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In Foreclosure Cases, No Attorney’s Fee Awards for Borrowers Who Successfully Challenge the Lender’s Standing

In Hopson v. Deutsche Bank Nat’l Trust Co (Fla. 2d DCA Aug. 28, 2019), the Second DCA held that a borrower that successfully challenges a lender’s standing to bring a foreclosure action cannot also recover contractual attorney’s fees.

In the trial court, the borrower successfully argued that Deutsche Bank was not the true party in interest, and was thus not authorized to maintain a foreclosure action against the borrower. However, the trial court denied the borrower’s motion for attorney’s fees. The trial court ordered that because the borrower prevailed at trial on the argument that Deutsche Bank lacked standing upon the contract at issue, the borrower thus could not recover attorney’s fees based on a provision in the same contract.

The Second DCA affirmed, holding that the borrower’s successful argument that Deutsche Bank was not a party to the mortgage was fatal to his attempt to recover attorney’s fees under the same mortgage.

The Second DCA’s holding aligned with several holdings from the Third, Fourth, and Fifth DCAs, which also rejected prevailing party attorney’s fee claims where the parties successfully showed that their opponents lacked standing to enforce a contract. Most poignantly, an en banc panel of the Fourth DCA recently issued an opinion that announced in all capital letters:

“NO STANDING = NO ATTORNEY’S FEES.”

This opinion follows a change in precedent caused by the replacement of three Florida Supreme Court Justices in January. Shortly before the expiration of the terms of the three retiring Justices, the Florida Supreme Court issued an opinion holding that a borrower could recover prevailing party attorney’s fees despite successfully arguing the lender’s lack of contractual standing. However, after the three new Justices took the bench, the Florida Supreme Court issued a new opinion that recalled the mandate on the previous opinion, and dismissed review for lack of conflict jurisdiction.

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Judge Disqualified For “Preemptively” Denying A Party’s Motion

In Real State Golden Investments, Inc. v. Larrain (Fla. 3d DCA Aug. 21, 2019), a trial court judge made improper comments following his denial of a motion to intervene.

Although the Defendants had not filed a motion to stay the proceedings, nor suggested that they intended to file one, the trial court nonetheless denied a non-existent motion to stay the proceedings. The trial judge explained his ruling by stating that he expected a motion to stay because the Defendants “appeal everything in this case.” Thus, the trial court concluded that based on the events of the hearing, he would deny and motion to stay because there would not be a reasonable chance of success on the appeal.

The trial court’s statements were improper because a trial judge’s announced policy or predisposition to rule in a particular manner is grounds for disqualification. Moreover, a trial judge’s announced intention before a hearing to make a specific ruling, regardless of any evidence or argument to the contrary, “is the paradigm of judicial bias and prejudice.”

Therefore, because the judge’s remarks were made in the absence of any motion or evidence, they were sufficient to give the Defendants an objectively reasonable fear that they would not receive a fair trial. Thus, the Third DCA granted the writ of prohibition, holding that the trial court judge should have been disqualified from the action.

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Order Compelling Discovery From Non-Party Attorney Reversed Because Trial Court Did Not Properly Assess Attorney’s Privilege Claim

In Varela v. OLA Condominium Ass’n, Inc. (Fla. 3d DCA Aug. 21, 2019), a condominium association subpoenaed a nonparty attorney to appear for deposition in the case, and produce numerous documents related to various corporate entities. The attorney filed a motion for protective order, claiming that the subpoena requested documents protected by the attorney-client privilege. The trial court denied the motion for protective order, and ordered the attorney to appear at deposition and to produce all of the documents identified in the subpoena.

On appeal, the Third DCA reversed, holding that the trial court abused its discretion by ordering the production of the documents without conducting an in camera inspection of the documents. The trial court’s ruling was also error to the extent that the trial court relied on testimony from a prior hearing of which the attorney had no notice.

Also notable about this opinion is the Court’s recognition that the trial court’s order compelling discovery was an appealable final order under these circumstances. Because the attorney was not a party to the case, the trial court’s order ended all judicial labor as to the attorney. This case provides a useful reminder that orders regarding nonparty discovery can be challenged by a standard appeal. Thus, a nonparty challenging a discovery order does not have to meet the far stricter standards that apply to challenges to discovery orders by parties, which must be made by petition for certiorari.

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Janet Reno’s Historic Florida Homestead Preserved for Charity Under Cy Pres Doctrine

In Reno v. Hurchalla (Fla. 3d DCA Aug. 21, 2019), Florida’s Third District Court of Appeal approved a trial court’s order approving the transfer of the historic Janet Reno homestead to Miami-Dade College.

Janet Reno was a prominent figure in Florida history. She was the first woman to serve as Dade County state attorney, and the first woman to serve as United States Attorney General. Reno was at the center of many notable legal matters during the Clinton presidency, including the seizure of Elian Gonzalez, the Branch Davidian siege in Waco, the capture and conviction of the Unabomber and the Oklahoma City bombers, and the authorization of Kenneth Starr to investigate the Whitewater, Paula Jones, and Monica Lewinsky matters.

Reno also owned a historic homestead in Kendall, Florida, which was built by hand by her mother in the 1940’s. At the time of Reno’s death in 2016, the homestead was owned by a trust created by Reno.

Under the terms of the trust, the trust was directed to gift the homestead to the University of Miami after Reno’s death. The gift was conditioned on the University preserving and maintaining the historic character of the homestead in perpetuity. However, when the University of Miami rejected the terms of the bequest, the trustee sought to effectuate Reno’s charitable intention by arranging for the homestead to be donated instead to Miami-Dade College. The College was willing to accept the terms of the bequest.

Although most of Reno’s surviving family members approved of the transfer, one of Reno’s nieces sued to block the bequest. The trial court held that the bequest was valid under the doctrine of cy pres. As codified in section 736.0413, Florida Statutes, the doctrine of cy pres allows that when a charitable purpose becomes unlawful, impracticable, impossible to achieve, or wasteful, a court may apply the doctrine of cy pres to modify or terminate the trust so that trust property may be distributed in a manner consistent with the settlor’s charitable purposes.

The Third DCA affirmed the trial court, holding that the use of the cy pres doctrine was valid because the terms of the trust became “impracticable” or “impossible to achieve” after the University of Miami declined to accept the bequest. Thus, the trustee properly preserved the charitable intent of the trust in identifying Miami-Dade College as an educational institution willing to preserve the unique character and historic importance of the Reno Homestead in perpetuity.

(Image of Janet Reno by flickr user Elvert Barnes, used pursuant to Creative Commons license).

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Does a Patient’s Fall at a Medical Facility Constitute Medical Malpractice, or Ordinary Negligence? Small Factual Distinctions Make a Big Difference

Under Florida law, the mere fact that a negligent act occurred in a medical setting does not make it medical negligence. The distinction is important, because vastly different laws and procedures apply to each class of claim. Most importantly, a condition precedent to bringing a medical negligence claim is compliance with the presuit screening and notice requirements set forth in section 766.106(2), Florida Statutes.

The Second and Fourth DCAs recently grappled with this issue, and reached opposite conclusions based upon the specific facts of each case.

In McManus v. Gamez (Fla. 2d DCA Aug. 7, 2019), a patient fell off a table during a visit for a neurological examination. At the time of the fall, the treating doctor and a staff member had left the patient alone on an examination table without sides. The trial court held that the claim sounded in medical negligence, and dismissed the patient’s lawsuit for failure to follow the presuit requirements.

The Second DCA reversed. The court began by noting that “medical negligence” is statutorily defined as “a claim, arising out of the rendering of, or the failure to render, medical care or services.” To determine whether a claim sounds in medical negligence, a court must consider whether the action arose out of medical diagnosis, treatment, or care; and whether such “diagnosis, treatment, or care” was rendered by a health care provider.

The Second DCA held that the patient’s claim was for ordinary negligence, because the patient’s treatment had been completed, and no health care providers were in the room assisting the patient off the table at the time of the incident. The Second DCA distinguished other cases deeming falls from hospital beds medical negligence, because those cases involved patients admitted into a hospital receiving active medical care.

However, the Fourth DCA reached the opposite conclusion in North Broward Hospital District v. Slusher (Fla. 4th DCA Aug. 21, 2019). In that case, a patient admitted to the hospital was classified as a fall risk. A nurse attempted to transfer the patient from a bed to use the bathroom. However, the nurse answered her phone while attempting the transfer, causing the patient to fall.

The hospital moved to dismiss the plaintiff’s complaint for failure to comply with the medical negligence presuit notice requirements. The patient successfully opposed the motion to dismiss, arguing that his allegations sounded in general negligence. The patient argued that the nurse’s actions did not involve professional skill or judgment.

The Fourth DCA granted the hospital’s petition for certiorari. The Fourth DCA held that the case sounded in medical negligence, because liability will be determined by analyzing the standard of care that applies to transferring “fall risk” patients from hospital beds.

Judge Taylor dissented, arguing that the routine task of assisting a patient out of bed is not an act directly related to medical care or services requiring the use of professional judgment or skill.

These cases illustrate that the distinction between ordinary negligence and medical negligence, especially in the context of patient falls, is vary narrow, and will depend greatly on the specific facts of each case.

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Amount In Controversy Limits for Florida County Courts Set To Increase

Under a new law passed by the legislature earlier this year, the amount in controversy threshold between county court and circuit court cases will raise to $30,000 on January 1, 2020. The threshold will raise again to $50,000 in January of 2023.

However, until January 2023, the District Courts of Appeal will retain jurisdiction over any appeals where the amount in controversy exceeds $15,000, regardless of whether the case originated in the county or circuit courts.

The Florida Bar News reports that preparations for the new jurisdictional amounts are already underway throughout Florida’s judicial system. Before the new law was passed, a working group analyzing the issue estimated that an increase of the amount in controversy threshold to $25,000 would result in 7,831 cases per year being filed in county court, rather than circuit court. The working group concluded that the change in caseload would be absorbable within existing court resources.

According to the Bar News, a major concern with the new law is that many county court judges hearing civil cases are assigned to courtrooms without jury facilities. Furthermore, the new law may ultimately require a rebalancing of circuit and county judge positions throughout Florida’s trial courts due to changes in case allocation. Also beginning in 2023, the circuit court appellate panels will likely see a significant increase in their caseloads.

The new law also requires the Office of State Courts Administrator to submit a report in February 2021 making recommendations regarding the adjustment of county court jurisdictional limits. A proposed new rule will update the civil cover sheet form, requiring parties to state the amount of the claim. The new civil cover sheet will make it possible to track the effect of raising the civil jurisdiction limit.

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Jury Selection: Odd Facts Lead to Rare Case Where Cause Challenge to a Juror Is Preserved Without a Final Objection to the Jury Panel and Without a Request for Additional Peremptory Challenges

In Sanchez v. GEICO Indem. Co. (Fla. 1st DCA July 22, 2019), an unusual series of events caused a juror to be improperly included on a panel. The First DCA affirmed the trial court’s granting of a new trial, despite the fact that the party opposing the juror did not make a final objection to the panel before the jury was sworn, and did not request an additional peremptory challenge to use against the juror.

In this uninsured motorist case, potential jurors number 13 and 17 both had the last name “Johnson.”

During voir dire, juror number 13 answered several questions by indicating that he would be biased in favor of the plaintiff and against the insurance company. He stated that he was dissatisfied with the result of his own previous insurance claim, and that his girlfriend had a current claim against Geico.

Conversely, the other Johnson, juror number 17, answered questions indicating a bias in favor of Geico.

Plaintiff’s counsel successfully challenged juror number 17 for cause. However, Geico’s counsel did not seek to have juror 13 removed for cause. During the peremptory strike phase, Geico used all of its peremptory strikes on other jurors. This resulted in juror 13, the anti-Geico Johnson, being selected for the panel. Both sides agreed to the jury. However, the judge did not put the jury under oath at that time, but first called a lunch recess.

Over lunch, Geico’s counsel realized that he had failed to move to strike juror 13 for cause, due to mixing up the two Johnsons. Plaintiff’s counsel objected, and the trial court announced that juror 13 would only be stricken if it was clear that the juror should be stricken for cause.

Juror 13 was brought in for additional questioning, and maintained that although he would do his best to be fair, he would be inclined to find for the plaintiff if the evidence equally favored the plaintiff and defendant.

The judge denied Geico’s strike for cause, over defense counsel’s continued objections that the juror had repeatedly expressed bias against Geico. Geico’s renewed motion to strike juror 13 on the second day of trial was never ruled upon.

The jury returned a verdict for Plaintiff, awarding her $2.5 million in damages. The trial court granted Geico’s motion for new trial, conceding that juror 13 should have been struck for cause because there was reasonable doubt as to his impartiality. The trial court further stated that it accepted defense counsel’s failure to move to strike juror 13 was caused by to mistake, due to the existence of two jurors Johnson seated on the same row.

In a divided opinion, the First DCA affirmed the trial court’s order granting a new trial. The opinion agreed that the juror expressed bias against the defendant, and that the juror was not rehabilitated by subsequent questioning.

The opinion also held that the objection to juror 13 was properly preserved, despite defense counsel not renewing his objection before the jury was sworn, and despite not moving for an additional peremptory challenge to exercise on juror 13. Nonetheless, defense counsel made a clear argument that juror 13 should be stricken for cause immediately before the jury was sworn, thus putting the trial court on notice that he was dissatisfied with the panel. Moreover, the trial court had previously announced that it would not strike juror 13 unless it was clear that he should be stricken for cause. Thus, for the purposes of appellate preservation, any defense motion for an additional peremptory challenge would have been futile.

In a dissent, Judge Bilbrey wrote that he would have reversed the order granting a new trial because defense counsel did not request an additional peremptory challenge. Judge Bilbrey noted that long-standing Florida precedent requires a party to exhaust its peremptory challenges, and have a motion for additional peremptory challenges be denied, in order to preserve the question of an improper denial of a challenge for cause for appellate review. Judge Bilbrey further observed that it is speculative to assume that the trial court would not have granted an additional peremptory challenge.

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Construction worker working on a wood frame of a building under construction, with ladder nearby.

Construction Law: Because Attic Ladder is an Improvement To Real Property, Statute of Repose Applies

In Harrell v. The Ryland Group (Fla. 1st DCA Aug. 13, 2019), a homeowner was injured when an attic ladder collapsed underneath him. The homeowner sued the builder, alleging that the builder was negligent in its installation of the ladder.

The builder moved for summary judgment, arguing that the homeowner’s claim was barred by the statute of repose. The statute of repose, codified at Section 95.11(3)(c), Florida Statutes, requires an action founded on the construction of an improvement to real property to be brought within 10 years of the date the owner takes possession of the property (or certain other events not relevant here).

The trial court granted summary judgment, finding that the installation of the ladder was an improvement to real property as defined in the statute of repose. The trial court also found that the statute of repose applied because the accident happened more than ten years after the original owners took possession of the home.

The First DCA affirmed the trial court’s summary judgment order. The legislative intent of the statute of repose is to protect engineers, architects, and contractors from stale claims. Thus, the statute applies if the homeowner’s suit was founded on the “construction of an improvement to real property.”

Because the Legislature did not define “construction” or “improvement” in the statute, the First DCA referred to Black’s Law Dictionary to determine the ordinary meaning of the words. The current edition of Black’s defines “construction” as “the act of building by combining or arranging parts or elements,” and defines “improvement” as “an addition to property, [usually] real estate, wether permanent or not; [especially] one that increases its value or utility or that enhances its appearance.”

A prior Florida Supreme Court opinion, relying on the 1972 edition of Black’s Law Dictionary, defined “improvement” as “a valuable addition made to property (usually real estate) or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital, and intended to enhance its value, beauty or utility or to adapt it for new or further purposes.”

The First DCA held that an attic ladder meets meets both definitions of an “improvement.” The ladder was an affixed addition to real property, and provided added utility. Under the older definition, the ladder is an addition to the property, cost labor and capital to install, and enhanced the value and utility of the property. Furthermore, nothing in the statute or dictionary definitions requires an addition to significantly increase the value or utility of the property to be deemed an improvement. Thus, the statute of repose applied to the homeowner’s claim.

Because it was undisputed that the original owners took possession of the property more than ten years before the subject incident, the claim was properly barred under the statute of repose.

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Nominal Proposals For Settlement Are Enforceable If Good Faith Basis Exists For Concluding That Exposure Is Minimal

In Miccosukee Tribe of Indians of Florida v. Lewis Tein, P.L. (Fla. 3d DCA August 14, 2019), a nominal proposal for settlement was upheld because the party making the proposal had a good-faith basis for concluding that its exposure was minimal.

The underlying case involved a convoluted saga between the Miccosukee Tribe and its former lawyers, described in detail in a prior opinion from the Third DCA. During the pendency of the previous appeal, the tribe served proposals for settlement in the total amount of $7,500 on the former lawyers, which were not accepted. The prior appellate opinion held that the claims alleged in the lawsuit were barred by tribal sovereign immunity, and reversed the trial court order denying the tribe’s motion to dismiss.

On remand, the trial court dismissed the action, but denied the tribe’s motion for attorney’s fees. The trial court ruled that the proposals for settlement were filed in bad faith because they were nominal.

The Third DCA reversed the trial court. It held that a nominal proposal for settlement is not made in bad faith if the party making the proposal has a reasonable basis to conclude that its exposure is nominal or minimal. Thus, proof of bad faith requires a showing beyond the mere amount of the offer. Rather, a determination that a proposal was made in bad faith requires an inquiry into the circumstances shown by the entire record of the case.

In this case, the Miccosukee Tribe had a “well-founded, good faith, and legally correct” basis to conclude that sovereign immunity barred the Plaintiff’s claim. Thus, its nominal proposals for settlement were enforceable. Therefore, the trial court abused its discretion in ordering that the proposals were unenforceable.

Note: this post was updated on August 19, 2019 at 1:25 p.m. to reflect minor changes to the opinion issued by the Third DCA pursuant to its recent granting of a motion for rehearing.

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Juror Conducting Internet Research Causes New Trial

In State v. Needelman (Fla. 5th DCA 2019) a juror violated the trial court’s explicit instructions by conducted extensive independent research online during a two week criminal trial.

After the jury returned a guilty verdict against the defendant, a juror approached defense counsel in the parking lot, suggesting that there had been improper behavior by another juror. Juror interviews revealed that one of the jurors, a paralegal at a local law firm, repeatedly engaged in online legal research, and shared the results with some of the other jurors. The juror also improperly shared her work-related knowledge with the jury regarding the court’s procedures before imposing a sentence upon the defendant.

The 5th DCA affirmed the trial court’s ruling that the juror’s misconduct could have affected deliberations, thus requiring a new trial. Moreover, a new trial was required on all counts, even though the misconduct only clearly tainted some of the counts. The tainted charges, although alleged as separate counts, were intertwined with the overall allegations. Moreover, it would have been impermissible to question jurors as to whether they actually relied on the information from outside the record.

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