The Second District Court of Appeal denied arbitration in a nursing home case, finding the power-of-attorney was not authorized to sign such a document for the resident since the POA document only granted authority over property interests.

Once again, as we saw in Estate of McKibbin v. Alterra Health Care Corp., the court avoided referencing the POA language thus denying lawyers outside of the case from understanding exactly what language the court found restrictive. We can solve that problem. Briefs are provided in the hyperlinks below.

For a primer of recent power-of-attorney interpretation cases in Florida, see this prior post.

In Carrington Place of St. Pete, LLC; Traditions Management of Florida; et al. as to Carrington Place Nursing & Rehabilitation Center v. Estate of Jennie Milo through Annette Brito, the Second DCA (Davis, Northcutt and Villanti) found the durable power of attorney (DPOA) did not grant a nursing home resident's daughter authority to sign the admission agreement which contained an arbitration clause.

The court held that, "where nothing in a POA gives an attorney-in-fact legal authority to enter into an arbitration agreement..." then the trial court cannot grant arbitration. Relying upon two prior decisions, McKibbin and Jaylene v. Moots, the court held that arbitration agreements signed "where the POA unambiguously makes a broad, general grant of authority to the attorney-in-fact" should be upheld. Because the Panel found that the POA document here was restricted to property rights, no arbitration was ordered.

It is interesting that the McKibbin case did not set out the language at issue in that case (but denied arbitration) yet a subsequent panel on the Second District seemed to criticize that shortcoming in Jaylene v. Moots. Here, a different Panel of Second DCA judges likewise denied arbitration but declined to offer the restrictive language. Not helpful. Compare, for example, the inclusion of the wording in the recent First District's opinion in Five Points v. Mallory.

For the inquisitive, the briefs in the Milo case are more instructive (Initial Brief, Answer Brief, and Reply). Check the Reply Brief for the easiest full citation of the POA language.

An annoyed Florida legislature is slowly advancing two bills which would overturn a two-month old Florida Supreme Court decision which invalidated any liability waiver signed by parents for their children to participate in commercial recreational activities. That case was Scott Corey Kirton et al. v. Jordan Fields et al.; Dean Dyess v. Jordan Fields; and H. Spencer Kirton v. Fields.

Supported by theme parks, tourism organizations, and recreation businesses, the bills also received an unspoken boost by a legislature which appears to be displeased with the High Court's Fields decision which created sweeping new law without prior warning or precedent. Some have suggested that the Legislature, not the judiciary, should have made the new rule. Opponents to the bills include plaintiff lawyers and consumer rights groups.

House Bill 363 (and corresponding Senate Bill 886) has breezed through two out of three House of Representative committees, most recently the Civil Justice and Courts Policy Committee earlier this week. Votes at the committee meeting can be viewed here.

Insightful Staff Analysis can be found here and here.

If you do business in Florida and use written contracts after July 1, you may need to hire a lawyer. A Florida House Bill which began as an anti-arbitration proposal passed the Civil Justice & Courts Policy Committee this week in an amended version which barely mentions arbitration -- but now mandates revisions to every contract for goods and services in Florida.

Specifically, for any contract signed after July 1, 2009, this bill would require all conditions, procedures or remedies to be stated in bold print in its own separate paragraph – and initialed by each party. The effect? Almost all “standard form” contracts would need to be amended. Moreover, the signing of common contracts would also require initialing of paragraphs or else un-initialed provisions would be invalid.

As previously reported, Florida House Bill HB 1135 began as an anti-arbitration bill with a number of provisions which would essentially turn Florida into an arbitration-hostile state. The 3/23/09 Staff Analysis accurately pointed out some procedural errors (e.g., arbitrators are not “certified”) but further raised the specter that the bill violated Article I, Section 10 of the Florida Constitution (“no... law impairing the obligation of contracts shall be passed”).

On March 24, the bill was significantly amended down to this version, which eliminates all but one reference to arbitration. In part one, any conditions or procedures relating to breach or termination must be disclosed along with any available remedy or right to cure. This would include arbitration, mediation, and other provisions which set out consequences for non-performance. In part two, each of those contract provisions must be in bold print, individual paragraphs, and must be initialed by both parties.

A new 3/25/09 Staff Analysis was hustled out, noting that "businesses and individuals will have to change their current contract forms for all goods and services..."

Christopher Hopkins, from FloridaArbitrationLaw.com, testified before the committee, raising the concern that the newly-amended bill would cause massive confusion for businesses and consumers; create a situation where a non-lawyer might not be able to write their own contracts; and would lead to bolding and initialing of so many contract provisions that the average person would simply be hunting and pecking to initial sections of a contract rather than reading and comprehending the terms.

HB 1135, which now lacks a corresponding Senate Bill, travels next to the Insurance, Business & Financial Affairs Policy Committee.

We are sensing a connection between litigation involving Hyundai and Proposals for Settlements... perhaps just a coincidence which we will explain in a moment. What is a continuing trend, however, is that Florida courts, more likely than not, strike down Proposals for Settlements when the issue goes on appeal. So much for encouraging settlement -- a response voiced by a sitting appellate judge.

Let's set the stage for a moment. In the last year, more than half of the Florida state appellate decisions involving Proposals have stricken them. Going back further, the failure rate increases. Our coverage of a May 2008 First DCA opinion provided the groundwork for our theory that Proposals are "tricky little creatures." We then published an article (available on the right side of your screen under "ADR Materials") about how to "Build a Better Proposal for Settlement." Then, in September 2008, a conflict emerged over the meaning of joint Proposals for Settlement (when two or more parties serve one proposal on an opponent). Thereafter, the Fourth DCA shot down a failed joint Proposal in Jacqueline Brower-Eger v. Lisa Noon. Finally, the first case we covered in 2009 was Central Motor Company d/b/a Central Hyundai et al v. Earlene P. Shaw, where the Third DCA shot down a modified attempt at a joint Proposal. Enter Hyundai into our discussion.

The issue of joint Proposals for Settlement under Florida Statute 768.79 and Florida Rule of Civil Procedure 1.442 jumped back to life in the March 18, 2009 Fourth District opinion of Daila Cano v. Hyundai Motor America, Inc. and Guillermo Cano, where the full court (with Hazouri concurring) held that the Proposal form was not valid. Assuming that the same divisions of Hyundai are involved in the Shaw case, supra, and this Cano case, we humbly suggest they consider and adopt these Proposal for Settlement guidelines. But this is a tricky area and we give them credit for aggressively serving Proposals and defending their cases with vigor.

In the Cano opinion, a dispute arose over husband and wife's purchase of a vehicle, for which a warranty lawsuit resulted. Before trial, Hyundai served the couple with a single, joint Proposal for Settlement which did not set forth the amount of money attributed to each claimant. The case went to trial but the husband was dropped as a party. Hyundai won. The trial court upheld the Proposal nonetheless, holding it was valid because the Canos' claims were indistinguishable. The Fourth disagreed.

Under the Brower-Eger v. Noon decision, a joint proposal shall state the amount and terms attributable to each party [Fla. R. Civ. P. 1.442(c)(3)] and our Supreme Court has rejected any deviation from the strict requirements of [F.S. 768.79] and [Rule 1.442] [which lead the court to conclude that] a settlement offer made to or from to or more parties... must specify the amount attributable to each of them." This, the court held, was a bright line rule.

Here, there were two plaintiffs and Hyundai's Proposal failed to specify the amount attributable to each; although their claims may have been indistinguishable, it did not change the outcome. The court found there are no exceptions to the multiple-party-appportionment-rule.

Judge Hazouri echoed the First DCA's 2005 call for the Florida Supreme Court to re-visit Rule 1.442 in order to amend it so that it less strict and more favorable to encouraging settlements.

Earlier this year, the Florida Supreme Court decision in Scott Corey Kirton et al. v. Jordan Fields et al.; Dean Dyess v. Jordan Fields; and H. Spencer Kirton v. Fields confirmed a shift in Florida law where parents were unable to sign pre-injury waivers for children to participate in commercial activities. This not only exposed commercial activity providers to liability but also lead community activity providers to question whether they were exposed since there was some ambiguity as to what would be a "protected" community activity.

Central Florida theme parks and vacation activity providers -- everything from SeaWorld and Disney to Gatorland -- are concerned and are supporting two bills before the Florida legislature, according to this Orlando Sentinel article.

House Bill 363 and Senate Bill 886 propose to revise Florida Statute 744.301 to allow natural guardians/parents to "to waive and release, in advance, any claim or cause of action that would accrue to any of their minor children to the same extent that any adult may do so..."

Given the tight economy and the amount of construction after the 2004 and 2005 hurricanes, construction attorneys in Florida are quite busy with breach of contract and lien claims. The timeliness and validity of construction liens are being hotly contested.

The Fourth District (Phillips, Stevenson, and Damoorgian) entered the fray with an interesting case where work under a settlement agreement, which supplemented a developer-contractor agreement, tolled the time for a construction lien.

In Zupnik Haverland, LLC and Platte River Insurance Company v. Current Builders of Florida, Inc. and Power Design, Inc., a developer and contractor entered into a construction contract. A dispute arose regarding performance which was resolved by a settlement agreement (SA). Under the SA, a neutral engineer determined if punch list items were completed while money was placed in escrow; the SA also required payment under the original contract plus a second payment for "additional work not in the scope of the original contract."

A lien and a lawsuit then arose due to non-payment. The developer claimed the lien was untimely and willfully exaggerated. The appellate court determined its standard of review was abuse of discretion/competent, substantive evidence.

The "untimely" argument was premised upon Florida Statute 713.08 ("... not later than 90 days after the final furnishing of labor or services or materials by the lienor"). The Panel found that the "punch list was a blending of work" under the contract and SA -- "while some of the work may not have tolled the time to record a lien, the parking lot work was additional work not in the scope of the original contract."

The Fourth DCA stated that "there are no steadfast rules to apply to determine if work constitutes a 'final furnishing' rather the lower courts are to apply the Aronson test [Aronson v. Keating, 386 So. 2d 822 (Fla. 4th DCA 1980)]." The court went on to confirm that the parking lot "additional work" fulfilled the elements of good faith work, done in a reasonable time, in pursuance of the terms of the contract, and it was necessary to do a finished job.

As to "willful exaggeration" of the lien, the Panel left the intent/good faith question to the court's discretion and noted that a mere "disagreement regarding the amount of money owed" does not convert a good faith dispute into a fraudulent lien.

The Eleventh Circuit slipped out an unpublished opinion on arbitration in mid-February, but some sharp readers of the blog caught it and sent the case to us. Thanks! Save yourself the PACER fees and get the opinion via the links below.

In Earl Scott v. EFN Investments, LLC d/b/a Napleton's Nissan, CitiFinancial Auto Corporation, the 11th Circuit (Black, Barkett and Marcus) held that a free-standing arbitration agreement was still valid despite the fact that the auto sales contract at issue had been rescinded.

Mr. Scott went shopping for a used car and ultimately selected one at the defendant dealership, signing both an "Agreement to Arbitrate" and a Retail Installment Sales Contract (RISC) -- the latter of which was a "spot deliver" agreement where it remains contingent on financing approval. According to the plaintiff, the dealership rescinded the deal.

The RISC had an arbitration clause but that was not featured in the opinion. Instead, the question was whether the free-standing arbitration agreement was valid. The court said, "yes," since (a) the Agreement to Arbitrate was specifically broad and detailed enough to encompass the tort/statutory claims and (b) under Buckeye Check Cashing v. Cardegna, there was no challenge to the arbitration agreement alone but instead to the entire transaction, which was for the arbitrator. Arbitration granted.

[Updated] I posted ealier today about the Council on Litigation Management Conference. They are apparently partnering with Martindale Hubbell, which has put its "Connected" professional networking site into public beta. Connected can be found here.

Obviously, Connected is intended to be the lawyer's version of LinkedIn. Without question, since there are competing social networking sites, we should expect other law-related vendors to get into the professional networking action (West? Lexis-Mealey's). Although it is hard to imagine a Facebook vs. Myspace distinction for professional networking sites.

The site doesn't like Google Chrome, at least during the sign in process. I was able to create my profile using Chrome. So you may want to use Internet Explorer, at least in the initial steps. It's hard to get lawyers to be truly high tech, isn't it?

Connected did serve one function -- Martindale had not updated their records since I moved my practice nearly a year ago and, while they had all of the right contact information, the firm name was missing. So the registration process updated the missing details.

Connected is still in beta. It allows you to create a profile and then has blogs and community groups. The profile section needs to allow more expression. I don't think we need a Facebook wall, but there should be more customization available, a la LinkedIn. Unless, of course, I missed it. Since it is a lawyer site, perhaps an area where you can list your trials, appeals, articles or other recognition.

Email me if you've signed up and let me know your thoughts (email link is upper right corner of this site).

Also, are you on Twitter (cbhopkins), Facebook (cbhopkins), and LinkedIn? After you clear voicemails, emails, faxes, and mail... do we need other ways to be reached? Or are the latter groups just there when you have a spare moment at the courthouse, airport or depo?

Whenever you take that next foray into social/professional networking, feel free to drop a line and follow/friend/connect with me.

A short plug for the Council for Litigation Management Conference being held this week in Phoenix. CLM is a non-profit organization generally tailored to corporate general counsel, outside attorney's, and insurance professionals. This is not necessarily a "defense lawyers" conference since all of the aforementioned groups often have corporate plaintiff cases. Instead, the focus is on claims management, legal invoice review and payment, and ethics -- the organization focuses on the interaction between corporations and their outside counsel, not the validity of claims nor techniques for defense strategies. It's more about a civil, ethical procedure. More information can be obtained here.

There is nothing definitively relating to arbitration or ADR on the schedule (unless you include the session about how legal bills are reviewed and paid) however arbitration should come up in some of the individual talks. I am a Florida state chair, so please come say hello if you are going.

The State of Florida is making waves in the world of arbitration. In Washington D.C., Senator Mel Martinez re-introduced the Nursing Home Arbitration Fairness Act, which failed to get anywhere last session. Meanwhile, in Tallahassee, lawmakers proposed two paired bills (HB 1135 / SB 2192) which would revise the existing Florida Arbitration Code, Chapter 682, Florida Statutes.

Without question, the bills are going to be subjected to some revisions. So we'll focus on the major points thus far:

1. Chapter 682 will be divided into two sections, "Arbitration" and "Consumer and Small Business Arbitration Act" -- in short, any arbitration which does not involve the consuming public may not be effected.

2. Insurance -- any mandatory arbitration provision is void. The bill writers apparently don't grasp the interstate nature of insurance and the reality that most insurers can or have already invoked Federal Arbitration Act protections.

3. Pre-dispute arbitration -- void unless it complies with the rest of the new changes.

4. Arbitrator disclosure -- unless agreed upon by the parties, prospective arbitrators must reveal any prior proceedings they were involved in, including any proceedings' involving the parties' industry. Of note, as described later, failure to make a complete disclosure is grounds for appeal. Given the vagueness of "industry," a significant basis for appeal exists for the non-prevailing party.

5. Arbitration process -- must be "fundamentally fair," with "adequate and appropriate discovery," and cannot be administered under any rules where the losing party pays. The "adequate and appropriate" language sounds a lot like the nursing home statute so we wonder if this provision is not derived from nursing home arbitration cases where a nursing home corporation sought to create its own fixed discovery rules; either way, existing case law already serves that function.

6. Arbitrations Filed With the Court -- apparently the bill writers forgot that arbitration was supposed to avoid court involvement. Under these procedures, all arbitration awards shall be filed with the court and confirmed. So each arbitration will then involve the court cost of filing as well as at least one hearing.

7. Vacating Awards -- new grounds include failing to meet the new code requirements; inconsistent with law or public policy; arbitrary or capricious ruling; without substantial evidentiary basis; and not fair. In short, the losing party has an opportunity for appeal to a circuit court which appears broader than any other existing appellate grounds. Few losing parties, for example, think it was "fair" that they lost... right?

8. Arbitration Agreement -- arbitration provisions in private contracts must be in 18 point font... and include data such as average daily cost of arbitrators. Contract must include arbitration opt-out provision.

9. Failure to Disclose Arbitration -- failure to follow the disclosure guidelines does not just void agreement or risk that it is unconscionable; it exposes the party who proposed the contract to a lawsuit (with a fee provision) under the Unfair Trade Practice Act. In fact, "any person" can bring such a claim... you do not even need to be the recipient of such a proposed contract.

Anyone care to comment? Follow the link at the top right and email us.

While the U.S. Supreme Court begins its session on the First Monday in October, it was not until the second Monday in March that we received their first arbitration decision. Arbitration-watchers get anxious when that occurs, as we often expect that Supreme Court will hand down a some broad, significant ruling. The issue in this case is narrow, however, and, while it will likely spur a few interpreting cases, there is no reason to believe it will change the landscape for parties compelling or avoiding arbitration. This case is not a "hot button" issue like class action waiver or other percolating issues. Don't look for this case to be covered on local news.

The case of Betty A. Vaden v. Discover Bank involves technical questions of federal jurisdiction as raised under section 4 of the Federal Arbitration Act. The issue essentially boils down to a procedural method for federal courts to determine if they have jurisdiction under the FAA to compel arbitration. Again, most of this opinion is more about jurisdiction rather than arbitration.

Discover sued Vaden for $10k owed on her credit card. The suit was filed in Maryland state court and applied state law theories. No basis for diversity jurisdiction, give the amount at issue. Vaden answered and counterclaimed, bringing state law theories. Neither side mentioned arbitration or federal law. Then, Discover did something strange. It filed a wholly separate lawsuit in federal court, asking that court to compel arbitration of Vaden's counterclaims. The theory was that her counterclaims were pre-empted by a federal lending statute which then gave FAA jurisdiction to the court. It went up to the Fourth Circuit twice, and arbitration was compelled.

The U.S. Supreme Court was called upon to resolve a controversy since some federal courts would not look at the underlying case to determine if there was federal court jurisdiction. The High Court agreed (unanimously) that the trial court should "look through" the pleadings to determine if there was free-standing federal court jurisdiction. In other words, if there was no arbitration clause, would the federal trial court still have jurisdiction over the lawsuit? That is now the (clarified) interpretation of section 4 of the FAA.

In this case, both claims apparently should be pre-empted by federal law however federal jurisdictional theories (complete preemption doctrine and well pleaded complaint rule) directed the Court to the conclusion that the plaintiff's complaint alone, and not defenses or counterclaims, trigger federal jurisdiction. But no one was claiming the initial action (collection case worth ten grand) was a federal issue. Hence, the Court agreed with Discover that federal trial courts should look through the arbitration issue and focus on the underlying claim to find jurisdiction; once there, however, the Court disagreed with Discover and held that the facts of this case did not present federal jurisdiction.

Technicians of federal jurisdiction and arbitration, as well as academics, will likely scrutinize this decision at length. These are the two groups which pose lofty questions about whether the FAA does or does not confer federal jurisdiction (it doesn't) and the implications either way. Unless you have a discrete federal practice involving lots of arbitration issues, this is not something most lawyers trouble themselves with. I certainly do not envy first year law students subjected to this new Opinion mid-semester. The broader dispute about whether arbitration is "good" or "bad" is not going to rest on this decision.

A matter which began as an uninsured motorist arbitration claim turned into a lawsuit over attorney's fees because an insurance company claimed that arbitration should occur in New Hampshire, not Palm Beach, based upon where the insured "lives."

The Fourth District (Polen, Warner, Hazouri) provided nominal facts in Pawtucket Insurance Company, Sandra Lucate, Jean Camille aka Jean L. Herisson v. Michael and Anne Manganelli, so it is hard to determine if the insurance company had a valid position. The subject insurance policy stated that the insured's home county (where he "lives") was to be the location of the arbitration. The policy was issued in New Hampshire and the insurance company claimed that's where the insured listed his primary residence (we have no information one way or the other in the opinion). The insured, who had three residences (FL, NJ, NH), claimed Palm Beach and the local circuit court agreed. Again, no information on the basis for that argument.

Under Florida Statute 627.428 and 727.727(8), the insured moved for fees. The circuit court held that the insurance company "had no basis for insisting that arbitration take place in New Hampshire under the pertinent policy language" -- which is not necessarily supported by the prior paltry facts in the opinion. The court further found that fees are properly granted under the statutes when the insurance company requires something of the insured that could place coverage in jeopardy. Under the insurance statute, this fee penalty was inserted to "penalize a carrier for wrongfully causing the insured to resort to litigation to resolve a conflict when it was reasonably within the carrier's power to do so."

It has been suggested before that the Fourth District may be the most difficult appellate court in Florida to compel arbitration. While that may or may not be the case, this case involving the denial of arbitration sounds like it was properly decided based upon the language of the contract.

In John Sitarik, M.D. v. JFK Medical Center, Hospital Corp of America (HCA, Inc.), and Sheridan Healthcorp, Inc., the plaintiff was an anesthesiologist who was fired after reporting a sponge being left inside a surgical patient. He brought suit against the hospital (JFK) and the contractor (Sheridan) under the whistleblower statute and for other claims. The defendants responded with a motion to compel arbitration based upon the JFK-Sheridan Professional Services Agreement (PSA).

The Plaintiff claimed he was not a party to the PSA nor an intended third party beneficiary. Indeed, the wording cited by the Fourth DCA (Damoorgian, Farmer, and Gross) suggests that "parties" were not defined but appear to be limited to the hospital and contractor and that non-parties such as the Plaintiff were specifically excluded in another section.

Given the lousy economy, it is likely going to be increasingly common that people switch jobs, forgetting about -- or ignoring -- non-compete agreements (also known as a covenant not to compete). There is a Florida Statute provision regarding the appropriate term and scope.

Is there liability for an employer who knowingly hires an employee who is still subject to his prior-employer's non-compete agreement? The answer, in part, is "no."

In Fiberglass Coatings, Inc. v. Interstate Chemical, Inc., the defendant corporation hired Fiberglass' prior employee with the full knowledge that the employee was still subject to a non-compete agreement.

The Second District (Casanueva, Northcutt, and Villanti) held that summary judgment for the defendant was appropriate on one claim, but not a second claim.

Specifically, the defendant/new employer said that the employee was "predisposed to breach his covenant not to complete" as evidenced by the fact that the individual had been employed by another competitor prior to coming to the defendant's company. This theory attacks the causation element of the tortious interference claim.

Citing a Fourth DCA case, the court held that one does not induce another to commit a breach of contract with a third person where he merely enters into an agreement with the other with knowing that the other cannot perform both it and his contract with the third person. In short, hiring an employee with knowledge that he is subject to another company's non-compete agreement is not, alone, enough to warrant tortious interference.

That said, the Complaint also alleged that the defendant hired the employee to solicit ten customers which violated the employee's non-compete agreement. As to that claim, the court held summary judgment was not appropriate under the specific facts.