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Florida Decision Weekly Wrap-up 2/26

March 1, 2010

Florida Decision Weekly Wrap-up 2/26

BAYFRONT CENTRAL SECURITY AND SYSTEMS v. SEMLA HADZISEJDIC and NEW YORK CENTRAL MUTUAL INSURANCE COMPANY. Case No. 09-010570-CI-13 UCN: 522009CA010570XXCICI. Circuit Court, Hillsborough County. January 8, 2010.

[TORTS. PERSONAL JURISDICTION. INSURANCE]

The Defendants in the underlying action were a New York resident who was involved in a traffic accident in Florida, and her New York based insurance company.  In the accident, the Defendant/Insured collided with a vehicle used by the Plaintiff in its business. At the time of the accident, the vehicle was transporting custom cabinets. The appraiser for the Defendant/Insurer assessed the property damage to the car at $6,451.39 and the replacement cost for the cabinets at $4,957.44, but neither amount was paid to the Plaintiff.

When suit was filed, the Defendant/Insurer filed a motion to dismiss on the basis that the court lacked personal jurisdiction over it. The court held that, to establish personal jurisdiction over the New York based insurer, the plaintiff had the burden of alleging (1) the defendant performed one of the acts enumerated in the Florida long-arm statute, F.S.§ 48.193, and (2) the defendant had sufficient minimum contacts with Florida that exercising personal jurisdiction would comport with due process requirements (citations omitted).

The Plaintiff argued that the Defendant/insurer carried on business in Florida by adjusting an insurance claim there, that it committed a tort in Florida by having an unlicensed adjuster perform the appraisal in violation of Florida laws and that its insured’s car was present in Florida. The Plaintiff further argued that, because the insurance policy covered accidents in all states, the nonresident insurer had a contractual obligation to exercise good faith to defend its nonresident insured who was involved in an accident in Florida and a loss in Florida was a foreseeable consequence of issuing a policy with nationwide coverage.

The Court noted that in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), the Supreme Court rejected the theory that this type of foreseeability is a basis for establishing in personam jurisdiction. “[T]he foreseeability that is critical to due process analysis . . . is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there (citations omitted). Based on an affidavit from the Defendant/Insurer that it had not sold insurance, issued or delivered policies, obtained a license to do business, transacted business, nor maintained any offices or agents to transact business in Florida, the Court concluded that the Defendant/Insurer had only “an attenuated relationship” with Florida, and that even if its actions brought it within the reach of Florida’s long-arm statute, it still lacked sufficient minimum contacts to reasonably anticipate being haled into court in Florida (citations omitted). Therefore, the Defendant/Insurer’s motion to dismiss was granted.

WIESENBERG vs. COSTA CROCIERE, Case No. 3D07-555. 3rd DCA. February 24, 2010.

[TORTS. CRUISE SHIP TICKET FORUM SELECTION AND STATUTE OF LIMITATIONS CLAUSES]

The Plaintiff in the underlying action punctured his leg on a misplaced lounge chair while he was a passenger on a cruise ship operated by the Defendant. The passenger ticket contained a “forum selection” clause and a one year statute of limitations. The Plaintiff was not sure whether the forum selection clause required him to file in state or federal court, so actions were filed in both within the one year limitations period. Plaintiff properly served Defendant in the state court action, but not in the federal action. 

Counsel for both parties thereafter engaged in settlement negotiations, and during the period of those negotiations. Plaintiff’s counsel believed the Defendant had agreed that all litigation would remain in abeyance while the parties attempted to resolve the claim. After the 120 day time period for serving the Defendant had passed with no service on the Defendant, the federal district court dismissed the federal action pursuant to Federal Rule of Civil Procedure 4(m). The plaintiff did not move for rehearing or file an appeal, believing he would be allowed to reinstate the federal suit if settlement discussions proved unsuccessful, and eventually they did prove unsuccessful.

The Plaintiff filed a motion under Federal Rule of Procedure 60, seeking relief from the dismissal order. The motion was denied. The plaintiff did not appeal, but rather filed a new complaint in federal court asserting the same claim asserted in the earlier action.

The Defendant moved to dismiss the action as being time-barred by the one-year limitations period contained in the cruise ticket. The plaintiff argued that Costa should be estopped from raising a limitations defense on account of the alleged agreement between the parties to hold litigation in abeyance while settlement negotiations proceeded. The federal district court concluded that the elements of estoppel were not met, and dismissed the action on the basis that it was time barred by the one year statute of limitations.

Meanwhile, the Defendant moved to dismiss the state court action on the basis that the federal court decision on the statute of limitations was res judicata as to the state court action. The trial court agreed and dismissed the action and the Plaintiff appealed.

The 3rd DCA concluded that the trial court erred in its ruling because, although a dismissal on the statute of limitations is generally considered a dismissal on the merits, there is an exception to that rule applicable to this case. Specifically, where the federal court action expressly states, as it did here, that the Plaintiff “can make that argument in his state court action”, that decision explicitly allows the state court action to go forward. Because the Court found that the exception applied in this case, it held that the state court action should not have been dismissed on res judicata grounds.

However, the Court decided to affirm the lower Court’s dismissal of the action on different grounds. According to the Court, while this case was on appeal, the court had upheld the validity of a forum selection clause like the on the Plaintiff’s ticket. Therefore, the Court decided that dismissal of the state court action was proper because the action should have been filed and maintained in federal court as per the forum selection clause.  

SEYMOUR vs. PANCHITA INVESTMENT, INC. Case No. 3D09-1558. 3rd DCA. February 24, 2010.

[TORTS. SERVICE OF PROCESS. DEFAULT]

The Plaintiff in the underlying action filed a complaint against the Defendant Panchita Investments on behalf of her daughter who was injured on property owned by Panchita. Two days after the complaint was filed, the Plaintiff obtained service on Jorge Ramos, who was the registered agent, of Panchita. Panchita failed to appear and eventually, the court issued a default judgment on liability and the case proceeded to verdict on the issue of damages. Several months later, Panchita filed a motion to set aside the judgment on the basis that the summons and return of service were defective and ineffective to serve Panchita with process because both documents indicated that Mr. Ramos was served personally and failed to identify the corporation Panchita at all. The trial court agreed and granted the motion to set aside the default judgment. 

The 3rd DCA held that, despite the fact that “[i]t is undisputed that Mr. Ramos is, and always has been, Panchita’s registered agent and sole officer and director, and that the address shown on the summons is Panchita’s principal place of business, its mailing address, and its registered agent’s and sole officer/director’s address” and despite the fact that the court was in complete agreement with the Plaintiff that “this corporate defendant surely must have known that it was being sued by Ms. Seymour” and despite the fact that “the caption for the lawsuit on the summons and complaint, and the allegations within the complaint, disclosed that Panchita, not Ramos, was the defendant”, it was nonetheless compelled to affirm the trial court’s decision setting aside the judgment. 

The Court stated that the statutes regarding service of process on corporations must be strictly construed and complied with (citations omitted). In the present case, the Court found that the public records made it easy to serve Panchita properly, but that Plaintiff’s counsel and process server simply failed to follow the rules until 2009, when the trial court gave leave to file and serve an amended summons. The 3rd DCA affirmed and remanded the case to the trial court so the Defendant Panchita could respond to the amended return of service. 

WEBSTER v. BDI PHARMACEUTICALS, et al. Case No. 1D08-5114. 1st DCA. February 24, 2010.

[TORTS. PRODUCT LIABILTY]

In the underlying action, the Plaintiff sued various defendants involved in the manufacture and distribution of Super Mini’s/Mini Thin Naturals, a dietary supplement containing ephedrine, claiming that he had suffered a stroke as a result of taking the supplement. At the time of his stroke, the Plaintiff was a 26 year old college student. After a jury trial, the trial court issued judgment for the Defendants.   

The Plaintiff appealed based on the trial court’s decision denying Plaintiff’s pretrial motion to inform the jury that six years after the Plaintiff’s stroke the FDA had issued a rule banning all dietary supplements containing ephedrine and the court’s refusal to take judicial notice of this FDA ban. The trial court excluded the FDA rule, on grounds that the ban came after the Plaintiff’s stroke and had no bearing on his claims. 

Evidence at trial indicated that neither the Plaintiff’s blood nor his urine contained evidence of ephedrine in his system at any pertinent time. The jury returned a defense verdict, finding that no defendant had placed any ephedrine-containing dietary supplement on the market “with a defect which was a legal cause of damage” to Mr. Webster.

The court held that the trial court may have abused its discretion by excluding the evidence requested by Plaintiff because “[a]s the dissent explains, evidence of a post-accident recall may be admissible in strict products liability cases to prove that the product was defective when it left the possession of the manufacturer” (citation omitted). After noting that two FDA witnesses had testified at length about the investigation (including concluding that “a dietary supplement with more than eight milligrams of ephedrine alkaloids was ‘unreasonably dangerous for a consumer’”), the Court concluded that reversal is unwarranted in a civil case unless the appellant demonstrates that “it is reasonably probable that a result more favorable to the appellant would have been reached if the error had not been committed.” (citations omitted). The Court concluded that any error in precluding the FDA witness from testifying to the fact the FDA eventually banned dietary supplements containing ephedrine was harmless because the Plaintiff had failed to demonstrate a reasonable probability that proof of the ban itself would have led to a different result.

CATALFUMO CONSTRUCTION v. VARELLA, Case No. 3D09-1967. 3rd DCA. February 24, 2010.

[TORTS. WORKERS’ COMPENSATION IMMUNITY]

The Plaintiff below was an electrician who was injured while working for RAMS, an electrical subcontractor for Defendant, Catalfumo Construction. The Plaintiff filed a workers’ compensation claim against RAMS, whose carrier denied the claim on the basis that the accident was not within the course and scope of Plaintiff’s employment. 

The Plaintiff then filed suit against the Defendant general contractor for negligence. The Defendant moved for summary judgment on the basis that the claim was barred by the exclusivity of Plaintiff’s remedy under the workers’ compensation statute. The trial judge held the Defendant was not entitled to workers’ compensation immunity as a matter of law.

The 3rd DCA reversed and held that the Defendant was a statutory employer under section F.S. §440.11, Florida Statutes (2005), who was entitled to workers’ compensation immunity, and was obligated to provide workers’ compensation insurance when the subcontractor does not. The case was remanded to allow the Plaintiff to assert his claim for benefits against the Defendant general contractor.

OMI OF ORANGE PARK, INC. v. GEICO GENERAL INSURANCE COMPANY. Case No. COCE08-11345. County Court, 17th Judicial Circuit in and for Broward County. January 6, 2010.

[INSURANCE. APPLICABLE VERSION OF PIP STATUTE]

The Circuit Court in and for Broward County granted the Plaintiff’s motion for summary judgment and indicated that its decision depended on the proper interpretation of a January 1, 2008 change to the PIP law. It certified the following question to the 4th DCA: 

DOES THE LEGISLATURE’S JANUARY 1, 2008 REENACTMENT/REVISION TO THE FLORIDA NO-FAULT LAW APPLY TO TREATMENT OCCURRING ON OR AFTER JANUARY 1, 2008, WHERE THE EFFECTIVE DATE OF THE INSURANCE POLICY AND THE DATE OF THE ACCIDENT ARE PRIOR TO JANUARY 1, 2008?

RAFAEL ABOY, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Case No. 09-CV-21400-CIV-HUCK. U.S. District Court, Southern District of Florida. January 4, 2010.

[INSURANCE. BAD FAITH]

The Plaintiff was involved in a multi-vehicle accident on December 1, 2005. The driver of the vehicle was insured by Defendant State Farm through a policy issued to his father. The policy had a $15,000 limit for bodily injury claims. The Plaintiff filed a lawsuit in state court against the driver and his father and State Farm provided defense. Four days after the Plaintiff’s attorney informed State Farm, that the Plaintiff had undergone neck surgery and had medical expenses exceeding $50,000, State Farm offered to pay Plaintiff the $15,000 policy limits. The Plaintiff rejected the offer as untimely. The Plaintiff thereafter sued the driver and his father and obtained a $219,182.31 judgment against them. The driver and his father assigned their bad faith claim to the Plaintiff for State Farm’s alleged bad faith in failing to settle with the Plaintiff in a reasonable time. The U.S. District Court found that the record indisputably demonstrated that State Farm acted reasonably under the circumstances and granted State Farm’s Motion for summary judgment. 

MERCURY INSURANCE COMPANY OF FLORIDA v. CHARLIE’S TREE SERVICE, et al. Case No. 4D09-3192. 4th DCA. February 24, 2010.

[TORTS. INSURANCE COVERAGE]

Valentin Bautista-Bautista and Elias Caballero were employees of Charlie’s Tree Service, Inc. While both were in a company truck on the job with Caballero driving and Bautista a passenger, the truck was in an accident that killed Caballero and injured Bautista.

Bautista settled with Charlie’s Tree Service for worker’s compensation benefits and sued Caballero’s estate. Charlie’s Tree Service was the named insured on a commercial auto policy issued by the Mercury Insurance Company of Florida.   Mercury filed a declaratory judgment action to establish that exclusions in the policy precluded coverage for Bautista’s claim against Caballero’s estate. Both parties moved for summary judgment. The circuit court granted summary judgment in favor of Bautista, ruling that there was coverage under the Mercury policy for Bautista’s claims against Caballero’s estate.

The 4th DCA reversed and held that at least one of the policy exclusions applied to Plaintiff’s claims and therefore, the trial court should have granted judgment in favor of Mercury.

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