Tuesday, May 28, 2013

I received more comments about my trip to Peru than about all my erudite entries on appellate decisions.  That should tell me something.
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.
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.”
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.

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