Denial of Right to Depose Material Witness

Posted by David Adelstein on April 23, 2017
Depositions, Standard of Review / Comments Off on Denial of Right to Depose Material Witness

Depositions are an integral part of a dispute’s “truth seeking” discovery process. This is where parties can depose a witness under oath and explore key factual issues and parties’ positions, both from a liability and damages perspective.   Certain depositions can be introduced for purposes of substantive evidence at trial.   Other depositions can be used for purposes of impeachment in case a witness changes his/her position or story at trial. The significance of a deposition of a material witness in a civil case cannot be understated.

 

If an opposing party wants to limit or prevent a deposition from moving forward, that party will file a motion for protective order based on its good cause reasoning to restrict that deposition. The burden is on that party to support its good cause reasoning. If the court grants the motion for protective order, an appellate issue arises. “When a party has been denied the right to depose an alleged material witness without finding of good cause to preclude the deposition, the trial court departs from the essential requirements of law.”   Akhnoukh v. Benvenuto, 42 Fla.L.Weekly D882 (Fla. 2d DCA 2017). This gives the denied party the right to move for a writ of certiorari: “Certiorari jurisdiction generally exists to review the denial of a motion to compel the deposition of a material witness.” Id. (further explaining that a witness can be material even if relevant information can be obtained from a party).

 

For instance, in Akhnoukh, the plaintiffs obtained a protective order that prevented defendants from deposing plaintiff’s minor son (who was not a party). The son was the only passenger in the car at the time of the accident; he was eight year’s old at the time of the car accident and eleven year’s old at the time of the protective order. The defendants wanted to take the minor’s accident since he was sitting in the front passenger seat and an eyewitness to the accident and could shed value on the moments before the accident, the impact of the accident, whether the mother was wearing a seat belt, and the mother’s activities after the accident. Nonetheless, the trial court granted the protective order. The appellate court, however, quashed the motion for protective order:

 

The trial court did not require Benvenuto [plaintiff] to establish good cause for the protective order. She based her argument on her [minor] son’s age, lack of maturity, and experience but provided no evidence. She also did not provide any evidence of how the taking of the deposition may be detrimental to her son. The trial court made no findings of good cause and departed from the essential requirements of law in prohibiting the deposition.  Thus, we grant the petition and quash the trial court’s order granting the motion for protective order. The trial court in its discretion may take protective measures if necessary for the minor’s well-being, such as requiring that the deposition take place before the court or a magistrate.

Akhnoukh, supra.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Litigating the Amount of Contractual Attorney’s Fees

Posted by David Adelstein on April 14, 2017
Trial Perspectives / Comments Off on Litigating the Amount of Contractual Attorney’s Fees

Recovering attorney’s fees is a vital component of many claims. Parties that have a contractual or statutory basis to recover attorney’s fees want to know they will get a judgment for reasonable attorney’s fees if they prevail in the underlying action.   This oftentimes results in litigating the amount of fees.

There is authority that when parties seek fees pursuant to a statute, they are not entitled to fees associated with litigating the amount of fees. See State Farm Fire & Cas. Co. v. Palma, 629 So.2d 830 (Fla. 1993).

What about if a party seeks fees pursuant to a contract? Can the party recover attorney’s fees associated with litigating the amount of contractual fees?  The answer is it depends on the contractual attorney’s fees provision. The broader the scope the greater the chance a party will be entitled to attorney’s fees for litigating the amount of contractual fees owed to the prevailing party.

In Trial Practices, Inc. v. Hahn Loeser & Parks, LLP, 42 Fla.L.Weekly D848a (Fla. 2d DCA 2017), the Second District addressed whether a prevailing party is entitled to recover contractual attorney’s fees associated with litigating the amount of reasonable attorney’s fees.   The Court held yes based on the scope of the contractual attorney’s fees provision since contracting parties are free to contract on the scope and issue of attorney’s fees.

The provision at-issue read in material part:

…prevailing party in any action arising from or relating to this agreement will be entitled to recover all expenses of any nature incurred in any way in connection with the matter, whether incurred before litigation, during litigation, in an appeal, . . . or in connection with enforcement of a judgment, including, but not limited to, attorneys’ and experts’ fees.

The court held that this language in the attorney’s fees provision was broad enough to encompass fees associated with litigating the amount of fees.

Remember, contracting parties are fee to negotiate and contract on the issue of attorney’s fees.  Based on the provision, a prevailing party will be entitled to attorney’s fees for litigating the amount of fees.  This perhaps may make a party think twice regarding litigating the amount of contractual fees if the issue can get resolved without an evidentiary proceeding on the amount. 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Designating a Representative(s) to Serve as the Corporate Representative for Deposition

Posted by David Adelstein on April 07, 2017
Standard of Review, Trial Perspectives / Comments Off on Designating a Representative(s) to Serve as the Corporate Representative for Deposition

Corporate representative depositions play an important role in the discovery of any dispute involving a corporate party. A corporate representative deposition requires the corporate representative to speak on behalf of the company – they are not speaking based on their personal knowledge, but as to the company’s position regarding designated topics. In fact, the designated corporate representative does not have to have the most knowledge about a particular topic to be the representative. See Fla.R.Civ.P. 1.310(b)(6). See also Sybac Solar, GMBH v. 6th Street Solar Energy park of Gainesville, LLC, 42 Fla. L. Weekly D771a (Fla. 2d DCA 2017) (“The corporation is not required to designate ‘the witness with the most knowledge’ of the designated subject matter; indeed the witness is not required to have any personal knowledge whatsoever. And there may be a good reason why a corporation does not produce the most knowledgeable witness for deposition. For example, the person with the greatest knowledge of the subject matter ‘may not totally embrace the corporation’s position.’” Instead, the corporation is required to prepare the designated witness to testify regarding the designated subject matter.) (internal citations omitted).

Typically, the corporation can designate the representative(s) it wants to testify about the designated topics. With that said, the Second District in Sybac Solar explained that a deposing party that does not like the designated representative(s) can move the trial court to depose another corporate representative of its choice subject to the discretion of the trial court to issue a protective order.  

In this case, the deposing party moved to compel the opposing party to designate a certain individual as a corporate representative. The trial court granted the motion. The opposing party appealed –through a writ of certiorari since orders compelling a deposition can result in irreparable harm that cannot be undone on a final appeal. The Second District reversed in part because the individual had interests that were adverse to that of the company and would not be a proper corporate spokesperson; thus, the individual could not be a corporate representative for those topics.

I find this case frustrating. An entity should be entitled to designate those person(s) it wants to speak on the designated topics. The entity has a duty to prepare the person(s) to speak about the topics and the entity’s position because the person may not have, and is not required to have, the most knowledge about the topic. As long as the person is sufficiently prepared, the story should end.   If the person says “I don’t know” or “I don’t recall” during the entire deposition or gives wishy-washy answers (based on their lack of preparation), than that it is a different story.  But assuming the person is prepared, if the opposing party does not like the answers they are not precluded from taking depositions of other persons, or even the designated representatives, based on their personal knowledge. Otherwise, everyone will move to depose the person they want to serve as the corporate representative (which is probably the person with the most knowledge) which waters down this rule.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Punitive Damages for Business Torts

Posted by David Adelstein on March 31, 2017
Standard of Review, Trial Perspectives / Comments Off on Punitive Damages for Business Torts

Punitive damages can be warranted in business torts, although you are dealing with a much tougher threshold. Typically, the misconduct warranting the punitive damages needs to be intentional, i.e., the defendant had knowledge of the wrongfulness of the conduct and its high probability of damage and engaged in the misconduct anyway. See Fla. Stat. 768.72. This is because “‘the purpose of punitive damages is not to further compensate the plaintiff, but to punish the defendant for the wrongful conduct and to deter similar misconduct by it and other actors in the future.’”   See Bistline v. Rogers, 42 Fla. L. Weekly D706a (Fla. 4th DCA 2017) quoting Owens-Corning Fiberglass Corp. v. Ballard, 749 So.2d 483, 486 (Fla. 1999). Thus, an award of punitive damages for a business tort will typically need to require evidence showing fraud, malice, or deliberately outrageous conduct. See Bistline, supra.

A party, however, just cannot come right out of the gate and sue for punitive damages. Rather, a party needs to file a lawsuit and thereafter make an evidentiary proffer supporting the intentional misconduct that it believes gives rise to punitive damages for a business tort. What is plead is an allegation – it is not evidence—and will not support an evidentiary proffer. Again, there needs to be an evidentiary proffer with evidence reasonably showing the basis of the intentional misconduct to support an award for punitive damages.   See Bistline, supra (reversing award of punitive damages because there was not reasonable evidentiary proffer and because trial court based amendment to assert punitive damages on allegations in complaint, which is not evidence).

It is important that a party moving for punitive damages properly make that evidentiary proffer with the court to allow it to amend its complaint to include these damages. This is important in any punitive damages proffer, particularly in business tort disputes where the threshold is greater.  In this manner, the procedural requirements in Florida Statute s. 768.72 are crucial to comply with. Because an impermissible punitive damages award is difficult to remedy on appeal, a defendant will be entitled to certiorari review “to determine whether a trial court has complied with the procedural requirements of section 768.72…but not the sufficiency of the evidence.” See Bistline, supra, quoting Tilton v. Wrobel, 198 So.3d 909, 910 (Fla. DCA 2006).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Significant Relationship between Claim and Agreement to Arbitrate

Posted by David Adelstein on March 25, 2017
Trial Perspectives / Comments Off on Significant Relationship between Claim and Agreement to Arbitrate

Just because you have an agreement to arbitrate does not necessarily mean that every conceivable claim, including those unrelated to the agreement, are subject to arbitration.   For instance, if there are separate agreements—one with an arbitration clause and another without—does not mean that a claim related to the agreement without an arbitration clause will be subject to arbitration per the separate agreement.   There needs to be a “significant relationship” between the agreement containing the arbitration provision and the claim, as best explained as follows:

[T]he mere coincidence that the parties in dispute have a contractual relationship will ordinarily not be enough to mandate arbitration of the dispute.” Rather, “there must exist a significant relationship between the claim and the agreement containing the arbitration clause.” The Florida Supreme Court has expanded upon the definition of “significant relationship” as follows:

A “significant relationship” between a claim and an arbitration provision does not necessarily exist merely because the parties in the dispute have a contractual relationship. Rather, a significant relationship is described to exist between an arbitration provision and a claim if there is a “contractual nexus” between the claim and the contract. A contractual nexus exists between a claim and a contract if the claim presents circumstances in which the resolution of the disputed issue requires either reference to, or construction of, a portion of the contract. More specifically, a claim has a nexus to a contract and arises from the terms of the contract if it emanates from an inimitable duty created by the parties’ unique contractual relationship. In contrast, a claim does not have a nexus to a contract if it pertains to the breach of a duty otherwise imposed by law or in recognition of public policy, such as a duty under the general common law owed not only to the contracting parties but also to third parties and the public.

Timber Pines Plaza, LLC v. Zabrzyski, 42 Fla. L. Weekly D587a (Fla. 5th DCA 2017 (internal citations omitted).

An example of this can be found in the Time Pines Plaza case.   Here, an owner of a shopping outlet mall contracted to sell outparcels of land to a buyer.  The contract for sale contained an arbitration provision.   Thereafter, and prior to closing, the owner issued amended deed restrictions on one of the outparcels that required plans for future construction to be submitted to the owner for pre-approval. The buyer signed an acknowledgment of its receipt of the amended deed restrictions. (There was no arbitration clause in this deed restrictions.)

After closing, the owner sued the buyer arguing that the buyer commenced construction without obtaining plan approval as required by the amended deed restrictions.   The buyer counter-sued with a claim asserting that owner breached the contract for sale.   The owner moved to compel this counterclaim to arbitration based on the arbitration provision in that contract.

The issue was whether the owner’s original claim relating to a breach of the amended deed restrictions had a significant relationship to the contract for sale such that it should have been subject to arbitration. If it should have been, there was an argument that the owner waived the right to arbitrate by initiating the lawsuit.

The court found that no significant relationship existed between the contract for sale and the amended deed restrictions. There was no contractual nexus with the argument that the buyer commenced construction without seeking approval and the contract for sale. The contract for sale contained no obligation regarding commencing construction before obtaining prior approval; this issue was only contained in the amended deed restrictions. “Of course, the instant dispute would not exist had the parties not contracted for the purchase and sale of the North Outparcel, but ‘the mere fact that the dispute would not have arisen but for the existence of the contract and consequent relationship between the parties is insufficient by itself to transform a dispute into one ‘arising out of or relating to’ the agreement.’” Timber Pines Plaza, supra (citation omitted).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Ebook: Innovative Attorney’s Fee Arrangements – Providing Value To YOUR Business Objectives

Posted by David Adelstein on March 23, 2017
Trial Perspectives / Comments Off on Ebook: Innovative Attorney’s Fee Arrangements – Providing Value To YOUR Business Objectives

Are you interested in learning more about innovative attorney’s fee arrangements that provide value to your business and are outside of the boring, traditional hourly billing model.  If so, check out my ebook on Innovative Attorney’s Fee Arrangements:  Providing Value To YOUR Business Objectives.   You can also check out this ebook for Nook

 

 

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Enforcing Non-Compete Agreement with Injunctive Relief

Posted by David Adelstein on March 19, 2017
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There are numerous employers that want employees to sign a non-compete, non-disclosure, and non-solicitation agreement (collectively, the “non-compete agreement”).   For good reason, they don’t want to train employees to learn the business’ trade secrets and business practices (e.g., marking strategies, pricing, techniques, customer lists, etc.) only to then compete with the employer and solicit its clients.   The non-compete agreement will allow the employer to move for injunctive relief if a former employee violates the agreement to maintain the status quo and prevent the irreparable harm to the employer.

An example is as follows. In Allied Universal Corp. v. Given, 42 Fla. L. Weekly D631a (Fla. 3d DCA 2017), an employer that engaged in the manufacture and distribution of water treatment chemicals hired an employee. The company trained the employee regarding its practices and provided him with proprietary information such as production costs, customer lists, prospective customer lists, and marketing and pricing information. The employee’s non-compete agreement provided he would not compete with the employer for 18 months after leaving the company and within a 150-mile radius of any of the employer’s facilities. The employee left the company to work for a competitor and the employer moved for a preliminary injunction to enforce the non-compete agreement against the employee.

The trial court denied the employer’s motion for a preliminary injunction after an evidentiary hearing. The employer appealed. Because a trial court has discretion in granting or denying an injunction, its decision will not be overturned absent an abuse of discretion. In this case, the appellate court reversed the trial court finding the trial court abused its discretion in denying the granting of the preliminary injunction.

Non-compete agreements in Florida will be governed by Florida Statute s. 542.335, which is designed to construe restraints on trade and commerce in favor of providing reasonable protection to legitimate business interests. The statute includes a non-exhaustive list of legitimate business interests, such as, trade secrets, valuable confidential information, customer goodwill, substantial relationships with specific prospective or existing customers, specialized training, etc.

A party moving for a preliminary injunction must establish:

  • “the likelihood of irreparable harm and the unavailability of an adequate remedy at law;
  • a substantial likelihood of success on the merits;
  • that the threatened injury to the petitioner outweighs any possible harm to the respondent; and
  • that the granting of the temporary injunction will not disserve the public interest.”

Allied Universal Corp., supra.

Importantly, the “breach of a non-compete agreement that threatens a former employer’s goodwill and relationships with its customers, indicates that nothing short of an injunction would prevent this loss.” Allied Universal Corp., supra.

At the evidentiary hearing, the employer established legitimate business interests that it wanted to protect including the employer’s relationship with specific existing and prospective customers. The evidence showed that the employer trained the employee in its production techniques, marketing strategies, and pricing strategies.  Hence, the employer showed it would be irreparably harmed by the employee’s violation of the non-compete agreement—the employer’s business would be harmed if the employee were to use the employer’s customer information, relationships, and marketing strategy in his new employment. This meant that the burden shifted to the employee to establish the absence of an irreparable injury, which the employee was unable to do. For this reason, the appellate court reversed the trial court and remanded with directions for the trial court to grant the temporary injunction.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Strict Construction of Condominium and Homeowner Association’s Declarations

Posted by David Adelstein on March 13, 2017
Trial Perspectives / Comments Off on Strict Construction of Condominium and Homeowner Association’s Declarations

Do you live in a condominium or in a homeowner’s association? If so, then you know you are governed by a Declaration of Condominium (in the case of condominium unit ownership) or a Declaration of Covenants (in the case of home ownership).   Please review these in addition to any amendments that may modify any of the paragraphs or covenants. These are recorded in the official, public records where the condominium or homes are located.   So, you can obtain these documents online with ease.

 

Declarations are covenants running with the land operating as a contract between the governing association and owners.   See Woodside Village Condominium Ass’n, Inc. v. Jahren, 806 So.2d 452 (Fla. 2002). For this reason, Declarations are strictly construed, particularly when it comes to restrictive covenants therein, since a Declaration serves as the constitution of the condominium or community.   See, Pudit 2 Joint Venture, LLP v. Westwood Gardens Homeowners Ass’n, Inc., 169 So.3d 145, 147-48 (Fla. 4th DCA 2015); Lathan v. Hanover Woods Homeowners Ass’n, Inc., 547 So.2d 319, 321 (Fla. 5th DCA 1989).

 

Sure, there is a statutory scheme relating to condominiums (Florida Statutes Chapter 718) and homeowner’s associations (Florida Statutes Chapter 720). These statutory schemes are certainly important. But, it all generally starts with the governing documents (constitution) of your condominium or community – particularly, the Declaration and all recorded amendments.  Before you become crosswise with your association, spend the time to read the Declaration and any amendments.  

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Insurance Coverage Disputes where the Focus is the Policy Language

Posted by David Adelstein on March 06, 2017
Standard of Review / Comments Off on Insurance Coverage Disputes where the Focus is the Policy Language

Insurance coverage disputes are fairly common between an insured and his/her/its insurer.   These are important disputes to an insured, particularly when they have been damaged and their insurer refuses to defend them from a third-party claim or otherwise denies coverage. An insured never wants to be in this position—understandably so. On the other hand, an insurance policy is not designed to cover every single risk under the sun as there are exclusions identified in policies for risks or perils that are not covered.   This ultimately means an insured needs to have an appreciation of those risks or perils not covered (in case he/she/it needs to procure another policy or a policy endorsement to cover certain risks or perils).

There are insurance coverage disputes where the primary focus is on the policy language. The material facts are not in dispute; the dispute is centered on whether the undisputed facts create coverage under the applicable policy. In this instance, the insurance coverage dispute is an issue for the court and not for a jury.

A recent case explains the appellate standard of review in insurance coverage disputes, particularly when the overriding issue has nothing to do with the facts and everything to do with the policy language:

We review the instant appeal from a final judgment interpreting the provisions of an insurance policy to determine coverage de novo. Where the facts are not in dispute and the language of an insurance policy is unambiguous and not subject to conflicting inferences, “its construction is for the court, not the jury.” Moreover, even where an ambiguity exists, if the facts are not disputed “it is within the province of the trial judge not the jury to resolve the ambiguity as a matter of law.” Here, because neither a factual dispute nor an ambiguity was demonstrated to exist, the coverage issue raised below should have been decided by the court below and on the record below….

Zurich American Ins. Co. v. Cernogorsky, 42 Fla. L. Weekly D476b (Fla. 3d DCA 2017) (internal citations omitted).

If you have questions regarding an insurance policy or you are involved in an insurance coverage dispute, do the prudent thing, consult an attorney that understands insurance.  Insurance is challenging, even for experienced practitioners, so do not assume you can navigate the complicated insurance waters solo.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Don’t Neglect Mediation!

Posted by David Adelstein on February 26, 2017
Trial Perspectives / Comments Off on Don’t Neglect Mediation!

 

I believe in the process of mediation for all disputes, particularly complicated factual business disputes.   I use the word “process” because that is what mediation really is – a series of actions to achieve a particular end. Mediation can be a tiring process. A frustrating process. An informative process. A continuing process. A result oriented process. In certain instances, a futile process. Oftentimes, mediation is a mixture of all of the above. But, mediation allows parties to make a business decision based on their perception of risk — the risk of losing or the risk of a damages award (greater or lesser than expectations).   This business decision is important because a party, typically, never wants to bank on the resources and uncertainty that goes along with trial (and, then the appeal) without truly knowing where that case could have been resolved at during the course of a dispute.

 

The process of mediation should not be taken for granted. Preparation is important. I believe in learning the facts and developing the theme of the case and persuasively presenting this theme at mediation.   This may include demonstrative aids. A powerpoint. Handouts of key documents. A well-versed narrative. The participation of fact witnesses. The participation of experts. You name it — whatever best tells the story of the dispute.

 

I also want to hear the other side’s presentation of their theme because they may make good points that factor into a party’s business decision. Look, in my experience, there is no such thing as a slam dunk dispute. If it was truly a slam dunk dispute, parties could probably resolve the dispute without the assistance of counsel. As such, there are probably issues of contention that are worth considering, whether from a factual or legal perspective.

 

Once the presentations and themes are out there, there is strategy that goes into trying to get the case resolved. This strategy comes from the mediator and, of course, the parties. I prefer an aggressive mediator. What I mean by this is I prefer a mediator that is not afraid to be direct or assertive with a party. I know if a mediator is being direct with my client he/she is doing the same thing with the other party. I need a mediator that is going to be more than simply a message carrier. He/she needs to be able to get the parties to compromise from their positions and oftentimes the only way to do this is to be strategically direct and assertive. A good mediator finds a way to get cases resolved or puts the parties in the best position to make a business decision, even if that decision results in an impasse at mediation.  

The clip above from the movie Wedding Crashers is a great opening scene in a movie dealing with the mediation of a family law dispute.  Sure, this is an unorthodox mediation, but it was a hilarious strategy that allowed the parties to make a business decision.  

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

 

 

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