judge Fine held a hearing and then reviewed the documents himself. He denied production.
Second Hearing Before Judge Fine
In 2007, Alvarez filed another motion, this time to vacate the original 2003 order limiting discovery to the two GTS numbers. He based his request on an order of Judge Kenneth Stern who had allowed additional production of documents in another Cooper Tire case pending in the Fifteenth Circuit in Palm Beach County. That case, however, did not involve GTS numbers 3011 or 3163. Judge Fine again held a hearing on the issue and again denied discovery, noting that he simply disagreed with Judge Stern’s ruling.
"On appeal, Alvarez argues that the trial court’s limitation of discovery to the 'subject tire and substantially similar tires,' defined as 'tires designed and manufactured according to Green Tire Specification 3011 and 3163,' was too narrow and deprived him of relevant discovery......In products liability actions, when a plaintiff seeks discovery regarding other products manufactured by the defendant, Florida courts have uniformly held that the other products must be 'substantially similar' to the subject product."

The Court held:
Whether another product is “substantially similar” is a question for the trial court based upon all of the proofs presented. In this case, the trial judge reviewed the affidavits from the experts, saw a demonstration of the tire at the hearing, heard argument of counsel, and reviewed many of the documents. In fact, two trial judges reviewed documents and held multiple hearings on the issue, and each came to the same conclusion—that discovery was properly limited to tires with the subject GTS numbers. Based upon the record before us, we cannot find that the court abused its discretion.
This court adheres to review of discovery orders under an abuse of discretion standard. Trial judges must be afforded leeway in making the relevance and burdensomeness decisions required in discovery disputes. Otherwise, the cost and burden of civil litigation will imperil its very existence.
[emphasis is mine].

Southern District of Florida Amends Local Rules (Effective Dec. 1, 2011)

The Local Rules for the Southern District of Florida have been amended, effective December 1, 2011. The new rules are below and followed by the order implementing the rule change which shows the changes in the rules.
Southern District of Florida Local Rules (December 1, 2011) Southern District of Florida Order Amending Local Rules 2011-100

Wednesday, November 23, 2011

Florida Supreme Court Issues Second Arbitration Opinion Of Day - Public Policy Challenge Decided By Court

In Gessa v. Manor Care of Florida, Inc. (SC09-768), the Florida Supreme Court held "that the district court below erred in the following respects: (i) in ruling that the limitation of liability provisions in this case, which place a $250,000 cap on noneconomic damages and waive punitive damages, are severable; (ii) in failing to rule that the court, not the arbitrator, must decide whether the arbitration agreement violates public policy; and (iii) in failing to rule that the above limitation of liability provisions violate public policy. As in Shotts, we also conclude that the United States Supreme Court's decision in Jackson is inapplicable here." The Shotts opinion was also released today and is discussed HERE. Gessa was previously discussed HERE.

In Gessa, Justice Perry wrote the majority opinion which was joined by Justice Pariente, Justice Lewis, Justice Quince and Justice Labarga. Justice Polston wrote a dissenting opinion which was joined by Chief Justice Canady.

The majority described the facts as follows: "Angela Gessa was admitted as a resident to Manor Care of Florida, Inc., a nursing home. Upon admission, her daughter, acting as her attorney-in-fact, signed admissions documents that included an arbitration agreement. During her stay, Gessa filed suit against Manor Care, alleging negligence, violation of resident's rights, and breach of fiduciary duty. Manor Care moved to compel arbitration. At the hearing on the motion, Gessa argued that the arbitration agreement was unconscionable and contrary to public policy due to the limitation of liability provisions in the agreement that capped noneconomic damages at $250,000 and waived punitive damages. The trial court, however, granted the motion to compel, ruling that, because any offensive clauses can be severed, the agreement was not unconscionable. The court declined to rule on the public policy issue, leaving it for the arbitrator. Gessa appealed, arguing that the limitation of liability provisions violated public policy and were not severable. The district court affirmed, agreeing with the trial court that the provisions were severable. Also, the district court did not rule on the public policy issue, leaving it for the arbitrator."


"As in Shotts, we conclude that the limitation of liability provisions in the present case, which place a $250,000 cap on noneconomic damages and waive punitive damages, are not severable from the remainder of the agreement."

Court or Arbitrator

"This issue has already been decided in Gessa's favor in Shotts. There, we held that the court, not the arbitrator, must decide whether an arbitration agreement violates public policy"

Limitation of Liability Provision

"As in Shotts, we conclude that the limitation of liability provisions in the present case violate public policy. As noted above, the nursing home statute provides for the award of 'punitive damages for gross or flagrant conduct or conscious indifference to the rights of the resident. Moreover, there was no cap on pain and suffering damages in the statute.' In contrast, the limitation of liability provisions in the present case eliminate punitive damages altogether and severely restrict damages for pain and suffering. These provisions directly frustrate the remedies created by the statute. The provisions eviscerate the remedial purpose of the statute, or, in the language of Shotts, they 'substantially diminish[] or circumvent[] these remedies.' Shotts, No. SC08-1774, slip op. at 31. Thus, these limitation of liability provisions, which place a $250,000 cap on noneconomic damages and waive punitive damages, violate the public policy of the State of Florida and are unenforceable."

Rent-A-Center v. Jackson

The Court's analysis was nearly identical to that in Shotts and the court concluded the Supreme Court's decision did not control the outcome of this case.

The Dissent

The dissent began: 
The majority errs by holding that the arbitration agreement is not enforceable because challenged limitations of remedies within the agreement violate public policy. Contrary to the majority's ruling, the challenged limitations may be severed from the arbitration provisions so that the arbitration should go forward as agreed by the parties. Moreover, the Florida Legislature, not this Court, should decide whether Florida's public policy has been violated. Because the Florida Legislature has addressed the enforceability of other limitations but not these, the Court should not void the contract. The Court should not be a policy maker.

"Severability of the contract is a matter of state law, therefore is controlled by Florida law....Severability has long been recognized in Florida‟s law of contracts and is determined by the intent of the parties. Who decides whether severance is permissible in this contract—the court or arbitrator? As earlier stated, the enforceability of the arbitration agreement, not the whole admissions agreement, is challenged and there is no delegation clause for the matter to be decided by arbitration. Accordingly, the court, rather than the arbitration panel, must decide severability here."

"Contrary to the majority's ruling, the issue of severability cannot be decided in Petitioner's favor. The majority mistakenly considers the $250,000 limitation on noneconomic damages and the preclusion of punitive damages in the contract as 'the financial heart of the agreement.'....Contrary to the majority's ruling, the limitations of noneconomic damages and elimination of punitive damages are divisible and do not eliminate the essence of the agreement to arbitrate the parties' claims."
Because of the severability of the challenged provisions, the matter should be arbitrated, and the arbitration panel should decide whether the challenged provisions may be enforced, if they ever arise. The speculative nature of these challenged limitations is an additional reason to enforce the arbitration provision. Petitioners may not be able to prove entitlement to noneconomic damages exceeding $250,000 or punitive damages so that the limitations would never be triggered. If that were the case, then the arbitration agreement, which otherwise should be enforced according to the facts of the case, would be improperly rendered unenforceable by the speculation that such limitations might be invoked.
Public Policy - Enforceability
Because the arbitration panel should decide whether the challenged provisions may be enforced as a matter of Florida law, as described earlier, the majority erred by reaching the issue and then again by erroneously deciding the challenged limitation provisions are unenforceable as void against public policy. The Florida Legislature, not this Court, should decide Florida's public policy. It is well-settled that contractual waivers are enforceable under Florida law for any type of rights......The public policy of the State of Florida was expressed by the vote of the people of Florida by enacting this 2004 Florida constitutional amendment to provide rights relating to contingency attorney's fees. In spite of the remedial provisions in favor of claimants, this Court held that these Florida constitutional rights could be waived by contract and that attorneys could recover more than permitted by this amendment. See In re Amendment to the Rules Regulating the Fla. Bar—Rule 4-1.5(f)(4)(B) of the Rules of Prof'l Conduct, 939 So. 2d 1032 (Fla. 2006) (adopting an amendment to the Rules Regulating the Florida Bar to permit a contractual waiver of section 26, imposing a specified legal fee structure for contingency fees). It is difficult to understand how, as a matter of public policy, the expressly declared rights of this constitutional provision may be waived, but the damages provided by statute may not be limited by contract....Unlike other statutory remedies, the Florida Legislature has not prohibited a waiver of the remedies provided in chapter 400, Florida Statutes (2004). The Florida Legislature has specifically prohibited waiver of rights under chapter 443, Florida Statues (2004), Florida's unemployment compensation law, and voided any agreement that attempts to waive those rights....
"Similarly, if waiver of the remedies of chapter 400 violates public policy, it should be the Florida Legislature's decision to specify that such waivers are prohibited and void, rather than the judiciary's." [emphasis is mine].

Florida Supreme Court Holds Court Not Arbitrator Determines Whether Agreement Violates Public Policy

In Shotts v. OP Winter Haven, Inc. (SC08-1774), the Florida Supreme Court held:
  1. "That the district court below erred in failing to rule that the court, not the arbitrator, must decide whether the arbitration agreement violates public policy.";
  2. "That the district court below erred in failing to rule that the limitations of remedies provisions in this case violate public policy, for they directly undermine specific statutory remedies created by the Legislature.";
  3. "That the district court below erred in ruling that the limitations of remedies provision that calls for imposition of the AHLA rules is severable."; and
  4. "Finally, we conclude that the United States Supreme Court's recent decision in Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (2010), is inapplicable here."
Justice Perry wrote the majority opinion which was joined by Justice Lewis, Justice Quince and Justice Labarga. Justice Pariente concurred in result. Justice Polston wrote a dissenting opinion which was joined by Chief Justice Canady. This is one of two arbitration opinions released today. The other, Gessa v. Manor Care of Florida, Inc. (SC09-768), is discussed HERE.

In this case, "Edward Clark was involved in an automobile accident in 1977, and he sustained brain damage. For many years, Clark's care was provided by his niece, Gayle Shotts, in her home. Eventually, Clark was admitted to OP Winter Haven, Inc., a nursing home in Florida. He remained there until his death in 2003, at which time Shotts, as his personal representative, filed a complaint against OP Winter Haven alleging negligence and breach of fiduciary duties. OP Winter Haven moved to compel arbitration based on an agreement Shotts had signed on Clark‟s admission. The agreement contained the following 'limitations of remedies' provisions: (i) the arbitration will be conducted in accordance with the American Health Lawyers Association (AHLA) rules; and (ii) the arbitrators will have no authority to award punitive damages. The agreement also stated that its terms were severable. At the hearing on the motion to compel, Shotts argued that the agreement was unenforceable because it was unconscionable and violated public policy. The trial court granted the motion, and the district court affirmed. Shotts sought discretionary review, which we granted."

The majority stated:
This Court in Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999), held that, in a hearing on a motion to compel arbitration, the inquiry follows the same three-step process regardless whether the inquiry is conducted under the FAC or the FAA: Under both federal statutory provisions and Florida's arbitration code, there are three elements for courts to consider in ruling on a motion to compel arbitration of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived. Seifert, 750 So. 2d at 636.....
With respect to which contract defenses—besides “fraud, duress or unconscionability”—constitute “generally applicable contract defenses” for purposes of section 2, we conclude that public policy clearly is such a defense, for if an arbitration agreement violates public policy, no valid agreement exists. “[T]he rights of access to courts and trial by jury may be contractually relinquished [via an arbitration agreement], subject to defenses to contract enforcement including voidness for violation of the law or public policy, unconscionability, or lack of consideration. . . . No valid agreement exists if the arbitration clause is unenforceable on public policy grounds.” 
[emphasis from the Court].

Public Policy Challenge - Court or Arbitrator

As to the issue framed above, the Court stated: "Although this Court has not confronted the specific issue of whether the court or the arbitrator must decide whether an arbitration agreement violates public policy, the Court in Seifert has ruled that it is for the court, not the arbitrator, to decide 'whether a valid written agreement to arbitrate exists.'”
...this Court in Seifert held that it was for the court, not the arbitrator, to determine “whether a valid written agreement to arbitrate exists,” Seifert, 750 So. 2d at 636 (emphasis added), and we later explained the meaning of the term “valid” in this context, with respect to arbitration and public policy: “No valid agreement exists if the arbitration clause is unenforceable on public policy grounds.” Global Travel, 908 So. 2d at 398. Thus, under Siefert and Global Travel, it is incumbent on the court, not the arbitrator, to determine whether an arbitration agreement violates public policy. This conclusion is consistent with the vast weight of authority in Florida, as discussed above.
[emphasis is mine].

Limitation of Remedies

On the issue of limitation of remedies, the court stated: "the arbitration agreement in the present case contains the following limitations of remedies provisions: (1) “[t]he arbitration shall be conducted in accordance with the American Health Lawyers Association (“AHLA”) Alternative Dispute Resolution Service Rules of Procedure for Arbitration”; and (2) “the arbitrators shall have no authority to award punitive damages.” The district court below did not decide whether these provisions violate public policy, but rather left that matter for the arbitrator to determine." The court concluded:
Based on the foregoing, we conclude that the limitations of remedies provisions in the present case violate public policy, for they directly undermine specific statutory remedies created by the Legislature. See §§ 400.022, 400.023, Fla. Stat. (2003)....In light of the recognized need for these remedies and the salutary purpose they serve, we conclude that any arbitration agreement that substantially diminishes or circumvents these remedies stands in violation of the public policy of the State of Florida and is unenforceable. In this respect, we find the rationale of the Fourth District Court of Appeal in Blankfeld and Romano cogent and compelling. Under the above standard of review, we hold that the district court below erred in failing to rule that the limitations of remedies provisions in the present case violate public policy.

"In this claim Shotts contends that the district court below erred in ruling that the limitations of remedies provisions in the present case are severable.The trial court below held that the provisions were not severable. The district court reversed. The district court held that, if the arbitrator were to conclude that these provisions violate public policy, they are severable. Shotts contends that the district court erred in so ruling—she contends that these limitations of remedies provisions violate public policy and are not severable. We agree." The court concluded: "Based on the foregoing, we conclude that the limitations of remedies provision in the present case that calls for the imposition of the AHLA rules is not severable from the remainder of the agreement. Although the arbitration agreement in this case contains a severability clause, the AHLA provision goes to the very essence of the agreement. If the provision were to be severed, the trial court would be forced to rewrite the agreement and to add an entirely new set of procedural rules and burdens and standards, a job that the trial court is not tasked to do."

Rent-A-Center v. Jackson

"Approximately two weeks after this Court heard oral argument in the present case, the United States Supreme Court issued its decision in Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (2010)....[and] held that, where there has been no specific challenge to the delegation provision, the arbitrator, not the court, must decide the issue."

The Florida Supreme Court concluded that: "In the present case, because the arbitration agreement contained no delegation provision, there was no such provision for Shotts to challenge. Instead, she challenged the arbitration agreement itself. This was the proper course of action under the section 2 template, for unlike the situation in Jackson, the entire arbitration agreement in the present case operated as the “written provision . . . to settle by arbitration a controversy,” in the section 2 lexicon."

The Dissent

The dissent began "Because the majority's opinion seriously violates the Federal Arbitration Act and its accompanying federal substantive law, I respectfully dissent....Once again, this Court erroneously applies Florida law to invalidate an arbitration agreement in violation of the Federal Arbitration Act. See Cardegna v. Buckeye Check Cashing, Inc., 894 So. 2d 860 (Fla. 2005) (applying Florida law to hold that Florida courts rather than an arbitrator should make determination), rev'd, Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 446 (2006) (rejecting “the Florida Supreme Court's conclusion that enforceability of the arbitration agreement should turn on „Florida public policy and contract law,‟ 894 So. 2d at 864”). As provided by the Federal Arbitration Act (FAA), the arbitration agreement should be enforced as agreed by the parties, not stricken at the whim of this Court." [emphasis is mine]. 

First DCA Certifies Question About Constitutional Guarantee To Adequate Education

In Haridopolos, et al v. Citizens for Strong Schools, Inc., et al (1D10-6285), a divided First District, sitting en banc, denied a petition for writ of prohibition. However, both the majority opinion and the dissent agreed that the following question should be certified to the Supreme Court of Florida as one of great public importance:
Chief Judge Benton wrote the majority opinion which was joined by Judge Davis, Judge Van Nortwick, Judge Padovano, Judge Lewis, Judge Clark, and Judge Marstiller. Judge Wolf filed an opinion specially concurring with the majority opinion. Judge Roberts wrote a dissenting opinion which was joined by Judge Hawkes, Judge Thomas, Judge Wetherell, Judge Rowe, Judge Ray, and Judge Swanson.

Majority Opinion

The majority opinion began:
After the trial judge denied their motion to dismiss respondents’ amended complaint for declaratory and supplemental relief, the President of the Florida Senate, the Speaker of the Florida House of Representatives, the Commissioner of Education, and the State Board of Education filed a petition for writ of prohibition, initiating original proceedings here in an effort to bring further proceedings in the circuit court to a halt. Because the present case lies at the intersection of well established rules governing writs of prohibition and significant, but unsettled, questions about Florida’s “paramount duty” to provide “for the education of all children residing within its borders,” Art. IX, § 1(a), Fla. Const., we deny the petition for writ of prohibition, but certify a question of great public importance to the Supreme Court of Florida.....
In the course of its 135 paragraphs, respondents’ amended complaint alleges a failure to make adequate provision “for a uniform, efficient, safe, secure, and high quality system of free public schools” by, e.g., providing insufficient funding for public education, shifting responsibility for educational funding to local governments, providing inadequate resources for teachers’ salaries in particular, and adopting a so-called accountability policy that is an obstacle to high quality. 
The amended complaint alleges that Florida’s public schools are not safe and secure, that graduation rates are too low, that student promotion and retention policies are ineffective, that results of achievement tests reveal various inadequacies, and much more. Petitioners moved to dismiss the amended complaint, relying on Coalition for Adequacy and Fairness in School Funding, Inc. v. Chiles, 680 So. 2d 400, 407 (Fla. 1996), for the proposition that the amended complaint raises only nonjusticiable “political” questions, see Baker v. Carr, 369 U.S. 186, 209 (1962), questionswhich the trial court—and, indeed, any court (according to the petitioners)—lacks jurisdiction to entertain. Rejecting petitioners’ argument that it lacked jurisdiction to decide any facet of any one of the respondents’ claims, the trial court denied the motion to dismiss.
Because “‘In this state, circuit courts are superior courts of general jurisdiction, and nothing is intended to be outside their jurisdiction except that which clearly and specially appears so to be.’”.....The petitioners’ apprehension at the prospect of burdensome discovery demands unduly discounts the protections they and all litigants will enjoy because any discovery that may occur will take place under the supervision of the able trial judge, if and as needed. More fundamentally, the petitioners’ asserted concerns about discovery do not speak to the only issue that is germane in prohibition proceedings: the nature and extent of the lower tribunal’s jurisdiction. A court of general jurisdiction, the circuit court has statutory authority to entertain claims for declaratory judgment." [emphasis is mine]. 

In this case, the majority denied the writ of prohibition because "Prohibition lies to redress an inferior tribunal’s usurpation of jurisdiction, but it does not lie to prevent mere error in the exercise of the inferior tribunal’s jurisdiction.....Prohibition is unavailable to divest a lower tribunal of jurisdiction to hear and determine its own jurisdiction, or to test the correctness of a jurisdictional determination that depends on fact finding the lower tribunal is charged with making.....The writ is narrow in scope, is to be employed with great caution, and, our supreme court has even said, is to be utilized only in 'emergencies.'” [emphasis is mine]. That being said, the majority concluded "There is no emergency here." There is no emergency, according to the majority, because "the trial court has been asked to construe the Florida Constitution, not the constitution of any other state. But analogous questions have arisen under the constitutions of other states, and the majority rule is that educational adequacy provisions in state constitutions are judicially enforceable."

Judge Wolf, Specially Concurring

Judge Wolf wrote an opinion specially concurring with the majority opinion that began:
This is a difficult case because it involves a clash of two extremely important precepts: the concept of separation of powers enumerated in article II, section 3 of the Florida Constitution, and the right of the people to have their will concerning the adequacy of the state’s education system, as expressed in an amendment to article IX, section 1 of the constitution, implemented....On the other hand, the Florida Constitution is a document of the people......The people’s will is expressed through the adoption of constitutional language. The difficult issue is when do the people have a right to enforce their will, as it is expressed in the constitution, through the court system.
Judge Wolf concluded: "In the instant case, the allegations of the complaint, taken as true, indicate a clear failure of the Legislature over a reasonable period of time to assure the fundamental values identified within the amendment were being met. While the remedy suggested by this opinion was not specifically requested by the respondents, they did ask for any other 'relief the court deems proper.' In addition, the complaint requested the adoption of a “remedial plan . . . which includes necessary studies to determine what resources and standards are necessary to provide a high quality education to Florida students.' A request for implementing legislation is necessarily contained within these requests for relief."

Dissenting Opinion

The dissent began: "In Coalition for Adequacy & Fairness in School Funding, Inc. v. Chiles, 680 So. 2d 400, 402 (Fla. 1996), the plaintiffs filed a complaint seeking declaratory relief challenging the funding of the state school system of K-12 education. They alleged that the funding and policies adopted by the legislature did not meet the requirements of article IX, section 1 of the Florida Constitution. They asked the trial court to declare that an adequate education was a fundamental right under the Constitution and that the state had failed to make adequate provision for a uniform system of free public schools as provided for in the Constitution. The trial court dismissed the complaint with prejudice finding that, to grant relief, it would have to usurp or intrude upon the appropriation power exclusively reserved to the legislature. The trial court also found that the complaint presented a non-justiciable political question. Id. On appeal, the Florida Supreme Court affirmed the trial court’s dismissal. Id. at 402, 408."

Later, the dissent stated:
Further, the respondents seek a declaration that would mandate a change in educational policy consistent with their policy views. In their amended complaint, they allege that the state’s current accountability policy is an obstacle to obtaining a high quality education. Education policy matters such as the state’s accountability policies involve thousands of interested persons, including parents, teachers, administrators, and locally elected officials. As in matters of appropriations, under our constitution’s strict separation of powers, only the legislature is properly equipped to balance the competing interests involved in education debates, in addition to other vitally important issues such as criminal justice, health care, economic and environmental regulation, and other matters. Thus, it is solely in the legislative branch that the constitutional values of an “efficient, safe, secure and high quality” school system can be constitutionally defined and implemented. In other words, this question is quintessentially political and thus not justiciable, and the writ of prohibition must issue as the trial court did not have jurisdiction to consider this question.....See generally, The Fla. Senate v. Fla. Public Employees Council 79, 784 So. 2d 404 (Fla. 2001). In Florida Senate, the court recognized that the judiciary has no power to encroach on the legislative process and stated that it is the “final product” of legislation that is subject to judicial review. Id. at 408. Here, however, the respondents seek a declaratory judgment to order the legislature to make policy and appropriation changes in futuro. Thus, while the respondents purport to challenge present appropriations and policies, their prayer for relief seeks to order the legislature to enact policies and increase appropriations, and such relief cannot be granted without interfering in internal legislative affairs, by necessity.

Foreclosure Judgment Reversed Due Issues With Assignment Of Mortgage

In Venture Holdings & Acquisitions Group, LLC v. A.I.M. Funding Group, LLC (4D10-832), Real Investments, LLC v. A.I.M. Funding Group, LLC (4D10-1159), and Real Investments, LLC v. A.I.M. Funding Group, LLC (4D10-1848), the Fourth District released THIS consolidated opinion and held "that because A.I.M. did not file the original promissory note or account for its absence before the court entered summary judgment, we must reverse the summary judgment orders in each of the cases. We further find that A.I.M. lacked standing to foreclose at the time it filed its complaints, but that some parties waived the defense of lack of standing."
An assignment of a promissory note or mortgage, or the right to enforce such, must pre-date the filing of a foreclosure action. Jeff-Ray Corp. v. Jacobson, 566 So. 2d 885, 886 (Fla. 4th DCA 1990). A party must have standing to file suit at its inception and may not remedy this defect by subsequently obtaining standing. Progressive Exp. Ins. Co. v. McGrath Cmty. Chiropractic, 913 So. 2d 1281 (Fla. 2d DCA 2005). “The assignee of a mortgage and note assigned as collateral security is the real party in interest, that he holds the legal title to the mortgage and note, and that he, not the assignor is the proper party to file a suit to foreclose the mortgage.” Laing v. Gainey Builders, Inc., 184 So. 2d 897 (Fla. 1st DCA 1966); see also A & B Discount Lumber & Supply, Inc. v. Mitchell, 799 So. 2d 301, 307-08 (Fla. 5th DCA 2001).
Here, before A.I.M. filed any of the foreclosure actions below, A.I.M. assigned the promissory note and mortgage to a third party as collateral for a loan. Thus, A.I.M. did not have standing to foreclose on any of the properties at the time it filed suit. However, “the entry of default precludes a party from contesting the existence of the plaintiff’s claim and liability thereon.” Fla. Bar v. Porter, 684 So. 2d 810, 813 n.4 (Fla. 1996) (citations omitted). Real, in Case No. 09-018086, was found to be in default. Venture in Case No. 09-19636, was found to be in default. Neither party may contest A.I.M.’s standing at the inception of the suit. See Glynn v. First Union Nat’l Bank, 912 So. 2d 357, 358 (Fla. 4th DCA 2005) (holding that a homeowner waived any claim that the bank lacked standing to foreclose where the homeowner never filed a motion or an answer in the trial court). But even a party in default does not admit that the plaintiff in a foreclosure action possesses the original promissory note....

Monday, November 21, 2011

Foreclosure Judgment Reversed Due To Challenge To Amount Owed

In Glarum v. LaSalle Bank National Association (4D10-1372), the Fourth District withdrew the opinion previously discussed HERE and issued a new opinion on rehearing. The revised opinion began "LaSalle moves for rehearing and clarification, or rehearing en banc. We deny the motions for rehearing, noting that LaSalle does not challenge this court’s reversal of summary judgment. We grant the motion for clarification. For ease of reference, we withdraw our previously issued opinion and substitute the following in its place.....We reverse the trial court’s entry of summary judgment in favor of LaSalle in part, as LaSalle’s summary judgment evidence was insufficient to establish the amount due to LaSalle under the note and mortgage. We likewise reverse the entry of sanctions against appellants’ counsel as improper. However, we find no merit in appellants’ contention that LaSalle lacked standing to seek foreclosure." [emphasis is mine].

Factually, the court stated:
Appellants admitted in their answer that they had not made payments according to the terms of the note, and as such, they were in default. Appellants, however, denied LaSalle’s allegations regarding the amount of the default. To establish the amount of appellants’ indebtedness for summary judgment, LaSalle filed the affidavit of Ralph Orsini, a “specialist” at the loan servicer, Home Loan Services, Inc. Orsini claimed in the affidavit that appellants were in default of their payment obligations and owed in excess of $340,000 on the note. In opposition to the motion for summary judgment, appellants filed Orsini’s deposition, wherein Orsini explained that he derived the $340,000 figure from his company’s computer system. However, Orsini did not know who entered the data into the computer, and he could not verify that the entries were correct at the time they were made. To calculate appellants’ payment history, Orsini relied in part on data retrieved from Litton Loan Servicing, a prior servicer of appellants’ loan.
The court continued that "We find that Orsini’s affidavit constituted inadmissible hearsay and, as such, could not support LaSalle’s motion for summary judgment. Pursuant to section 90.803(6)(a), Florida Statutes, documentary evidence may be admitted into evidence as business records if the proponent of the evidence demonstrates the following through a records custodian or other qualified person...."
Orsini did not know who, how, or when the data entries were made into Home Loan Services’s computer system. He could not state if the records were made in the regular course of business. For instance, Orsini testified:
Q. And who would make those entries as payments were made or as the account needed to be updated?
A. No idea. Q. Would it be someone at Home Loans? A. Again, no idea.
. . . .
Q. And is there a department that typically puts in each – any account activity on these databases at your company?
A. I’m not sure.
Q. You don’t know what department that would be?
A. No.
He relied on data supplied by Litton Loan Servicing, with whose procedures he was even less familiar. Orsini could state that the data in the affidavit was accurate only insofar as it replicated the numbers derived from the company’s computer system. Orsini had no knowledge of how his own company’s data was produced, and he was not competent to authenticate that data. Accordingly, Orsini’s statements could not be admitted under section 90.803(6)(a), and the affidavit of indebtedness constituted inadmissible hearsay.
On a separate issue,
The trial court also entered sanctions against appellants’ counsel for filing a “form affidavit” from an expert, Rita Lord, who opined on the ability of lay persons to distinguish between original and high-quality copies of promissory notes. Lord did not represent in the affidavit that she reviewed the papers at issue in this case....We note that LaSalle moved for sanctions under section 57.105, Florida Statutes. That statute permits a trial court to award a “reasonable attorney’s fee” to the “prevailing party” where the plaintiff’s claim was frivolous or to a party to compensate for the opposing party’s dilatory conduct. § 57.105(1)-(2), Fla. Stat. The trial court did not find that appellants’ claims were frivolous, and the trial court did not conclude that Lord’s affidavit was filed to cause unreasonable delay. Thus, section 57.105 could not serve as a basis for the award of attorney’s fees to LaSalle.....To the extent that the trial court may have been exercising its inherent authority to sanction parties or their attorneys, we also find error. “[A] trial court possesses the inherent authority to impose attorneys’ fees against an attorney for bad faith conduct.” Moakley v. Smallwood, 826 So. 2d 221, 226 (Fla. 2002).
The trial court did not make any specific findings of bad faith on the record, and the sanctions order must be reversed without prejudice.....“Upon remand, should the court be asked to reconsider the issue, any future hearing and order must comply with the requirements of Moakley.” Id

11th Circuit Certifies Insurance Indemnification Questions To Florida Supreme Court

In Intervest Construction of Jax, Inc. v. General Fidelity Insurance Company (10-12613), the Eleventh Circuit released a published opinion and certified two questions of Florida law to the Florida Supreme Court. The questions certified are below:
The dispute in the case "exists between the insureds, Intervest Construction of Jax, Inc. and ICI Homes, Inc. (collectively 'ICI'), and their insurer, General Fidelity Insurance Company, over whether General Fidelity breached its obligations under a commercial general liability insurance policy, number BAG0002112-00 (the 'General Fidelity Policy'), that ICI had with General Fidelity at the time of the accident. The coverage dispute arose out of a personal injury lawsuit filed against ICI by an injured homeowner." The court continued:
In 2000, ICI contracted with Custom Cutting, Inc. for Custom Cutting to provide trim work, including installation of attic stairs in a residence that ICI was in the process of building. The contract between Custom Cutting and ICI contained an indemnification provision requiring Custom Cutting to indemnify ICI for any damages resulting from Custom Cutting’s negligence. In April 2007, Katherine Ferrin, the owner of a residence constructed by ICI, fell while using the attic stairs installed by Custom Cutting. This fall resulted in serious injuries. Ferrin then filed suit against ICI for her injuries; she did not file suit against Custom Cutting. In turn, ICI sought indemnification from Custom Cutting under the terms of the subcontract. At the time of the accident, Custom Cutting maintained a commercial general liability insurance policy with North Pointe Insurance Company. ICI was not an additional insured under Custom Cutting’s policy with North Pointe. ICI, meanwhile, held the General Fidelity Policy at the time of the accident. Contained in the General Fidelity Policy was a Self-Insured Retention endorsement (the “SIR endorsement”) in the amount of $1 million.
ICI, Custom Cutting, North Pointe, General Fidelity, and Ferrin participated in a mediation of Ferrin’s suit. At the mediation, the parties agreed to a $1.6 million settlement of Ferrin’s claim. As part of the settlement, North Pointe agreed to pay ICI $1 million to settle ICI’s indemnification claim against Custom Cutting. ICI, in turn, would pay that $1 million to Ferrin. The instant dispute then arose as to whether ICI or General Fidelity was responsible for paying Ferrin the other $600,000.
[emphasis is mine]. "The parties disagree about which provisions of the General Fidelity Policy are relevant; however, the crux of the dispute focuses on the SIR endorsement and the transfer of rights clause. The SIR endorsement states that General Fidelity will provide coverage only after the insured has exhausted the $1 million SIR. The parties dispute the effect of the language in the SIR endorsement as applied to these facts. The transfer of rights clause, on the other hand, grants the insurer some subrogation rights, the extent of which are also disputed." 
To more narrowly frame this dispute, there can be no disagreement that had ICI borrowed the $1 million from a bank, deposited those funds, and then used those funds toward the settlement, that money would be credited toward the SIR. A more difficult question would be whether a separate insurance policy previously obtained by ICI to cover the retained amount could reduce the SIR. General Fidelity cites several cases to establish that money derived from additional insurance policies cannot be used to satisfy the SIR, and argues to this court that these decisions should be highly persuasive to this issue before us, just as they persuaded the district court. We are not completely convinced, however, that these cases are persuasive to the interpretation of the General Fidelity Policy before us today.
[emphasis is mine]. The second issue was described as follows: "Additionally, there is a related dispute between the parties as to whether the 'made whole doctrine' applies or whether the parties contracted around that doctrine given the language of the transfer of rights provision. Assuming that ICI could apply the funds it received to satisfy its SIR, the issue then becomes whether the transfer of rights provision in the General Fidelity Policy gave ICI or General Fidelity the priority to recover....The language of this provision on its face is clear—the insurer has subrogation rights. Given that both ICI and General Fidelity have some rights, the language is still completely silent as to who has priority to recover when the indemnity amount is insufficient to 'make whole' both parties."

Due to the uncertain state of the law, the Eleventh Circuit certified the two questions above to the Florida Supreme Court for resolution.

Voluntary Electronic Filing In The Eleventh Circuit Begins Jan. 1, 2012

The Eleventh Circuit has the Public Notice copied below on its website indicating that voluntary electronic filing will begin on January 1, 2012. According to the Pacer Service Center, "Beginning December 1 you may register for electronic filing with the 11th Circuit through the Appellate ECF application at"


The 11th Circuit U.S. Court of Appeals will begin VOLUNTARY electronic filing on January 1, 2012.
Pursuant to Section 4.4 of the ECF Guide, the electronic filing of a Certificate of Interested Persons (CIP) in ECF does not relieve an Attorney Filer of the requirement to also complete and keep updated the web-based CIP on the Court's web site. To complete the web-based CIP, counsel must obtain from the clerk an Eleventh Circuit password that is independent of PACER and ECF passwords.

Reference Information:

Friday, November 18, 2011

Florida Supreme Court Removes Judge; Discusses Free Speech & Campaign Contributions

In Inquiry Concerning A Judge, No. 09-01 Re: N. James Turner (09-1182), the Florida Supreme Court released an opinion and held "that Judge Turner is unfit to hold judicial office and that removal is the only appropriate sanction. For the reasons stated above, N. James Turner is hereby removed as a judge of Florida‘s Ninth Judicial Circuit." The opinion is interesting and details the facts leading to his removal. Articles can be read in the Orlando Sentinel (Florida Supreme Court permanently removes hugging judge); Miami Herald (State Supreme Court removes central Florida judge); and another in the Orlando Sentinel (Supremes remove Turner from the bench).

The court determined that the conduct was sufficient to warrant removal from the bench without even addressing all of the charges against the judge. The court stated "We need not reach the other specific charge—a charge regarding the solicitation of campaign contributions, which Judge Turner challenges on constitutional grounds." Chief Justice Canady, in an opinion concurring in result and joined by Justice Polston, would have reached the constitutional issue. Chief Justice Canady's opinion stated:
I would address the merits of Judge Turner‘s argument that Canon 7C(1)‘s prohibition of all personal solicitation of campaign contributions by judicial candidates violates the First Amendment of the United States Constitution, hold that prohibition unconstitutional, reject the Panel‘s finding of guilt regarding count 5, but nonetheless remove Judge Turner from office based on his other misconduct.
Chief Justice Canady continued:
Proper judicial restraint does dictate that when legislative or executive action is challenged on constitutional grounds, the courts should avoid the constitutional issue if the case can be decided on other grounds. This principle of judicial restraint has no proper application where the constitutional challenge is to a judicially adopted rule which trenches on constitutional rights. This Court was responsible for the adoption of Canon 7C(1) and is responsible for its continuing existence. To the extent that Canon 7C(1) infringes on speech rights protected by the First Amendment, this Court bears responsibility for the ongoing constitutional violation. When presented with a case which properly presents a constitutional challenge to a rule we have adopted, we should not decline to address it but should use the opportunity to ensure that we have exercised our rule-making power in a way that is consistent with constitutional requirements. If Canon 7C(1) violates the First Amendment, Florida state judges who wish to vindicate their First Amendment rights should not be required to seek relief in federal court or in state circuit court while the Florida Supreme Court remains silent.
After discussing, Carey v. Wolnitzek, 614 F.3d 189, 200 (6th Cir. 2010), Chief Justice Canady concluded:
I similarly conclude that Florida‘s interest in preserving the actual and apparent impartiality of Florida‘s judiciary is not significantly protected by Canon 7C(1). Canon 7C(1) completely chills a candidate‘s speech regarding contributions while providing only marginal protection against actual or perceived judicial bias. I therefore conclude that Canon 7C(1) encroaches on the free speech rights of judicial candidates in violation of the First Amendment of the United States Constitution.