Trial Perspectives

Significant Relationship between Claim and Agreement to Arbitrate

Posted by David Adelstein on March 25, 2017
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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
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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.

Strict Construction of Condominium and Homeowner Association’s Declarations

Posted by David Adelstein on March 13, 2017
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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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Don’t Neglect Mediation!

Posted by David Adelstein on February 26, 2017
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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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Timely Filing Motion for Attorney’s Fees and Costs

Posted by David Adelstein on February 11, 2017
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Florida Rule of Civil Procedure 1.525 provides:

Any party seeking a judgment taxing costs, attorneys’ fees, or both shall serve a motion no later than 30 days after filing of the judgment, including a judgment of dismissal, or the service of a notice of voluntary dismissal, which judgment or notice concludes the action as to that party.

This is a specific statutory time period and a motion for rehearing does NOT toll this 30 day period. Jackson v. Anthony, 39 So.3d 1285, 1286 (Fla. 1st DCA 2010). This means that a motion for a final judgment taxing attorney’s fees and costs must be made within 30 days after the filing of a judgment or voluntary dismissal that concludes the action as to that party. (A court in certain circumstances may grant an extension of time to this 30 day period if the motion for extension is filed within 30 days).   Not timely filing a motion for attorney’s fees and costs can result in…(you guessed it)…a loss of a party’s right to recover attorney’s fees and costs.

In Hovercraft of South Florida, LLC v. Reynolds, 42 Fla. L Weekly D367a (Fla. 5th DCA 2017), the plaintiffs prevailed and received a final judgment. The defendant moved for a new trial and/or rehearing which was denied.   Within 30 days of the denial of the defendant’s motion for rehearing, but well outside the 30 days from when the final judgment was entered, the plaintiffs moved for attorney’s fees and costs. However, the motion for attorney’s fees was not timely filed within 30 days of the filing of the final judgment meaning…(you guessed it again)…the plaintiff’s lost the right to recover their attorney’s fees and costs!!!  Do not let this happen to you.  

Notably, an exception to this 30 day requirement is if the final judgment itself determines entitlement to attorney’s fees reserving only the right to determine the quantum of the reasonable attorney’s fees.   Hovercraft of South Florida, supra (“In order to avoid the thirty-day requirement, the judgment itself must determine entitlement to attorney’s fees and costs and reserve jurisdiction only as to the amount owed.”) Notwithstanding this exception, file the motion for attorney’s fees and costs within 30 days — no excuses.

 

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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A Contractual Waiver of the Right to Challenge Venue is Enforceable

Posted by David Adelstein on February 03, 2017
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Many contracts contain a forum selection provision or a venue provision.   Contracts may even contain language that parties agree not to challenge or otherwise waive the venue of any filed lawsuit.

An example of such a provision was included in an operating agreement:

This Agreement is to be construed and governed by the laws of the State of Florida (without giving effect to principles of conflicts of laws). Each party hereto irrevocably agrees that any legal action or proceeding arising out of or in connection with this Agreement may be brought in any state or federal court located in Florida (or in any court in which appeal from such courts may be taken), and each party agrees not to assert, by way of motion, as a defense, or otherwise, in any such action, suit or proceeding, any claim that it is not subject personally to the jurisdiction of such court, that the action, suit or proceeding is brought in an inconvenient forum, that the venue of the action, suit or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and hereby agrees not to challenge such jurisdiction or venue by reason of any offsets or counterclaims in any such action, suit or proceeding. 

Of relevance, this venue provision allowed the parties to bring suit in any state or federal court in Florida and stated that the parties agree not to assert that the venue of any suit is improper.

A dispute arose between the members of the operating agreement. One of the members filed suit against the other member in Martin County, Florida. The other member moved to transfer venue to Palm Beach County, Florida arguing that nothing tied the dispute to Martin County. The trial court agreed and transferred venue to Palm Beach County.   The appellate court, however, reversed. Why? Because the parties agreed that a lawsuit could be filed in any Florida court and, importantly, that they each waive the right to challenge venue.   The parties’ agreement to waive any challenge to venue was enforceable. See Powers, Jr. v. Melick, 42 Fla. L. Weekly D288b (Fla. 4th DCA 2017).

Consider venue provisions when entering into and negotiating contracts – any type of contract.  

 

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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Impeachment as to Prior Crimes in Civil Trials

Posted by David Adelstein on January 29, 2017
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In a civil trial, I want to attack (impeach) the credibility of a testifying witness by bringing up a crime that witness committed. Can I do this?

When it comes to impeaching the credibility of a witness based on crimes, Florida Statute s. 90.610 states in material part:

(1) A party may attack the credibility of any witness, including an accused, by evidence that the witness has been convicted of a crime if the crime was punishable by death or imprisonment in excess of 1 year under the law under which the witness was convicted, or if the crime involved dishonesty or a false statement regardless of the punishment, with the following exceptions:

(a) Evidence of any such conviction is inadmissible in a civil trial if it is so remote in time as to have no bearing on the present character of the witness.

So, in a criminal trial, a witness’s credibility can be attacked if (1) the witness was convicted of a crime in excess of one year (a felony) or (2) the witness was convicted of a crime involving dishonesty or a false statement regardless of the length of punishment (a misdemeanor involving dishonesty or a false statement).   But, in a civil trial, not so fast – this type of impeachment will not be permitted if the conviction is remote in time that it has no bearing on the character of the witness.   If the crime is so remote in time, there is no probative value to impeach the witness other than the prejudicial effect the knowledge of the crime may have with the jury. See, e.g., Trowell v. J.C. Penny Co., Inc., 813 So.2d 1042 (Fla. 4th DCA 2002) (“The statute directs the court to determine whether the past convictions have a bearing on the present character of the witness. Evidence of theft and shoplifting convictions in the early 1980s with no subsequent convictions would tend to suggest that the witness no longer has a propensity toward dishonesty, and thus such convictions would have little or no bearing on his present character. Evidence of a continuing pattern of theft convictions tends to suggest that the appellant’s character in this regard remains unchanged.”).

The objective in attacking a witness’s credibility based on a crime (as permitted above) is that the witness cannot be trusted—their testimony is nothing but a bunch of lies.

The procedure to attack a witness’s credibility based on a crime is quite simple.   The witness will be asked whether he/she has ever been convicted of a felony or convicted of a misdemeanor crime involving dishonesty. If the witness says yes, the next question will be to ask the witness how many times has he/she been convicted of such crimes. The lawyer impeaching the witness will already know the answer to these questions. What if the witness lies? If the witness lies or gives a misleading answer, the lawyer can impeach that testimony by introducing a certified copy of the judgment of conviction for each crime (which is usually a judgment of the conviction and the sentence). This allows the lawyer to prove that the witness has been convicted of a particular crime, however, the lawyer cannot go into the nitty gritty about the crime(s). See Porter v. State, 593 So.2d 1158, 1159 (Fla. 2d DCA 1992).

 

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 I or Do I Not File a Reply to Affirmative Defenses?

Posted by David Adelstein on January 13, 2017
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I’ll be the first to tell you that I seldom file a reply to affirmative defenses unless I am truly looking to avoid an affirmative defense – I have a defense to the defense. When I do file a reply, it is typically specific and catered to a specific defense (again, a specific defense to a specific affirmative defense). This is an important consideration and not filing a reply and specifically avoiding a defense (when you have a defense to the defense) can be problematic as an insured recently found out in an insurance coverage dispute.  Thus, if you have an avoidance to a specific affirmative defense, raise it in a reply!

The insured filed an insurance coverage dispute and the insurer relied on an exclusion in the policy. The insured, however, never filed a reply to the affirmative defense. When the insurer moved for summary judgment on the exclusion, the insured tried to argue waiver, that the insurer’s conduct waived its right to this affirmative defense. Well, this is an avoidance of the defense (a defense to a defense) and should have been raised in a reply. But, it was not. The trial court granted the summary judgment in favor of the insurer and on an appeal the appellate court agreed – the insured failed to preserve its waiver argument because it never raised its waiver defense to the insurer’s affirmative defense through a reply:

We reject Gamero’s [insured’s] argument that Foremost [insurer] waived its right to rely upon the marring exclusion [in the insurance policy] by its pre-suit conduct in initially acknowledging coverage and paying a portion of the claim. Moreover, even if such actions by Foremost amounted to a waiver, Gamero failed to preserve the issue below. After Gamero filed suit for breach of the insurance contract, Foremost answered and asserted, as an affirmative defense, that Gamero’s claim was excluded from coverage because the loss constituted marring. Gamero, however, failed to reply to, or avoid, this affirmative defense by alleging, as he does in this appeal, that the affirmative defense was waived by Foremost’s conduct in initially acknowledging coverage and paying a portion of the claim. Instead, Gamero raised this issue, for the first time, in opposition to Foremost’s motion for summary judgment. The trial court was correct in not considering this issue, raised for the first time in opposition to Foremost’s motion for summary judgment.

Gamero v. Foremost Ins. Co., 42 Fla. L. Weekly D158b (Fla. 3d DCA 2017).

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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Quick Note: An Ambiguous Agreement will Lead to Admissibility of Parol Evidence

Posted by David Adelstein on January 01, 2017
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In an earlier article I explained that parol evidence (extrinsic evidence) is inadmissible to determine the intent of an unambiguous agreement. The corollary is that parol evidence is admissible to determine the intent of an ambiguous agreement. Naturally, parties want their agreements to be clear—crystal clear—to avoid any argument regarding an ambiguity. For example, in a recent case, a commercial lease was deemed ambiguous regarding the tenant’s lease rate. As a result, the landlord could not ram its commercial eviction claim through the court due to what it claimed to be the tenant not paying the right lease rate. Instead, evidence needed to be considered regarding the intent of the parties, particularly as it pertained to the paragraph in the lease regarding the lease rate. Clearly, this is not what the commercial landlord wanted and, perhaps, could have been avoided by specific and unambiguous language regarding the lease rate. Remember, an ambiguity regarding a material portion of an agreement is bad–it just leads to the inevitable dispute.  

 

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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Recoverability of Expert Witness Fees in Federal Court

Posted by David Adelstein on December 24, 2016
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Many litigants are unaware that testifying expert costs are not automatically recoverable in federal court like they are in state court.   Expert witness fees / costs are not an automatic taxable costs.   28 U.S.C. s. 1920 discusses taxable costs. 28 U.S.C. s. 1821 discusses a witness’ per diem costs of $40/day for each day’s attendance. See 28 U.S.C. 1821(2)(b) (“A witness shall be paid an attendance fee of $40 per day for each day’s attendance. A witness shall also be paid the attendance fee for the time necessarily occupied in going to and returning from the place of attendance at the beginning and end of such attendance or at any time during such attendance.”).

The Eleventh Circuit in Primo v. State Farm Mutual Automobile Ins. Co. , 2016 WL 5436821, *5 (11th Cir. 2016) explained that, “[u]nder 28 U.S.C. § 1821(b), [a] witness shall be paid an attendance fee of $40 per day for each day’s attendance. The Supreme Court has held that when a prevailing party seeks reimbursement for fees paid to its own expert witness, a federal court is bound by the limit of § 1821(b), absent contract or explicit statutory authority to the contrary.” (internal quotations omitted).

In order to recover more than the standard per diem witness fee, either the contract needs to authorize expert witness fees or a specific federal statute needs to authorize the recovery of testifying expert costs. See Troche v. City of Orlando, 2015 WL 631280 (M.D.Fla. 2015) (“[A]bsent explicit statutory or contractual authorization for the taxation of the expenses of a litigant’s [expert] witness as costs, federal courts are bound by the limitations set out in 28 U.S.C. § 1821 and § 1920. Section 1920 does not provide for costs for experts unless they were court-appointed.”) (internal quotations omitted).

When drafting a prevailing party attorney’s fees provision in a contract, I always like to include that the prevailing party is entitled to recover their testifying expert witness fees.  This way if the lawsuit is filed in federal court there is a contractual basis to recover expert witness 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.

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