MACHU PICCHU
I received more comments about my
trip to Peru than about all my erudite entries on appellate decisions. That should tell me something.
ARBITRATIONS
The legislature approved the “Revised
Florida Arbitration Code.” I do not see
any news that the governor has signed the bill, but it was promoted by business
and approved unanimously in both the House and Senate, so I see no reason why
the governor won’t sign it. I will
provide a summary in later blogs, as it does not go into effect until July.
Raymond
James Fin. Servs. v. Phillips, 2013 Fla. LEXIS 977 (Fla. May 16, 2013) reversed
the Second District decision which had held that a FINRA arbitration had no
limitations period, as it is not a “civil action or proceeding” under Fla. Stat. § 95.011.
A unanimous court held that the statute does apply to
arbitrations. It would seem like a
slam-dunk, but it’s not. In Broom v.
Morgan Stanley, 169 Wa. 2d 231, 236 P. 3d 182 (2010), the Washington
Supreme Court held that Washington statutes of limitation did not apply in
arbitration and therefore a FINRA arbitration panel’s dismissal of claims on
that basis exceeded the arbitrators’ powers. The Washington legislature has now
overruled Broom by amending the Washington Uniform Arbitration Act, RCW
7.04A.090, to expressly provide that SOLs apply in arbitration (HB 1065). It
becomes effective in July 2013.
McKenzie
Check Advance of Fla., LLC v. Betts, 2013 Fla. LEXIS 671 (Fla. Apr. 11, 2013)
presented the issue of whether a class
action waiver in an arbitration agreement violated Florida public policy. Relying AT&T Mobility, LLC v.
Concepcion, 131 S. Ct. 1740, 1744, 179 L. Ed. 2d 742 (2011) (holding that the
Federal Arbitration Act (FAA) “prohibits States from conditioning the
enforceability of certain arbitration agreements on the availability of classwide
arbitration procedures.”), the Florida Supreme Court concluded that the FAA
preempts invalidating the class action waiver on the basis of it being void as
against public policy.
COMMON LAW INDEMNITY
Diplomat
Props., L.P. v. Tecnoglass, LLC, 2013 Fla. App. LEXIS 8130 (Fla. 4th DCA May
22, 2013) interpreted Houdaille
Industries, Inc. v. Edwards, 374 So. 2d 490 (Fla. 1979)
saying that “a party’s liability for breach of contract can form the basis for
an indemnification claim against a third party.
“In this case, Diplomat, which stepped into the shoes of Shower
Concepts, alleged that 1) Shower Concepts was wholly without fault for the
defective shower doors, 2) Tecnoglass was at fault for the defective shower
doors, and 3) Shower Concepts was held vicariously, constructively,
derivatively or technically liable for the wrongful acts of Tecnoglass. These
allegations were sufficient to state a cause of action for common law
indemnity.”
BAD FAITH FAILURE TO SETTLE
Safeco
Ins. Co. v. Fridman, 2013 Fla. App. LEXIS 8298 (Fla. 5th DCA May 24, 2013) a
divided court reversed a jury returned for $1 million. On January 8, 2007, Fridman suffered personal
injuries as a result of an automobile collision. The insurer for the tortfeasor tendered its
policy limits to Fridman. Thereafter, Fridman made a claim on Safeco for
payment of the UM policy limits. On
October 13, 2008, after Safeco had refused to pay on the UM claim, Fridman
filed a Notice pursuant to Fla. Stat. § 624.155, alleging
that Safeco had failed to attempt in good faith to settle his claim for UM
benefits. On April 29, 2009, Fridman filed a one-count complaint against
Safeco seeking damages under his insurance policy for UM benefits. Prior to the
trial date of September 12, 2011, Safeco tendered a check to Fridman for the
$50,000 policy limits and filed both a confession of judgment and motion for
entry of confession of judgment. In these filings, Safeco expressly agreed to
the trial court entering a final judgment in favor of Fridman for the $50,000
sought by Fridman in his complaint.
The court explained
that the only cause of action before the trial court was Fridman’s UM claim.
Fridman had appropriately not included a bad faith count in his complaint.
Accordingly, when Safeco agreed to the entry of a judgment against it in
the amount of the policy limits, the issues between the parties, as framed by
the pleadings, became moot because the trial court could not provide any
further substantive relief to Fridman. Thus, it was error for the trial
court to require the parties to proceed to trial. The court made clear
that the decision did not create any legal
impediment to Fridman pursuing a bad faith claim against Safeco.
A dissent by Judge
Sawaya opined that Fridman had the right to have the jury determine the full
extent of his damages, and he properly exercised that right. He did not believe
it should be taken away by declaring the jury verdict void.
Discussion: It would seem that after this case, the
better practice would be to include a second count for bad faith failure to
settle, even though under
Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289 (Fla. 1991),
that count would have to be stayed. But at
least such a count would prevent an insurer from agreeing to a confession of
judgment and cutting off the plaintiff from proceeding on its bad faith claim.
