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Monthly Archives: October 2020

“The code is more what you’d call ‘guidelines’ than actual rules.” – Barbossa, Pirates of the Caribbean

Florida Rule of Judicial Administration 2.250(a)(1) enumerates the time standards of a civil matter from the filing of a complaint to final disposition. Specifically, the Florida Supreme Court
suggests that a jury case should be concluded within 18 months of the filing of a complaint, 12 months for a bench trial, and 95 days for a small claim matter. As practitioners, we know that
rarely does a case (actually litigated) resolve within those time frames. However, there has been a trend over the last few years in county court matters to dispose of claims and deny amendment
of pleadings based on the length of time a case has been pending. In fact, county court judges have not been shy in voicing their displeasure over the age of a case. While attorneys and judges
should be sympathetic to the need to conclude court matters, that desire should not be trumped by a party’s right to litigate or defend its case.

On April 30, 2020, the Broward County Circuit Court, acting in its appellate capacity, recognized this principle when it determined that the county court abused its discretion in denying GEICO’s request to amend its affirmative defenses, in part, based on the length of time the action had been pending. See GEICO General Ins. Co. v. Hollywood Diagnostics Ctr., Inc., CACE19-10199 (Fla. 17th Cir. Ct. May 1, 2020). The Circuit Court noted that Florida Rules of Civil Procedure demands a court freely permit amendment when justice so requires—even an ore tenus motion for leave to amend to assert an affirmative defense made at or before a hearing on a motion for summary judgment. The Circuit Court rejected the county court’s decision to deny amendment “because ‘the age of the case…it’s set for trial… gone past the pre-trial, and [there’s] a stipulation.” Id. at *3. The appellate court reversed the trial court's final judgment and recognized that a party has a right to defend a case—even if the lawsuit lasts beyond timing requirements described in the Rules of Judicial Administration. The appeal has been remanded to county court to allow the amendment of the affirmative defense.

CSK’s appellate department is available to consult on any legal issue you may have, whether you have had an adverse order or just have questions.

Nip a Punitive Damages Claim in the Bud: Procedural Issues Corporations Should Attack

Punitive damages in Florida are meant to punish a defendant for wrongful conduct and deter similar conduct in the future. Once a claim for punitive damages is injected into a case, the
landscape of the litigation changes, opening the door to financial worth discovery and increasing the potential value of the claim. The game-changing nature of punitive damages claims
highlights the importance of attacking these claims from all angles.

In Florida, a claimant seeking punitive damages must first seek the court’s leave to assert the claim. This step requires the claimant to comply with a pleading component and an
evidentiary component. In other words, not only does the claimant have to present evidence demonstrating the defendant’s conduct warrants punitive damages, but the claimant must also
comply with a number of pleading requirements, including filing an appropriate motion that attaches the appropriate pleadings, serving the evidence within a certain time period, and
sufficiently stating a claim for punitive damages in the proposed pleading. See § 768.72(1), Fla. Stat.; Fla. R. Civ. P. 1.110(f).

Claimants who seek to assert punitive damages claims against corporations must also comply with a heightened pleading standard. Section 768.72(3) requires claimants to plead (and
prove) the corporation actively and knowingly participated in the wrongful conduct; the officers, managers, or directors knowingly condoned, ratified, or consented to the conduct; or, the
corporation engaged in the wrongful conduct. But corporations act only through individuals. Accordingly, the claimant must demonstrate some fault on the part of the corporation’s corporate
officers, directors, or managers. See, e.g., Schropp v. Crown Eurocars, Inc., 654 So. 2d 1158 (Fla. 1995); Tallahassee Memorial Healthcare, Inc. v. Dukes, 272 So. 3d 824 (Fla. 1st DCA
2019).

A claimant who fails to make sufficient allegations of wrongdoing against a corporate officer, director, or manager fails to sufficiently state a claim for punitive damages against a corporation. See, e.g., Dukes, 272 So. 3d 824; Fetlar, LLC v. Suarez, 230 So. 3d 97 (Fla. 3d DCA 2017). Without these requisite allegations, the trial court would have no need to consider whether the claimant’s supporting evidence establishes a reasonable evidentiary basis for the recovery of punitive damages. In such case, the trial court should exercise its gatekeeping function and deny the request to add a claim for punitive damages.

A trial court order that allows the addition of a punitive damages claim without an attendant finding of compliance with the requirements of the statute would depart from the essential requirements of law. These orders are subject to immediate appellate review to determine whether the procedural requirements of the punitive damages statute were complied with.

Therefore, in addition to attacking the sufficiency of the proffered evidence, defendants facing a motion to add a punitive damages claim should be sure to evaluate whether all procedural requirements of the punitive damages statute have been complied with. Corporate defendants in particular should attack any proposed punitive damages claim that does not correctly or sufficiently allege wrongful conduct of corporate directors, officers, or managers. This strategy ensures any arguments attacking the procedural deficiencies of the proposed punitive damages claim are preserved for immediate appellate review.

Supersedeas Bonds & Real Property

Guided by a federal standard, the Third District Court of Appeal recently clarified the factors relevant to calculating the amount of a supersedeas bond where the final judgment pertains to real property.

First, some basics. A party on the losing end of a final judgment will frequently seek appellate review. The filing of a notice of appeal, however, does not automatically stay the execution of the final judgment. Instead, the appellant must first seek a stay from the trial court. If not successful, the appellant may then seek review of the trial court's denial of a stay from the appellate court, which will apply a deferential "abuse of discretion" standard. The metes and bounds of that discretion are only broadly provided by Rule 9.310, which states that "[a] stay pending review may be conditioned on the posting of a good and sufficient bond, other conditions, or both." Fla. R. App. P. 9.310(a). The Rule provides little additional guidance. Of course, many litigants will be more familiar with the Rule's "exception" for money judgments, which may be stayed without trial court involvement by posting a bond in the amount required by the Rule (i.e., the amount of the judgment and two years statutory interest). But what about judgments that involve equitable relief and/or contractual rights which cannot be readily quantified? What amount protects the successful litigant, now an appellee?

In Capital Development Group, LLC, v. Buena Vista Terminal, LLC, — So. 3d –, Case No. 3D19-2346 (Fla. 3d DCA, July 1, 2020), the underlying dispute involved a pending contract for the sale of commercial property. The trial court construed the contract as "terminable at will" and specified, in a final judgment, the buyer had 60 days to close or to forfeit its contractual rights. The buyer, now appellant, moved for a stay pending appeal, and the trial court determined that a supersedeas bond of $1,680,000.00 would be required. The trial court did not, however, show its work in the stay order, leaving the how and why of the amount calculated unexplained.

Characterizing the amount set in the stay order as "excessive and arbitrary," the buyer sought review at the Third District. The appellate court could not find any Florida precedent for "the specific factors that must be considered in setting a supersedeas bond pertaining to real property." Looking to federal precedent, the Third District noted five factors relevant to the task: "(1) the time value of the property; (2) the diminution in value or destruction of the property, quantified as the cost of insurance on the property; (3) the cost that the appellee will incur for the appeal; (4) the estimated taxes for the property; and (5) any other expenses that the appellee will incur as a result of the delay caused by the
appeal."

The decision indicates that each of these factors should be considered in assessing the amount of the bond, and stay orders should contain written findings. Expressing no opinion as to whether the amount of the bond was appropriate, the Third District reversed for the trial court to re-examine the issue in

“You’ve Got Mail!” . . . But Do You Actually Ever Need to Receive It?

A common issue arising with first-party insurance litigation is when a homeowner alleges her or she did not receive payment of an insurance claim by mail. Insureds, or their assignees, often allege their insurance company never paid a properly submitted, claim because the insureds never received the insurance company’s reimbursement payment by mail. In this instance, the insureds often file suit against their insurance company for non-payment of funds under their homeowners’ policy.

In some first-party cases where the insurance company re-issues a check after the insured or assignee alerts the insurance company of non-receipt of payment by mail, the insured races to the courthouse to file suit to then allege the re-issuance of the reimbursement check from the insurance company is a confession of judgment entitling the insured to attorneys’ fees pursuant to section 627.428, Florida Statutes. However, the insurance company never actually needs to show proof that it mailed the specific check for the insured’s or their assignee’s claim to defeat such an allegation.

In Florida, an organization’s routine business practice can prove the organization’s conduct on a particular occasion conformed with the routine business practice, despite having no direct proof of the conformity on that particular occasion. Evidence of a routine mailing procedure can be used to prove that a check an insured allegedly never received was in fact mailed. At that point, it is presumed that the insurance company followed its routine business practice and that the check was received by the insured. In fact, if an insurance company can prove that it had a routine mailing procedure, the insured then has to prove the routine business practice was not followed on that particular occasion. Proof of an insurance company’s routine business practice can be established by a person who supervised, was sufficiently acquainted with, or had personal knowledge of the routine business practice.

Having an issue with an insured claiming they never received payment by mail for a properly submitted and accepted claim? CSK’s appellate department is available to consult on any legal issue you may have, whether you have had an adverse order entered against you or just have questions.

Ancient Pure Bill of Discovery

A pure bill of discovery is an equitable remedy, rarely used since the adoption of the Florida Rules of Civil Procedure. This underutilized pleading can be used to petition the court for
an order requiring a party to produce documents or to disclose facts that can be used in an expected lawsuit.

However, the filing of a bill of discovery is justified only in narrow and limited circumstances. Specifically, a bill of discovery may be used in the absence of an adequate legal remedy to: 1) identify potential defendants and theories of liability, and 2) to obtain information necessary for meeting a condition precedent to filing suit. However, some lawyers use this relief as a “fishing expedition” to see if causes of action exist against a party, to obtain a preview of discovery that otherwise is obtainable once suit is filed, or simply “to substantiate one’s suspected causes of action.” Vorbeck v. Betancourt, 107 So. 3d 1142 (Fla. 3d DCA 2012). These are akin to the proverbial “cat out of the bag” discovery that causes irreparable harm and places an undue burden on the court, thereby warranting certiorari.

For example, in Kirlin v. Green, 955 So. 2d 28, 30 (Fla. 3d DCA 2007), the plaintiff filed a pure bill of discovery but had “already identified the proper party defendants and several
potential causes of action.” Nevertheless, the plaintiff asserted that discovery was necessary to “ascertain who may be sued and under what theories.” Id at 29. On certiorari review, the Third
District Court of Appeal affirmed dismissal of the complaint, concluding the pure bill of discovery complaint was improper because it was being used merely to substantiate the plaintiff’s prospective causes of action, i.e., to determine whether sufficient evidence existed to support her allegations, or to render her suspected causes of action viable or non-frivolous. Consistent with this holding, other Florida courts routinely hold that the pure bill of discovery is a rarely used tool, available only in the specific circumstances delineated above.

Having an issue with a pure bill of discovery claim? CSK’s appellate department is available to consult on any legal issue you may have, whether you have had an adverse order or just have questions.

Bad Faith & The Abuse of Civil Remedy Notices

CSK’s nationally recognized bad faith attorneys hold vast experience in defending, guiding and consulting all types of clients in bad faith claims including the abuse of Civil
Remedy Notices (CRN) by Plaintiffs’ attorneys. The intricacies of litigating bad faith issues are routine procedure for many CSK attorneys.

CRNs are processed and filed through The Department of Financial Service (DFS). CRNs are“intended for use by parties who are beginning the process of filing suit against an insurer, when a party feels they have been damaged by specific acts of the insurer.”

However, DFS makes it clear that it “does not involve itself in the litigation filed pursuant to his statute and this program is not intended for consumers seeking the assistance of
the DFS.” Instead, Florida’s Bad Faith Statute delineates the requirement for a CRN. The lack of regulation causes an overwhelming amount of unnecessary litigation. Filing numerous CRNs
have become the norm amongst Plaintiff attorneys wreaking prolonged litigation and financial havoc. When dealing with bad faith, it is important to consult with experienced attorneys. CSK is
here to help.

Perfecting Proposals for Settlement

In addition to briefing and arguing appeals, CSK’s Appellate Practice Group routinely provides litigation support at the trial level including formulation of defense strategy, handling dispositive motions, and providing appellate support at trial. The Appellate Group also serves as a consulting resource to CSK’s clients and trial attorneys by assisting with legal research and providing answers to difficult legal questions. In particular, the Appellate Group analyzes draft proposals for settlement and offers of judgment to ensure compliance with section 768.79, Florida Statutes, Florida Rule of Civil Procedure 1.442, and Federal Rule of Civil Procedure 68.

The requirements for a valid proposal for settlement are strict, and a mistake could result in the court
denying a claim for attorneys’ fees. The following is a non-exhaustive list of important points to keep in
mind when drafting a proposal for settlement:

Damages Only. The proposal must resolve all claims for damages between the offeror and offeree that may be awarded in a final judgment.

No Equitable Claims. The language of the proposal must not be so broad that it could be interpreted as attempting to resolve equitable claims.

Claims at Issue. The proposal cannot purport to extinguish other claims between the parties that are not part of the litigation.

No Joint Proposals. Joint proposals requiring acceptance by multiple offerees are invalid because each offeree must be able to independently accept. Instead, separate proposals should be sent to each offeree.

Apportionment. The amount offered must be apportioned among multiple offerors. However, apportionment is not required in cases where the complaint alleges that one defendant-offeror is “solely” vicariously liable for the fault of the other.

Avoid Ambiguities. Although courts frequently reject “nit picking” arguments about ambiguous proposal language, courts often invalidate proposals based on ambiguities that would reasonably affect the offeree’s ability to evaluate whether to accept or reject the proposal.

Releases. If the proposal asks for a release, the proposed release language must not create ambiguities. It must also be specific to the damages at issue and must not purport to extinguish equitable claims or claims that are not part of the litigation.

The foregoing points are a few basic guidelines and are not intended as legal advice for any particular case. The law in this area is vast, and there are many exceptions to the rules that must be considered based on each scenario. Accordingly, it is important to consult with an attorney experienced in the area of proposals for settlement to ensure compliance with the statute, rules, and case law.

Lien on Me: Attorney’s Fees Liens in Florida

It is very common for Florida claimants to change attorneys during litigation. Invariably, the now former attorney will immediately send a letter to the insurer and new attorney asserting
an attorney’s fee charging lien. Often, this letter is ignored, especially if very little work has been done on the case to date. However, if received, the insurer has a duty to protect the lien.

Virtually every jurisdiction in the United States recognizes the right of an attorney to recover fees by imposing a lien on a judgment obtained by his efforts for his client. See Scott v.
Kirtley, 113 Fla. 637, 152 So. 721 (1933); Note, Attorney and Client: Attorney's Charging Lien, 4 U. Fla. L. Rev. 58 (1951). Although Florida, unlike many jurisdictions, has not
codified this common law lien, its courts have long acknowledged the appropriateness of such a lien and the justification for allowing resolution by proceedings in equity:
The law is settled in this jurisdiction that a litigant should not be permitted to walk away with his judgment and refuse to pay his attorney for securing it. It is further consistent with law that an attorney's lien in a case like this be enforced in the proceeding where it arose. The parties are before the court, the subject matter is there, and there is no reason whatsoever why they should be relegated to another forum to settle the controversy.

In re Warner's Estate, 160 Fla. 160, 464, 35 So. 2d 296, 298-99 (1948) (citations omitted).

“A charging lien is an equitable right to have costs and fees due an attorney for services in the suit secured to him in the judgment or recovery in that particular suit.” Sinclair, Louis, Siegel, Heath, Nussbaum & Zavertnik v. Baucom, 428 So. 2d 1383, 1384 (Fla. 1983). An attorney’s charging lien attaches to the tangible fruits of the services. Correa v. Christensen, 780 So. 2d 220, 220 (Fla. 5th DCA 2001) (citing Sinclair, 428 So. 2d 1383). The establishment of the lien "declares the right of the attorney to participate in the recovery." Litman v. Fine, Jacobson, Schwartz, 517 So. 2d 88, 94 n.6 (Fla. 3d DCA 1987).

To establish or perfect a charging lien, the lienor-attorney need only demonstrate that he or she provided the parties to the litigation with timely notice of the interest. Sinclair, 428 So. 2d at 1385. A perfected lien is “chargeable against any person who, at the time notice of intent to claim a lien is given, holds monies or property which become proceeds of a judgment to be
entered in the future.” Hutchins v. Hutchins, 522 So. 2d 547, 549 (Fla. 4th DCA 1988); see also Hall, Lamb & Hall, P.A. v. Sherlon Inv’s. Corp., 7 So. 3d 639, 641 (Fla. 3d DCA 2009) (citing
Brown v. Vt. Mut. Ins. Co., 614 So. 2d 574, 580-81 (Fla. 1st DCA 1993) (holding that if a party has notice of an attorney's charging lien, pays out a settlement to the attorney's client, and fails to protect the attorney's interest, the paying party may be held jointly and severally liable for the attorney's fees along with the attorney's client to the extent of the settlement proceeds or other funds held).

Insurers cannot avoid liability for the attorney's fees subject to attorney’s charging lien simply
because it transferred the funds to a third party. Law Office of Michael B. Brehne, P.A. v. Porter
Law Firm, LLC, 268 So.3d 854, 855 (Fla. 5th DCA 2019). As the paying party, an insurer has a
duty to protect the attorney’s lien by:
1. notifying the former attorney of the settlement,
2. including the former attorney on the settlement check,
3. obtaining a waiver of its lien in writing, or
4. obtaining a Hold Harmless agreement from the subsequent law firm.

Geico Gen. Ins. Co. v. Steinger, Iscoe & Greene, P.A., 275 So. 3d 775 (Fla. 3d DCA 2019). If
the funds remain in trust and have not been disbursed, the attorney’s lien has not been impaired.
However, should that situation change in the future, insurers cannot avoid liability for the
attorney’s fees subject to attorney’s lien. Brehne, 268 So. 3d at 855.

Admissibility of Expert Testimony Under the Daubert Standard: The “Reliability” Factor

In May 2019, the Florida Supreme Court found the standard set forth in Daubert v. Merrell-Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), would determine the admissibility of expert testimony in Florida. See In re Amendments to Fla. Evidence Code, 44 Fla. L. Weekly S170 (Fla. May 23, 2019). Under Daubert, the three main elements a trial court considers to determine admissibility
are: 1) whether the expert is qualified in the area of testimony; 2) whether the methodology used by the expert in formulating an opinion was reliable, and 3) whether the testimony would assist the jury in understanding the evidence and determining a fact in issue presented in the case. Out of these three elements, parties almost always challenges the reliability of an expert’s opinion. Thus, it is important to know what makes an expert’s opinion reliable in order for it to be
admitted at trial.

When questioning the reliability of an expert’s opinion, parties commonly attack the accuracy of an expert’s methodology and the credibility of the testimony. However, the Daubert standard “focuses on the reliability of the expert’s methodology, not the reliability of the expert’s data or underlying conclusion”; the accuracy of the data “goes to weight, not admissibility.” Gecker
as Tr. for Collins v. Menard, Inc., Case No. 16 CV 50153, 2019 WL 3778071, at *6 (N.D. Ill. Aug. 12, 2019). Instead, the main concerns relevant to the Daubert reliability element are whether the methodology has been tested, whether it has been peer-reviewed, and whether it is scientifically accepted. See Vitiello v. State, 281 So. 3d 554, 560 (Fla. 5th DCA 2019). These are the factors courts should consider when performing a reliability analysis. Courts are likely to find an expert’s testimony reliable if it is scientifically valid and based upon a peer-reviewed methodology. Issues with the credibility and accuracy of an opinion do not preclude the admission of the testimony. Rather, these issues should ultimately be left for the jury to decide. See Lapsley v. Xtek, Inc., 689 F.3d 802, 805 (7th Cir.2012).