NEW CHIEF JUDGE-ELECT
Congratulations to Judge Suarez
on his election to chief judge-elect!
Coincidentally, the two opinions below were both authored by him.
INADVERTENT
DISCLOSURE OF PRIVILEGED DOCUMENTS
Constr.
Sys. of Am. v. Travelers Cas. & Sur. Co. of Am., 2013 Fla. App. LEXIS 12329
(Fla. 3d DCA August 7, 2013) involved a
petition for certiorari in a seven-year-old suit where counsel inadvertently
received privileged documents. A motion to compel return of the documents and a
motion to disqualify the law firm were referred to a special magistrate.
The special magistrate issued a
report and recommendation finding the documents constituted fact work product.
However, he concluded the privilege had been waived and recommended
denial of both motions. The trial court rejected the recommendation and granted
the motions, concluding that no waiver had occurred and the possibility counsel
had gained an unfair informational advantage from the disclosure required
disqualification.
The opinion reviews the five-factor
analysis established in prior cases: (1) The reasonableness of the precautions
taken to prevent inadvertent disclosure in view of the extent of the document
production; (2) the number of inadvertent disclosures; (3) the extent of the
disclosure; (4) any delay and measures taken to rectify the disclosures; and
(5) whether the overriding interests of justice would be served by relieving a
party of its error.
Upon reviewing the magistrate’s
report and the trial court’s order on the motion to compel, the trial court did
not exceed its authority by accepting the facts as found by the magistrate but
correctly determining the magistrate misconceived the legal effect of the
evidence. Therefore, order compelling return of the documents was left
unscathed, but the order disqualifying counsel was quashed because the trial
court made extensive findings and credibility determinations based on testimony
presented to the magistrate. “This was error. Upon determining the privilege
was not waived, the trial court should have remanded the matter to the
magistrate for further findings.”
WRIT OF ATTACHMENT
G.E.
v. Chuly Int'l, 2013 Fla. App. LEXIS 12334 (Fla. 3d DCA August 7, 2013) reversed an order
denying GE’s motion for pre-judgment writ of attachment against Chuly’s property. GE had sued Millennium and a guarantor, but
while the action was pending, the guarantor gave a $1.74 million loan to Chuly,
a company owned by the guarantor’s then girlfriend. This loan was subsequently forgiven. When GE discovered this, it filed a verified
motion for a prejudgment writ of attachment against Chuly for the amount of the
Chuly loan and was willing to post a bond in excess of the amount it sought
from Chuly. After an evidentiary hearing, the circuit court summarily denied
GE's motion for prejudgment writ of attachment or garnishment.
In an action for relief against
an allegedly fraudulent transfer sought pursuant to Chapter 726, Florida
Statutes, a creditor may seek an attachment against the transferred
asset. §
726.108(1)(b), Fla. Stat. (2013). Because the determination of actual
fraudulent intent can be difficult, courts look to certain “badges of fraud” to
determine whether the transfer was made with the intent to defraud creditors.
Those “badges of fraud” are set forth in section
726.105, Florida Statutes (2013).
“At the hearing on GE’s motion
for garnishment or attachment, GE presented competent, substantial evidence to
support issuance of the writ. GE was not required at that time to prove by a
preponderance of the evidence that the loan forgiveness was, actually, a
fraudulent transfer. GE merely had to
raise a rebuttable presumption of fraudulent intent by asserting the existence
of certain badges of fraud, thereby creating a prima facie case for
fraudulent transfer to be determined later in the litigation between the
parties. GE's complaint clearly alleges several of these badges of fraud, and
adequately stated a cause of action for fraudulent transfer.”
The record revealed that the transfer
was made to an insider without adequate consideration; the transfer was
concealed and it was made shortly before or shortly after a substantial debt
was incurred. Chuly did not present sufficient evidence to rebut the initial
presumption of fraudulent transfer. Further, GE asserted it would provide a
bond in the amount of $3,200,000.00, more than twice the amount of the debt
sought against Chuly. See §
76.12, Fla. Stat. (2013).
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