Another day, another Florida state court opinion shooting down either a 57.105 Motion for Sanctions or invalidating a Proposal for Settlement. For practitioners, defending AGAINST these motions has always been a serious matter, given the consequences. Over the last few years, PURSUING such motions has become so burdensome and unlikely that it is hard to strongly encourage them to a client, since the risk of success seems so daunting. The cost of the motion, affidavits, hearings, and appeals should not be lost on court watchers.

Enter the case of Frank W. Kenniasty et al. v. Bionetics Corporation et al., which has a long procedural history dating back to its inception in 2001. A Motion for Sanctions, under Florida Statute 57.105, was filed in March 2003 without the 21-day warning letter as required under section 57.105(4), Florida Statutes. Was it valid?

The answer is no. The 21-day letter requirement/safe harbor provision in s. 57.105(4) became effective July 1, 2002. The Fifth District (Griffin, Pleus, and Torpy) held that the 7/1/02 date applied to the filing of the Motion for Sanctions, not the filing of the lawsuit. In this case, the suit was filed in 2001 while motion was filed nearly a year later in 2003 -- it was defective since the motion was filed after July 1, 2002 without the 21-day letter.

Two recent releases from the 15th Judicial Circuit reveal the effects of a vortex of judicial appointments, judicial problems, and budgetary cuts which has lead to drifting judicial assignments as well as the temporary closure of entire trial divisions.

At least one criminal defense lawyer reports he is getting the "best deals" from the overwhelmed SA's office. Civil lawyers are left wondering which judge they should appear before and whether Spring trials will be held. A good time to consider arbitration..?

A split Panel on the Third District (Shepherd, Suarez and Schwartz) held that a defendant cannot collect on a valid Proposal for Settlement when the Plaintiff received payment from the co-defendant which released all parties and dismissed the case. Given the unusual ruling and the apparent strong positions of the parties, Central Motor Company d/b/a Central Hyundai et al v. Earlene P. Shaw may see its way to the Florida Supreme Court.

While confusing, this decision sits nicely with the other Proposal for Settlement/Offer of Judgment cases which lead to dizzying and uncertain results.

The dispute involves a plaintiff car-buyer, defendant dealership, and co-defendant finance company. The underlying Circuit Court case has a docket number of "98-12530," which indicates the suit dates back to 1998 -- which means it is a 10 year old case. In February 2004, year five of the suit, defendant-dealer serves the plaintiff with a $1,000 Proposal. Over two and a half years later, in October 2006 (7th or 8th year of litigation), defendant finance company settles the entire case for $10,000.

The finance company's settlement explicitly indicates it is settling the entire case (essentially paying on behalf of the co-defendant dealer) and its payment requires dismissal of both defendants. The dissent hints this was done because plaintiff and finance company were ready to settle while dealer refused to settle.

The majority held that the Proposal for Settlement statute provides attorney's fees as a sanction and, under the circumstances, the plaintiff should not be sanctioned. It held that, under a 2003 Florida Supreme Court case, there was no evidence of the plaintiff unreasonably continuing litigation, thus causing "delay costs and expenses unnecessarily prolonging litigation..." It noted that the settlement benefited the defendant dealer, who knew of the settlement and never objected. Indeed, the majority held that the dealer got a "windfall."

The dissent (Shepherd) points out that there was two and a half years of litigation between the Proposal and the settlement; moreover, defendant dealer had the "right" not to settle. Judge Shepherd noted that the Proposal for Settlement statute was a "mandatory right" and that the only basis on which a court can disallow entitlement to fees is that the offer was not made in good faith. No such argument was made. As the dissent summed up, "[plaintiff and defendant finance company] had no right to decide what 'profit' Central Motors should receive as a result of its ten-year defense of this action brought against them."

Admittedly, the plaintiff was in a box since defendant-1 was clearly not settling while the plaintiff and defendant-2 were ready to move on. The court's desire to soften the blow and give a way out is understandable. But it stands in contrast to the strict interpretation applied to the Proposal for Settlement in prior cases.

Having been the defense lawyer who has sought to enforce my share of Proposals, there is a bit of a concern when the court talks about the "profit" made by the successful offeror seeking enforcement. It's not profit. That company was accused of deceptive and unfair trade practices and defended itself for ten years. That's expensive. Probably embarrassing. It has a right to not settle and want to take the matter to court. Perhaps they wanted to make law so they would not have to face the same types of lawsuits over and over. To not recover its paid attorney's fees after the period of time is a serious loss, even if they were not exposed to liability. To use the word "profit" to describe the recovery of the fees is a misnomer.

We are a full four business days into the new year and it is the Third DCA which wins the race to issue the first arbitration decision of 2009. Unfortunately, this case is fact intensive but light on law so it may not hold much precedent.

In Noah Breakstone v. Breakstone Homes, Inc. and BHI Developers, LLC., the Third District (Cope, Cortinas and Salter) address shareholder disputes and the question of whether they are to be arbitrated since the "Shareholders' Agreement" has an "any controversy or claim arising out of or relating to this Agreement"-type arbitration provision.

The Panel appropriately turned to Seifert v. U.S. Home Corp. to determine if the parties needed to rely on the Agreement in any substantive way to resolve the dispute. The Court found that contractual rights (remedy for engaging in a competing enterprise), obligations (buy/sell provision), and damages were all at play. Thus, the claims and the Agreement were "significantly related." Arbitration was compelled.

The Florida Supreme Court took up the question of the enforceability of (fairly common) "pre-injury" liability waivers/general releases which are signed by parents so their children can participate in commercial activities. Finding this an issue of "great public importance," the Court held that these releases are NOT valid. If, however, the waiver is for the child to participate in non-commercial activities such as school or community events, such a waiver could be valid.

As the dissent points out, it is odd for the Florida Supreme Court to enunciate a public policy (of great public importance) despite no such prior reference in Florida general or statutory law. Moreover, quickly Florida lawyers will question (a) whether the parents can be called upon to indemnify the activity operator or (b) whether a case involves a commercial or school/community activity.

The case of Scott Corey Kirton et al. v. Jordan Fields et al.; Dean Dyess v. Jordan Fields; and H. Spencer Kirton v. Fields were consolidated appeals arising from an August 2007 Fourth District Court of Appeal decision.

Our prior post gives the backdrop of case law which lead to this Florida Supreme Court ruling, which should not have come as a shock in light of the hints dropped in the 2005 Global Travel v. Shea opinion.

The Court held that "a parent does not have the authority to execute a pre-injury release on behalf of a minor child when the release involves participation in commercial activity." In a quick footnote, the Court then qualified that this decision would only be dicta if (when!) the questions arise about the enforceability of parent-signed exculpatory agreements for children to participate in non-commercial activity.

That creaking noise you hear is the door being swung wide open for appeals arising from the enforcement of liability waivers in non-commercial cases as well as in instances where it is unclear whether an activity is commercial or non-commercial.

The Court admitted there is no statute on point. It did, however, find that this situation invoked the State's parens patriae public policy basis to preclude the enforcement of such waivers. Signing a pre-injury waiver was deemed not to be so much a part of a fundamental right of raising children but more an "injustice" which "deprives the child of the right to legal relief" and could lead the child, family, and the State to "suffer." Signing the waiver "impacts the minor's estate and the property rights personal to the minor."

A short-shifted discussion was then had about how commercial activities could afford insurance and/or pass the cost along to the consumer; hence the differential treatment.

Justice Wells concurred but noted that "until today, this Court has never held that such a pre-injury release knowingly executed by a parent is unenforceable." He further pointed out, given the number of cases on point, that the Legislature certainly had the opportunity to outlaw such provisions -- and didn't. He concluded, "it is fundamentally unfair to now declare a new public policy and then apply it to the defendants in this case."

While Florida parents will likely collectively sigh with relief, this new public policy which divides commercial and non-commercial activity into two poorly-defined camps may lead to confusion -- if not mistaken decisions -- involving signing releases in quasi-commercial (or questionably non-commercial) activities.

At least that's what the Orlando Sentinel and Palm Beach Post are reporting... Congrats to Palm Beach Circuit Court Judge LaBarga. He had been appointed to the 4th DCA in December and then was appointed to the FSC in January. We note the Sentinel ran the story (and Tweeted it) 45 minutes before the PB Post picked it up off the wire. Nice grab.