The collateral source rule is the source of unnecessary confusion. This rule is aimed at preventing an injured-plaintiff from having its cake and eating it too – from receiving a windfall from the defendant-tortfeasor based on compensation the plaintiff received from collateral sources.

The collateral source rule allows an injured plaintiff to present all of its damages to the trier of fact (jury) irrespective of payment the injured party received from a collateral source (e.g., insurance, social security, etc.).  Evidence of payments the injured plaintiff received from a collateral source is inadmissible at trial due to the confusion that could result from the introduction of such evidence. However, the court must later reduce the amount of awarded damages by the amount the injured plaintiff received from collateral sources. The point is to prevent the injured-plaintiff from receiving a windfall.

The collateral source rule is embodied in Florida Statute s. 768.76.  Check out this link for this statute in detail, a relevant portion which is identified below.  “This section abrogated the common law rule prohibiting reduction of damages from collateral source payments in an effort to ‘reduce insurance costs and prevent plaintiffs from receiving windfalls.’” Rasinski v. McCoy, 42 Fla.L.Weekly D1711a (Fla. 5^th DCA 2017) citing Joerg v. State Farm Mut. Auto. Ins. Co., 176 So. 3d 1247, 1249 (Fla. 2015).

Florida Statute s. 768.76

(1) In any action to which this part applies in which liability is admitted or is determined by the trier of fact and in which damages are awarded to compensate the claimant for losses sustained, the court shall reduce the amount of such award by the total of all amounts which have been paid for the benefit of the claimant, or which are otherwise available to the claimant, from all collateral sources; however, there shall be no reduction for collateral sources for which a subrogation or reimbursement right exists. Such reduction shall be offset to the extent of any amount which has been paid, contributed, or forfeited by, or on behalf of, the claimant or members of the claimant’s immediate family to secure her or his right to any collateral source benefit which the claimant is receiving as a result of her or his injury.

(2) For purposes of this section:

(a) “Collateral sources” means any payments made to the claimant, or made on the claimant’s behalf, by or pursuant to:

1. The United States Social Security Act,except Title XVIII and Title XIX; any federal, state, or local income disability act; or any other public programs providing medical expenses, disability payments, or other similar benefits, except those prohibited by federal law and those expressly excluded by law as collateral sources.

2. Any health, sickness, or income disability insurance; automobile accident insurance that provides health benefits or income disability coverage; and any other similar insurance benefits, except life insurance benefits available to the claimant, whether purchased by her or him or provided by others.

3. Any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the costs of hospital, medical, dental, or other health care services.

4. Any contractual or voluntary wage continuation plan provided by employers or by any other system intended to provide wages during a period of disability.

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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Caveat Emptor.  Buyer Beware!!!! This is a doctrine that applies to commercial property transactions. Watch out and do your due diligence when entering into a commercial real estate transaction. If you do not, the doctrine of caveat emptor will apply which puts the onus on you, the buyer, to discover material facts relating to the property.

In Transcapital Bank v. Shadowbrook at Vero, LLC, 42 Fla.L.Weekly D1657b (Fla. 4^th DCA 2017), a bulk buyer purchased 123 out of 164 condominium units for approximately $11 Million.   The buyer, thereafter, sued the seller / lender for fraud, among other counts, claiming it was misled about the value of the property and, particularly, each of the condominium units.

Post-trial, the seller / lender appealed claiming the trial court erred in denying its motion for directed verdict at trial. The appellate court agreed that the trial court erred. Why?

The doctrine of caveat emptor applied to this commercial transaction where the buyer purchased 123 condominium units. “This doctrine places the duty to examine and judge the value and condition of the [commercial] property solely on the buyer and protects the seller from liability for any defects.” Transcapital Bank, supra, quoting Turnberry Court Corp. v. Bellini, 962 So.2d 1006, 1007 (Fla. 3d DCA 2007).

There are three exceptions to the applicability of caveat emptor: 1) where the buyer has been prevented from making an independent inquiry regarding the property due to a trick from the buyer; 2) where the buyer does not have equal opportunity to become apprised of a material fact; and 3) where the seller discloses some facts but not the whole truth regarding those facts. Transcapital Bank, supra citing Turnberry Court Corp. v. Bellini, 962 So.2d 1006, 1007 (Fla. 3d DCA 2007).   None of the exceptions, however, applied to this transaction. “Even if any of the defendants [seller / lender] had misrepresented the property’s appraised value, such a misrepresentation would not be actionable under the doctrine of caveat emptor in the absence of evidence that the defendants resorted ‘to some fraudulent means in preventing a prospective purchaser from making an examination of the property under consideration.’” Transcapital Bank, supra, citing Farnham v. Blount, 11 So.2d 785, 790 (Fla. 1942).

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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Sometimes, a trial court issues a pre-trial order on a discovery issue that a party claims causes it irreparable harm.   In this situation, the only basis to appeal the pre-trial discovery order is through a petition for writ of certiorari, as recently explained by the Second District Court of Appeal:

A party seeking review of a pretrial discovery order must show that the trial court’s order departed from the essential requirements of law and caused material injury to the petitioner throughout the remainder of the proceedings below, effectively leaving no adequate remedy on appeal.  Generally, certiorari is not available to review orders denying discovery because in most cases the harm can be corrected on appeal. But certiorari relief may be appropriate when the requested discovery is relevant or is reasonably calculated to lead to the discovery of admissible evidence and the order denying that discovery effectively eviscerates a party’s claim, defense, or counterclaim.  The harm in such cases is not remediable on appeal because there is no practical way to determine after judgment how the requested discovery would have affected the outcome of the proceedings.

Westerbeke Corp. v. Atherton, 42 Fla.L.Weekly D1741c (Fla. 2d DCA 2017) (internal quotations and citations omitted).

In this recent opinion (discussed in more detail here), the trial court in a product liability case denied a defendant’s right to perform destructive testing of a boat’s gas generator that caused an explosion. The defendant claimed the destructive testing was necessary to determine the cause of the explosion and prepare a defense. In other words, the harm imposed on the defendant could not be corrected on a final appeal since the harm prevented it from generating a sufficient defense. Here, the Second District granted the writ of certiorari because the trial court applied the wrong legal standard in denying the defendant’s request to perform destructive testing. The take-away is the Second District’s explanation as to when certiorari relief is appropriate to remedy a pre-trial discovery order.

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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Have you been duped into procuring something through misleading advertising? There is a Florida Statute that provides a civil cause of action for misleading advertising. Florida Statute s. 817.41 provides a statutory cause of action for misleading advertising that gives the prevailing party a basis to recover their attorney’s fees in addition to a potential claim for punitive damages.  This is probably a less known statutory cause of action, but it is a particularized statutory fraud claim that is available.

Additionally, the statute maintains that, “There shall be a rebuttable presumption that the person named in or obtaining the benefits of any misleading advertisement or any such sale [i.e, party making misleading advertisement] is responsible for such misleading advertisement or unlawful sale.”  Florida Statute s. 817.41(4).  This is favorable language for a party asserting a claim.

Florida Statute s. 817.40(5) defines misleading advertising as follows:

(5) The phrase “misleading advertising” includes any statements made, or disseminated, in oral, written, electronic, or printed form or otherwise, to or before the public, or any portion thereof, which are known, or through the exercise of reasonable care or investigation could or might have been ascertained, to be untrue or misleading, and which are or were so made or disseminated with the intent or purpose, either directly or indirectly, of selling or disposing of real or personal property, services of any nature whatever, professional or otherwise, or to induce the public to enter into any obligation relating to such property or services.

Importantly, the misleading advertising MUST be made “with the intent or purpose, either directly or indirectly, of selling or disposing of real or personal property, services of any nature whatever, professional or otherwise, or to induce the public to enter into any obligation relating to such property or services.” Fla.Stat. s. 817.40(5); Samuels v. King Motor Co. of Fort Lauderdale, 782 So.2d 489, 496 (Fla. 5^th DCA 2001). Since a civil cause of action for misleading advertising is a specialized type of fraud claim, the person asserting the claim MUST allege and support other elements of fraudulent inducement. See Third Party Verification, Inc. v. Signaturelink, Inc., 492 F.Supp.2d 1314, 1322 (M.D.Fla. 2007) (explaining that party asserting misleading advertising claim must also allege: “(a) the representor made a misrepresentation of a material fact; (b) the representor knew or should have known of the falsity of the statement; (c) the representor intended that the representation would induce another to rely and act on it; and (d) the plaintiff suffered injury in justifiable reliance on the representation.”).  

Conversely, if the misleading advertising claim is made by a competitor, then reliance element–that the party asserting the claim relied on the misrepresentation–does not have to be alleged and proven. See id.

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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