Saturday, November 24, 2012

Federal and Florida Appellate Opinions


In re Atl. Marine Constr. Co., 2012 U.S. App. LEXIS 23803 (5th Cir. Tex. Nov. 19, 2012) denied a writ of mandamus to transfer a case pursuant to a forum selection clause.  The parties’ agreement provided that disputes “shall be litigated in the Circuit Court for the City of Norfolk, Virginia, or the United States District Court for the Eastern District of Virginia, Norfolk Division.” It contained no choice of law provision.  Ignoring the forum-selection clause, plaintiff filed suit in Texas.  Defendant moved to under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406, arguing that the forum-selection clause obligated plaintiff to bring suit in Virginia. Alternatively, it moved to transfer the case to the Eastern District of Virginia under 28 U.S.C. § 1404(a).  The district court denied the motion to dismiss or transfer the case. It concluded that when a forum-selection clause designates a specific federal forum or allows the parties to select the federal courts of a different forum, section 1404(a), not Rule 12(b)(3) and § 1406, is the proper procedural mechanism for its enforcement. Applying § 1404(a), the district court denied Atlantic’s motion to transfer, finding that Atlantic had not met its burden of showing why the interest of justice or the convenience of the parties and their witnesses weighed in favor of transferring the case to Virginia.
         The first issue was whether it was proper to use § 1404(a), instead of Rule 12(b)(3) and § 1406, to enforce the contractual forum-selection clause. The circuit court explained that section 1391 governs whether venue is proper in a given federal district. Rule 12(b)(3) and § 1406(a) provide for dismissal or transfer of an action that has been brought in an improper venue. By contrast, when the action has been brought in a proper venue, § 1404 provides for transfer of the action within the federal system to another federal venue where the action could have been brought. Thus, the determination of whether § 1406 or § 1404(a) applies turns on whether venue is proper in the court in which the suit was originally filed. If venue is improper in that court, then § 1406 or Rule 12(b)(3) applies. If venue is proper in that court, then § 1404(a) applies. In turn, the choice between Rule 12(b)(3) and § 1406 on the one hand and § 1404 on the other depends on whether private parties can, through a forum-selection clause, render venue improper in a court in which venue is otherwise proper under § 1391.  Federal circuit courts are divided on the issue.
Here, the trial court held that when a forum-selection clause designates a specific federal forum or allows the parties to select the federal courts of a different forum, a motion to transfer under § 1404(a) is the proper procedural mechanism for enforcing the clause.  In so doing, the district court followed the minority of the federal appellate courts, but the Fifth Circuit agreed with that approach, relying on Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 108 S. Ct. 2239, 101 L. Ed. 2d 22 (1988) for support.  The concurring opinion agreed that mandamus was improper, but that the district court had been in error in its ruling and approach, reasoning that the Supreme Court has made clear that forum-selection clauses are enforceable, citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S. Ct. 1907, 32 L. Ed. 2d 513 (1972) and Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593-94, 111 S. Ct. 1522, 113 L. Ed. 2d 622 (1991).
The U.S. Supreme Court should weigh in on the subject and, given the recent decisions in the context of enforcing arbitration clauses, the Court, in my opinion, is likely to enforce such forum selection clauses.


Miss. ex rel. Hood, 2012 U.S. App. LEXIS 24096 (5th Cir. November 21, 2012) involved an appeal by manufacturers and distributors of liquid crystal display (“LCD”) panels, who had jointly removed the case to federal district court on the grounds that (1) the action was a “class action” under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(1)(B), or (2) the action was a “mass action” under the CAFA, § 1332(d)(11)(B). The district court’s order granting the motion to remand was reversed because the suit qualified as a mass action under the CAFA, making the removal proper.
The court explained that ordinarily, a district court's remand order was not appealable, see 28 U.S.C. § 1447(d); but a statutory exception that grants discretionary appellate jurisdiction to review remand orders in actions that are removed under the CAFA. See 28 U.S.C. § 1453(c).  
Under the CAFA, removal of a suit to federal court is proper if the suit qualifies as a “class action” or a “mass action.” See 28 U.S.C. § 1453(b); 28 U.S.C. § 1332(d)(11)(A). Mississippi’s suit against the LCD manufacturers does not qualify as a “class action.”  But the suit qualified as a “mass action,” which is defined as a civil action in which (1) monetary relief claims of (2) 100 or more persons (3) are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact and (4) include an amount in controversy exceeding $75,000. 28 U.S.C. § 1332(d)(11)(B)(i).


Barabin v. AstenJohnson, Inc., 2012 U.S. App. LEXIS 23528 (9th Cir. Wash. Nov. 16, 2012) reversed a $9.4 million verdict because the trial court failed to conduct a Daubert hearing.  [Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993)].  The court ruled based on written submissions, first excluding, then allowing the testimony of two experts in this asbestos-related mesothelioma case, explaining that “the district court’s decision to allow presentation of the expert testimony to the jury without making any gateway determinations regarding relevance and reliability constituted an abuse of discretion requiring a new trial.”


Castelo Devs. v. Rawls, 2012 Fla. App. LEXIS 20059 (Fla. 3d DCA November 21, 2012) held that appellant had no standing to prosecute an appeal where, after purchasing a condominium at a foreclosure sale, it conveyed its interest in the property to a third party.  At the time it filed the notice of appeal, appellant had no interest in the unit.  Nor could the third party be substituted because it was never present in the lower tribunal.  The court concluded that to rule otherwise “would shake the foundation of the Florida Rules of Appellate Procedure.”


Surgical Partners, LLC v. Choi, 2012 Fla. App. LEXIS 20192 (Fla. 4th DCA Nov. 21, 2012) reversed an award of prevailing-party attorney’s fees where a doctor successfully defended a breach of contract action on the basis that the agreement was unenforceable because the plaintiff had failed to provide the requisite the written notice to commence.  As no binding contract was formed, the doctor could not avail himself of the fees provision in the contract.


Steinger Iscoe & Greene, P.A. v. Geico Gen. Ins. Co., 2012 Fla. App. LEXIS 20208 (Fla. 4th DCA Nov. 21, 2012) quashed an order that compelled a law firm to produce discovery pertaining to the firm’s relationship with a treating physician.  The court noted that, for uncovering bias, there was no distinction between a treating physician, an expert witness and a retained expert, subject to Rule 1.280(b)(5)(A)(iii)2, and Elkins v. Syken, 672 So. 2d 517 (Fla. 1996).  Here, the discovery request was directed to a non-party law firm, seeking bias discovery regarding the firm’s ongoing relationship with plaintiff’s treating health care providers.  
The court concluded that where there is a preliminary showing that the plaintiff was referred to the doctor by the lawyer (whether directly or through a third party) or vice versa, the defendant is entitled to discover information regarding the extent of the relationship between the law firm and the doctor. Here, the law firm was not a party to the litigation and the record did not establish that the doctor had a financially beneficial relationship with the law firm.  If a referral is shown to exist, discovery from the law firm regarding the extent of the relationship may be calculated to lead to the discovery of admissible evidence. 
Normally, discovery seeking to establish that a referral has occurred should first be sought from the party, the treating doctor, or other witnesses — not the party’s legal counsel. Once there is evidence that a referral relationship exists, discovery from the law firm may be appropriate, with the trial court balancing the privacy rights of the former patients and clients, and implementing appropriate safeguards.
GEICO had not established the existence of a referral relationship between the health care providers and the law firm. Accordingly, the trial court should not have required the law firm to produce the discovery, as it was premature

Friday, November 16, 2012

New Developments in Appellate Courts - State and Federal


Butler v. Sears, 2012 U.S. App. LEXIS 23284 (7th Cir. Ill. Nov. 13, 2012) is an opinion written by Judge Posner in which he writes that predominance is a question of efficiency. A class action is the more efficient procedure for determining liability and damages in a case involving a defect that may have imposed costs on tens of thousands of consumers, yet not a cost to any one of them large enough to justify the expense of an individual suit. If necessary, a determination of liability could be followed by individual hearings to determine the damages sustained by each class member.

Reid v. Doe Run Res. Corp., 2012 U.S. App. LEXIS 23281 (8th Cir. Mo. Nov. 13, 2012) affirmed the denial of a stay pending the outcome of an arbitration. The plaintiff comprised 35 children living near a smelting facility alleging that environmental contamination injured them. The defendant took over the operation from a state-owned company which owned the facility. It removed the case based on 9 U.S.C. § 205, which grants federal jurisdiction of any case that “relates to” a covered arbitration. The parties agreed that the arbitration agreement fell under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Defendant removed the case under the Convention, which allows for removal “[w]here the subject matter of an action or proceeding . . . relates to an arbitration agreement or award falling under the Convention.” 9 U.S.C. § 205. The removal right in § 205 is "substantially broader" than that in the general removal statute. The court held that a case may be removed under § 205 if the arbitration could conceivably affect the outcome of the case.

The Federal Arbitration Act requires a district court to issue a stay if an issue in the case is “referable” to arbitration. 9 U.S.C. § 3is made applicable to the Convention by 9 U.S.C. § 208. The children were nonsignatories to the arbitration agreement, but claims made by nonsignatories can be subject to a stay under 9 U.S.C. § 3. In this case, defendant sought a stay, not an arbitration with the children arguing that the court should be more inclined to grant the stay due to the strong policy favoring arbitration.

A nonsignatory attempting to bind a signatory to an arbitration agreement is distinct from a signatory attempting to bind a nonsignatory. Nonsignatories can be bound to an arbitration agreement when they directly benefit from the agreement. The children were not direct beneficiaries of the terms of the agreement, but defendant argued that they benefitted from the agreement by invoking its terms throughout the case. The court disagreed and concluded that the district court properly denied a mandatory stay


American Express Co. v. Italian Colors Restaurant
( is another class arbitration case, involving arbitration clauses prohibiting class arbitration in card acceptance contracts between American Express Company and retail merchant companies like the restaurant serving as lead plaintiff in this putative class action. The Second Circuit Court of Appeals ruled that AmEx could not enforce its arbitration clauses containing a class action waiver against a putative class of retail merchants pursuing statutory antitrust claims. The court considered that the class action waivers were unenforceable because they “would effectively preclude any action seeking to vindicate the statutory rights asserted by the plaintiffs.” It reasoned that the antitrust claims would not be economically rational to pursue individually.

Because this litigation has been around the Second Circuit Court of Appeals for a while, Justice Sotomayor took no part in the consideration or decision on the certiorari petition. She will likely also recuse herself from participating in the Supreme Court’s merits review.
Lefemine v. Wideman, 2012 U.S. LEXIS 8566 (U.S. Nov. 5, 2012) concerned the award of attorney’s fees in a suit alleging unconstitutional conduct by government officials.  It reversed the Fourth Circuit for holding that a plaintiff who secured a permanent injunction but no monetary damages was not a “prevailing party” under 42 U. S. C. §1988, because the injunction ordered the defendant officials to change their behavior in a way that directly benefited the plaintiff.
ABA Capital Mkts. Corp. v. Provincial De Reaseguros C.A., 2012 Fla. App. LEXIS 19155 (Fla. 3d DCA Nov. 7, 2012) stated that even though the order failed to set forth the trial court’s analysis of the Kinney factors, there was no per se rule requiring a remand provided such an adequate analysis during the hearing itself can support affirmance of an otherwise insufficient order.  See Smith Barney, Inc. v. Potter, 725 So. 2d 1223, 1225 (Fla. 4th DCA 1999). See also Ramirez, 1-4 Florida Civil Procedure § 4-13, fn. 281-84.  Here, the trial court conducted two hearings and both parties’ positions were made abundantly clear during these hearings, and were considered by the trial court.  It affirmed the trial court in this action by a Venezuelan plaintiff against a British Virgin Island defendant based on the main witness and president of defendant residing in Miami and other witnesses from Venezuela having already made several trips to Miami for the litigation and agreeing to continue doing so.
Espresso Disposition Corp. v. Santana Sales & Mktg. Group, 2012 Fla. App. LEXIS 19608 (Fla. 3d DCA November 14, 2012) enforced a mandatory forum selection clause.  The trial court apparently ruled that the clause was inserted by mutual mistake, but instead of discussing the issue, the opinion sardonically explained, first that “[t]here is absolutely no set of facts that Appellee could plead and prove to demonstrate that Illinois state courts do not exist;” and second, that the origin of “cutting and pasting” came “from the traditional practice of manuscript-editing whereby writers used to cut paragraphs from a page with ‘editing scissors.’”
Powell v. Madison County Sheriff's Dep’t, 2012 Fla. App. LEXIS 19141 (Fla. 1st DCA Nov. 7, 2012) affirmed the dismissal of a complaint for failure to serve within 120 days per FRCP 1.070(j), even though the statute of limitations had expired, because more than a year had passed without service.  Although the court recognized the policy preferring actions to proceed to the merits, here the trial court did not abuse its discretion where it balanced that policy against the preclusive effect of the statute of limitations, which protects from having to defend stale claims.  See Ramirez, 1-6 Florida Civil Procedure § 6-4.
Cardiosonx Labs., Inc. v. Aguadilla Med. Servs., 2012 Fla. App. LEXIS 19604 (Fla. 3d DCA November 14, 2012) reversed the trial court for refusing to consider a previously served motion to set aside a default prior to ruling on a motion for final judgment based on the default. As a matter of law the trial court had to resolve the pending motion to set aside clerk’s default prior to entry of Final Judgment in plaintiff’s favor.
First Protective Ins. Co. v. Schneider Family P’ship, 2012 Fla. App. LEXIS 19701 (Fla. 2d DCA November 14, 2012) rejected the argument that under Fla. Stat. § 627.7015(7) (2005), and Florida Administrative Code Rule 69J-2.003(10) (2005)2, the insured was not required to participate in an appraisal because only an insured can choose appraisal after an unsuccessful mediation.  Instead, the court reasoned contract § 627.7015 provides an alternative procedure for resolution of disputed property insurance claims. The purpose of the statute is to use mediation to resolve insurance claim disputes before resorting to the appraisal process or litigation. Under the version of the statute in effect when the parties entered into the contract, the insured was not required to submit to an appraisal before suing the insurer if the insurer requested mediation and the results of the mediation were rejected by either party. Here, it was the insured, not the insurer, who requested mediation. Because the statute did not address a situation where the insured requests mediation and the parties cannot reach an agreement, the court concluded that under the statute the insurer was entitled to pursue an appraisal pursuant to the terms of the contract.
Everhome Mortg. Co. v. Janssen, 2012 Fla. App. LEXIS 19703 (Fla. 2d DCA November 14, 2012) reversed an order vacating a final judgment under rule 1.540(b)(4), because the court lacked jurisdiction as plaintiff was not the holder of the mortgage when it filed suit and thus lacked standing.  The court explained that possession of the note determined standing and the holder of the original note endorsed in blank has standing.  Further, even if plaintiff lacked standing when it filed suit, the final judgment was merely voidable, not void, and a voidable judgment may not be set aside under rule 1.540(b)(4).
Rooker v. Ford Motor Co., 2012 Fla. App. LEXIS 19712 (Fla. 2d DCA November 14, 2012) reversed summary judgment granted in favor of defendant. The allegations contained in the complaint asserted design defects that caused the accident and the injuries plaintiff allegedly suffered. Even if plaintiff’s negligence caused the accident that resulted in the vehicle’s rolling over, the allegations that the defective design of the roof structure and the occupant restraint devices caused the injuries she suffered in the accident remained to be decided. Just because the alleged defect in the vehicle may not have been the cause of the accident, Ford may still be liable for the injuries caused by the other defects alleged.
Highway 46 Holdings, LLC v. Myers, 2012 Fla. App. LEXIS 19548 (Fla. 5th DCA Nov. 9, 2012) explained that once an injunction is entered, a party seeking relief may choose to file a direct appeal within 30 days or a motion to dissolve the injunction at any time under rule 1.610(d). The procedural posture chosen by the party has a direct effect on whether an appellate court can conduct a plenary review of the matter. In cases where the enjoined party takes a direct appeal from an ex parte injunction and does not file a motion to dissolve, there is no factual record and the appellate court is constrained to review only the legal sufficiency of the order, the complaint, and any supporting documents.
If a motion to dissolve an ex parte temporary injunction is filed and a hearing on the motion is held, the party who obtained the injunction bears the burden of going forward with evidence to establish a prima facie case to support the injunctive relief, and the appellate court may review the factual basis for the injunction. If the enjoined party takes a direct appeal after notice and a hearing without moving to dissolve, an appellate court may consider the underlying factual matters because there is a record of the evidence and testimony presented upon which the trial court based its decision to grant the temporary injunction. 
But a motion to dissolve is necessary only where an ex parte temporary injunction was issued. If proper notice was provided and an evidentiary hearing conducted prior to issuance of the temporary injunction, an appeal should be filed to review the propriety of the temporary injunction; in this instance, a motion to dissolve is limited to raising only new matters and a trial court will not abuse its discretion in denying the motion if the enjoined party does not establish that a change in conditions justifies dissolution.

Saturday, November 3, 2012



BKD Twenty-One Mgmt. Co. v. Delsordo, 2012 Fla. App. LEXIS 18985 (Fla. 4th DCA Oct. 31, 2012) reversed an order denying a motion to compel arbitration in a trip and fall action against the defendants-lessors.  The arbitration clause provided that “any claim or dispute (including those based on contract, negligence or statute) amongst the Parties… arising out of or related to this Agreement, the Establishment or the services/care provided to the Resident, shall be resolved by binding arbitration….” The arbitration provision does not define the term “Establishment.”  The lease covered an independent retirement living facility.  The court states that cases decided after Seifert v. United States Home Corp., 750 So. 2d 633 (Fla. 1999) [See Ramirez, 2-28 Florida Civil Procedure § 28-5 fn. 74-75] have made clear that an arbitration agreement may be drafted to expressly mandate arbitration of tort claims.  It concluded that the term “Establishment” in the context of the lease agreement meant “place of business.”  Thus, plaintiff’s negligence claim was subject to arbitration.


GMPF Framing, LLC v. Villages at Lake Lily Assoc., LLC, --- So. 3d --- (Fla. 5th DCA November 2, 2012) reversed an award of attorney’s fees pursuant to F.S. § 713.29, the claim of lien statute.  Even though the trial court discharged the claim of lien, there remained pending additional claims for the imposition of an equitable lien and unjust enrichment. Under F.S. § 713.29, the prevailing party is not necessarily the party who recovers a net judgment, but instead to that party that has prevailed on “significant issues” in the case.  See Prosperi v. Code, 626 So. 2d 1360 (Fla. 1993) [See also Ramirez, 2-24 Florida Civil Procedure § 24-5].  Here, because significant counts remained, it was impossible to determine the substantially prevailing party until the pending counts were resolved.


Braaksma v. Pratt, --- So. 3d --- (Fla. 2d DCA November 2, 2012) held that once a party complies with the technical requirements of F.S. § 768.79 and rule 1.442, the trial court may only disallow fees upon a finding that the offer was not made in good faith.  Here the judge denied fees because rejection of the offer did not result in any additional delay costs and expenses, a factor not authorized.


Am. K-9 Detection Servs. v. Cicero, 2012 Fla. App. LEXIS 19085 (Fla. 5th DCA Nov. 2, 2012) affirmed the trial court for finding that a clause providing that “[t]he Parties hereby expressly consent to: (a) the personal jurisdiction of the federal and state courts within Central Florida,” was a permissive forum selection clause allowing plaintiff to file suit in Orange County.  Although the terms “venue” and “jurisdiction” are not synonymous, “there have been many instances in which Florida courts have interpreted provisions that omit the words ‘forum’ or ‘venue’ and refer only to ‘jurisdiction’ in a particular location to be forum selection clauses.” Any ambiguity had to be construed against the drafter (defendant). [See Ramirez,


Bedwell v. Rucks, 2012 Fla. App. LEXIS 18963 (Fla. 4th DCA Oct. 31, 2012) reversed an order denying defendants’ motion to transfer venue in an action for violation of the Uniform Fraudulent Transfer Act, F.S. § 726.106.  The suit was filed in Okeechobee County.  It was undisputed that defendants resided in Miami-Dade or Broward County, and no property was at issue.  Therefore, the issue was where the action accrued.  A cause of action accrues when the last element necessary to complete it occurs. See F.S. § 47.011 [See also Ramirez, 1-4 Florida Civil Procedure § 4-9, fn. 194].  The court reasoned that proof of damages in the underlying claim is not an element of a Fraudulent Transfer Act claim. The Fraudulent Transfer Act only requires that a creditor’s claim arise before the alleged transfer.  Accordingly, the place where damages occurred in the underlying claim is irrelevant to determining when and where a fraudulent transfer claim accrued.  The court relied on the applicable statute of limitations, which states “within 4 years after the transfer was made…” F.S. § 726.110(2). A Fraudulent Transfer Act claim accrues at the moment the alleged transfer occurs.  Here, defendants presented evidence that the alleged fraudulent transfers took place in either Miami-Dade or Broward County. This was sufficient to shift the burden back to plaintiffs to demonstrate that venue was proper in Okeechobee County.  To rebut defendants’ evidence, plaintiffs relied only on facts relevant to a separately filed professional malpractice claim. This was insufficient to meet their burden.


Vidal v. Liquidation Props., 2012 Fla. App. LEXIS 18960 (Fla. 4th DCA Oct. 31, 2012) reversed summary judgment where, to demonstrate standing, the plaintiff produced the original note and mortgage, an undated allonge endorsed in blank, and a mortgage assignment executed on February 6, 2009, with an effective date of January 15, 2009, where suit was filed on February 5 2009.  The court reasoned that the back-dated assignment did not demonstrate, as a matter of law, that a legal or equitable transfer of the note and mortgage had occurred prior to the filing of the complaint.


Clarke v. State Farm Fla. Ins., 2012 Fla. App. LEXIS 18961 (Fla. 4th DCA Oct. 31, 2012) affirmed a declaratory judgment for the insurer because the plaintiff’s claims fell outside the plain language that defined the scope of the policy’s coverage. State Farm agreed to defend and indemnify Clarke for claims brought against Clarke “for damages because of bodily injury.” The policy excluded from the definition of “bodily injury” communicable diseases “transmitted by any insured to any other person.” The plaintiff based all four of her causes of action on the fact that she “was exposed to a high risk HSV virus and contracted the herpes virus from the Defendant” as a result of his actions.  The court stated that the complaint alleged injuries expressly excluded by the policy.


Voort v. Universal Prop. & Cas. Ins. Co., 2012 Fla. App. LEXIS 18964 (Fla. 4th DCA Oct. 31, 2012) reversed summary judgment explaining that, while it is the insured’s burden to prove the essential elements of its cause of action at trial, on a motion for summary judgment, it was the insurer’s burden to prove the nonexistence of a material fact.  Thus, at this stage, the insureds did not have to prove that the loss occurred during the policy period; the insurer had to prove that it did not.


Weber v. Marino Parking Sys., Inc., --- So. 3d --- (Fla. 2d DCA November 2, 2012) held that, as a matter of law, a valet parking service owed no duty to third parties to refrain from returning car keys to an obviously intoxicated customer, and that customer collided with and killed Weber.


R. J. Reynolds Tobacco Co. v. Jewett, 2012 Fla. App. LEXIS 18994 (Fla. 1st DCA Nov. 2, 2012) reversed for a new trial for failure to give a jury instruction requested by the defendant, stating that a trial court abuses its discretion when it fails to give a proposed instruction that is (1) an accurate statement of the law, (2) supported by the facts of the case, and (3) necessary for the jury to properly resolve the issues, so long as the subject of the proposed instruction is not covered in other instructions given to the jury and the failure to instruct is shown to be prejudicial.  Defendants requested that the jury be told that they did not need to prove that plaintiff “was actually diagnosed with COPD prior to May 5, 1990, in order to prevail on this defense. For purposes of this defense, the critical event is not when her COPD was actually diagnosed by a physician, but when her COPD first manifested itself.”
Defendant also requested that following:  That plaintiff “knew or should have known that there was a reasonable possibility that her COPD was caused by cigarette smoking if her COPD manifested itself to her in a way that supplied some evidence of a causal relationship to cigarette smoking. In making that determination, you may properly consider what [plaintiff] knew prior to May 5, 1990, concerning the health risks of cigarettes.”