Trial Perspectives

Set-Off when Entering into Settlements in Multi-Party Disputes

Posted by David Adelstein on March 25, 2018
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Lawsuits oftentimes involve multiple parties.  This could include multiple defendants or third-party defendants, whatever the case may be.  During the course of the dispute, there are avenues for settlement.  With a multi-party dispute, sometimes the stars are aligned where a favorable global settlement works out.  Sometimes, a party needs to settle with some, but not all, of the defendants.  This means the plaintiff will need to try the case against the remaining defendants (or parties).  The remaining defendants, obviously, want the settlements with the settling defendants to be used to set-off any damages or judgment entered against them.  For example, if the plaintiff settles with multiple defendants for $1 Million and recovers damages against the remaining defendants for $1.5 Million at trial, the remaining defendants want the $1 Million in pre-suit settlements to be set-off from their damages award.  This means their exposure is not a $1.5 Million judgment, but instead, a $500,000 principal judgment — a big difference, right!  

The issue of set-off is an issue that should not be overlooked in multi-party disputes, specifically from the plaintiff considering pre-suit settlements.  Time should be dedicated to trying to craft settlements to truly prevent a set-off, which is designed to prevent the plaintiff from recovering a gratuitous windfall.  For more information on a construction defect case where the issue of set-off hurt a plaintiff based on the broad wording in settlement agreements, view this article.  Due to pre-suit settlements, the plaintiff’s damages against the remaining defendants at trial were reduced by the total sum of the settlements.  All because of this set-off doctrine; had the settlement agreements been drafted differently, perhaps the plaintiff’s damages awarded at trial would not have been set-off by the pre-suit settlements.

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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The Not Widely Known Harris Act: Protection of Private Property Rights

Posted by David Adelstein on March 18, 2018
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There is a Florida statute not universally known called the “Bert J. Harris, Jr., Private Property Rights Protection Act” and oftentimes called the “Harris Act” for ease of reference.   The Harris Act is embodied in Florida Statute s. 70.001 (found here) and it deals with the protection of private property rights.  More specifically, it provides a private cause of action when the existing use (or vested rights) of property is inordinately burdened by the Florida government (including agencies thereof).  The Harris Act has some teeth in certain situations, as demonstrated below in a case example, and is a good Act to know because it does create a private cause of action.

The Harris Act was enacted by the Florida Legislature in 1995 as a mechanism to protect and compensate any landowner whose property is affected by government action not rising to the level of a taking. To prevail under the Harris Act, the property owner must prove that “a specific action of a governmental entity has inordinately burdened an existing use of real property or a vested right to a specific use of real property.” Accordingly, when a claim under the Harris Act is presented for judicial review, the court must first consider whether a claimed “existing use of the real property” or a claimed “vested right to a specific use of the real property” actually existed. If it finds either, it must next determine whether the government action inordinately burdened the property. If the court also finds that there was an inordinate burden, then it must impanel a jury to determine the total amount of compensation to the property owner for the loss caused by the inordinate burden to the property. The party seeking relief under the Harris Act bears the burden of proof. 

Ocean Concrete, Inc.  v. Indian River County, Board of County Commissioners, 43 Fla. L. Weekly D577a (Fla. 4th DCA 2018) (internal citations omitted).

The Harris Act starts off as follows:

(1) This act may be cited as the “Bert J. Harris, Jr., Private Property Rights Protection Act.” The Legislature recognizes that some laws, regulations, and ordinances of the state and political entities in the state, as applied, may inordinately burden, restrict, or limit private property rights without amounting to a taking under the State Constitution or the United States Constitution. The Legislature determines that there is an important state interest in protecting the interests of private property owners from such inordinate burdens. Therefore, it is the intent of the Legislature that, as a separate and distinct cause of action from the law of takings, the Legislature herein provides for relief, or payment of compensation, when a new law, rule, regulation, or ordinance of the state or a political entity in the state, as applied, unfairly affects real property.

(2) When a specific action of a governmental entity has inordinately burdened an existing use of real property or a vested right to a specific use of real property, the property owner of that real property is entitled to relief, which may include compensation for the actual loss to the fair market value of the real property caused by the action of government, as provided in this section.

The term “existing use” as used in the Harris Act means:

(3)(b) (1) An actual, present use or activity on the real property, including periods of inactivity which are normally associated with, or are incidental to, the nature or type of use; or

(3)(b)(2) Activity or such reasonably foreseeable, nonspeculative land uses which are suitable for the subject real property and compatible with adjacent land uses and which have created an existing fair market value in the property greater than the fair market value of the actual, present use or activity on the real property.

The term inordinately burdened” as used in the Harris Act means:

(3)(e)(1) Mean that an action of one or more governmental entities has directly restricted or limited the use of real property such that the property owner is permanently unable to attain the reasonable, investment-backed expectation for the existing use of the real property or a vested right to a specific use of the real property with respect to the real property as a whole, or that the property owner is left with existing or vested uses that are unreasonable such that the property owner bears permanently a disproportionate share of a burden imposed for the good of the public, which in fairness should be borne by the public at large.

(3)(e)(2) Do not include temporary impacts to real property; impacts to real property occasioned by governmental abatement, prohibition, prevention, or remediation of a public nuisance at common law or a noxious use of private property; or impacts to real property caused by an action of a governmental entity taken to grant relief to a property owner under this section. However, a temporary impact on development, as defined ins. 380.04, that is in effect for longer than 1 year may, depending upon the circumstances, constitute an “inordinate burden” as provided in this paragraph.

In determining whether reasonable, investment-backed expectations are inordinately burdened, consideration may be given to the factual circumstances leading to the time elapsed between enactment of the law or regulation and its first application to the subject property.

The recent, factually complicated case, Ocean Concrete, Inc., discusses the application of the Harris Act.   Here, a plaintiff purchased undeveloped property that was zoned light industrial.  The plaintiff wanted to build a concrete batch plant.  The light industrial zoning allowed for this use.  

During the site plan review and application process with the County, a neighboring city and other members of the community asked the County to deny the proposed concrete batch plant project.   They wanted the County to modify the industrial light zoning code to preclude using the property as a concrete batch plant or any plant that processes large quantities of materials and would generate loud noise and dust. The County’s Board of Commissioners voted to approve the modification to the zoning code without any exception as to vested rights.  After dealing with certain administrative nuances and appeals and the plaintiff ultimately losing the property through foreclosure, the plaintiff asserted a claim against the County under the Harris Act.   

The trial court held there was no violation of the Harris Act by the County so the plaintiff’s damages were not presented to a jury.  In a de novo appellate standard of review, the appellate court reversed and found that the County did violate the Act and remanded the case back to a trial on damages.

Applying the applicable law, nothing about the physical or regulatory aspects of the property at the time of the government regulation made Appellants’ [plaintiff] expectations for the development of a concrete batch plant unreasonable. A concrete batch plant was a permitted use under the zoning code as a matter of right and throughout the site-plan approval process, Mr. Maib [plaintiff] was led to believe that approval was inevitable. Further, Mr. Maib obtained the services of an expert engineer who told him that the development was feasible. Finally, the property abutted a railroad and Mr. Maib was able to install a spur to facilitate the importation and exportation of materials. That the overall undertaking may have been expensive and a significant task does not invalidate the fact that, based on the property itself, Appellants’ investment-backed expectations were reasonable.

Ocean Concrete, Inc., 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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Yes, There is Such a Thing Called Apparent Authority

Posted by David Adelstein on March 04, 2018
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“But he did NOT have the authority….”   This is the beginning of a sentence that does not start well.  

Agents have the authority to bind their principal.  “Even where there is no express agent/principal relationship, a principal may be bound by the acts of an agent acting with apparent authority.”  Clayton v. Poggendorf, 43 Fla.L.Weekly D436a (Fla. 4th DCA 2018). 

Apparent authority sometimes gets lost in the shuffle and the reason why the sentence, “But he did not have the authority…,” does not start well.  If the person is deemed to have apparent authority then he did have the authority to bind you or make decisions on your behalf.

Apparent authority arises from the authority a principal knowingly tolerates or allows an agent to assume, or which the principal by this actions or words holds the agent out as possessing.”  Clayton, supra.  If the principal creates the appearance of the agent’s authority, then the agent will have apparent authority.  Id quoting Regions Bank v. Maroone Chevrolet, L.L.C., 118 So.3d 251, 255 (Fla. 3d DCA 2013).

In Clayton, a settlement agreement with installment payments was entered into.  The settlement agreement provided that if payments were not timely made, the payee would provide the payor a notice to cure.  If there was no cure, the payee could move for a judgment against the payor.  These are common settlement terms when dealing with installment payments.  

In this case, notices to cure were sent to the payor’s counsel when the payor failed to timely pay.  The payee’s counsel even inquired whether the payor’s counsel was still representing the payor and no response was ever provided.  In prior instances, the payor cured the nonpayment after his counsel received the notice to cure.  However, when the payor ultimately did not cure, the payee moved for a judgment against the payor per the terms of the settlement agreement.  The payor argued that the notices to cure should not have been sent to his counsel because his counsel did not have the authority. This was not a successful argument:

Apparent authority rests on the doctrine of estoppel. Estoppel requires: 1) representation of a material fact by the party estopped (Clayton) [payor] to the party claiming the estoppel (Poggendorf and Thomas) [payee] that is contrary to the fact later asserted by the estopped party; 2) reliance on that representation by the party claiming the estoppel; and 3) the party claiming estoppel detrimentally changed their position due to such reliance.  Clayton [payor], by his conduct in allowing Tittle [payor’s attorney] to accept the notices of default, represented that the notices of default complied with the Settlement Agreement. Poggendorf and Thomas [payee] clearly relied on that representation by continuing to send the email notices to Tittle. Finally, Poggendorf and Thomas changed their position by not sending the notices directly to Clayton.

So, yes, apparent authority does exist!

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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Defamation Per Se Opens Door for Punitive Damages

Posted by David Adelstein on February 18, 2018
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A defamation per se action opens the door for punitive damages even if actual damages cannot be shown or proven.  Lawnwood Medical Center, Inc. v. Sadow, 43 So.3d 710, 729 (Fla. 4th DCA 2010).   This is because malice is presumed and, thus, the statements are presumed harmful as a matter of law.  Id.  However, “proof of liability for defamation per se requires a showing that the declarant knew or should have known the defamatory statement was not true.”  Tilton v. Wrobel, 198 So.3d 909 (Fla. 4th DCA 2016).  Hence, while a claimant may not be able to prove actual damages as the result of the defamatory (slanderous or libelous) per se action, the plaintiff can still potentially recover punitive damages.  It is this reason why parties oftentimes pursue defamation per se actions.

 “‘[A] publication is libelous per se, or actionable per se, if, when considered alone without innuendo: (1) it charges that a person has committed an infamous crime; (2) it charges a person with having an infectious disease; (3) it tends to subject one to hatred, distrust, ridicule, contempt, or disgrace; or (4) it tends to injure one in his trade or profession.’” Blake v. Guistibelli, 182 So.3d 881, 884 (Fla. 4th DCA 2016) quoting Richard v. Gray, 62 So.2d 597, 598 (Fla. 1953).

Libel concerns the written publication of false statements.  Dunn v. Air Line Pilots Ass’n, 193 F.3d 1185, 1191 (11th Cir. 1999)

Slander is a spoken or oral defamation of another which is published to others and which tends to damage that person’s reputation, ability to conduct that person’s business or profession, and which holds that person up to disgrace and humiliation.”  Scott v. Busch, 907 So.2d 662, 666 (Fla. 5th DCA 2005).

There is a lot more to defamation and if you have been the victim of a truly defamatory per se action, consult with counsel so that you understand your rights moving forward.

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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Homestead Protection does Not Attach to Corporation (as Judgment Debtor Found Out!)

Posted by David Adelstein on February 11, 2018
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There are times where (potential) judgment debtors try to be way to crafty.  And, guess what, it doesn’t always work!  A recent case exemplifies this point.

In DeJesus v. A.M.J.R.K. Corp., 43 Fla. L. Weekly D331a (Fla. 2d DCA 2017), a plaintiff sued a defendant corporation in a personal injury action.  During the litigation, the defendant corporation transferred residential property it owned to its sole shareholder.  This was done through a quitclaim deed and was obviously done as a down and dirty asset protection technique.  Of course, the quitclaim deed lacked consideration and was defective – the transfer was invalid.

The plaintiff recovered a judgment against the defendant and initiated proceedings supplementary, as a judgment creditor, to collect on the judgment.  (Getting the judgment is one thing.  Collecting on the judgment is another and oftentimes the most important consideration.). Plaintiff asserted a claim against the shareholder arguing that the transfer of the property was not effective and was done to prevent the forced sale of the asset owned by the company.  The trial court held that even though the conveyance of the property was ineffective, the sole shareholder was entitled to homestead protection on the property, meaning it was protected from a forced sale of the property.

On appeal, however, the appellate court reversed.  The property was owned by the corporation (the transfer was ineffective) and a corporation is not entitled to homestead protection.  Just because the sole shareholder lived in the property did not change the fact that the property was owned by a corporation; it also does not give the sole shareholder an interest in the corporation’s property.  Ultimately, this will mean that without the homestead protection the judgment creditor should be able to force the sale of the residential property, which is likely the only asset owned by the corporation.

If you are a defendant in a lawsuit, doing things down and dirty doesn’t always work, as the defendant in this case may have found out.  Make sure to consult with counsel so your interests are best protected.  It is highly likely that the defendant in this case considered the advice of counsel but did things notwithstanding the advice.  Perhaps the defendant did not even consult with counsel thinking once the property was transferred during the litigation the corporation was judgment-proof.  

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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Requests for Admissions as a Discovery Tool

Posted by David Adelstein on January 30, 2018
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Requests for Admissions are one of my favorite discovery tools in litigation. Requests for Admissions are designed to narrow the disputed facts by requiring the recipient of the request to admit or deny the requested fact. These should be served with the objective of having the recipient admit the requested fact.   If the recipient does admit the fact, then the fact is a stipulated fact – it does not need to be proved at trial because it is stipulated to.  

Florida Rule of Civil Procedure 1.380(c) provides:

(c) Expenses on Failure to Admit. If a party fails to admit the genuineness of any document or the truth of any matter as requested under rule 1.370 and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, the requesting party may file a motion for an order requiring the other party to pay the requesting party the reasonable expenses incurred in making that proof, which may include attorneys’ fees. The court shall issue such an order at the time a party requesting the admissions proves the genuineness of the document or the truth of the matter, upon motion by the requesting party, unless it finds that (1) the request was held objectionable pursuant to rule 1.370(a), (2) the admission sought was of no substantial importance, or (3) there was other good reason for the failure to admit.

Under this rule, if a recipient denies a request for admission and the requester proves the truth of the matter, the requester is entitled to expenses inclusive of attorney’s fees. You would think this rule is designed to motivate a party to truly admit a fact versus denying a fact to avoid the stipulation. But, not so fast…

In a recent case, R.J. Reynolds Tobacco Co. v. Ward, 43 Fla.L.Weekly D252b (Fla. 1st DCA 2018), the court awarded the requester $981,116.23 in attorney’s fees and costs under this rule by proving the truth of the matter of the recipient’s denials to requests for admissions. The appellate court, however, reversed maintaining that if the recipient has a good reason to deny the request, such fees and costs cannot be awarded.  For instance, if the recipient denies a hotly contested fact in the case and is later proved wrong, fees and costs cannot be awarded under this rule because the recipient had a good reason to deny the request.

There really is not a bright line standard as to what constitutes a good reason to deny and what does not, potentially watering down the sanction for a party’s denial of a fact. Nevertheless, this rule is not designed to shift fees and costs to the recipient simply because the party does not stipulate to a contested fact.

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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Proving Defense of Unilateral Mistake

Posted by David Adelstein on January 24, 2018
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One affirmative defense to a breach of contract claim is the defense known as “unilateral mistake.” This is not an easy defense to prove and the party asserting this as a defense has the burden to prove it. Under this defense, the argument is that the contract cannot be enforced because there was a unilateral mistake that induced the party into entering into the contract.

To prove the affirmative defense of unilateral mistake, the party asserting this defense must prove the following four elements:

(1) [T]he mistake was induced by the party seeking to benefit from the mistake, (2) there is no negligence or want of due care on the part of the party seeking a return to the status quo, (3) denial of release from the agreement would be inequitable, and (4) the position of the opposing party has not so changed that granting the relief would be unjust. ”  DePrince v. Starboard Cruise Services, Inc., 43 Fla. L. Weekly D171b (Fla. 3d DCA 2018) quoting Rachid v. Perez, 26 So.3d 70, 72 (Fla. 3d DCA 2010).

The first element – the inducement element—requires making a false statement of a material fact or some other action that induced the mistake. DePrince, supra. Notably, the other party’s knowledge of an error is not enough and is different than inducement. See id.

The second element – the negligence element—requires the party that made the mistake (and acted on the inducement) not to have acted negligently in making the mistake.

For example, in DePrince, a cruise ship’s jewelry store sold a diamond for $235,000 when the diamond was actually worth millions. The ship sought to avoid the transaction and the buyer sued. The ship asserted unilateral mistake as an affirmative defense, meaning the ship needed to prove the aforementioned four elements required for this 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.

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Public Body is Afforded Sovereign Immunity

Posted by David Adelstein on January 14, 2018
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When it comes to pursuing a claim against a public body in Florida, you need to consider the application of sovereign immunity. This stands for the premise that the “king can do no wrong.”  Sovereign immunity is an important issue and will dictate the types of claims you pursue against a public body, whether you pursue a claim against a public body, and the conditions precedent to pursuing such a claim against a public body.

Public bodies are afforded sovereign immunity with a limited waiver of sovereign immunity set forth in Florida Statute s. 768.28.   The limited waiver of sovereign immunity applies to common law tort claims (e.g., negligence-type claims). See Curcio v. State Dept. of Lottery, 164 So.3d 750, 754 (Fla. 1st DCA 2015). There is no limited waiver of sovereign immunity for statutory claims such as unfair and deceptive trade practices and misleading advertising. See id. (“[S]overeign immunity has not been waived for the unfair and deceptive trade practices and misleading advertising claims….These claims are not common law tort claims subject to the waiver of sovereign immunity in section 768.28, Florida Statutes….”). Ultimately, this means sovereign immunity applies to bar such statutory claims against a public body. See id. (finding that public body was entitled to sovereign immunity for statutory claims of unfair and deceptive trade practices and misleading advertising).

Notwithstanding the above, sovereign immunity does not apply to breach of contract claims against a public body. See id. “[W]here the state [public body] has entered into a contract fairly authorized by the powers granted by general law, the defense of sovereign immunity will not protect the state from action arising from the state’s breach of that contract.” Pan-Am Tobacco Corp. v. Dept. of Corrections, 471 So.2d 4, 5 (Fla. 1984).

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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Do Yourself a Favor: Have a Court Reporter at Important Hearings

Posted by David Adelstein on January 09, 2018
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Make sure to have a court reporter at any substantive hearing, particularly a hearing that could result in an appeal.

Here is why. In a slip and fall action, Lago v. Costco Wholesale Corp., 42 Fla. L. Weekly D2599a (Fla. 3d DCA 2017), the trial court granted summary judgment in favor of the defendant. The trial court’s summary judgment order provided NO elaboration or reasoning as to the basis of granting the summary judgment. It was probably a simple order that stated that the defendant’s motion for summary judgment was granted. This does not provide a whole lot of comfort to parties or even practitioners that receive an order with no reasoning. It certainly does not bring me any comfort.

The plaintiff appealed and argued that the trial court erred in entering an unelaborated order. The appellate court disagreed on this point: “‘[w]hile it might be desirable for the trial judge to specify his reasons for granting or denying a summary judgment there does not appear to be any rule or decision that requires him to do so.’” Lago, supra, quoting Newman v. Shore, 206 So.2d 279, 280 (Fla. 3d DCA 1968). Irrespective of the lack of stated reasoning in the order, the appellate court found that the reasoning was clear when reviewing the defendant’s motion for summary judgment, the plaintiff’s response, and the transcribed summary judgment hearing. (Remember, a summary judgment is reviewed on appeal with a de novo standard of appellate review.)

My guess is the transcribed summary judgment hearing was important and it underscores the importance of having a court reporter at a hearing for this purpose. If the trial court does not provide its reasoning in an order, it is not always clear what the reasoning is that led to the ruling. Having a court reporter at the hearing allows the appellate court to review the arguments raised at the hearing including any pronouncements by the trial court at the hearing.

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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Civil Recourse against Issuer of Worthless Check

Posted by David Adelstein on December 30, 2017
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Florida has a worthless check statute (Florida Statute s. 68.065) that authorizes treble damages plus the original amount of the check owing if a party issues a worthless check.  This statute affords a strong civil remedy for a party (payee) that receives a worthless check. 

The statute provides in material portion:

In any civil action brought for the purpose of collecting a payment instrument, the payment of which is refused by the drawee because of lack of funds, lack of credit, or lack of an account, or where the maker or drawer stops payment on the instrument with intent to defraud, and where the maker or drawer fails to pay the amount owing, in cash, to the payee within 30 days after a written demand therefor, as provided in subsection (4), the maker or drawer is liable to the payee, in addition to the amount owing upon such payment instrument, for damages of triple the amount so owing.

Fla. Stat. s. 68.065(3)(a).

This is certainly a hefty punishment for issuing a worthless check. And, of course, this serves as a hopeful deterrent for a party not to issue a worthless check.

As the statute states, one way to issue a worthless check is where the maker “stops payment on the instrument with intent to defraud.” The recipient of the check (payee) still has to prove that the maker intended to defraud him/her/it by stopping payment on the check. This is typically a factual issue. See Sanders Farm of Ocala, Inc. v. Bay Area Truck Sales, Inc., 43 Fla. L. Weekly D73a (Fla. 2d DCA 2017) (reversing summary judgment in favor of payee that received worthless check on de novo standard of appellate review because there was issue of fact as to whether maker stopped payment on a check with intent to defraud payee).

 

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.Civ

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