Wednesday, March 30, 2011

En Banc Fourth District Relating To Striking A Voluntary Dismissal, Question Certified

Update: The Fourth District granted a motion for clarification and released THIS opinion on March 30, 2011.  It appears the clarification indicates the attorneys referred to the Florida Bar were not the appellate attorneys.  The opinion was written by Judge Warner and Chief Judge Gross, Judge Stevenson, Judge Taylor, Judge May, Judge Damoorgian, Judge Ciklin, Judge Gerber, Judge Levine and Judge Conner concurred. Judge Hazouri was recused.  Judge Polen filed a dissenting opinion. The dissenting opinion was written by Judge Farmer, who has since retired from the Court.  Judge Polen filed the dissenting opinion as he agreed with what Judge Farmer had written.

The original opinion was discussed on February 2, 2011 in the post below:

In Pino v. Bank of New York Mellon (4D10-378), sitting en banc, the Fourth District released an opinion affirming the trial court's "denial of [the appellant's] motion under Florida Rule of Civil Procedure 1.540(b) to vacate a voluntary dismissal." The court stated:
BNY Mellon commenced an action to foreclose a mortgage against the defendant. The mortgage attached to the complaint specified another entity, Silver State Financial Systems, as lender and still another, Mortgage Electronic Registration Systems, as mortgagee. The complaint alleged that BNY Mellon owned and held the note and mortgage by assignment, but failed to attach a copy of any document of assignment. At the same time, it alleged the original promissory note itself had been “lost, destroyed or stolen.” The complaint was silent as to whether the note had ever been negotiated and transferred to BNY Mellon in the manner provided by law.
The defendant initially sought dismissal for failure to state a cause of action, arguing that in light of the claim of a lost instrument, the absence of an assignment of mortgage was a critical omission. BNY Mellon responded by amending the complaint only to attach a new unrecorded assignment, which happened to be dated just before the original pleading was filed.
In response to the amended complaint, the appellant/defendant moved for sanctions and the appellee/plaintiff dismissed the complaint.
Five months later, BNY Mellon refiled an identical action to foreclose the same mortgage. The new complaint no longer claimed the note was lost and attached a new assignment of mortgage dated after the voluntary dismissal. In the original, dismissed action, the defendant filed a motion under rule 1.540(b), seeking to strike the voluntary dismissal in the original action on the grounds of fraud o n the court and for a dismissal of the newly filed action as a consequent sanction, requesting an evidentiary hearing. The trial court denied the motion without an evidentiary hearing, essentially holding that, because the previous action had been voluntarily dismissed under rule 1.420, the court lacked jurisdiction and had no authority to consider any relief under rule 1.540(b).
The Fourth District stated:
We affirm the trial court’s refusal to strike the notice of voluntary dismissal. Neither rule 1.540(b) nor the common law exceptions to that rule allow a defendant to set aside the plaintiff’s notice of voluntary dismissal where the plaintiff has not obtained any affirmative relief before dismissal.
Here, we do not view it as an appropriate exercise of the inherent authority of the court to reopen a case voluntarily dismissed by the plaintiff simply to exercise that authority to dismiss it, albeit with prejudice. Only in those circumstances where the defendant has been seriously prejudiced, as noted in Romar International, should the court exercise its inherent authority to strike a notice of voluntary dismissal. The defendant in this case does not allege any prejudice to him as a result of the plaintiff’s voluntary dismissal of its first lawsuit. Indeed, he may have benefitted by forestalling the foreclosure.
The appropriate procedure is to follow Rule 1.420. Upon the voluntary dismissal, Pino would be entitled to his costs and possibly his attorney’s fees. See Fleet Servs. Corp. v. Reise, 857 So. 2d 273 (Fla. 2d DCA 2003). The court can require payment as a precondition to the second suit. See Fla. R. Civ. P. 1.420(d). Moreover, a referral of the appellee’s attorney for a violation of the Code of Professional Responsibility for filing the complaint with the alleged false affidavit is in order.
I wanted to add that appellate counsel for the appellee was not involved in the trial court and is not who the court is referring to the Florida Bar.

The Court also certified the question to the Florida Supreme Court as one of great public importance:
We conclude that this is a question of great public importance, as many, many mortgage foreclosures appear tainted with suspect documents. The defendant has requested a denial of the equitable right to foreclose the mortgage at all. If this is an available remedy as a sanction after a voluntary dismissal, it may dramatically affect the mortgage foreclosure crisis in this State. Accordingly we certify the following question to the Florida Supreme Court as of great public importance:
The opinion was written by Judge Warner and Chief Judge Gross, Judge Stevenson, Judge Taylor, Judge May, Judge Damoorgian, Judge Ciklin, Judge Gerber, and Judge Levine concurred. Judge Polen filed a dissenting opinion. The dissenting opinion was written by Judge Farmer, who has since retired from the Court. Judge Polen filed the dissenting opinion as he agreed with what Judge Farmer had written.

Order Granting Summary Judgment Is Not Appealable (Another One)

In Castillo v. Deutsche Bank National Trust Company (3D11-0232), the Third District dismissed an appeal based upon the lack of finality of the order for which the appellant sought review.  This is something numerous courts have discussed.  The court stated:
With regard to the order denying summary judgment, interlocutory appeals of non-final orders denying motions for summary judgment are not permitted under the rules of appellate procedure. See Fla. R. App. P. 9.130(a)(3); Taggart v. Morgan, 943 So. 2d 250 (Fla. 3d DCA 2006).
Additionally, with regard to the order granting summary judgment, the order appealed “is merely authorization for a final judgment. It does not constitute a final judgment, nor is it an order from which an interlocutory appeal could properly lie.” Shupack v. Allstate Ins. Co., 356 So. 2d 1298, 1299 (Fla. 3d DCA 1978).

Tuesday, March 22, 2011

Rule 1.540 Allows A Party To Set Aside It's Own Dismissal

In Wells Fargo Bank, NA v. Haecherl (4D09-4569), the Fourth District reversed the trial court's order concluding that it did not have jurisdiction to consider a motion to vacate notice of voluntary dismissal. The interesting thing about this case is that the appellant was seeking to vacate it's own voluntary dismissal. The court noted that Rule 1.540, which allows a party to seek relief from a dismissal, applies to any party that is impacted by the dismissal. Therefore: "Here, appellant was adversely impacted by the notice of voluntary dismissal, and was therefore entitled to seek relief pursuant to the rule."

Friday, March 11, 2011

Order Finding Personal Jurisdiction Over Subsidiary Reversed

In Reynolds American, Inc. v. Gero (3D10-2066), the Third District reversed the trial court's order denying a motion to dismiss for lack of personal jurisdiction. The court stated "Because we agree that there are insufficient jurisdictional facts to bring this action within the purview of Florida's long-arm statute, we reverse." The court reviewed the applicable test that is to be applied to a personal jurisdiction question as follows:
In Venetian Salami Co., the Florida Supreme Court set forth the procedure for determining whether personal jurisdiction over a foreign corporation is appropriate. This two-step inquiry requires a the trial court to first determine whether sufficient jurisdictional facts exist to bring the action within the ambit of Florida's long-arm statute (section 48.193), and then to determine whether the foreign corporation possesses sufficient “minimum contacts” with Florida to satisfy federal constitutional due process requirements. Venetian Salami Co., 554 So. 2d at 502.
Applying the test to this case, the court stated
In this case, Gero alleged specific jurisdiction over RAI and RGP on an agency theory, claiming that RJR, acting as RAI and RGP's agent, committed a tortious act in Florida, see § 48.193(1)(b), Fla. Stat. (2010), and breached a contract in Florida. See § 48.193(1)(g), Fla. Stat. (2010)......According to Gero, who concededly “never dealt” with RAI or RGP while in Florida or elsewhere, RAI and RGP are subject to personal jurisdiction in Miami-Dade County because RJR, RAI, and RGP are all agents of one another. More particularly, Gero claims that these entities are all agents of one another....
With regard to the agency claims, "An agency relationship exists where the following are demonstrated: “1) acknowledgment by the principal that the agent will act for it; 2) the agent's acceptance of the undertaking; and 3) control by the principal over the action of the agent....None of these elements is alleged or demonstrated to exist here.”

Ultimately, the court concluded "In short, we agree with RAI and RGP that insufficient jurisdictional facts exist to confer personal jurisdiction over them under Florida's long-arm statute. While this conclusion makes it unnecessary to address the constitutional prong of Venetian Salami Co., we nonetheless note that even if the undisputed facts fell within the ambit of section 48.193, RAI and RGP's conduct would still not be such that they should reasonably anticipate being haled into court in Florida."

Ex Parte Fact Finding By Judge Leads To Reversal

In Albert v. Rogers (4D09-4512), the Fourth District reversed "an order finding her in contempt and modifying the parties' visitation schedule with the children." What I found interesting is the Court's discussion about the trial court's independent fact finding mission. After a discussion of various issues and facts, the court stated:
When counsel for the mother pointed out that there appeared to have been an ex parte communication with the school, the judge explained: “I called the school to find out. … I did it to protect the children.” The mother's counsel then asked for the name of the person at the school whom the judge spoke to, but the judge replied that he “threw away the name,” explaining that the person was not the principal but was someone in the administration office.
The court addressed this communication as follows:
We first address the trial court's independent investigation of the facts of this matter, which served as the linchpin of the court's evaluation of the evidence. The judge's investigation constituted a fundamental denial of due process.

With limited exceptions, “[a] judge shall not initiate, permit, or consider ex parte communications, or consider other communications made to the judge outside the presence of the parties concerning a pending or impending proceeding ….” Fla. Code Jud. Conduct, Canon 3B(7). The commentary to this canon states, “A judge must not independently investigate facts in a case and must consider only the evidence presented.” As the Supreme Court of South Dakota has explained, “A judge simply cannot be both a judge and [an attorney] searching out facts favorable to [a party] without abandoning his or her judicial neutrality.” State v. McCrary, 676 N.W.2d 116, 125 (S.D. 2004). These principles were not followed in this case.

“[E]very litigant is entitled to nothing less than the cold neutrality of an impartial judge.” State ex rel. Davis v. Parks, 141 Fla. 516, 519-20, 194 So. 613, 615 (1939). Our supreme court has adhered to the principle that the courthouse is “temple of justice” where all litigants “may enter its portal with the assurance that they may controvert their differences in calm and dispassionate environment before an impartial judge and have their rights adjudicated in a fair and just manner.” Williams v. State, 143 So. 2d 484, 488 (Fla. 1962). That neutrality is destroyed when the judge himself becomes part of the fact-gathering process.

A trial judge's decision must be overturned when “the appellate court cannot determine if the trial judge's actions were harmless because the trial court's order was based on communications outside the record.” Wilson v. Armstrong, 686 So. 2d 647, 648-49 (Fla. 1st DCA 1996). We have no difficulty in this case finding that this error was harmful to the proceedings. The trial judge specifically stated that he relied upon his independent communication with the school in determining the mother's credibility. By initiating communication with the children's school administration and independently investigating the facts, the trial judge abandoned his role as a neutral arbiter of the dispute. The independent investigation served to deny the mother due process. We reverse and remand.

Fifth District Rejects Homeowners Association's Attempt To Retroactively Apply § 720.3085

In Ecoventure WGV, Ltd. v. Saint Johns (5D10-542), the Fifth District addressed "whether section 720.3085, Florida Statutes (2007), may be applied to impose joint and several liability on it for the unpaid homeowner's association assessments incurred by its mortgagor."

After Ecoventure foreclosed on a mortgage, the association sought to impose back assessment incurred by the prior owner on Ecoventure.
The trial court rejected Ecoventure's argument that imposing liability was a retroactive application of the statute because liability only attached for unpaid assessments that were due at the time title was transferred and Ecoventure obtained title after the statute's effective date. The trial court also found that applying the statute did not impair Ecoventure's rights under its mortgage with DMHB because the statute permitted it to seek recovery from DMHB of any amounts it paid.
The Fifth District addressed the contract impairment issue and stated:
Of the arguments raised by Ecoventure, the one we find dispositive is whether applying section 720.3085 impaired its contract rights. The trial court concluded the statute could be applied because it did not impair Ecoventure's rights under its mortgage with DMHB. This, however, is not the appropriate contract on which to focus....
When Ecoventure extended its mortgage to DMHB in 2001, its rights under the Declaration vested. Imposing section 720.3085, which was enacted after the mortgage was extended, completely alters Ecoventure's vested rights by making it jointly and severally liable with the "previous parcel owner for all unpaid assessments that came due up to the time of transfer of title." § 720.3085(2). The court in Coral Lakes Community Association, Inc. v. Busey Bank, N.A., 30 So. 3d 579, 584 (Fla. 2d DCA 2010), recently addressed the very issue raised in this appeal and concluded the enactment of "section 720.3085 cannot disturb that prior, established contractual relationship." We likewise agree that imposing the statute on Ecoventure "would operate to severely, permanently, and immediately change the parties' economic relationship . . . a circumstance not supportable under the law.

Appeal Dismissed, In Part, For Exceeding Word Limit In Brief

As reported by the ABA Journal, in THIS opinion, the Seventh Circuit summarily affirmed the trial Court's judgment and wrote simply to address the fact that the appellant's initial brief exceeded the 14,000 word limit by 4,000 words. This was done notwithstanding the fact that the appellant included a certificate in the initial brief stating the brief was less than 14,000 words. While the trial court's judgment was summarily affirmed on the merits, the court noted it could have dismissed based on the word count violation (and based upon the certification).

Thursday, March 10, 2011

Order Allowing Deposition Of Insurance Company CEO Quashed

In General Star Indem. Co. v. Atlantic Hospitality of Florida, LLC, 3D10-3109, 2011 WL 798909 (Fla. 3d DCA March 9, 2011), the Third District granted a petition for certiorari and quashed the trial court's order compelling the deposition of executives of the petitioner. The court stated:
Simply stated, Atlantic Hospitality obtained orders compelling two senior officers1 of General Star to appear for deposition in a windstorm insurance case. General Star filed an affidavit establishing that these senior officers had no role in the investigation or adjustment of Atlantic Hospitality's claims.... General Star has shown that its president is a manager, not an adjuster or other employee with personal knowledge of the factual disputes involved in the lawsuit.
The court noted:
The job of the president of the company is to manage the company, not to fly around the United States participating in depositions about policy-related claim disputes of which the president has no personal knowledge...If all claimants demand and obtain the same right, the chief executive officer manages his or her deposition schedule, not the company.
(emphasis mine).

The court concluded: "Discovery is intended to be part of the just, speedy, and inexpensive determination of disputes—not a device to get greater attention at an adversary's headquarters."

Thursday, March 3, 2011

Dismissal For Lack Of Personal Jurisdiction Required When Complaint Fails To Allege Jurisdiction

In Henderson v. Elias (4D10-458 & 4D10-1135), the Fourth District reversed the trial court's order denying a motion to dismiss for lack of personal jurisdiction.  The appellants filed a motion in the trial court seeking to dismiss for lack of personal jurisdiction and, among other things, to dismiss for inconvenient forum.  Both the jurisdictional issue and the forum issue were appealed but only the jurisdictional issue warranted reversal.  

The original complaint [petition] included the bare jurisdictional allegation that "the court possessed  jurisdiction over Stardale because of the court’s 'inherent jurisdiction to monitor the administration of the [e]state'.” The appellants filed a motion to dismiss which resulted in the appellee's filing an amended petition.  
In the amended petition, the personal representative alleged that the probate court had jurisdiction over Stardale pursuant to the court’s “inherent jurisdiction to monitor the administration of an   estate, including the authority to issue injunctions freezing assets claimed to belong to a decedent’s estate.” In addition, the personal  representative alleged  that  Stardale was “owned 50% by the  [e]state and 50% by Henderson.” Stardale filed a  motion to dismiss, claiming insufficient service of process.
Henderson filed another motion to dismiss the amended petition on the grounds that Stardale was an  indispensible party to any injunctive relief  the court might grant.  In the meantime, the estate personally served Stardale’s registered agent....Henderson’s counsel, who had also been Stardale’s counsel at the prior hearing, advised the probate court that he was appearing on   behalf of Stardale on a limited  basis to contest jurisdiction. The estate argued that the court had personal jurisdiction over Stardale because Stardale’s primary place of  business was in Palm  Beach County. Additionally, Stardale borrowed money from Elias and from Lydian Bank, and those obligations arose  in  Palm  Beach County. Payment on these loans was also to be made in Palm Beach County....Stardale responded by arguing that, since it was a foreign corporation, the estate was required to plead jurisdictional allegations in its amended petition which were sufficient to establish personal jurisdiction over Stardale. Stardale went on to argue that the jurisdiction allegations in the amended petition were insufficient to show that Stardale’s conduct fell within the scope of Florida’s long-arm statute, section 48.193(1), Florida Statutes (2009), or to show that Stardale had sufficient  minimum contacts with Florida to satisfy constitutional due process requirements.   
The court then discussed the two-part test that is used when a non-resident defendant challenges a court's personal jurisdiction over it. “‘First, it must be determined that the  complaint alleges sufficient jurisdictional facts to bring the action within the ambit’of  Florida’s long-arm statute,  section  48.193.”...“If so, ‘the next  inquiry is whether sufficient  “minimum contacts” are demonstrated to satisfy due process requirements.’”

Initially, it is the plaintiff's burden to plead sufficient allegations to establish personal jurisdiction over a non-resident defendant "by pleading the basis for service in the language of the statute without pleading the supporting facts."  In response, the defendant can file a motion to dismiss which, by itself, "does nothing more than raise the legal sufficiency of the pleadings." To contest the actual allegations, the defendant "must file  affidavits in support of his position."..."The burden is then placed upon the plaintiff to prove by affidavit the basis upon which jurisdiction may be obtained."

In this case, the appellant did not file affidavits in support of his position and, therefore, only challenged the legal sufficiency of the pleadings.  Therefore, the court "need only address the first prong."  However, in this case, the plaintiff had failed to satisfy the first prong.  The plaintiff/appellee:
made no allegations of conduct by Stardale which would subject the corporation to the jurisdiction of a Florida court under section 48.193(1)....The petition contains no allegations that Stardale is Henderson’s alter ego....Likewise, no allegations of a principal-agent relationship were found in the petition....Because the allegations in the petition are insufficient, the trial court should have dismissed the amended petition as to Stardale without prejudice.