A Party may Not Expand the Scope of Judicial Review of an Arbitration Clause

Posted by David Adelstein on October 14, 2018
Trial Perspectives / Comments Off on A Party may Not Expand the Scope of Judicial Review of an Arbitration Clause

Arbitration is a creature of contract.  This means if you are going to arbitrate a dispute, as opposed to litigating a dispute, there must be an agreement to arbitrate.  However, whether a dispute should be arbitrated pursuant to the terms of the contract is an area that has been heavily litigated for a couple of reasons: 1) a party does not want to arbitrate the dispute and, therefore, files a lawsuit versus a demand for arbitration and 2) an opposing party that has been sued wants to enforce an arbitration provision in a contract.  As a result, an order granting or denying arbitration is an appealable non-final order

In a recent construction dispute between a general contractor and its millwork subcontractor, National Millwork, Inc. v. ANF Group, Inc., 43 Fla.L.Weekly D2207a (Fla. 4th DCA 2018), the subcontractor filed a lawsuit against the general contractor and the general contractor’s payment bond.  The general contractor moved to stay the litigation and compel arbitration pursuant to the arbitration provision in the subcontract.  The subcontractor argued that the arbitration provision was unenforceable, and, therefore, void, because it expanded the scope of judicial review after an arbitrator renders an arbitration award contrary to the Revised Florida Arbitration Code in Florida Statutes Chapter 682 (and, specifically, Florida Statute s. 682.014). 

The arbitration clause in the subcontract empowered the court to address on judicial review any failure by the arbitrator to properly apply the law and if the court or arbitrator failed to properly apply the law then this was subject to appellate review. 

This clause was creating an appellate basis to challenge an arbitration award based on a party’s position that the arbitrator did not correctly apply the law.  However, challenging an arbitrator’s award is very limited to discrete statutory circumstances and a party’s position that the arbitrator did not correctly apply the law is not one of them.   For this reason, the millwork subcontractor claimed the arbitration provision is void against public policy because it expanded the statutory circumstances to challenge an arbitration award set forth in the Revised Florida Arbitration Code.  The appellate court agreed: “A party may not expand the scope of judicial review of an arbitration agreement.”  National Millwork Inc., supra

The contract had a severability clause, an important clause in contracts.  Based on the severability clause, the appellate court remanded the issue back to the trial court to determine whether the unenforceable language in the arbitration clause that expanded judicial review of an arbitrator’s award could be severed from the clause such that the parties are still required to arbitrate without the expanded judicial review.   In other words, the appellate court wanted the trial court to determine whether severing the unenforceable language would still retain the essence of the arbitration clause or whether the entire clause was unenforceable because the offending language was integral to the agreement to arbitrate.  See National Millwork, Inc. supra, citing Obolensky v. Chatsworth at Wellington Green, LLC, 240 So.3d 6 (Fla. 4th DCA 2018).

It would seem that the offending language expanding the scope of judicial review of an arbitration award could be, and should be, severed.  This is the value and point of a severability clause in a contract.  It is uncertain why the appellate court did not make this ruling instead of remanding the matter back to the trial court which could lead to a further appeal.  Severing the offensive language still requires the parties to arbitrate, which is the basis of the arbitration clause, but without the appellate recourse / judicial review of a party challenging the arbitrator’s award based on an incorrect application of law. 

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.

Tags: , , , , ,

Spoliation of Evidence Claim Against Third-Party

Posted by David Adelstein on October 06, 2018
Uncategorized / Comments Off on Spoliation of Evidence Claim Against Third-Party

 

What is a spoliation of evidence claim?  Let’s find out…

The recent decision in Amerisure Insurance Company v. Rodriguez, 43 Fla.L.Weekly D2225b  (Fla. 3d DCA 2018) involved a case where an employee was injured.  While he was collecting worker’s compensation benefits, he sued the the party responsible for his injuries in a premise liability (negligence) claim.  He learned that his employer and its worker’s compensation insurer lost a copy of a videotape of his accident.  He claimed the video would help prove his premise liability claim.  For this reason, he also sued the insurer and his employer for spoliation of evidence—that these third-parties negligently destroyed evidence impacting his ability to prove his premise liability claim.  The trial court ordered this trial to occur at the same time as his premise liability trial.  A petition for writ of certiorari was taken.  

 

Distinction between First-Party and Third-Party Spoliation Claim

 

The appellate court first distinguished a first-party spoliation claim with a third-party spoliation claim, with the underlying case being the latter since it involved the plaintiff suing a third-party for spoiling evidence applicable to his premise liability claim:

“First-party spoliation claims are claims in which the defendant who allegedly lost, misplaced, or destroyed the evidence was also a tortfeasor in causing the plaintiff’s injuries or damages.”  In contrast, third-party spoliation claims “occur when a person or an entity, though not a party to the underlying action causing the plaintiff’s injuries or damages, lost, misplaced, or destroyed evidence critical to that action.” . The Florida Supreme Court has held that no independent cause of action for spoliation will lie against a first-party tortfeasor.  Instead, spoliation in that context should be addressed by the trial court imposing sanctions and presumptions.  Here, we are dealing with a classic third-party spoliation claim.

Amerisure Insurance Co., supra (internal citations omitted).

 

Timing of Third-Party Spoliation Claim

 

When it comes to third-party spoliation claims, the appellate court held it was premature for the spoliation claim to continue while the underlying premise liability (negligence claim) had not been resolved.  Hence, the third-party spoliation claim should be dismissed or abated / stayed until the underlying claim is resolved.  Notably, however, the appellate court refrained from deciding whether this applies in the products liability context based on older, questionable legal authority.

 

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.

Tags: , , ,

Appealing Correct Measure of Damages

Posted by David Adelstein on September 29, 2018
Appeal, Evidence / Comments Off on Appealing Correct Measure of Damages

In an earlier article, I wrote how economic damages MUST be supported by substantial competent evidence. 

In a recent case, Levy v. Ben-Shmuel, 43 Fla.L.Weekly D2229a (Fla. 3d DCA 2018), a plaintiff, after a bench trial, recovered a judgment against a defendant that included money damages associated with a claim for conversion.  During trial, and after the plaintiff’s case-in-chief, the defendant moved for an involuntary dismissal arguing the plaintiff failed to meet its burden in establishing the correct measure of damages at trial.  On appeal, the plaintiff ultimately conceded that he did not establish the correct measure of damages.  The issue was whether the plaintiff should be entitled to a new trial.  The Third District held NO!  The plaintiff is NOT entitled to a new trial on damages:

We also write to clarify the law within this [Third] district, and hold, as a general rule, that where this court determines, on appeal from a properly preserved claim, that a party failed to meet its burden of establishing the correct measure of damages at trial, that party is not entitled on remand to a new trial on damages, unless that party’s failure to meet its burden was the result of judicial error.

Levy, supra (“The generally prevailing rule is that a party will not be permitted a new trial on remand to remedy its own failure to present sufficient evidence to support its claim.”).

It is worth noting that in a bench trial, “the sufficiency of the evidence to support the judgment may be raised on appeal whether or not the party raising the question [objection] has made any objection thereto in the trial court or made a motion for rehearing, for new trial, or to alter or amend the judgment.”  Fla.R.Civ.P. 1.530(e).   Thus, in a bench trial, a party can challenge the sufficiency of the evidence for the first time on appeal.  In Levy, the defendant had actually moved for an involuntary dismissal after the plaintiff’s case-in-chief, but had he not done so, the objection to the sufficiency of evidence would still have been properly preserved for appeal.  

A jury trial, however, is different.  In a jury trial, “where a defendant fails to timely move for a directed verdict [as the sufficiency of evidence], and raises this issue for the first time in a motion for new trial, the proper remedy upon reversal and remand is a new trial.”  Levy, supra, n. 2.  Hence, in a jury trial, if a defendant does timely move for a directed verdict on such an issue, then the proper remedy is to enter judgment in favor of the defendant as the plaintiff is not entitled to a new trial. Id.  But, if the defendant first raises such an issue for the first time in a motion for new trial, then the proper remedy would be a new trial.

 

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.

Tags: , , , , , , ,

Economic Damages Must be Based on Competent Substantial Evidence

Posted by David Adelstein on September 22, 2018
Trial Perspectives / Comments Off on Economic Damages Must be Based on Competent Substantial Evidence

Economic damages must be supported by substantial competent evidence.  Stated differently, economic damages cannot be speculative and the amount of the damages must be quantifiable.  Putting on speculative, unquantifiable damages at trial can be fatal to a claim because damages should be the most important part of a claim.  If damages cannot be proven, there is no claim, so making sure damages can be supported with competent substantial evidence is beyond important.

The recent decision of Alvarez v. All Star Boxing, Inc., 43 Fla.L.Weekly D2102a (Fla. 3d DCA 2018) establishes what can happen if a party puts on speculative damages.  This case involved the famous professional boxer Canelo Alvarez.  He was sued by a former promoter and a jury found he was liable in unjust enrichment to the promoter to the tune of $8.5 Million.  Unjust enrichment damages typically focus on the reasonable value of the labor or services performed or the reasonable value of such labor or services to the party that was unjustly enriched.   Alvarez, supra.  In this case, however, the promoter put on a forensic accountant to support damages associated with a percentage of Canelo Alvarez’s earnings during a certain period—a type of lost profits methodology.  The appellate court avoided addressing the issue of whether lost profits can form unjust enrichment damages, and instead, focused on the fact that the methodology utilized by the promoter to calculate lost profits was wholly speculative. The methodology and damages did not rest on a reasonable basis but were grounded in a lot of guesswork.  As a result, the $8.5 Million jury verdict could not stand.  The appellate court remanded back to the trial court to reconsider a motion of remittitur–a motion to reduce the damages–to reduce the damages based on evidence at trial that supported the reasonable value of the promoter’s expenses and services and, if not, to enter judgment in favor of the defense. 

 

 

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.

Tags: , , , ,

Quick Note: Competent Substantial Evidence to Support Mitigation of Damages

Posted by David Adelstein on September 15, 2018
Appeal, Burden of Proof / Comments Off on Quick Note: Competent Substantial Evidence to Support Mitigation of Damages

I recently discussed the defense of mitigation of damages as it applies to contract cases.  An issue dealt with whether an owner failed to mitigate his damages after his contractor walked off the job and breached the construction contract.  In the case referenced in the article, the trial court did not award the owner certain damages at trial finding that the owner should have mitigated his damages.  The owner appealed this issue which was reversed on appeal.  The reason it was reversed is because the trial court’s finding that the owner failed to mitigate his damages is reviewed on appeal for competent substantial evidence.  If competent, substantial evidence supports the trial court’s findings, the ruling would not be disturbed on appeal. At trial, however, there was NO competent substantial evidence presented by the contractor that the owner failed to mitigate his damages. Forbes v. Prime General Contractors, Inc., 43 Fla.L.Weekly D2094a (Fla. 2d DCA 2018) (“Here, there is no competent substantial evidence that the Forbeses [owner] could have taken any measure without undue effort or expense to avoid [mitigate] the damages they sought.”).

 

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.

Tags: , ,

You Can’t Sue Someone for Unjust Enrichment when there is a Contract

Posted by David Adelstein on September 08, 2018
Trial Perspectives / Comments Off on You Can’t Sue Someone for Unjust Enrichment when there is a Contract

You cannot sue someone for unjust enrichment (or quantum meruit) if there is a contract between the parties.  You can sue them for breach of contract; but you cannot try to circumvent the parameters of the contract by suing them for unjust enrichment (an equitable quasi-contract theory of liability).  

For example, in Sterling Breeze Owners’ Association, Inc. v. New Sterling Resorts, LLC, 43 Fla.L.Weekly D2040c (Fla. 1st DCA 2018), a condominium association sued the developer for, among other claims, unjust enrichment.  The claim stemmed from the fact that the developer (in developing the condominium) reserved in the condominium documents ground floor units for its own commercial use.  The developer was required to maintain the interior of the units and pay for expenses including utilities relating to the units. The association claimed the developer did not pay and the association sued the developer under a theory of unjust enrichment for the collection of those expenses. However, the developer was already responsible for paying the expenses through the condominium documents.  Thus, the appellate court held the association had NO unjust enrichment claim: “[T]he agreement [in the condominium documents] specifically addresses the expenses for unpaid services and utilities sought in the Association’s lawsuit. Because a contract [i.e., the condominium documents] covers this matter, we reverse and remand the judgment on Count III and direct that judgment be entered for New Sterling Resorts [the developer] on this quasi-contractual claim.” Sterling Breeze Owners’ Association, Inc., supra.  The association could have sued on the contract, but it could not circumvent the contract by suing on an unjust enrichment theory!

 

 

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.

Tags: , ,

Premise Liability Claims and Duties of Owners to Invitees

Posted by David Adelstein on September 01, 2018
Trial Perspectives / Comments Off on Premise Liability Claims and Duties of Owners to Invitees

Owners of real property are oftentimes concerned about the prospect of premise liability claims when people are invited onto their property.  What happens if an invitee, such as a business invitee, gets hurt on the owner’s premises? What duty, in particular, does the owner of the real property owe to invitees? 

The owner or occupier of real property owes two duties to business invitees, namely [1] a duty to “use ordinary care in keeping the premises in a reasonably safe condition” and [2] a duty to warn of latent or concealed hazards that the owner/occupier knew or should have known about and which are not known to the invitee in a timely manner. The open and obvious danger doctrine may discharge the duty to warn, but it “does not apply when negligence is predicated on breach of the duty to maintain the premises in a reasonably safe condition.” 

TruGreen Landcare, LLC v. LaCapra, 43 Fla.L.Weekly D2027a (Fla. 5th DCA 2018) (internal citations omitted).

The open and obvious doctrine, referred to above, is a defense to owners in a premise liability claim and applies to the second duty — the duty to warn of latent dangerous conditions / defects.  But, this duty does not apply to dangerous conditions / defects that are open and obvious. 

The open and obvious danger doctrine “provides that an owner or possessor of land is not liable for injuries to an invitee caused by a dangerous condition on the premises when the danger is known or obvious to the injured party, unless the owner or possessor should anticipate the harm despite the fact that the dangerous condition is open and obvious.”  “This doctrine rests upon the generally accepted notion that owners and possessors of real property should be legally permitted to assume that those entering their premises will perceive conditions that are open and obvious to them upon the ordinary use of their senses.”  In analyzing whether a danger is open and obvious, “the courts are required to consider all of the facts and circumstances surrounding the accident and the alleged dangerous condition.”

TruGreen Landcare, LLC, supra (internal citations omitted).

As mentioned, if a potentially dangerous condition on the property is open and obvious, i.e., it is not latent / hidden, than an owner has a strong defense to an injured invitee’s premise liability claim. However, this open and obvious defense does not apply when a plaintiff claims that an owner or possessor negligently maintained the property in a reasonably safe condition (and this caused their injury).   “Thus, an issue of fact for the jury exists when the plaintiff alleges the owner/occupier breached the duty to keep the premises in a reasonably safe condition regardless of whether the danger was open and obvious.”  TruGreen Landcare, LLC, supra

In TruGreen Landcare, LLC, the plaintiff bypassed a sidewalk and walked in a landscaped area in front of a movie theater in a plaza.  As he was walking in the landscaped area, he tripped and fell in a depressed area.  The landscaped area was surrounded by sidewalk and was referred to as a palm tree planter square which was a grassy area with artificial turf with a palm tree in the center.  The plaintiff sued, among other parties, the landscaper for negligently maintaining the landscaped area (palm tree planter square) in a reasonably safe condition. The landscaper contended that it owed no duty to the plaintiff to keep that area in a safe condition or warn of any dangerous condition because, as a matter of law, landscaped areas are not dangerous conditions.  The landscaper further argued that the issue that caused the plaintiff to trip was open and obvious.

Remember, the open and obvious defense does not apply when the plaintiff is claiming that the owner or possessor of the property negligently failed to maintain the property in a reasonably safe condition. While this is generally an issue of fact for the jury, there are:

[S]ome conditions [that] are considered so obvious and not inherently dangerous that they do not, as a matter of law, support liability for the breach of the duty to maintain the premises in a reasonably safe condition.  In particular, landscaping features “are generally found not to constitute a dangerous condition as a matter of law.”  Additionally, there is no duty to make areas that are not designed for walking reasonably safe for that purpose or to warn that they are not safe for walking.  In these situations, the rule “is to absolve the landowner of liability unless the landowner should anticipate or foresee harm from the dangerous condition despite such knowledge or obviousness.” 

TruGreen Landcare, LLC, supra (internal citations 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.

Tags: , , , , , ,

Incentive for Taking Case on Contingency – the Contingency Fee Multiplier

Posted by David Adelstein on August 26, 2018
Trial Perspectives / Comments Off on Incentive for Taking Case on Contingency – the Contingency Fee Multiplier

A recent appellate decision came out regarding contingency fee multipliers–the incentive for taking a case on contingency.  

I included a thorough discussion on the requirements establishing a contingency fee multiplier here.  Check out this discussion that goes into establishing reasonable attorney’s fees and then the contingency fee multiplier.

Notably, in this case, the appellate court affirmed that the elements associated with establishing an entitlement to a contingency fee multiplier are as follows:

(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel (i.e., whether there are attorneys in the relevant market and would have taken the case on contingency absent the availability of the multiplier);

(2) whether the attorney was able to mitigate the risk of nonpayment in any way; and

(3) whether any of the factors set forth in Rowe (the reasonable attorney’s fees factors) are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.  This is looked at through the lens of the counsel at the time the counsel takes the case, and not with the benefit of hindsight.

There are a number of reasons for an attorney to take a matter on contingency.  While there is certainly a risk, there is also the prospect of an award, and with the contingency fee multiplier, the incentive is that a multiplier could be added to reasonable attorney’s fees to increase the amount of awarded fees. 

 

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.

 

 

Tags: , ,

Sufficient Factual Detail to Support Four Prongs of Temporary Injunction

Posted by David Adelstein on August 20, 2018
Appeal, Standard of Review, Trial Perspectives / Comments Off on Sufficient Factual Detail to Support Four Prongs of Temporary Injunction

An order on a motion for temporary injunction entered by a trial court must be based on [1] the likelihood of irreparable harm, [2] the unavailability of an adequate remedy at law, [3] the substantial likelihood of success on the merits, and [4] considerations of public interest.”  XIP Technologies, LLC v. Ascend Global Services, LLC,  43 Fla.L.Weekly D1850a (Fla. 2d DCA 2018).  A trial court’s order granting a temporary injunction must contain clear factual detail to support each of these four prongsId.

A trial court has discretion to grant or deny a motion for temporary injunction.  Its discretion, however, is not absolute and will be reviewed under an abuse of discretion standard of appellate review.  It will be deemed an abuse of discretion if an injunction is issued where the moving party has an adequate remedy at law or there has not been strict compliance with the factual detail needed to support the injunction.

In XIP Technologies, LLC, a defendant provided software that allowed the plaintiff to accept credit card payments from its customers and tracked all customer information, transactions, and purchases.  Due to a dispute, the defendant stopped transferring credit card payments to the plaintiff, stopped providing the plaintiff the tracked customer data, and stopped accepting credit card payments from the plaintiff’s customers.  The plaintiff stopped paying the defendant the required monthly fee for the software.  The plaintiff sued the defendant and moved for a temporary injunction that, among other things, required the defendant to pay the plaintiff the withheld credit card payment amounts, provide the plaintiff the tracked customer data, and continue to accept credit card payments from the plaintiff’s customers. The trial court granted the injunction.

On appeal, the defendant argued that it was wrong to order it to pay the plaintiff the withheld credit card payments because that payment constitutes an adequate remedy at law and injunctive relief is only when a party does NOT have an adequate remedy at law.  The appellate court agreed:  “If indeed XIP [defendant] is determined to be in breach of the parties’ contract, Ascend [plaintiff] will have an adequate remedy at law in the form of damages to replace the withheld revenue.  Because damages are available, there is no irreparable harm.” XIP Technologies, LLC, supra

The appellate court, on the other hand, found that injunctive relief could be appropriate relating to the customer data and refusal of the defendant to continue to process credit card payments of the plaintiff’s customers.   However, the trial court’s order was insufficient in that it did NOT contain sufficient factual detail supporting all of the four prongs to justify the issuance of a temporary injunction.  In particular, the trial court’s order did not include factual detail regarding requirements 3 (the substantial likelihood of success on the merits) and 4 (considerations of public interest).  For this reason, as to these issues, the appellate court remanded back to the trial court to enter a temporary injunction as to these issues “but only if it includes the required findings as to each of the necessary four prongs.”  XIP Technologies, LLC, 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.

Tags: , , , , ,

Inducement is NOT a Required Element in Proving the Defense of Unilateral Mistake

Posted by David Adelstein on August 12, 2018
Appeal, Trial Perspectives / Comments Off on Inducement is NOT a Required Element in Proving the Defense of Unilateral Mistake

Earlier this year I wrote an article regarding proving the defense of unilateral mistake.  In that article, I discussed a case where the appellate court ruled a party asserting the defense of unilateral mistake must prove that the mistake was induced by the party seeking to benefit from the mistake.  Based on this opinion, a party moved for a rehearing en bank under Florida Rule of Appellate Procedure 9.331–see applicable portion of 9.331(d)(1)–arguing that in some prior opinions the appellate court required a party asserting unilateral mistake to prove inducement, and in other decisions it did not. 

The appellate court granted the rehearing en bank to address this undeniable conflict and lack of uniformity holding that inducement is NOT a required element in proving unilateral mistake:  “We conclude that inducement is not an element of unilateral mistake. A contract may be set aside on the basis of a unilateral mistake of material fact if: (1) the mistake was not the result of an inexcusable lack of due care; (2) denial of release from the contract would be inequitable; and (3) the other party to the contract has not so changed its position in reliance on the contract that rescission would be unconscionable.”  DePrince v. Starboard Cruise Services, Inc., 43 Fla.L.Weekly D1734a (Fla. 3d DCA 2018).   Without the inducement element, the defense of unilateral mistake becomes easier to prove.

 

 

9.331(d)(1) Generally. A rehearing en banc may be ordered by a district court of appeal on its own motion or on motion of a party. Within the time prescribed by rule 9.330, a party may move for an en banc rehearing solely on the grounds that the case or issue is of exceptional importance or that such consideration is necessary to maintain uniformity in the court’s decisions. A motion based on any other ground shall be stricken. A response may be served within 10 days of service of the motion. A vote will not be taken on the motion unless requested by a judge on the panel that heard the proceeding, or by any judge in regular active service on the court. Judges who did not sit on the panel are under no obligation to consider the motion unless a vote is requested.

 

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.

Tags: , , ,

Contact Me Now

Prove YOUR Case!

Contact:

David Adelstein ♦

(954) 361-4720 ♦

dadelstein@gmail.com