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Case Law Update

A Cause of Action for Quantum Meruit

Daake v. Decks n Such Marine, Inc., 41 Fla. L. Weekly D1992 (Fla. 1st DCA Aug. 29, 2016)

Quantum meruit is a legal doctrine under which the law implies the existence of a contract where a party receives goods or services and should be expected to pay for them. However, quantum meruit is not available where an express contract exists. A construction contractor was unable to recover for quantum meruit because an express, enforceable agreement existed. Additionally, even though the court found that the agreement had been breached by a family trust for non-payment, the contractor was unable to recover for breach of contract because the claim had only been filed against individual family members, not the family trust.

Dismissal of an Action as a Sanction

Bank of Am., N.A. v. Ribaudo, 41 Fla. Law Weekly D1919 (Fla. 4th DCA Aug. 17, 2016)

Before the ultimate sanction of dismissal of the case is imposed for a discovery violation, the trial court is required to consider the six factors set forth in the case of Kozel v. Ostendorf, 629 So. 2d 817, 818 (Fla. 1993), which include (1) whether the attorney’s disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience; (2) whether the attorney has been previously sanctioned; (3) whether the client was personally involved in the act of disobedience; (4) whether the delay prejudiced the opposing party through undue expense, loss of evidence, or in some other fashion; (5) whether the attorney offered reasonable justification for noncompliance; and (6) whether the delay created significant problems of judicial administration. Failure to set forth specific factual findings as to each of the six Kozel factors results in reversible error if the issue has been properly preserved for appellate purposes upon the filing of a timely filed motion for rehearing. Even though the trial court committed reversible error in failing to consider the Kozel factors prior to dismissal of the case, Bank of America failed to preserve the issue for an appeal.

Discovery of Financial Information

Rosen v. McCobb, 41 Fla. L. Weekly D1943 (Fla. 4th DCA May 18, 2016)

A discovery order that potentially requires disclosure of non-parties personal information subject to privacy restrictions creates the type of irreparable harm needed for certiorari review by the appellate court. Article I, section 23 of the Florida Constitution grants a right of privacy, but the trial court is tasked with balancing the right to privacy and the right to discovery of relevant information. Florida law does not automatically require an in camera inspection (a judge’s private viewing of the discovery materials) before ruling on a discovery objection.

Florida Deceptive and Unfair Trade Practices Act (Fla. Stat. §§ 501.201 -.213 (2016))

Banner v. Law Office of David J. Stern, P.A., 41 Fla. L. Weekly D1970 (Fla. 4th DCA Aug. 24, 2016)

The plaintiff filed claims against the defendants under the Florida Deceptive and Unfair Trade Practices Act (“FDUPTA”) and the Florida Consumer Collection Practices Act (“FCCPA”) (§§ 559.55-.785). While the plaintiff prevailed on her claim under the FCCPA, the trial court granted summary judgment in favor of the defendants on the FDUPTA claim. At the conclusion of the case, both sides appealed and both sought recover of attorneys’ fees as the prevailing party. The appellate court ruled that the defendants were not entitled to an award of attorneys’ fees for prevailing on the FDUPTA claim. Aligning itself with the decision in Heindel v. Southside Chrysler-Plymouth, Inc., 476 So. 2d 266 (Fla. 1st DCA 1985), the court held that where a case involves multiple causes of action arising out of the same conduct, to recover attorneys’ fees under FDUPTA, the party must (1) recover on the FDUPTA claim and (2) recover a net judgment in the entire case.

FINRA/Securities Litigation Developments

Motions to Dismiss in FINRA Arbitrations
Proposed Changes to Rule 12504 of the Customer Code and Rule 13504 of the Industry Code

Fin. Indus. Regulatory Auth., File No. SR-2016-030 (Form 19b-4) (Aug. 03, 2016)

On August 3, 2016, FINRA submitted proposed changes to Rule 12504 of the Customer Code and Rule 13504 of the Industry Code to address an additional basis for granting motions to dismiss. In 2009, FINRA overhauled the Code of Arbitration Procedure (the “Code”) to severely curtail the use of dispositive motions because it believed respondents were routinely filing such motions solely for the purposes of delay, increasing the costs of arbitration, and to intimidate the claimants. Under the current version of the Code, the arbitrators are not permitted to dismiss the case prior to the final arbitration hearings unless (1) the non-moving party previously released the claim in a settlement agreement or written release, (2) the moving party was not involved with the account, security, or conduct at issue, or (3) the claim is ineligible to be arbitrated because it is outside the six-year time limit for submitting the claim. FINRA has requested permission from the Securities and Exchange Commission to amend the Code to include a new ground for dismissal prior to final hearings, to wit: the non-moving party previously brought a claim regarding the same dispute against the same party that was fully and fairly adjudicated on the merits and memorialized in an order, judgment, award, or decision.

Offsetting Awards in FINRA Arbitrations
SEC Approves Changes to Rule 12904 of the Customer Code and Rule 13904 of the Industry Code

Arbitration Awards, Exchange Act Release No. 54,901, 81 Fed. Register 159 (Aug. 17, 2016)

Up until recently the Code of Arbitration Procedure did not explicitly offset monetary amounts in an award (awards where some monetary relief was granted in favor of the claimant and other monetary relief was granted for the respondent). Unless the arbitrators addressed the issue in the award, the parties were forced to either exchange payments or file post-award motions with the arbitration panel to allow for offsetting amounts whereby the net non-prevailing party would have to pay the prevailing party. On August 11, 2016, the SEC approved FINRA’s proposed changes to Rule 12904 of the Customer Code and Rule 13903 of the Industry Code to address the administrative problem where the parties are awarded offsetting amounts. The revised rules provide that unless the award specifies an alternative payment procedure, when the arbitrators order opposing parties to pay each other damages, the monetary awards shall offset, and the party that owes the larger amount shall pay the net difference.
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