Florida Case Law Update

Author: Haldon Greenburg, Kris Darrough

Guest Editor: Alexander Nguyen

January 7, 2019 9:00am

Florida Case Law Update – Haldon Greenburg

Highland Stucco and Lime Products, Inc. v. Silverio Onorato et al.

43 Fla. L. Weekly D2579a (Fla. 3d DCA, November 21, 2018).

The defendant Highland Stucco and Lime Products, Inc. (“Highland”) appealed an order denying its motion to dismiss for lack of personal jurisdiction.  On review, the Third District Court of Appeals reversed the order because the plaintiffs, Silverio Onorato (“Onorato”) and Faye Onorato (collectively, “the plaintiffs”) failed to satisfy the “minimum contacts” federal constitutional due process requirement. [1]  The opinion provides an opportunity to review and discuss the procedural requirements that must be met by a plaintiff in Florida seeking to satisfy personal jurisdiction over a defendant.

Facts

The plaintiffs filed a products liability action against Highland and several other defendants alleging Onorato developed mesothelioma from his exposure from 1972 to 1976 to asbestos-containing products that were manufactured, distributed, and/or sold by the defendants in the state of Florida.

Highland filed a motion to dismiss for lack of personal jurisdiction, and in support of its motion, Highland submitted the sworn affidavit of Frederick M. Atkinson (“Atkinson”). In his affidavit, Atkinson explained Highland (which was then dissolved) was not and had never been a resident of the state of Florida, and at all times had been a resident of the state of California with its principal place of business in California; had no owners, agents, or employees in Florida; never owned or operated a facility outside of Southern California; never transacted any business in Florida; never negotiated, entered into, or performed a contract in Florida; never owned, used, or possessed real or personal property in Florida; never maintained a place of business in Florida; was never registered to conduct business in Florida; never maintained any bank accounts, offices, post office boxes, telephone numbers, or any other business facility in Florida; never advertised in any Florida publication or on any Florida radio or television station; did not directly solicit business in Florida; never manufactured, distributed, sold, supplied, or installed any asbestos-containing products in Florida; and had no connection with Florida arising from any action or conduct Highland purposely directed towards Florida. The affidavit further stated “[t]he overwhelming majority of HIGHLAND’s business was conducted in California. During the time period when HIGHLAND used asbestos, its products were primarily sold to building supply dealers within a 60 mile radius of its Van Nuys, California plant.”

In response to Highland’s motion, the plaintiffs submitted as evidence:

(1) excerpts from Onorato’s deposition wherein he testified Highland’s products were commercially available for purchase in Florida during the time of his exposure;

(2) a 1959 trade journal advertisement for Highland’s “Hi-Sorb” acoustical plaster that was distributed by Highland Stucco and Lime Products of Florida, Inc. (“Highland of Florida”);

(3) an article from the same trade journal that references a plant in Fort Lauderdale operated by Highland of Florida; and

(4) an excerpt from Atkinson’s deposition which was taken in connection with a 2000 California lawsuit.

In reply to the response, Highland submitted documentation demonstrating Highland of Florida was dissolved in 1964, approximately eight years prior to Onorato’s alleged exposure.

The trial court conducted a non-evidentiary hearing on the motion. At the conclusion of the hearing, the trial court denied Highland’s motion to dismiss. In its order, the trial court concluded the plaintiffs had alleged sufficient jurisdictional facts to support the trial court’s exercise of specific jurisdiction over Highland pursuant to section 48.193(1)(a), Florida Statutes, and to satisfy the constitutional due process requirements because Onorato “testified to his use of and exposure to Highland Stucco products within the state of Florida,” and “[the] product was purchased through distributors in Florida.”

Florida Law Regarding Personal Jurisdiction

In Venetian Salami Co. v. Parthenais, 554 So. 2d 499 (Fla. 1989), the Florida Supreme Court set forth a two-step process for determining whether personal jurisdiction exists. First, a trial court must determine whether: (1) there exist sufficient jurisdictional facts to bring the action within the purview of Florida’s long-arm statute, section 48.193, Florida Statutes, and (2) whether the foreign corporation possesses sufficient minimum contacts with Florida to satisfy federal constitutional due process requirements. Venetian Salami, 554 So. 2d at 501-02.

The first prong is established by demonstrating either general or specific jurisdiction. Teva Pharm. Indus. v. Ruiz, 181 So. 3d 513, 517 (Fla. 2d DCA 2015). General jurisdiction is established where the defendant has engaged in substantial and not isolated activity within the state. Id. In other words, the defendant’s affiliations with the state are so continuous and systemic as to render it essentially “at home” in the forum state. Daimler AG v. Bauman, 571 U.S. 117, 128 (2014) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Specific jurisdiction, on the other hand, is established by pleading specific facts that demonstrate the defendant’s conduct fits within one or more subsections of section 48.193.

Specific Jurisdiction Under Florida’s Long-Arm Statute

In this case, the plaintiffs relied on specific jurisdiction to satisfy personal jurisdiction under Florida’s long-arm jurisdiction. Section 48.193(1)(a) provides, in part:

A person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself . . . to the jurisdiction of the courts of this state for any cause of action arising from any of the following acts:

  1. Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state.
  2. Committing a tortious act within this state.
  3. Owning, using, possessing, or holding a mortgage or other lien on any real property within this state.
  4. Contracting to insure a person, property, or risk located within this state at the time of contracting.

. . . .

  1. Causing injury to persons or property within this state arising out of an act or omission by the defendant outside this state, if, at or about the time of the injury, either:
  2. The defendant was engaged in solicitation or service activities within this state; or
  3. Products, materials, or things processed, serviced, or manufactured by the defendant anywhere were used or consumed within this state in the ordinary course of commerce, trade, or use.
  4. Breaching a contract in this state by failing to perform acts required by the contract to be performed in this state.

. . . .

Because the complaint alleged Highland committed a tortious act in Florida, thus satisfying specific jurisdiction under section 48.193(1)(a)(2), the burden shifted to Highland to contest the allegations by affidavit or other proof, or to claim the federal minimum contacts requirement was not satisfied. S. Wall Prods. Inc. v. Bolin, 251 So. 3d 935, 938-39 (Fla. 4th DCA 2018) (citing Venetian Salami, 554 So. 2d at 502).

As noted above, Highland submitted the affidavit in support of its motion to dismiss, and because Highland adequately contested the allegations, the burden then shifted back to the plaintiffs to refute the evidence submitted by Highland. Venetian Salami, 554 So. 2d at 502. The Third District reviewed the evidence submitted by the plaintiffs to rebut the affidavit and determined the advertisement and article were both unauthenticated, and the prior case testimony did not include anything which refuted the statements in the affidavit.

In reviewing the facts as established through the record, the Court indicated Highland was a California corporation that dissolved in 2009. Highland of Florida, at best, was a Florida corporation that dissolved in 1964, approximately eight years before Onorato’s alleged exposure to stucco products containing asbestos.  The Court concluded Onorato failed to show any connection or relationship between the two corporations, and noted nothing in the record suggested the two corporations shared a corporate identity.  The Court also recognized even if the plaintiffs had established the Florida entity was a subsidiary of Highland, the mere presence of a subsidiary in Florida, without more, is insufficient to subject a non-Florida corporate parent to Florida’s long-arm jurisdiction. See Walt Disney Co. v. Nelson, 677 So. 2d 400, 403 (Fla. 5th DCA 1996). More importantly, even if the plaintiffs had satisfied specific jurisdiction under Florida’s long-arm jurisdiction, they still failed to establish Highland, not Highland of Florida, had sufficient minimum contacts with Florida, such that extending jurisdiction did not offend constitutional due process.

Constitutional Due Process

While the statutory prong of the analysis is applied broadly, the constitutional prong is controlled by United States Supreme Court precedent interpreting the Due Process Clause and imposes a more restrictive requirement. Exec-Tech Bus. Sys., Inc., v. New Oji Paper Co., 752 So. 2d 582, 584 (Fla. 2000). The constitutional prong of the analysis requires the trial court to consider whether the defendant has sufficient minimum contacts with the state so that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice. Venetian Salami, 554 So. 2d at 502 (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

In this connection, a plaintiff must establish the defendant’s contacts with the forum state are: (1) related to the cause of action or gave rise to it; (2) involve some act by which the defendant purposefully availed itself of the privilege of conducting business within the forum; and (3) the defendant’s act is such that it should reasonably anticipate being haled into court in that forum state. See Bolin, 251 So. 3d at 938 (citing Moro Aircraft Leasing, Inc. v. Int’l Aviation Mktg., Inc., 206 So. 3d 814, 817 (Fla. 2d DCA 2016)). “Random, fortuitous, or attenuated contacts” are insufficient. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).

The “purposefully availed itself of conducting business within the forum” and the “act is such that it should reasonably anticipate being haled into court in that forum state” prongs of the constitutional due process analysis were noted by the Third District to be especially important in this case.  The Court stated in products liability cases, it is the defendant’s purposeful availment that renders jurisdiction consistent with “traditional notions of fair play and substantial justice.”[2]  Citing to prior judicial precedent[3] the Court reasoned, it is not enough that Highland’s products may have found their way into Florida or that Highland may have predicted they might reach Florida, as foreseeability a product may find its way into a forum state is not enough, by itself, to allow that state to constitutionally exercise jurisdiction over an out-of-state defendant.

Here, the Court held the plaintiffs never established a link between Highland and the product he used, how it came to be in Florida, or that Highland’s contacts within the state of Florida were “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ The Court concluded even if specific jurisdiction under Florida’s long-arm jurisdiction was established, the plaintiffs failed to meet their burden of overcoming Highland’s sworn affidavit and submitting evidence demonstrating Highland’s contacts with Florida were sufficient under the constitutional due process prong of the jurisdictional analysis.  Accordingly, the Court reversed the trial court’s order denying Highland’s motion to dismiss for lack of personal jurisdiction.

 

CB Contractors, LLC v. Allens Steel Products, Inc. et al.

43 Fla. L. Weekly D2773a (Fla. 5th DCA December 14, 2018)

A condominium association brought an action against general contactor CB Contractors for alleged defects in construction involving several buildings.  CB Contractors then brought claims against multiple subcontractors for contractual and common law indemnification.  During litigation, the subcontractors filed motions for summary judgment arguing the contractual indemnity claims were based upon a “void and unenforceable” contractual provision and CB Contractors failed to sufficiently allege the elements of common law indemnity.  At the trial court level, the judge concluded the contractual indemnity clauses were void and unenforceable pursuant to Florida Statute §725.06. Further, the common law indemnity claim was unavailable because of the lack of a “special relationship” between CB Contractors and the subcontractors.

The Fifth District Court of Appeal, affirmed the order in part regarding the contractual indemnity claim, but reversed the summary judgment order regarding the common law indemnification claim, noting the parties had a “special relationship.”

The Contractual Indemnity Claim

The contractual indemnity clause at issue provided, in relevant part:

  1. Indemnity as to Liabilities. [CB Contractors] and the Owner shall not be liable or responsible for, and shall be saved and held harmless by [Appellees] from and against any and all suits, actions, losses, damages, claims, or liability of any character, type or description, including all expenses of litigation, court costs, and attorney fees arising out of, related to, directly or indirectly, the performance of the Subcontractor. Subcontractor’s indemnity obligations here under shall apply regardless of whether or not the claims, damages, losses, and expenses or causes of action are caused in part by a party indemnified here under and regardless of whether or not the claim relates to a claim under the worker’s compensation policy of Subcontractor. Such obligations to indemnify shall not be construed to negate, abridge, or otherwise reduce any other right or obligation of indemnification which would otherwise exist as to any party or person in any other portion of this Subcontract under law.

Florida Statute section 725.06, contains statutory requirments for contractual indemnity provisions in construction related contracts.  It states in relevant part:

Any portion of any agreement or contract for or in connection with, or any guarantee of or in connection with, any construction, alteration, repair, or demolition of a building, structure, appurtenance, or appliance, including moving and excavating associated therewith, between an owner of real property and an architect, engineer, general contractor, subcontractor, sub-subcontractor, or materialman or any combination thereof where in any party referred to herein promises to indemnify or hold harmless the other party to the agreement, contract, or guarantee for liability for damages to persons or property caused in whole or in part by any act, omission, or default of the indemnitee arising from the contract or its performance, shall be void and unenforceable unless the contract contains a monetary limitation on the extent of the indemnification that bears a reasonable commercial relationship to the contract…

In its holding, the Fifth District Court of Appeals reasoned the subject indemnity clauses were only void and unenforceable as to the “portion” purporting to impose the indemnity obligation for the actions or omissions of CB Contractors. Thus, the trial court erred in ruling the entirety of the clause was void and the clause was otherwise enforceable.

The Common Law Indemnity Claim

One of the elements required for a common law indemnification claim is that the parties exhibit a special relationship.  Dade County Sch. Bd. v. Radio Station, WQBA, 731 So. 2d 638, 642 (Fla. 1999).  The requisite “special relationship” describes a relationship that makes one party “only vicariously, constructively, derivatively, or technically liable for the wrongful acts” of the other party.  Diplomat Props., L.P. v. Tecnoglass, LLC, 114 So. 3d 357, 362 (Fla. 4th DCA 2013).

The trial court in CB Contractors concluded the common law indemnity claim was unavailable because of the lack of a “special relationship” between CB Contractors and the subcontractors.  The Fifth DCA disagreed with the trial court and cited to judicial precedent that concluded a requisite special relationship exists between a general contractor and sub-contractor, and common law indemnity is available to a general contractor sued for defects in construction and attributable to work of a subcontractor.[4]  Therefore, the common law indemnity claim was allowed to continue and the summary judgment order as to that count was reversed.

 

First Service Residential Florida, Inc. v. Carmen Rodriguez, et al.

43 Fla. L. Weekly D2709d (Fla. 5th DCA, December 7, 2018).

A Fifth District opinion highlighted the importance of preserving issues for appellate review.  Even though defendant’s statement of the law on appeal was correct, the Fifth District Court of Appeals denied defendant’s petition for review because defendant did not properly preserve the issue during litigation.

Ms. Rodriguez filed a premises liability lawsuit against several defendants, including First Service Residential Florida, Inc. (“First Service”).  Ms. Rodriguez alleged she slipped and fell on a transitory substance while walking to the elevator in her condominium, and First Service was the property management company that managed the condominium property at the time.

During litigation of the claim, Ms. Rodriguez scheduled the deposition of First Service’s corporate representative.  Prior to the deposition, First Service filed a privilege log asserting a work product privilege as to, among other things, two photographs of the area near Ms. Rodriguez’s condominium.  During the deposition, the corporate representative was asked questions regarding those photographs and First Service objected, asserting the work product privilege.

Following the deposition, Ms. Rodriguez filed a motion to compel production of the photographs, arguing she did not have any photos taken on the day of the fall and had no way to recreate the scene depicted in First Service’s two photos. In response, First Service argued only that Ms. Rodriguez had the substantial equivalent of the photographs requested, and as such, the exception to the work product privilege did not apply.  Importantly, First Service did not argue Ms. Rodriguez failed to meet her burden of presenting evidence establishing an exception to the work product privilege.  The trial court granted Ms. Rodriguez’s motion to compel and ordered the production of the two photographs.

First Service sought review of the trial court’s order by the 5th DCA and argued for the first time reversal of the order was warranted because Ms. Rodriguez failed to meet her burden of presenting evidence establishing an exception to the work product privilege exists in this case. In its appeal, First Service asserted the trial court’s discovery order departed from the essential requirements of the law because during the motion hearing Ms. Rodriguez did not present evidence sufficient to overcome First Service’s work product objection. Specifically, First Service argued Ms. Rodriguez made no evidentiary showing that could overcome First Service’s assertion of privilege. She did not cite any deposition testimony or affidavits in her motion or at the hearing below, and despite the evidentiary burden to do so, she presented no evidence whatsoever at the hearing below and failed to establish she was entitled to the photographs pursuant to rule 1.280(b)(4).

The work product privilege is set forth in Florida Rule of Civil Procedure 1.280. Specifically, rule 1.280(b)(4) provides:

[A] party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party . . . only upon a showing that the party seeking discovery has need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means.

To support its position, First Service cited to judicial precedent[5] that stands for the position rule 1.280(b) requires a showing, through evidence, the party seeking discovery needs the materials in the preparation of the case and cannot, without undue hardship, obtain the substantial equivalent of the materials by other means and assertions of counsel do not fulfill this requirement.   It also relied upon precedent that supported the argument “bare assertions of counsel are clearly inadequate to show the ‘need’ and ‘undue hardship’ required for production of work product documents.”[6]

While noting First Service’s statement of the law was correct, the Court had to deny First Service’s appeal because First Service failed to properly preserve the issue for  appellate review.  The Court noted at no time during the hearing on the motion to compel did First Service argue production of the photographs was not warranted because Ms. Rodriguez failed to submit “any deposition testimony or affidavits,” but instead improperly relied solely upon the assertions of her counsel to prove her case. Here, because the record demonstrated First Service did not raise any challenge to the sufficiency of Ms. Rodriguez’s evidence below, the argument was not preserved for appellate review.[7]

 

Florida Case Law Update – Kris Darrough

Restoration 1 of Port St. Lucie v. Ark Royal Insurance Co. (case #: 4D17-1113)

Policyholders sustained water damage to their home. Policyholders contracted with Restoration 1 of Port St. Lucie (“Restoration”) to do cleanup work and assigned benefits to Restoration. Once Restoration completed its work, it submitted a claim to Ark Royal Insurance Co. The assignment of benefits provision required the signatures of all insureds and mortgagees for the assignment to be valid.

Ark Royal refused to pay the amount requested by Restoration on the ground the insurance contract required approval from the policyholders and the policyholder’s mortgage company for the assignment of benefits to Restoration to be valid.

Restoration sued for breach of contract, alleging the requirement of signatures of all insureds and mortgagees for an assignment of benefits was inconsistent with public policy.

The Court of Appeal found the assignment of benefits provision in the contract was enforceable because the contract did not prohibit assignment, but instead, it imposed a condition in the form of requiring the approval of all insureds and the mortgagee. The court explained the policy holders and the mortgagee have a vested interest in having a reputable and legitimate third-party contractor perform the repairs.

Ultimately, the restriction did not create a great prejudice to the dominant public interest and was held to be valid.

 

Miorelli v. Hall (case #: 18-11647)

Royal Caribbean Cruises Ltd., an operator of cruise ships, issued guest ticket booklets that contained a bolded notice on the front page alerting passengers to the existence of contractual limitations on the right to sue, along with a stated limitation of time to sue. The actual clause containing the limitations was placed on a different page written in normal print. The clause explained injured passengers must provide written notice of the claim within six months of the injury and file suit within one year.

Plaintiff was injured on defendants’ cruise ship.  Six months after the incident, plaintiff’s counsel sent defendants a letter providing notice of intent to sue.  16 days prior to the expiration of the contractual limitations period, defendants’ claims adjuster wrote to plaintiff’s counsel inviting him to make a settlement demand. Plaintiff ultimately filed suit almost 20 months after the incident occurred.

The District Court granted defendants’ motion for summary judgment based on the one-year limitations period contained in the cruise ticket contract. Plaintiff appealed arguing the district court erred in determining the contractual time limitation applied and was not subject to equitable tolling.

The appellate court affirmed the lower court’s decision and rejected plaintiff’s contentions the lower court should have denied the motion for summary judgment as premature because of the lack of factual discovery.  The appellate court explained the discovery plaintiff desired to have completed did not relate to the timeliness of the claim.

Notably, the appellate court rejected plaintiff’s claim that he did not receive notice of the limitation period. The Court explained there was adequate notice based on the information contained in the booklet, and further, plaintiff had actual notice based upon his own statement to the defendants.

Finally, the Court noted equitable tolling did not apply because of the extraordinary nature of the remedy, and further, plaintiff’s failure to demonstrate it should apply. Specifically, the Court explained tolling is not warranted where a plaintiff knew or reasonably should have known the limitations period was running, which was the case in this action.

 

DeLisle v. Crane Co (case #: SC 16-2182)

The Florida Supreme Court reinstated an $8 million verdict against R.J. Reynolds Tobacco Co. and Crane Co. Further, the Court refused to adopt stricter federal standards for expert testimony admittance in Florida state courts.

In the underlying case, plaintiff filed a personal injury action against sixteen defendants after he developed mesothelioma. Plaintiff alleged each defendant caused him to be exposed to asbestos. Causation was hotly contested and many experts were involved. Defendants challenged each of plaintiff’s experts’ opinions, arguing their testimony should be excluded. However, the experts were allowed to testify and the jury returned an $8 million verdict.

On appeal, the Court of Appeals applied the strict Daubert standard and threw out the testimony of two of plaintiff’s expert witnesses.  The Daubert standard only allows a witness to qualify as an expert when the expert’s testimony is based on sufficient facts or data; the testimony is a product of reliable principles and methods; and the witness reasonably applies the principles and methods to the facts of the case. The Court of Appeal overturned the trial court verdict on the ground the experts should not have been permitted to testify because the trial court lacked sufficient information to approve or disapprove of them.

The Florida Supreme Court declined to disturb the state’s Frye standard for expert testimony. Under the Frye standard, the judge determines allowance of expert testimony based on whether the principles are ones which have gained general acceptance in the particular field. Thus, the Florida Supreme Court ruled the more lenient Frye standard will continue to apply in state court.

 

[1] See Reynolds Am., Inc. v. Gero, 56 So. 3d 117, 119 (Fla. 3d DCA 2011) (citing Venetian Salami Co. v. Parthenais, 554 So. 2d 499, 502 (Fla. 1989)).

[2] Citing, J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880 (2011).

[3] Blumbery v. Steve Weiss & Co., Inc., 922 So. 2d 361, 365 (Fla. 3d DCA 2006); see also Bolin, 251 So. 3d at 939-40 (noting that the United States Supreme Court has concluded that merely placing goods in the stream of commerce does not create sufficient minimum contacts to warrant the assertion of jurisdiction) (citing to the plurality in J. McIntyre Mach.).

[4] Citing to CC-Aventura, Inc. v. Weitz Co., No. 06-21598-CIV, 2009 WL 2136527, at 2 (S.D. Fla. July 13, 2009).

[5] CSX Transportation, Inc. v. Carpenter, 725 So. 2d 434, 435 (Fla. 2d DCA 1999)

[6] Florida East Coast Railway v. Jones, 847 So. 2d 1118, 1119 (Fla. 1st DCA 2003); North Broward Hospital District v. Button, 592 So. 2d 367, 368 (Fla. 4th DCA 1992); and Winn-Dixie Stores v. Nakutis, 435 So. 2d 307, 308 (Fla. 5th DCA 1983)

[7] See, e.g., Robins v. Colombo, 253 So. 3d 94, 97 (Fla. 3d DCA 2018); Holt for Thirteenth Judicial Cir., Hillsborough Cty. v. Keetley, 250 So. 3d 206, 209 (Fla. 2d DCA 2018); US Bank Nat’l Ass’n for CSFB Heat 2006-7 v. Tranumn, 247 So. 3d 567, 570-71 (Fla. 1st DCA 2018); Hernando HMA, LLC v. Erwin, 208 So. 3d 848, 849 (Fla. 5th DCA 2017) First Call Ventures, LLC v. Nationwide Relocation Servs., Inc., 127 So. 3d 691, 693 (Fla. 4th DCA 2013).

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