Archive for the ‘Contracts’ Category

Florida Cruise Line Passengers & Forum Selection Clause in the Ticket

Monday, June 7th, 2010

The Third District has presented to the Florida Supreme Court a question of great public importance as it relates to the enforceability of forum selection clauses in cruise ship tickets. While the dissenting judge suggests that this is just a “garden variety personal injury case with a contractual twist,” the panel (based in Miami) likely recognized the significance of the cruise line industry in Miami-Dade and elsewhere in the state.

In Walter Weisenberg v. Costa Crociere (Cope, Shepherd and Suarez), the forum selection clause read:

For cruises which depart from, return to, or make any
port call at a United States port, Passenger further agrees
that any suit against CARRIER shall be filed exclusively
in the United States District Court for the Southern
District of Florida located in Broward County, Florida,
and that any such suit shall be based exclusively upon the
admiralty jurisdiction of the United States District Court.

In short, it must be in federal court in Ft. Lauderdale and federal jurisdiction is conferred by admiralty law. The Plaintiff claimed that this was not sufficient notice of the need to file in federal court and that there would not be a jury. A prior case from last year, Leslie v. Carnival Cruise, involved a slightly different clause which did not require admiralty jurisdiction.

Question of GPI presented is:

IS A FORUM SELECTION CLAUSE ENFORCEABLE
IN CIRCUMSTANCES WHERE ITS EFFECT IS
THAT PASSENGERS WAIVE THE RIGHT TO A
JURY TRIAL BUT THE CLAUSE DOES NOT
EXPRESSLY SO STATE?

Death of the Pure Bill of Discovery in Florida?

Sunday, May 9th, 2010

Probably so, but not quite yet.

The case of Venezia Lakes Homeowners Association, Inc. v. Precious Homes at Twin Lakes Property Owners Assoc. (Third DCA: Suarez, Logoa, and Salter) reverses a trial court and remands with instructions to grant summary judgment on the grounds that a pure bill cannot be used to determine if a lawsuit exists.

In this case, two adjacent homeowners’ associations share expenses on one of two lakes.  Under the contract, Precious pays Venezia 30% of the expenses for one lake.  Typically, they get an approved budget with a single category, “lake budget,” which they believe may include expenses for both lakes — thus they may be overpaying.  When Precious asked for the service contracts which support the budget entry, they were refused.  They filed a pure bill of discovery to get those service contracts.

The Panel held that the pure bill of discovery’s “usefulness [has] diminished greatly” and quotes a swath of cases from the various intermediate appellate courts.  If there is no other remedy, it can be used to identify potential defendants, theories of liability, and information to meet conditions precedent to file suit.  But, in very vague terms, it “cannot be used as a fishing expedition to see if a case exists.”

Here, the court ruled that the pure bill does “not lie to see if a cause of action exists nor… [to determine] the extent of damages.”  Herein, the court suggested that alternative remedies were available including a declaratory judgment or breach of contract claim.

Appraisal Contingency Clause in Florida Real Estate Contract

Friday, April 30th, 2010

The Second District held that a clause allowing an “appraisal contingency” was valid which permitted the prospective buyer to back out of a contract without penalty.

The case is Nigel and Christine Gibney v. Randy and Helen Pillifant (LaRose, Villanti, Fu;mer).

The home sales contract was “contingent upon this property appraising for no less than $620,000 to be conducted by a local appraiser.”  Buyer performed an appraisal which came back under that amount.  Seller then requested an appraisal which was higher.  Who wins?

The panel held that “although inartful, this [clause] is not ambiguous” and that “appraising for no less than $620,000″ means that NO appraisal may be back less than that amount.  It was suggested that the sellers could have reserved the right to a competing, controlling appraisal.

New Florida Law “Repeals” (in part) Court Decision About Parents Signing Child Waivers

Friday, April 23rd, 2010

Commercial activity providers will soon be able to go back to having parents sign liability waivers for their children, once the Governor signs a new law passed by the Florida Legislature this week.  While the law facially curtails lawsuits, it has nonetheless been heralded as a “win” for trial plaintiff lawyers (don’t be fooled: it is good for defense lawyers to, since someone has to defend the cases).

The history of this issue started with a surprise 2008 decision from the Florida Supreme Court when it said in the Fields case that parents/guardians did not have the inherent authority to waive liability on behalf of children participating in commercial activity (e.g., motorcross, rides, boating, sports, safaris, etc.).  In 2009, spurred by Orlando theme parks, dive boat operators, motorsports venues and others, the Florida legislature tried but failed to pass a bill essentially “reversing” the court’s opinion.  See here for a brief overview.

The issue was revived again this year and it appears, from the coverage, that the bill succeeded due to a combined weakened perspective of the plaintiff bar and some concessions.

Senate Bill 2440 is here.  A solid history of the issues can be found in the staff analysis.

Highlights are:

* law amends Florida Statute 744.301 to allow parents/guardians to sign waivers releasing commercial activity providers from liability for injuries to children due to “inherent risks” (only)

* law creates a rebuttal presumption of no liability — it is not a bar to lawsuits nor it is grounds for a quick summary judgment

* many businesses have a hard time getting and maintaining the proper paperwork; the law requires certain releases with specific clauses or else it is invalid

* an attempt to make an overly broad release may invalidate the whole thing

* still no definition of a “commercial” vs. “noncommercial activity provider”

* law does allow “noncommercial activity providers” (whoever they are) total immunity under a valid pre-injury waiver

Can You Contract Away Your Immortal Soul?

Sunday, April 18th, 2010

Better read those online contracts and end user (EULA) agreements before clicking “accept.”

Our friends at CNET bring to us the story of an online game retailer which slipped the following clause into a sales contract:

“By placing an order via this Web site on the first day of the fourth month of the year 2010 Anno Domini, you agree to grant Us a non-transferable option to claim, for now and for ever more, your immortal soul. Should We wish to exercise this option, you agree to surrender your immortal soul, and any claim you may have on it, within 5 (five) working days of receiving written notification from gamesation.co.uk or one of its duly authorised minions.”

Good news, however, was that there was an opt-out provision.  Better still, if you opted out, the seller saved $5 on the purchase.

According to their not-so-scientific study, 90% of buyers failed to opt out and now owe their immortal soul… to a video game retailer.

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Third DCA Clarifies Damages in Breach of Services Contract

Tuesday, June 9th, 2009

What are the damages when a 5-year landscaping contract for monthing lawn care between a homeowner’s association and lawn mowing company is breached?  The monthly rate?  Total contract fee?  Lost profits?

Lost profits, according to the Third District in Marbella Park Homeowner’s Association, Inc. v. My Lawn Service, Inc. (Gersten, Cortinas, and Salter).  

“The measure of damages for breach of a services contract is the non-breaching party’s lost profits.”  Those are calculated by taking the performance costs and subtracting them from the contract price.  Here, it would be the price of the monthly mowing minus the cost of that service.  The burden is on the non-breaching party and thus an evidentiary hearing is required.

Liability Waivers Signed by Parents for Children to Participate in Commercial Activity are NOT Enforceable

Thursday, February 26th, 2009

The Florida Supreme Court took up the question of the enforceability of (fairly common) “pre-injury” liability waivers/general releases which are signed by parents so their children can participate in commercial activities. Finding this an issue of “great public importance,” the Court held that these releases are NOT valid. If, however, the waiver is for the child to participate in non-commercial activities such as school or community events, such a waiver could be valid.

As the dissent points out, it is odd for the Florida Supreme Court to enunciate a public policy (of great public importance) despite no such prior reference in Florida general or statutory law. Moreover, quickly Florida lawyers will question (a) whether the parents can be called upon to indemnify the activity operator or (b) whether a case involves a commercial or school/community activity.

The case of Scott Corey Kirton et al. v. Jordan Fields et al.; Dean Dyess v. Jordan Fields; and H. Spencer Kirton v. Fields were consolidated appeals arising from an August 2007 Fourth District Court of Appeal decision.

Our prior post gives the backdrop of case law which lead to this Florida Supreme Court ruling, which should not have come as a shock in light of the hints dropped in the 2005 Global Travel v. Shea opinion.

The Court held that “a parent does not have the authority to execute a pre-injury release on behalf of a minor child when the release involves participation in commercial activity.” In a quick footnote, the Court then qualified that this decision would only be dicta if (when!) the questions arise about the enforceability of parent-signed exculpatory agreements for children to participate in non-commercial activity.

That creaking noise you hear is the door being swung wide open for appeals arising from the enforcement of liability waivers in non-commercial cases as well as in instances where it is unclear whether an activity is commercial or non-commercial.

The Court admitted there is no statute on point. It did, however, find that this situation invoked the State’s parens patriae public policy basis to preclude the enforcement of such waivers. Signing a pre-injury waiver was deemed not to be so much a part of a fundamental right of raising children but more an “injustice” which “deprives the child of the right to legal relief” and could lead the child, family, and the State to “suffer.” Signing the waiver “impacts the minor’s estate and the property rights personal to the minor.”

A short-shifted discussion was then had about how commercial activities could afford insurance and/or pass the cost along to the consumer; hence the differential treatment.

Justice Wells concurred but noted that “until today, this Court has never held that such a pre-injury release knowingly executed by a parent is unenforceable.” He further pointed out, given the number of cases on point, that the Legislature certainly had the opportunity to outlaw such provisions — and didn’t. He concluded, “it is fundamentally unfair to now declare a new public policy and then apply it to the defendants in this case.”

While Florida parents will likely collectively sigh with relief, this new public policy which divides commercial and non-commercial activity into two poorly-defined camps may lead to confusion — if not mistaken decisions — involving signing releases in quasi-commercial (or questionably non-commercial) activities.

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