In November 2016, Florida voters overwhelmingly approved, with more than 70% voting yes, expanded medical marijuana by passing Amendment 2.

Now comes the tough work of implementing Amendment 2.  One bill, SB 614, proposes to throw out the current medical marijuana system in Florida (which was set up in 2015 to grow, process and distribute low-THC cannabis oil) which strictly capped the number of businesses allowed to participate in medical marijuana.

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St. Petersburg Republican Jeff Brandes, the proponent of SB 614, calls the current system “state sanctioned cartel” that limits competition and results in higher prices.  At present, the Florida medical marijuana system is limited to only seven vertical license holders.  A “vertical license” means that the license holder must do it all and grow, process and distribute the product.  And, by maintaining the current system it will obviously severely restrict businesses who want to be involved in what will be big business under Amendment 2.

Senator Brandes’ plan would get rid of the vertical license system and instead create four types of licenses:  one to grow marijuana, one to process marijuana, one to transport marijuana, and one for retail centers.  Each county, and Florida is a large state with 67 counties, could have one retail center per 25,000 residents, or nearly 800 statewide.  But, the bill still permits local governments to outright ban retail dispensaries.

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Dori K. Stibolt is a partner with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Contractual forum selection clauses may be “mandatory” or “permissive”.  However, there are times when a forum selection clause that appears to be permissive is actually mandatory.  Florida’s Third District Court of Appeal recently addressed such a situation in Quick Cash, LLC, v. Tradenet Enterprises Inc., 3rd DCA Case No. 3D16-1640 (Fla. 3d DCA Feb. 22, 2017).

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In Quick Cash, the Third DCA was asked to consider whether this clause required the parties to litigate in California:

This purchase order shall be deemed entered into and performed in the State of California and Buyer consents to the jurisdiction of the State of California for purposes of enforcement of the terms hereof.

The Court noted that there are no “magic words” that need to be used to make a forum selection clause mandatory, but stated that:

the test is whether, when read as a whole, the forum selection clause indicates that the parties intended to try a case in the specified forum and to the exclusion of all others.

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Finding that allowing the case to proceed in Florida would “render meaningless” the exclusivity language in the forum selection clause, the Court ruled that the trial court properly dismissed the case for lack of jurisdiction and improper venue.  So, while no specific language is required to make a forum selection clause mandatory, viewing such a clause in a way that makes “words of exclusivity” meaningless is not proper.

Copyright: pockygallery / 123RF Stock Photo
Copyright: pockygallery / 123RF Stock Photo

In Florida, the duty to preserve evidence relevant to a case may arise long before a complaint is filed.  A party’s duty to preserve evidence is triggered once litigation is reasonably anticipated.  The duty extends to any evidence that a party:

  • knows, or
  • reasonably should know

is relevant to the anticipated action, including electronically stored information.

The failure to preserve relevant evidence, also known as the spoliation of evidence, may result in the imposition of sanctions and a rebuttable presumption shifting the burden of proof in the underlying action.  A court may exercise a “leveling mechanism” due to the spoliation of evidence if it finds that:

  • the evidence existed at one time;
  • the party had a duty to preserve the evidence; and
  • the evidence was critical to the opposing party’s ability to prove its prima facie case or defense.

Under Rule 1.380(e) of the Florida Rules of Civil Procedure, a party cannot be sanctioned for the failure to produce electronically stored information that was lost due to the “routine, good faith operation of an electronic information system.”  However, the Committee Notes to Rule 1.380 are clear that a party cannot avoid discovery obligations by allowing relevant evidence to be destroyed in the routine operation of an electronic information system.

To avoid becoming a spolier, companies and other large institutions that routinely destroy electronically stored information, such as emails, should consider implementing procedures to save and preserve relevant electronic information.

Who could have ever guessed that post same-sex marriage legalization, litigation would focus on the issues of wedding cakes and wedding florists.  But, now comes recent news that the case pending in Washington State involving the florist who declined to provide flowers for her friend’s gay wedding has lost her case at the state level.

As Barronelle Stutzman explained, in her own words to The Seattle Times, because she is a Christian weddings have a particular significance to her and despite her long friendship with this particular gay customer, even knowing that he was gay for many years, she simply could not provide a special arrangement of flowers for his wedding due to her religious beliefs.

I just couldn’t see a way clear in my heart to honor God with the talents He has given me by going against the word He has given us.

The Washington Supreme Court held, in unanimous decision, that her floral arrangement talents did not constitute protected free speech, and that providing flowers to a same-sex wedding would not serve as an endorsement of same-sex marriage.

As Stutzman acknowledged at deposition, providing flowers for a wedding between Muslims would not necessarily constitute an endorsement of Islam, nor would providing flowers for an atheist couple endorse atheism.

Ms. Stutzman indicates that she will appeal the decision to the Supreme Court of the United States.

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As I explained back in 2015, Palm Beach County’s public accommodation law was amended to greatly broaden the types of businesses covered as public accommodations.  As a result, cake bakers and florists are covered by the law which means that turning away customers based on a religious basis is asking for trouble and litigation.  To avoid litigation, businesses including small businesses, should serve all customers unless there is a safety or security reason not to.

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Dori K. Stibolt is a partner with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Florida, dating back to its early years, has always been a hot bed of scams and fraud.  These days, Florida leads the nation in IRS tax return fraud.  And, that is because Florida has a large transient population, no state income tax (so no state review of tax returns which provide a second layer of scrutiny), elderly population with low income but valid Social Security number, etc.

Doctor’s offices and hospitals have been ripe for the collection of Social Security numbers, so have schools.  Accordingly, most data experts advise against providing Social Security numbers at hospitals, doctor’s offices and schools.  Remember, just because they ask for your Social Security number does not mean you need to fill in that information since most providers really have no reason to collect this information.  I, personally, long ago stopped giving that information out on behalf of myself and I’ve never provided it for my daughter.  If you are a senior or you are caring for a senior, unfortunately the  Medicare system, for many years, utilized seniors’ Social Security numbers on their Medicare cards so that information has been collected for thousands of seniors.  Thankfully, in 2015, President Obama signed legislation requiring the Department of Health and Human Services to send out new Medicare cards without seniors’ Social Security numbers.

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Now, comes news on the latest scam.  The scammers have decided to go directly to Human Resources and payroll departments to collect this data in bulk.  Large companies, mid-size companies and small companies are all being targeted with phishing scams designed to get employees to send W-2s and W-2 data directly to these scam artists.  Please see this important blog post from Fox’s Privacy and Data Security blog for more information.

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Dori K. Stibolt is a partner with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Can a foreclosure sale be held when interrelated counterclaims remain pending?  Florida’s Second District Court of Appeal recently addressed this issue in DeLong v. Paradise Lakes Condominium Association, Inc., 2nd DCA Case No. 2D16-547 (Fla. 2nd DCA Feb. 22, 2017).

50301009 - final decision stencil print on the grunge white brick wall

In DeLong, a condominium association was granted a summary final judgment of foreclosure.  However, the condominium Owner’s interrelated counterclaims had not been resolved.  Accordingly, the appellate court found that the Association’s summary final judgment was neither final, nor appealable.

65888487 - legal cartoon about having a hearing too early in the morning.

The Second DCA, treating the appeal as a proceeding for writ of certiorari, concluded that the trial court

departed from the essential requirements of law when it authorized the sale of the property prior to the rendition of an appealable final judgment … .

DeLong should serve as a reminder that a foreclosure sale may not proceed until a final appealable order has been entered and all interrelated claims have been resolved.

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The recent decision in the Olivares case [2016 WL 6810716 (Bankr. S.D. Fla. 2016) reminds lenders of the perils of being a second mortgage holder where equity is questionable.

A lender that held a second mortgage on real property owned by the chapter 13 debtor objected to the debtor’s proposed plan on the basis that the debtor’s plan was filed in bad faith, not feasible and the debtor proposed to pay the first mortgage holder with out participating in the mortgage modification mediation program.  The debtor filed a motion to value the property and determine the secured status of the lender.

Unfortunately for the second mortgage holder, the decision of the Court came down to one issue, the determination that there was no equity in the property in excess of the first mortgage.  The lender conceded that there was no equity in the debtor’s real property.  Specifically, the property was valued at $459,544.00 and the amount owed on the first mortgage is $823,372.03.

The second lender attempted to make several objections that could have been raised by the first mortgage holder, but the Court found that the second mortgage holder could not argue objections belonging to a third party, including: 1) the debtor’s inability to meet the payment requirements of the first mortgage, 2) the veracity of the family members promises to help fund the first mortgage payments, and 3) bad faith for failure to participate in the MMM program.
The second mortgage holder also argued that the debtor could not strip off liens where the first mortgage is being “treated outside the plan”, but failed to cite any legal authority for their argument.
As a result, the Court found that the plan was proposed in good faith, confirmable, and the motion to value and strip off its lien should be granted.  The only solace for the second mortgage holder is that the lien strip is conditional upon the debtor’s successful completion of all payments under her chapter 13 Plan.

  Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP. Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation. You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

In late-2016, the Florida Supreme Court finally addressed the application of the statute of limitations in a re-filed mortgage foreclosure action.  In Bartram v. U.S. Bank, N.A., Fl. Sup. Ct. Case No. SC14-1265 (Fla. Nov. 3, 2016), the Court ruled that the statute of limitations does not bar a lender from filing a new foreclosure action after dismissal of a prior foreclosure action, as long as there was a default within the preceding five years.  Now, Florida’s appellate courts are being asked to further refine the scope of Bartram.

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In Desylvester v. The Bank of New York Mellon, Fla. 2nd DCA Case No. 2D15-5053 (Fla. 2nd DCA Feb. 22, 2017), the Second District answered the question of whether a re-filed foreclosure action that relied upon an initial payment default more than five years earlier was time-barred.  Applying Bartram, the Second DCA found that such a claim would not be barred because the allegation of default in the re-filed Complaint stated, not only the initial default date, but also a failure to make

all subsequent payments.

The lender was able to avoid the statute of limitations by alleging that the borrowers were in

a continuing state of default.

 

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The Court made a point of distinguishing Desylvester from Collazo v. HSBC Bank USA, N.A., 41 Fla. L. Weekly D2315 (Fla. 3d DCA Oct. 13, 2016). Unlike in Desylvester, the lender in Collazo, had tried its case “on the basis of a date of default that was outside of the five-year statute of limitations period.”  The continuing state of default at the time of the re-filed Complaint in Desylvester was the key distinction.

 

In Desylvester, the Second DCA has made clear that, when re-filing a mortgage foreclosure action based upon an initial default that is more than five years earlier, the lender must allege that the borrower continued to miss subsequent payments and remained in a continuing state of default up to the date that the new Complaint is filed.

Back in 2015 Houston, Texas attempted to and failed to pass an expanded human equal rights ordinance (“HERO”) which would have made it illegal to discriminate against someone based on 15 different “protected characteristics,” including sex, race, religion, sexual orientation and gender identity.

Now, the State of Texas has thought it prudent to follow the lead of North Carolina and pass a state wide law restricting bathroom access.

Texas Senate Bill 6 would require transgender people to use bathrooms in public schools, government buildings and public universities based on “biological sex.”  The measure would also preempt local nondiscrimination ordinances (these are the HERO or HROs that more liberal or progressive cities pass to provide protection within city limits) that allow transgender Texans to use the bathroom that corresponds with their gender identity.

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Not surprisingly, like North Carolina’s HB-2 there may be a large negative economic impact if Texas passes Senate Bill 6.   Texas politicians have already invited the ire of the NFL, large companies and celebrities/entertainers by proposing to limit bathroom access by “biological sex”.

“Biological sex” is defined in the bill as “the physical condition of being male or female, which is stated on a person’s birth certificate”.   What’s so complicated about that, you ask.

  • First, as many as 1 in 1,500 babies are born with ambiguous genitalia that qualify them as “intersex”.
  • Second, thousands of the 1.4 million transgender Americans have had sex-reassignment surgery, which means that many people who were designated as male or female at birth now have “the physical condition” of being another gender.
  • Third, for transgender people who retain the biological markers of their original gender identification (because they choose not to undergo surgery or cannot afford it), many transgender women and men feel not only uncomfortable but endangered when being forced to use a bathroom that does not mesh with their identity.

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Baffled by bathroom litigation and how to handle bathroom access, I’ve written several posts on bathroom access and employment litigation regarding bathroom access.  See my posts here (OSHA guidance on bathroom access), here (EEOC settlement of litigation which included bathroom access claims), here (11th Circuit Court of Appeals overturned summary judgment in favor of employer in discrimination claim that involved restroom access), and here (litigation involving Hobby Lobby that included restroom access claims).

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Dori K. Stibolt is a partner with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

After previous efforts that failed in 2012 and 2016, the City of Jacksonville, Florida has now passed an expanded human rights ordinance (“HRO”) that provides employment and housing protections based on sexual orientation and gender identity.

This time around the City Council addressed several issues that created hurdles during the prior efforts to expand the HRO.

  • First, sexual orientation and gender identity are defined in the HRO;
  • Second, gender identity must be demonstrated in a “consistent and uniform” manner and be sincerely held, not asserted for “improper, illegal or criminal purpose”.

These two provisions are designed to address the scenario, much discussed in the news, where a man dresses up as a woman solely to invade the women’s restroom for nefarious purposes.

35571133 - jacksonville, florida, usa city skyline on st. johns river.

  • Third, addressing the locker room issue, the HRO states that businesses can still provide single sex facilities for anything that is, by its nature, a private facility, like a single-sex bathroom.  Businesses will not be required to change any existing signage or retrofit any existing facility.
  • Fourth, dress codes are also allowed under this bill, but cannot be based on “sex stereotype”- meaning a business cannot tell a secretary to wear a skirt if she’s female (if your dress code requires women to wear skirts or high heels or makeup, you are already asking for trouble).  Rather, the dress code would require the secretary to be dressed professionally.

Additionally, the City of Jacksonville provided carve outs for religious institutions and small businesses.

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Befuddled by bathroom litigation, I’ve written several posts on bathroom access and employment litigation regarding bathroom access.  See my posts here (OSHA guidance on bathroom access), here (EEOC settlement of litigation which included bathroom access claims), here (11th Circuit Court of Appeals overturned summary judgment in favor of employer in discrimination claim that involved restroom access), here (addressing Houston’s bathroom access ordinance) and here (litigation involving Hobby Lobby that included restroom access claims).

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Dori K. Stibolt is a partner with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.