The poet of depair reading his own work.
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The poet of depair reading his own work.
A litigator’s dream; choice of laws, statutes of limitation and evidentiary issues. Bombardier Aerospace Corporation versus Signature Flight Support Corporation.
Bombardier manages an 83-aircraft fleet for use by its clients across the United States. Signature is a Fixed Base Operator (“FBO”), providing ground services to aircraft owners/operators at airports nationwide. Bombardier and Signature entered into a FBO Services Agreement for Signature to perform FBO services on Bombardier’s aircraft fleet at numerous airports in the United States. Between 2004 and 2006, Signature damaged six aircraft in Bombardier’s fleet.
There was a trial and Signature won! But, they lost on a statute of limitations claim. Bombardier appealed and so did Signature. First, the court found that Florida law allows contracts to use the law of another state, in this case, Texas. Then, the court found that Signature was injured when the trial court judge used the Florida statute of limitations rather than the Texas one. Three of the six claims were tossed out. Then, the court looked at a rather nifty Texas law provision. “Under Texas law, if a claimant makes an excessive demand, the claimant may forfeit its right to attorney’s fees in the ensuing litigation.” The Florida trial court, however, allowed the jury to consider the excessive demand as an affirmative defense to the whole claim. “The Texas
doctrine of excessive demand is an affirmative defense only to an award of attorney’s fees.” So, if in Texas, you make an excessive demand, you still get your money; you just lose the right to get fees for getting your money.
The court kicked out claims for damage to three planes; but, remanded for a trial on damages for the other three. One is reminded of poor King Pyrrhus. For a brief period (280-275 BC), the Epirote leader Pyrrhus managed to make Epirus the most powerful state in the Greek world, and his armies marched against Rome during an unsuccessful campaign in Italy. Pyrrus smashed the Roman Legion at Heraclea in 280 BC and whipped them again at Asculum in 279 BC. Plutarch commented the he lost, a “great part of the forces he brought with him, and almost all his particular friends and principal commanders; there were no others there to make recruits, and he found the confederates in Italy backward. On the other hand, as from a fountain continually flowing out of the city, the Roman camp was quickly and plentifully filled up with fresh men, not at all abating in courage for the loss they sustained, but even from their very anger gaining new force and resolution to go on with the war.”
His lieutenant came up to Pyrrhus and congratulated him on his victory. Then Pyrrhus said, “If we are victorious in one more battle with the Romans, we shall be utterly ruined.”
Good luck at the re-trial boys.
Three lawyers learned an expensive lesson about “virtual” and ethical lawyering. In Hagood v. Wells Fargo, 38 Fla. L. Weekly D1099 (Fla. 5th DCA 2013), the lawyers of “KEL” held a winning hand, but came up losers. In Hagood v. Wells Fargo, Case No. 5D12-2016 (Fla. 5th DCA 2013), the lawyers were sanctioned.
When Hagood was served with a lawsuit he hired Kaufman Englett and Lynd Attorneys, LLLPLC, who promptly filed an Answer and Affirmative Defenses. When the case dragged on, the bank, Wells Fargo, filed for summary judgment. Unfortunately, the KEL lawyer, “failed to appear at a hearing on Appellee’s motion for summary judgment, the court entered summary final judgment of foreclosure. Mr. Montequin, [the KEL lawyer,] filed a motion for rehearing and to vacate the judgment based on excusable neglect. He attached to the motion his own affidavit and those of KEL staff members, attesting to the fact that the notice of hearing had been received but not calendared due to a clerical error. He also alleged a meritorious defense based on a previously filed answer and defenses. The court held a hearing on the motion and subsequently denied it without explanation.”
KEL had a winning argument. They should have challenged the summary judgment on the basis that the lower court erred in granting the judgment in the face of the answer and defenses on file. If the file shows conflicted facts, you don’t need to show up to the hearing. The judge cannot grant a judgment even if the lawyer was not there. There was another winner. The trial court abused its discretion in denying the request for relief from judgment based on excusable neglect. However, that is not what happened. KEL filed a brief based on false statements. As the court stated, “Appellant’s initial brief, prepared by three KEL lawyers, asserts that Appellant was not given notice of the hearing, an assertion that the record conclusively refutes.” Ouch.
The KEL lawyer did not attend the hearing because the staff goofed. He filed affidavits. Even though KEP admitted to the trial court judge that they had notice, the brief they filed, “repeatedly asserts the total lack of notice—a fact that Appellant represented was ‘uncontroverted.’” This brief was ripped to shreds by Roy A. Diaz and Ryan T. Cox of SHD Legal Group, P.A. The responding lawyers used that old trick, citations to the record. As the court said, “Appellee refuted Appellant’s lack of notice contention by directing our attention to the affidavits in the record on appeal.”
Unfortunately for poor Mr. Hapgood, the winning argument did not show up until the Reply Brief. There is an old rule of practice. An issue not raised in an initial brief is deemed abandoned and may not be raised for the first time in a reply brief. The court said, “we are constrained to affirm without addressing the merits of Appellant’s alternative argument.” But wait, there’s more.
“The quality of the legal work performed by KEL’s attorneys in this case is
disturbing. It resulted in a waste of judicial resources and, perhaps, an injustice to the litigants. At a minimum, it increased the cost of the litigation and the time necessary to conclude it. The three lawyers who represented Appellant on appeal are not novices. In the aggregate they have over sixty years of experience as members of The Florida Bar. The least experienced of the three, Ms. Domenech, appeared for oral argument and attempted to field the questions from the panel. She informed the Court that all three attorneys participated equally in the preparation of the briefs, but that Mr. Withers, the most experienced of the group, was the “lead” attorney. He signed the briefs on behalf of all three attorneys and the firm. No satisfactory explanation was proffered by Ms. Domenech at oral argument why this Court should not impose sanctions. Before we impose sanctions, however, it is appropriate that all three attorneys have an opportunity to address the Court’s concerns. Accordingly, pursuant to Florida Rule of Appellate Procedure 9.410, each attorney for Appellant named on the briefs shall, within
10 days, show cause in writing why sanctions should not be imposed.” Double ouch.
Friday, the other shoe dropped. In a second opinion the District Court sanctioned the three lawyers. “Mr. Lynd asserts that his name was placed on the briefs because he is a partner at Kaufman, Englett & Lynd, PLLC (“KEL”), and he might have been needed at oral argument. He did not review the briefs or work on the case. Ms. Domenech asserts that, working remotely as a part-time employee of KEL, she simply drafted the initial brief at Mr. Withers’ request, using the trial lawyer’s electronic notes. She did not review the record on appeal or the firm’s physical file, and she was not aware that the brief’s contents were false. When she submitted the initial brief for Mr. Withers’ review, she asserts that she “made it clear” that she had not reviewed the motion for summary judgment or motion for rehearing. Due to a gap in employment, Ms. Domenech did not see the answer brief or participate in the preparation of the reply brief. Inexplicably, although she handled the oral argument for the firm, she asserts that it was not until after oral argument that she realized her “draft” initial brief had been mistakenly filed with the Court.”
All three lawyers were admonished and sanctioned.
There is much to learn from here. First, working remotely is not a substitute for the old-fashioned review of the file. Had Ms. Domenech looked at the file she would have seen the winning argument, and known that the theory she was advancing was factually wrong. Second, if you write the wrong argument, there is a remedy. Ask to redo your brief. Write a good brief, staple it to a motion and tell the court you wrote a stupid brief and ask them to replace it with the good one you stapled to the motion. There is a hint in the opinion that this tactic might have worked. “Inexplicably,” says the District Court, “rather than attempt to correct the initial brief,” the Appellant raised the issues poorly in the Reply Brief.
The final lesson is don’t put your name on a brief unless you know the record, the issues presented and are fully versed on the facts of the case. “This Court also admonishes all counsel that each attorney of record is responsible for the content of the entire document when his or her name appears on the document. Each attorney who appears in a proceeding and authorizes his or her name to be affixed to an appellate brief or other pleading cannot avoid responsibility for the content of the brief by later claiming limited or no involvement in its preparation.”
If they can get you asking the wrong questions, they don’t have to worry about the answers.
Thomas Pynchon (1973) Gravity’s Rainbow, Viking Press, p. 251.
In Ford Motor Company v. Stimpson the Fifth District took up a case involving a claimed defect and fraud on the court. There was a trial court Plaintiff who was seriously injured. The Plaintiff’s theory was that her 1991 Ford Aerostar van’s cruise control system cruise control system was defectively designed and built because the system was susceptible to allowing electromagnetic interference to cause a malfunction that would unexpectedly open the throttle without the driver pressing on the gas pedal causing sudden acceleration from a standstill position. She said Ford was aware of, but did nothing to address, the defect.
How did a 1991 van become the subject of a twenty-first century trial? In order to overcome Florida’s products liability statute of repose, the Stimpsons invoked the statutory provision which tolls the repose period for any time during which the manufacturer actively conceals the defect. §95.031(2)(d), Fla. Stat. (2003). Ford defended. The Plaintiff, it said, caused the accident was caused by pedal misapplication: stepping on the gas pedal instead of the brake pedal. The Plaintiff tried to strike the defenses because of fraud, but, the court reserved ruling.
The case proceeded to a four-week trial. The jury returned a special verdict in
favor of Ford, finding that Ford did not place the 1991 Ford Aerostar on the market with a defect that was the legal cause of Peggy Stimpson’s injury, and that there was no negligence on the part of Ford that was a legal cause of Peggy Stimpson’s injury. The trial court entered judgment on the verdict.
The Stimpsons filed motions seeking alternative forms of post-judgment relief,
including rule 1.540(b)(3) relief from judgment and a new trial. They sought relief based primarily on the theory that Ford committed fraud on the court by presenting its pedal misapplication defense because Ford knew, since the early 1980s, that van’s cruise control system was defective. Ford responded there could be no finding of fraud on the court because all of the evidence regarding the Plaintiff’s concealment theory was presented to the jury on the statute of repose issue, and because the husband testified at trial that he may have touched the gas pedal.
The trial court conducted extensive post-judgment hearings. Then granted the Stimpsons relief based on its finding that Ford committed fraud on the court. The court struck Ford’s answer and affirmative defenses, entered judgment on liability in favor of the Stimpsons, and ordered a trial on the issue of damages. The court also entered an alternative ruling conditionally granting the Stimpsons a new trial based upon findings both of fundamental error and that the jury’s verdict was against the manifest weight of the evidence. Not surprisingly, Ford challenged these rulings in the District Court.
The court found that Ford had destroyed reports that proved the cruise control was defective. The District Court disagreed about the content of the destroyed reports. But, more importantly, the reports were all destroyed long before the accident occurred. “Even if Ford did improperly dispose of its SIRs from the 1980s through 2002, such action would not constitute fraud on the court in this matter because, at the time of Ford’s alleged improper action, the Stimpsons’ accident had not yet taken place, this lawsuit had not yet been filed, there was no matter pending between the parties, and there was no evidence showing that the instant action was foreseeable by Ford.” Caselaw, said the court, only gives a party the duty to preserve evidence if there is knowledge that a suit may occur.
The trial court next concluded that Ford committed fraud on the court by making false representations to the National Highway Traffic Safety Administration. The District Court again disagreed with the trial judge on the falsity of the statements, and again said time was an issue. “Those representations occurred more than 10 years before the Stimpsons’ accident.”
Then the District Court turned to the trial court’s evisceration of Ford’s experts. After a complicated discussion on intrinsic and extrinsic fraud and the nature of the scientific evidence at trial, the court found that the trial court was wrong when it found Ford committed fraud. Then, the court turned to the new trial issue. No new trial for you Plaintiff.
“Conflicting testimony was presented during the Stimpsons’ case-in-chief concerning whether there was a causal defect in the van’s cruise control system, as well as whether there was causal negligence by Ford. Also, there was conflicting evidence concerning Mr. Stimpson’s pedal misapplication. As such, the trial court erred in concluding that the only reasonable inference from the evidence was that the cruise control system was negligently designed. Additionally, ‘[a] jury’s verdict is generally not against the manifest weight of evidence if the record shows conflicting testimony from two or more witnesses.’”
“We reverse and remand for reinstatement of the judgment.”
In 2008 a California lawyer filed a complaint in Florida and associated with a Florida Lawyer. Three years later when a sustainable complaint had still not been filed the Florida lawyer moved to withdraw. The Florida attorney, the California attorney, and the defense attorney entered into a stipulation agreeing to the withdrawal, but stipulating that the Florida attorney would be replaced and a third amended complaint would be filed within thirty days of the order approving the stipulation. They also agreed that if the complaint was not timely filed, the action would be dismissed with prejudice.
The judge signed an order letting the lawyer drop out, and no complaint was filed. Then the case was dismissed. California lawyer, who claimed not to have been mailed the order filed an appeal. What do you think happened?
Well, it turns out that the client was never told that the lawyer withdrew. Seminole County Judge Alan A. Dickey overlooked the requirement of client notification. As the District Court said, “Appellant, through new Florida counsel, points out two problems with the trial court’s dismissal. First, the record does not reflect that Appellant was ever notified by either of his attorneys about the withdrawal. Second, there is no indication that the court’s order permitting the withdrawal was provided to Appellant.” The rule of law is that, cases are to be “decided on the merits whenever possible.” The client was blameless in the delay, did not know her Florida lawyer had left her and cannot lose her case due to the lawyer’s dropping her case. “Although this case has proceeded very slowly during its lengthy stay in the system, it does not appear to be the fault of Appellant. Torrey requires that the court grant the amendment and allow the parties to proceed to trial on the merits.
REVERSED and REMANDED.”
This was not the only interesting case this week, in Johnson v. State, Case No. 5D12-1221, the court granted an Appellant’s request for an Opinion and Judge Torpy gives us gave an interesting explanation of how, or in this case how not to, lay the foundation for the admission of reputation evidence bearing on truthfullness. After hearing testimony, the trial court, St. Johns County Circuit Court Judge Wendy W. Berger, said, “I do not believe a sufficient predicate has been laid for the reputation evidence. There’s not been any evidence in a broad section of the community, and simply talking amongst family members is not sufficient; and, therefore, I’m not going to allow the reputation testimony.” “Spot on,” is the gist of the opinion. “The trial judge was in the best position to evaluate this testimony and make a preliminary finding of fact whether the witness was truly familiar with the reputation of the victim in the “community” or among her “associates,” as the statute requires. We cannot disturb this finding under our standard of review.”
This year, the banks began to once again review unpaid home loans. It takes a while for the creaky, wheezy, inadequate machinery of processing defaulted mortgages to rumble back to life. So it has — and we should expect to see signs of increasing foreclosures and distressed sales any day now.
The first data point supporting this was April’s existing-home sales. That gave us an early clue about what was to come. During the abatement period, distressed home sales, including foreclosures and short sales, had fallen substantially. They were down to 28 percent of existing-home sales for April – significantly less than the 37 percent a year earlier.
Distressed homes tend to sell for about 20 percent less than non-distressed sales.
The voluntary foreclosure abatement not only reduced the number of foreclosures, but also created the appearance of improving home prices. In reality, it was merely temporarily removed low-price, distressed properties from the overall pool of homes for sale.
That fortuitous set of circumstances appears to be over. Current foreclosure filings — default notices, scheduled auctions and bank repossessions — increased in May by 9 percent, according to the RealtyTrac monthly foreclosure report.
This was right on cue. With the abatements over, foreclosure starts are creeping up again. As the foreclosure machinery ramps up, the negative ramifications they bring will expand. More distressed sales, lower prices and increasingly tough comparable appraisals are likely over the next 12 months.
Ritholtz is chief executive of FusionIQ, a quantitative research firm. He is the author of “Bailout Nation” and runs a finance blog, the Big Picture. You can follow him on Twitter: @Ritholtz