Wednesday, May 27, 2009

CAFA, FDUTPA and a blend of aromatic decisions

In re Hannaford Bros. Co. Customer Data Security Breach Litigation,(C.A.1 (Me.))
Removal - Class action brought against stores in Florida qualified for remand to state court under the "home state exception" CAFA.

As a matter of first impression, the Court of Appeals for the First Circuit held that a class action brought against grocery stores in Florida qualified for remand to the state court under the "home state exception" to the Class Action Fairness Act. Although previously filed national class actions arising from same core set of facts involving sister corporation were consolidated by the Judicial Panel on Multidistrict Litigation, he class members in this action were specifically limited to Florida citizens, the grocery store was the only defendant in the action and its principal place of business was in Florida, and, the case was originally filed in Florida state court.

Arbitration -- Waiver -- Active participation in litigation -- Party who actively participated in litigation by filing answer, affirmative defenses, and motions to dismiss and by issuing subpoena and propounding discovery waived right to compel arbitration
Reported at 34 Fla. L. Weekly D900a

Appeals -- Collateral orders -- Order granting leave to file fourth amended complaint which would avoid preclusion of state law claims under Securities Litigation Uniform Standards Act, and remand to state court for lack of federal jurisdiction because Securities Litigation Uniform Standards Act was the only asserted basis for federal jurisdiction -- Order is not reviewable under collateral order doctrine because it is effectively reviewable on appeal from a final judgment in state court -- State courts have competence and authority to determine if fourth amended complaint was properly allowed -- Remand order based on lack of subject matter jurisdiction is unreviewable -- Order granting leave to amend to substitute parties is an unappealable interlocutory order
Reported at 21 Fla. L. Weekly Fed. C1777a

Appeals -- Federal -- Jurisdiction -- Order remanding case to state court from which it was removed -- Federal court of appeals has jurisdiction to review district court's order remanding case to state court after declining to exercise supplemental jurisdiction over state-law claims under 28 U.S.C. section 1367(c) -- Such order is not a remand for lack of subject-matter jurisdiction for which appellate review is barred by sections 1447(c) and (d)
Reported at 21 Fla. L. Weekly Fed. S837a

Arbitration -- Federal Arbitration Act -- Stay pending arbitration -- Denial -- Appeals -- Appellate courts have jurisdiction to review denials of stays requested pursuant to 9 U.S.C. section 3 by litigants who were not parties to the relevant arbitration agreement -- Litigant who was not a party to relevant arbitration agreement may invoke section 3 if relevant state contract law allows him to enforce the agreement
Reported at 21 Fla. L. Weekly Fed. S834a

Consumer law -- Florida Deceptive and Unfair Trade Practices Act -- Purchasers of pre-converted condominium units filed suit against developers for declaratory relief under FDUTPA, violations of FDUTPA, fraudulent inducement, and conversion and civil theft, alleging that units were purchased based on representations concerning developing the property into luxury resort and sport training facility by a partnership between developers and seller -- Purchase and sale agreements which contain various disclaimers do not bar FDUTPA claims because defendants were not parties to PSAs, and because defendants have expressly disavowed any connection to PSAs -- Purchasers sufficiently pled defendants' involvement with and participation in development project and specific representations made by each defendant to state a claim under FDUTPA -- Purchasers are entitled to seek declaratory relief under FDUTPA because they have stated a claim of a violation of FDUTPA -- There is no requirement that a plaintiff show an ongoing practice or irreparable harm, and declaratory relief is available regardless of whether an adequate remedy at law also exists -- Further, purchasers satisfied requirements for threshold standing under Article III where plaintiffs allege clear injury in fact by the loss of over $70 million, demonstrated causal connection between defendants' misrepresentations and plaintiffs' loss, and maintain that if court enters a declaratory judgment that defendants' conduct violates FDUTPA, plaintiffs will be able to seek redress for their losses -- Pleading requirements of Rule 9(b) do not apply to FDUTPA claims, and therefore cannot serve as basis to dismiss such claims -- Fraudulent inducement -- Disclaimers in written PSAs do not bar plaintiffs' fraudulent inducement claims, because defendants, as non-parties to contracts, may not benefit from disclaimers -- Purchasers pled fraudulent inducement claim with sufficient particularity to satisfy Rule 9(b) where they made specific allegations of fraud, including exactly what misleading statements were made, when and where they were made and, in several instances, by whom they were made -- Conversion -- Complaint states a claim for conversion where plaintiffs allege defendants took their money, which was delivered by each plaintiff at one time, by one act, and in one mass when each closed on a particular condominium unit, that they paid full purchase price of converted, luxury condominium units based upon representations made by defendant, and that at time of payments, defendants had no intention of performing any of improvements represented to plaintiffs -- Civil theft -- Complaint states a claim for civil theft where plaintiffs successfully pled claim for conversion and pled criminal intent by alleging that defendants acted knowingly with intent to permanently deprive each plaintiff of their property, and appropriated it to their own use or use and benefit of others not entitled to it -- Partnership liability -- Purchasers' theory of liability against defendant developers for actions of seller does not fail under Florida partnership law, where there is no indication that Florida courts would find purported partnership liability does not apply to tort claims, plaintiffs adequately pled actual reliance to their detriment on existence of partnership between developers and seller, and plaintiffs' reliance on purported partnership was not unreasonable as matter of law
Reported at 21 Fla. L. Weekly Fed. D621a

Environmental protection -- Comprehensive Environmental Response, Compensation, and Liability Act -- Remediation costs -- Apportionment of liability -- Seller of pesticide to agricultural chemical distributor was not liable as an “arranger” for contamination to distributor's site caused by chemical spills during transfers and deliveries and as a result of equipment failures -- Although evidence showed that seller was aware that minor, accidental spills occurred during the pesticide's transfer from common carrier to distributor's storage tanks after the product had come under the distributor's stewardship, the evidence also revealed that seller took numerous steps to encourage its distributors to reduce the likelihood of spills -- Seller's mere knowledge of continuing spills and leaks was insufficient grounds for concluding that it “arranged for” pesticide's disposal -- District court properly apportioned only 9% of site remediation costs to railroads which owned part of the facility on which distributor operated
Reported at 21 Fla. L. Weekly Fed. S839a

Torts -- Interference with contractual relationship -- Defamation per se -- Arbitration -- Plaintiff's assertion that entire agreement with defendant is invalid because it is unconscionable is an issue to be decided by arbitrator -- Under broad language of agreement, plaintiff's claims for interference with contractual relationship and defamation per se are arbitrable -- Further, under foreseeability test, tort claims arise out of agreement between parties, and were foreseeable at time agreement was entered into and within scope of arbitration clause
Reported at 21 Fla. L. Weekly Fed. D619a

Insurance -- Renewable term life insurance policy -- Notice of right to renew -- There is no basis upon which an owner of a renewable term life insurance policy is entitled to receive notice of the right to renew beyond the notice in the policy itself -- Trial court erred in entering summary judgment finding plaintiff was, by virtue of a dissolution of marriage decree, the equitable owner of a ten-year, renewable, life insurance policy her former husband had purchased and, for that reason, was entitled to notice, as the end of the original term approached, of her right to renew the policy
Reported at 34 Fla. L. Weekly D886a

Jurisdiction -- Non-residents -- Individual guarantors of promissory note executed by Florida corporation -- Minimum contacts -- Trial court erred in denying motion to dismiss, on ground of lack of personal jurisdiction, action against non-resident guarantors who reside in foreign state, executed guaranties in foreign state, and lack any other connection to Florida in their personal capacities -- Lender does not meet requirement of showing constitutional minimum contacts by showing that payments a defaulting borrower owes are to be made in Florida -- Contingent obligation a guaranty represents is, even in the event of default, a constitutionally inadequate basis for personal jurisdiction -- The furnishing of financial statements in connection with the guaranty does not make a material difference
Reported at 34 Fla. L. Weekly D885a

Attorney's fees -- Justiciable issues -- Claim or defense not supported by material facts or application of existing law to material facts -- Error to require that former law firm and client each pay 50% of opposing party's attorney's fees under section 57.105 without conducting evidentiary hearing or otherwise making express finding that law firm was not acting in good faith -- Section 57.105 does not permit assessment of costs against law firm -- Law firm did not have meaningful opportunity to be heard on issue of good faith where law firm appeared at hearing with witness prepared to testify to law firm's good faith, but court terminated hearing before testimony could be presented -- Although court attempted to rectify situation by permitting law firm to file post-hearing “initial” memorandum regarding good faith exception, use of word “initial” implied that law firm would have opportunity to authenticate attachments to motion or present additional evidence at a subsequent hearing, but court instead entered order finding law firm liable under section 57.105 after receipt and consideration of only the law firm's “initial” filing -- Remand with instructions to conduct evidentiary hearing and then either to make required finding regarding law firm's lack of good faith or to deny imposition of fees as to law firm
Reported at 34 Fla. L. Weekly D898a

Attorney's fees -- Offer of judgment -- Prejudgment interest -- Trial court properly awarded plaintiff prejudgment interest on attorney's fee award to run from date on which plaintiff obtained judgment higher than 125% of her written settlement offer, rather than date on which court entered order overruling defendant's objections to award of attorney's fees
Reported at 34 Fla. L. Weekly D915a

Child support -- Modification -- Trial court erred in sua sponte reducing father's child support obligation when considering mother's motion for contempt based on father's failure to pay child support and arrearages where father had not requested downward modification -- Even if father had requested modification, trial court failed to find that there was substantial change in circumstances that was not contemplated at time of final judgment and that was sufficient, material, involuntary, and permanent in nature -- Error to fail to rule on motion for contempt after determining that father had failed to pay child support -- Where mother's motion was well taken, it was error to prohibit mother from filing any further motions for contempt or affidavits of delinquency so long as father continued to pay specified sum toward child support obligation
Reported at 34 Fla. L. Weekly D896c

Contracts -- Employment -- Separation agreement under which employees received severance pay in exchange for general release of employer from any and all suits, actions, causes of action, damages and claims in law or equity which employees ever had or will have regarding any matter of employees' employment -- Employees breached separation agreement by filing suit against employer in foreign country -- Release served to release employer from suits brought in foreign countries as well as domestic suits -- Language of release, “including but not limited to,” followed by an enumeration of certain causes of action, did not limit scope of release to only those enumerated suits and causes of action -- Trial court erred in entering summary judgment for employees in employer's breach of contract action
Reported at 34 Fla. L. Weekly D911a

Contracts -- Real property sale -- Purchase of real property with bonus provision requiring buyers to pay seller an additional $5 million dollars should buyers obtain approval to construct total of 600,000 square feet or more of air-conditioned saleable square feet of space -- Action by seller alleging, in one count, that buyers breached implied duty of good faith and fair dealing by failing to seek approval of site plan in excess of 600,000 square feet of air-conditioned saleable space -- Trial court erred in denying buyers' motion for directed verdict where addendum to contract did not impose any duty on buyers to seek approval to build more than 600,000 square feet of air-conditioned, saleable space, but instead left the decision of whether to seek approval completely to the discretion of buyers -- Implied duty of good faith cannot be used to vary fully specified, unambiguous terms of contract -- Although buyers failed to renew motion for directed verdict at close of all evidence, as generally required to preserve issue for review, manifest miscarriage of justice would result if buyers were held to have breached a duty that does not exist
Reported at 34 Fla. L. Weekly D907a

Dissolution of marriage -- Child support -- Modification -- Where marital settlement agreement provided that father would pay child support for each minor child until they “reach the age of majority, marry, die, graduate from high school or becomes self supporting, whichever occurs first,” trial court erred in entering summary judgment in proceeding to modify child support to require father to continue to pay after child had reached majority and until child graduates from high school -- Public policy of requiring parents to support their children is limited to their minority and dependency -- Section 743.07(2) does not require the parent to continue to support the child after reaching majority while in last year of high school, but merely authorizes court to do so if statutory conditions are met -- MSA does not conflict with that policy by voluntarily ending father's support when child reaches age of majority while still in school
Reported at 34 Fla. L. Weekly D906b

Insurance -- Life -- Coverage -- Jurisdiction -- Ripeness -- Plaintiff, who took out life insurance policy with insurer on life of his business partner less than two years prior to insured's death, filed suit seeking declaratory judgment that he is owed the benefits under policy -- Case is not ripe for adjudication and must be dismissed for lack of jurisdiction, where insurer has statutory and contractual right to review any claim for benefits when death occurs within first two years of policy's life, insurer has not made any determination as to whether to grant or deny the claim, and insurer's insistence that it employ due diligence and review the claim has not harmed plaintiff in any material sense -- Question of whether insurer has breached contract is not fit for adjudication, there is little to no concrete hardship that attaches to parties if court withholds adjudication at this time, and prudential considerations that attach to this matter militate towards dismissing case until some future time when it is ripe for adjudication
Reported at 21 Fla. L. Weekly Fed. D628a

Insurance -- Rescission of life insurance policies -- Complaint by life insurance company alleging that defendants collaborated in scheme to recruit elderly applicants for life insurance policies which were never meant to be retained by insureds or their family members, but were paid for and held by outside investors, including defendant trusts organized in Delaware -- Jurisdiction -- Plaintiff failed to show that non-resident defendants committed a tortious act in Florida through telephonic, electronic, or written communication into Florida so as to subject defendants to jurisdiction under Florida's long arm statute -- Complaint sufficiently alleged that defendants formed a civil conspiracy and that at least some acts in furtherance of conspiracy were carried out in Florida -- Florida long arm statute reaches all participants in a civil conspiracy where at least one act in furtherance of conspiracy is committed in Florida -- Exercise of jurisdiction over non-resident defendants would not be contrary to Due Process Clause where allegations of complaint are sufficient to permit inference that non-resident defendants purposely directed their activities at residents of Florida -- Complaint sufficiently states claim for rescission of insurance contract due to fraudulent representation in application -- Because non-resident trusts are owners of policies, they were properly joined as defendants even though there is no allegation that they made any misrepresentations -- Complaint sufficiently alleges that policies are void for lack of an insurable interest -- Although Florida permits the assignment of life insurance policies to persons without an insurable interest in the life of the insured, this rule does not extend to sham assignments made simply to circumvent the law's prohibition on wagering contracts -- Allegations of complaint were sufficiently specific to allege common law claim of fraud -- Complaint adequately alleged that defendant trusts both participated in civil conspiracy to obtain fraudulently procured insurance policies, and aided and abetted that conspiracy -- Motion to dismiss denied
Reported at 21 Fla. L. Weekly Fed. D629a

Paternity -- Child custody -- Child support -- Imputed income -- Relocation of child -- Although issue of specific geographic relocation restriction was not raised in pleading, issue was tried by consent where father presented evidence and arguments in favor of residency relocation restriction -- Error to impose relocation restrictions which were more restrictive than those provided in more general relocation statute based on finding that statute did not apply because trial court was not designating a “primary parent” -- On remand, trial court shall exercise discretion in light of appellate court's determination that relocation statute applies -- Retroactive child support -- Trial court may award support even where it is not sought in pleadings -- Although mother defaulted without ever filing a pleading that was permitted by court and, accordingly, issue of retroactive child support should not have been considered by trial court, father consented to court's consideration of issue by failing to object when trial court advised parties that issue of retroactive child support was within scope of court's ruling -- Competent, substantial evidence supported award of retroactive child support -- Income -- No abuse of discretion in amount of income imputed to mother based on her prior income, occupational history, and experience
Reported at 34 Fla. L. Weekly D901a

Torts -- Interference with contractual or business relationship -- Jurisdiction -- Non-residents -- Tortious act within state -- Minimum contacts -- Action by foreign corporation which entered into contract for purchase of dolphins from Japan for delivery to its amusement park in Dominican Republic against movant and others who oppose the capture and confinement of dolphins and slaughter of dolphins by Japanese fishermen, alleging that nonresident defendant engaged in telephonic communications and in excess of 100 electronic communications with people in Florida to plan, coordinate, and block exportation of dolphins to Dominican Republic -- Error to deny motion to dismiss second amended complaint where complaint did not allege, nor could it have alleged, that tortious interference occurred within Florida, as nothing in contracts contemplated payment or performance in Florida, nor was Florida mentioned anywhere in the contracts -- Email communications between codefendants did not constitute tortious interference -- Further, exercise of jurisdiction over nonresident defendant would not comport with due process where defendant did not maintain adequate minimum contacts of such nature that defendant could reasonably anticipate being haled into court in Florida -- Remand with instructions to dismiss complaint as to nonresident defendant
Reported at 34 Fla. L. Weekly D897a

Torts -- Interference with contractual or business relationship -- Negligent hiring or retention -- Jurisdiction -- Non-residents -- Tortious activity within state -- Business activity in state -- Action by foreign corporation which entered into contract for purchase of dolphins from Japan for delivery to its amusement park in Dominican Republic against, among others, an out-of-state university which allegedly negligently appointed to unpaid research position an individual who interfered with plaintiff's contractual and business relationships by engaging in communications with people in Florida to plan, coordinate, and block exportation of dolphins to Dominican Republic -- Where separate appellate panel held that there was no long-arm jurisdiction over researcher because second amended complaint failed to demonstrate that she engaged in any tortious conduct within Florida and also held that researcher did not have minimum contacts with Florida necessary to support personal jurisdiction, there can be no jurisdiction under section 48.193(1)(b) over university, which supposedly acted through researcher -- University did not have “continuous systematic business contacts” with state which would support finding of general jurisdiction -- Activities of alumni associations in Florida are not type of systematic, continuous business activity that would result in general jurisdiction over school -- University's internet distance learning program does not amount to “substantial and not isolated activity within this state” where only two students with Florida addresses were enrolled in online courses offered through university's video network -- University's property interests in Florida do not support finding of general jurisdiction where, for the most part, these interests are contingent remainder interests or, in one case, a mortgage that was satisfied in 1971 -- University's participation in other lawsuits in Florida concerning subject matters separate and distinct from this lawsuit did not create personal jurisdiction over university in this case -- Error to deny motion to dismiss for lack of jurisdiction
Reported at 34 Fla. L. Weekly D902a

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