Will it Expand the Statute of Limitations Period in Filing Employment Discrimination Matters?
Under the Equal Employment Opportunities section of the Civil Rights Act of 1964, more commonly known as “Title VII,” an employee must generally file a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) within 180 days of the alleged unlawful employment practice being challenged.1 The time period to file a charge of discrimination is extended to 300 days if the employment practice occurs in a state with an agency that shares the investigatory work with the EEOC.2 In Florida, the Florida Commission on Human Rights (“FCHR”), and other county agencies, share work with the EEOC in conducting the investigations.3
Recently, in Lewis v. City of Chicago,4 the United States Supreme Court unanimously concluded that a group of African-American firefighter applicants had timely filed a charge for discrimination against the City of Chicago.5 In January 1996, the City of Chicago announced the results of a July 1995 written examination administered to approximately 26,000 applicants who were seeking to serve in the Chicago Fire Department.6 At the same time, the City issued a press release stating that “it would begin drawing randomly from the top tier scorers, i.e., those who scored 89 or above (out of 100), whom the City called ‘well qualified.’”7 However, a score of 65 or greater was considered passing, wherein the City rated those applicants who scored between 65 and 88 as “qualified.” Those applicants who were rated as “qualified” were subsequently notified that due to the number of “well qualified” applicants, it was unlikely that they would be contacted for further processing.8
On May 16, 1996, and on ten additional dates spanning a six-year period, the City ran a lottery to select applicants from the “well qualified” scorers of the July 1995 exam. During the final round of selections, the City exhausted the pool of “well qualified” applicants and for the first and only time, selected applicants from those rated as “qualified” to fill the remaining slots.9 On March 31, 1997, some 430 days after the City’s January 1996 announcement, Crawford M. Smith, an African- American applicant who scored in the “qualified” range, filed a charge of discrimination with the EEOC. Subsequently, five other individuals followed suit. On July 28, 1998, the EEOC issued all six individuals “right-to-sue” letters. Several months later, the individuals filed a civil action against the City alleging that its practice of only selecting “well qualified” applicants caused a disparate impact on African-Americans in violation of Title VII.10
Following the District Court’s class-certification, which consisted of more than 6,000 African-American applicants who fell within the “qualified” range, the City moved for summary judgment. The City asserted that the applicants had failed to file charges with the EEOC within the required 300 days after their claim had accrued. The motion was denied by the District Court, which reasoned that the City’s ongoing use of the 1995 test results constituted a continuing violation of Title VII. On appeal, the Seventh Circuit held that the EEOC charge was not timely filed, as the only discriminatory act was the sorting of the scored into the “well qualified,” “qualified” and “not qualified” categories. The Seventh Circuit further held that the eleven subsequent hiring decisions were immaterial because the hiring of only “well qualified” applicants was “‘the automatic consequence of the test scores, rather than the product of a fresh act of discrimination.”11
In reversing the Seventh Circuit’s decision, the U.S. Supreme Court held that each of the eleven times the City selected a class of applicants from those who tested in the “well qualified” range, the City “used” a practice that produced a disparate impact. The Court’s reasoning however, was not premised on the “continuing violations” doctrine, a theory which would treat the adoption and application of the cutoff score as a single, ongoing wrong.12 Moreover, the Court has previously rejected the “continuing violations” doctrine, finding that “unlawful employment practices” include “numerous discrete acts, holding that “[t]here is simply no indication that the term ‘practice’ converts related discrete acts into a single unlawful practice for the purposes of timely filing.”13 Rather, the Court focused on whether the City only used the discriminatory practice when it first announced the results and created the list of applicants, or whether the City used the discriminatory practice each of the eleven times it selected applicants from the list to fill open positions.14
The Court held that the City created a disparate-impact each time it selected applicants from the “well qualified” pool, and thus, the plaintiffs had timely filed a disparate-impact claim. The Court’s holding allows for a plaintiff who did not timely file a charge challenging the implementation of a practice to timely assert a charge for disparate-impact based upon the employer’s subsequent application of that practice if that party properly alleges the elements of a disparate-impact claim.15 Specifically, the Court notes that a Title VII employee must show a “present violation” within the statute of limitations period.
Consequently, an employer who regularly uses a practice implemented years prior may now be subject to new disparate-impact suits.16 In addition, the Court’s holding in Lewis may potentially subject employers to charges of discrimination filed outside the statute of limitations period of 300 days if an employee can show that the employer discriminated against the employee each time the employer made a decision based upon that practice. In that regard, pursuant to Title VII, the employee must show a “present violation” within the statute of limitations period.
Nonetheless, an argument can be made that the Court’s holding in Lewis is limited to those discrimination claims, such as disparate-impact, which do not require proof of discriminatory intent.17 Specifically, the Court noted the common requirement that the complaining party show discriminatory intent within the statute of limitations period. Stated differently, the employee must show the present effects of present discrimination and not the present effects of past discrimination outside the statute of limitations period.18 Where there is no requirement for discriminatory intent, a party can show a “present violation” of past discriminatory intent.
Although the full scope and reach of the Supreme Court’s holding in Lewis is presently unknown, employers should continuously review and revise their day to day employment practices and policies in order to avoid potential future claims, despite those claims appearing on their face to be filed outside the statute of limitations period.
1 42 U.S.C. § 2000e-5(e)(1).
3 § 760.03, Fla. Stat. (2010); § 760.04, Fla. Stat. (2010).
4 Lewis v. City of Chicago, Illinois, __ U.S. __, 130 S.Ct. 2191 (2010).
5 Id. at 2200
6 Id. at 2195.
8 Id. at 2196.
11 Id. quoting Lewis v. City of Chicago, Illinois, 528 F.3d 488, 491 (7th Cir. 2008)
12 Id. at 2200.
13 National R.R. Passenger Corp. v, Morgan, 536 U.S. 101, 111 (2002); 42 U.S.C. § 2000e- 6(a); 42 U.S.C. § 2000e-2.
14 Lewis, 130 S.Ct. at 2199.
15 Id. at 2199-2200.
17 See e.g. Malone v. Lockheed Martin Corp., 2010 WL 2541176, n. 9 (1st Cir. June 25, 2010) (declining to extend the scope of Lewis beyond the context of disparate-impact matters.).
18 Lewis, 130 S.Ct. at 2199-2200.
If a hundred people were asked to name their ten most pleasurable experiences, it is probably a safe bet that not a single list would contain the word “litigation.” For many, litigation is a synonym for stress, time, and expense. There is also the potential cost of losing a case. To make that prospect worse, if certain factors apply, there is the additional hurt of being forced to pay the winning party’s attorney’s fees and costs, on top of any adverse money judgment.
The “American Rule,”1 as it has come to be called, provides for “certain factors” when the losing party in a legal dispute may be required to pay the prevailing party’s attorney’s fees and costs. Generally, fees and costs cannot be recovered unless that recovery is authorized by a contract or statute.2 For example, Florida statutory law provides that the prevailing party in a claim for unpaid wages may recover costs and reasonable attorney’s fees.3
Of course, the American Rule, like many rules, has exceptions. One such exception is the Wrongful Act Doctrine. Under the doctrine, a “wrongful actor” can be compelled to pay certain of a party’s reasonable attorney’s fees and costs even in the absence of a contract or statute. “Where a defendant has committed a wrong toward the plaintiff, and the wrongful act has caused the plaintiff to litigate with third persons, the wrongful act doctrine permits the plaintiff to recover, as an additional element of damages, plaintiff’s third party litigation expense.”4
The doctrine often springs its head when allegations of professional malpractice are in the air. One example of where this doctrine has arisen is in the context of a law firm’s handling of a probate matter.5 When the firm’s handling of the matter caused the administration of the estate to be more expensive than it should have been, the plaintiffs sued both the firm and the company procured by the firm to be the estate’s corporate fiduciary.6 After the plaintiffs settled with the fiduciary, they proceeded against the firm, seeking recompense for “avoidable probate expenses” and a return of the fees already paid to the firm.7 When all was said and done, a portion of the total damages the firm had to pay were the legal expenses the plaintiffs incurred in their litigation against the corporate fiduciary, pursuant to the Wrongful Act Doctrine.8
However, professional malpractice is not required in order to make a claim under the doctrine. An insurer, believing it had title to an automobile, brought an action against the vehicle’s current owner to repossess the automobile, which had been purchased with a forged check and then resold numerous times, eventually ending up in the hands of its current owner.9 The current owner, in turn, brought a third party action against the car dealer who sold him the subject vehicle.10 The dealer asserted claims against the insurer for negligence, malicious prosecution, and, among other damage claims, and attorney’s fees.11 While the court determined that the negligence and malicious prosecution claims were without merit, it did find that the dealer could seek recovery of the attorney’s fees it incurred in defending against the owner’s claim.12
The Auto-Owners case provides additional guidance, as well. Importantly, a party seeking damages pursuant to the Wrongful Act Doctrine is only entitled to recover fees to the extent they were incurred in litigation with a third party in connection with that particular dispute.13 In other words, the dealer was entitled to recover from the insurer the fees the dealer incurred in defending against the owner’s claim. The dealer was not entitled, however, to recover the fees it incurred in litigating the negligence and malicious prosecution claims against the insurer.
The distinction is an important one. In some professional negligence cases, claimant’s seek recovery for damages under the Wrongful Act Doctrine for all its legal fees, including those it was incurring in the instant litigation. That is not the Wrongful Act Doctrine; it is simply an attempted end-around the American Rule. Rather, the defendant must have caused the claimant to litigate with a third party. The claimant may then seek to recover from the defendant any fees connected to the litigation with the third party. The claimant may not seek to have the defendant pay the fees the claimant incurs in its suit against the defendant. Such a claim is no different than asking a defendant to finance litigation against itself.
Another important rule regarding the Wrongful Act Doctrine is that it is not an independent cause of action.14 It is, on the other hand, “a claim for attorney’s fees as special damages.”15 Thus, the doctrine cannot stand alone as a count in a complaint; the fees under the doctrine must be sought as damages under an independent cause of action such as professional negligence. Further, because the wrongful act damages are “special damages,” they must be specifically pled.16 The claimant must plead entitlement to fees under the doctrine; otherwise, the claim is waived.17
We all know litigation can be an unpleasant experience. An application of the Wrongful Act Doctrine could certainly contribute to the burden litigation can have on expenses, and thus add to the displeasure that often comes with being a party in a legal dispute. It is therefore important to understand that, in applicable circumstances, a claimant can seek payment of certain of its attorney’s fees even in the absence of a contract or statute.
1 As opposed to the “English Rule.” See Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145, 1147-48 (Fla. 1985) (discussing the differences between the “American” and “English” Rules.
2 The “English Rule” awards fees and costs to the prevailing party regardless as to whether recovery of the fees and costs is provided for by statute or contract. See id.
3 See § 448.08, Fla. Stat. (2010).
4 State Farm Fire & Casualty Co. v. Pritcher, 546 So. 2d 1060, 1061 (Fla. 3d DCA 1989) (emphasis added).
5 Gunster, Yoakley &Stewart, P.A. v. McAdam, 965 So. 2d 182 (Fla. 4th DCA 2007).
6 Id.at 183.
9 Auto-Owners Ins. Co. v. Hooks, 463 So. 2d 468 (Fla. 1st DCA 1985).
10 Id.at 471.
12 Id.at 478-79.
13 Id.at 478.
14 See Pritcher, 546 So. 2d at 1061 (emphasis added).
16 See Fla. R. Civ. P. 1.120(g); Robbins v. McGrath, 955 So. 2d 633, 634 (Fla. 1st DCA 2007); Winselmann v. Reynolds, 690 So. 2d 1325, 1328 (Fla. 3d DCA 1997).
17 See Robbins, 955 So. 2d at 634.
On June 1, 2010, combined Florida Senate Bills 1196 and 1222 were signed by Governor Charlie Crist. The combined Bill includes significant amendments to Florida Statutes Chapter 718, the Condominium Act, and Florida Statutes Chapter 720, the Homeowners’ Association Act, and became effective July 1, 2010. This article examines the foreseeable impact of these Amendments on the liability exposure of community associations in the Directors and Officers (“D&O”) context.
Amendments were made to the portion of the Condominium Act that formerly obligated a condominium association to require each owner to provide proof of a currently effective policy of hazard and liability insurance.1 The bill also deleted the association’s former option of purchasing a policy of insurance on behalf of an owner, if the owner failed to provide a certificate of insurance within 30 days after a written request for such certificate was delivered. This relieves associations of some D&O liability, however, because a plaintiff may no longer claim that the association acted unreasonably in failing to procure a policy of insurance on behalf of an owner where the owner failed to provide proof of a currently effective insurance policy.
Both the Condominium Act and the Homeowners’ Association Act now require a tenant in a unit owned by a person who is late on their rent to the association up to the amount of future monetary obligations. The amendment also authorizes the association to sue a tenant who fails to pay rent for eviction.2 These amendments have been promoted by some as powerful tools for the collection of past due assessments. However, we also foresee claims arising from increasingly aggressive approaches to assessment collection. More eviction complaints will lead to more counterclaims for wrongful eviction. The association will be held to some of the procedural requirements of Florida’s Landlord-Tenant laws, and we foresee some growing pains as association attorneys adapt to what may be a new area of the law.
Other changes include an amended section 718.303, which now authorizes a condominium association to suspend, for a reasonable time, the right of a unit owner or the unit’s occupant, licensee, or invitee to use certain common elements if the unit owner is delinquent in the payment of any monetary obligation for more than 90 days until the obligation is paid. This section was also amended to allow for the suspension of voting rights if a unit owner is delinquent in the payment of any monetary obligation for more than 90 days until the obligation is paid.
Similarly, in the homeowners’ association context, section 720.305 was amended to authorize a homeowners’ association to suspend, for a reasonable time, the right of a member or member’s tenant, guest, or invitee to use certain common areas and facilities if a unit owner is delinquent in the payment of any monetary obligation for more than 90 days until the obligation is paid. This deleted the requirement that the governing documents provide for such suspension. The suspension process requires 14 days notice and an opportunity for a hearing.
We have already seen litigation arise over homeowners’ and condominium associations’ alleged failure to comply with procedural requirements. Now that every association has been extended the legal right to suspend, we foresee increasing litigation over this issue.
Furthermore, while there are now new tools for community associations in their struggle to cope with the current economic climate, the period of adaptation may be significant. Nevertheless, the new provisions clarify existing law and provide a more detailed roadmap for community associations in their enforcement of their governing documents. Accordingly, we believe that the long term impact will have the positive effect of decreasing and simplifying new claims.
1 Fla. Stat. § 718.111 (2010).
2 Fla. Stat. §§ 718.116, 720.3085, Fla. Stat. (2010).
Fla. Stat. § 768.0755 Eliminates the Ten-Year Old Standard Governing Foreign Transitory Substances in Slip-and-Fall Cases Articulated in Owens v. Publix Supermarkets, Inc. and Returns the Law to its pre-Owens State.
This Spring, Governor Charlie Crist signed into law House Bill 689, which significantly changed the “Publix” slip-and-fall law in Florida. This bill repealed the current premises liability statute, section 768.0710, Florida Statutes, and created section 768.0755. Section 768.0755 states that “if a person slips and falls on a transitory foreign substance in a business establishment, the injured person must prove that the business establishment had actual or constructive knowledge of the dangerous condition.” The statute further states that actual or constructive notice can be shown by demonstrating that the condition existed for a sufficient length of time or that the condition occurred with regularity. As amended, the new law will place a higher burden on plaintiffs in slip-and-fall cases by eliminating the burden-shifting scheme created by Owens v. Publix Supermarkets, Inc.1 This will benefit business owners and operators by placing the burden of proof on the plaintiff at all stages of the case.
This new section reverses of the Florida Supreme Court’s decision in Owens, which held that once a plaintiff demonstrates that she slipped on a foreign transitory substance, the burden of proof is shifted to business owners to show that they exercised reasonable care, and appears to return substantially to the standard used before Owens. It appears that, in Florida, the ten years spent under the Owens 2 standard and section 768.0710, Florida Statutes were an intermission between spans of two nearly-identical premises liability standards.
In 2001, the Florida Supreme Court decided Owens, and eliminated the requirement that a plaintiff prove that the premises owner or operator have actual or constructive knowledge of a transitory foreign substance. The Court held that once a plaintiff established that he or she slipped on a foreign transitory substance, there is a rebuttable presumption that the premises owner did not maintain the premises in a reasonably safe condition, and eliminated the notice requirement.
In reaction to the Supreme Court’s decision, the Legislature adopted section 786.0710, Florida Statutes.2 This section enacted a three-part standard for slip-and-fall cases, and shifted the burden back to plaintiffs to prove that “[t]he business acted negligently by failing to exercise reasonable care in the maintenance, inspection, repair, warning, or mode of operation of the business premises.” In an acknowledgement of the Supreme Court’s decision in Owens, the legislature added that “actual or constructive notice of the transitory foreign object or substance is not a required element of proof to this claim.”
In order to discern the impact House Bill 689 and the new section of the Florida Statutes will have on slip-and-fall cases, it would be helpful to look at case law predating Owens. Before Owens, the law in Florida regarding premises liability suits favored business owners, by requiring that Plaintiffs prove that the business owner have actual or constructive knowledge of the transitory foreign substance. Furthermore, it appears that, in creating the new premises liability law, the Legislature intended to return to this pre-Owens standard. The Legislature used language substantially similar to the pre-Owens case law, in setting forth how constructive notice can be established. Under the new law, just like the pre-Owens case law, constructive notice can be established by a plaintiff through demonstrating that the dangerous condition existed for such a length of time that the premises owner should have known of the condition or that the condition occurred with regularity and was therefore foreseeable.
As mentioned above, constructive notice can be imputed from the length of time that the dangerous condition existed. In a large amount of cases, courts have been willing to allow evidence of the condition of the transitory substance to be used to preclude summary judgment for premises owners. Methods for proving length of time have included lumps in butter,4 skid or scuff marks,5 and thawing.6 However, even if the substance appears that it was there for a sufficient amount of time, the defendant may still prevail if the plaintiff cannot demonstrate that the characteristics being used to prove constructive notice were acquired while on the floor of the premises. This is vividly illustrated in the lower court decision reviewed in Owens. In the case below, it was alleged that the plaintiff slipped on a discolored banana peel. The lower court found that summary judgment for the defendant was appropriate, because the plaintiff was unable to present evidence that the discoloration occurred on the floor, and that the banana was not already discolored when it was dropped.7 Also, plaintiffs will be able to establish constructive notice when the condition occurred with regularity and was therefore foreseeable. In this category, evidence of recurring or ongoing problems that resulted from operational negligence or negligent maintenance becomes relevant. In the pre-Owens case of Wal-Mart Stores, Inc. v. Reggie, the plaintiff alleged that liquid that had seeped out of an overflowing trash can caused a slip-and-fall accident.8 The plaintiff successfully presented evidence that the trash can in question would overflow regularly, and that the Wal-Mart staff would always be notified, and would clean it within 30 minutes to an hour-and-a-half. The court held there was sufficient evidence of foreseeability, due in part to the testimony that this seepage would occur regularly.
Allowing constructive notice to be established by showing the event occurred with regularity could portend some changes in how business owners protect themselves from liability. As discussed above, under the post-2001 and pre-2010 Owens framework, as soon as the plaintiff established that he slipped and fell on a transitory foreign substance on the premises, the defendant bore the burden of establishing that the premises were maintained in a reasonably safe condition. Therefore, premises owners found it necessary to maintain detailed records of maintenance, such as “cleaning logs,” “sweep sheets” and “wet spill entries” that document how often everything is cleaned and how quickly they clean up spills.
Under the new law, business owners may wish to take a more nuanced approach to record-keeping as business owners could also face a hidden danger in these records, as they could be used to demonstrate that they had constructive notice of the transitory foreign substance as the records could potentially demonstrate that the condition at issue occurred with regularity. This is especially true with “wet spill logs,” which chronicle every previous wet spill and when they were cleaned up as plaintiffs will use prior wet spills to argue that the business owner had constructive notice. Keeping maintenance logs and other records of cleanings and maintenance would not pose this same risk as they would not demonstrate that the condition occurred with regularity. However, it would be important to note that the less evidence a business owner keeps of cleaning procedures, the less evidence the business owner would have to rebut any potential claims. Nevertheless, it is likely that some premises owners will rethink their maintenance recordkeeping in light of the constructive notice requirement being added.
Finally, it appears that the initial judicial reaction is that this law is not retroactive.9 The first inquiry in determining if a statute is retroactive is whether the legislature evinces an intent to have the law apply retroactively.10 In this case, there is no indication either way in the statutory language. Therefore, the subsequent inquiry is whether the statute affects procedural or substantive rights. In cases affecting procedural rights, retroactivity is presumed, while the opposite is true in cases affecting substantive rights.11 In the case of section 768.0755, the United States District Court for the Middle District of Florida has recently decided a case concerning this issue and held that the statute as amended did not affect the burden of proof, but instead added a new substantive element that plaintiffs are required to prove, thereby precluding the statute from having a retroactive effect.12 At this time, no other courts have addressed this issue and no binding appellate rulings exist either; however, assuming that other courts adopt the same reasoning, it appears that section 768.0755 will be applicable only to cases filed after July 1, 2010.
The new law is yet untested, and so we cannot say with absolute certainty how the courts will view and enforce the new premises liability standard. However, because the new law is such a close approximation to the pre-Owens standard, it is safe to say that the premises liability landscape will likely approximate the standards and holdings before 2001.
1 802 So. 2d 315 (Fla. 2001).
3 § 768.0755, Fla. Stat. (2002).
4 Ramey v. Winn Dixie Montgomery, Inc., 710 So. 2d 191, 192-93 (Fla. 1st DCA 1998) (partially melted butter with lumps in it).
5 Woods v. Winn Dixie Stores, Inc., 621 So. 2d 710, 711 (Fla. 3d DCA 1993) (unidentified substance described as “very dirty,” “trampled,” “containing skid marks, scuff marks,” and “chewed up”).
6 Camina v. Parliament Ins. Co., 417 So. 2d 1093, 1094 (Fla. 3d DCA 1982) (ice cream was thawed, dirty, and splattered)
7 Owens v. Publix Supermarkets, Inc., 729 So. 2d 449 (Fla. 5th DCA 1999).
8 714 So. 2d 601 (Fla. 4th DCA 1998)
9 See e.g. Armiger v. Associated Outdoor Clubs, Inc., 35 Fla. L. Weekly D2194 (Fla.2d DCA 2010).
10 Basel v. McFarland & Sons, Inc., 815 So. 2d 687 (Fla. 5th DCA 2002).
11 Id.at 692.
12 Kelso v. Big Lots Stores, Inc., No. 8:09-cv-01286-T, 2010 WL 2889882 (M.D. Fla. July 21, 2010).