In a recent case out of the Southern District of Florida, the Court outlined the standard for dismissal of an individual’s Chapter 7 case based on the Debtor’s pre-petition bad faith behavior.

The statutory language of § 707(a) outlines the three nonexclusive bases a chapter 7 case may be dismissed for “cause,” including unreasonable delay by the debtor that is prejudicial to creditors, nonpayment of any fees or charges required under chapter 123 of title 28, and, upon motion by the United States Trustee, failure of a debtor in a voluntary case to timely file the information required under § 521(a)(1).

In the event that those three examples do not apply, the court must consider whether “cause” exists based on record evidence introduced in the case.  The controlling authority in the Eleventh Circuit as to what constitutes “cause” for dismissal  is In re Piazza, 719 F.3d 1253 (11th Cir. 2013).  In Piazza, the Eleventh Circuit held that “the power to dismiss a bankruptcy case ‘for cause’ in § 707(a) includes the power to involuntarily dismiss a Chapter 7 case based on prepetition bad faith” and “a totality-of-the-circumstances approach is the correct legal standard for determining bad faith under § 707(a).  Id. at 1261, 1271.  The Piazza court explained that “[t]he totality-of-the-circumstances inquiry looks for ‘atypical’ conduct . . . that falls short of the ‘honest and forthright invocation of the Bankruptcy Code’s protections.’” Id.  A court evaluating whether bad faith has occurred is required to examine whether a debtor’s intentional acts or omissions to act “constitute a misuse or abuse of the provisions, purpose, or spirit of the Bankruptcy Code.” Id. at 1272.

The most important takeaway from this recent case is to be prepared and present evidence at the evidentiary hearing supporting your motion for dismissal based on “cause”.  Lack of record evidence establishing the bases outlined in § 707(a) or prepetition bad faith rising to the level of “cause” will certainly result in denial of your motion to dismiss.


 

The new Florida Governor, Ron De Santis, has made some bold statements regarding medical marijuana in Florida, including the legality of smoking medical marijuana and Florida’s vertical license structure with limited licensees.    See my post at Fox’s In the Weeds.


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.

I’ve written another new post for Fox’s In the Weeds blog.  See my post which provided an update regarding oral argument in the appeallate case involving Florida medical marijuana smoking litigation.


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.

Sometimes its hard to tell that its the holidays in Florida with no snow on the ground or chill in the air.  But the end of the year means its time for Florida employers to pay attention to the new 2019 Florida minimum wage. As of January 1, 2019, Florida’s minimum wage will rise from the current rate of $8.25 per hour to $8.46.

Under Florida Statute § 448.110 4(a) and (b), the Florida Department of Economic Opportunity must calculate Florida’s minimum wage based upon the increase, if any, in the Federal Consumer Price Index for Urban Earners and Clerical Workers in the southern region. Based upon this year’s calculation, Florida’s new minimum wage for 2019 is $8.46 per hour.

Employers of tipped employees, who meet eligibility requirements for the tip credit under the Fair Labor Standards Act, may count tips actually received as wages under the Florida minimum wage. However, the employer must pay tipped employees a direct wage. The direct wage is calculated as equal to the minimum wage, $8.46 minus the tip credit for Florida, $3.02, or a direct hourly wage of $5.44 as of January 1, 2019.

The photo in this post is of the Royal Poinciana Surfboard Christmas Tree in Palm Beach (photo by me).


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.

 

On November 15, 2018, the Florida Supreme Court held that “an allegation that a trial judge is a Facebook ‘friend’ with an attorney appearing before the judge, standing alone, does not constitute a legally sufficient basis for disqualification.”

The statute which governs a motion to disqualify requires that the moving party file an affidavit in good faith stating fear that he or she will not receive a fair trial…on account of the prejudice of the judge as well as the facts and the reasons for the belief that any such bias or prejudice exists.

In finding that Facebook “friendship” alone falls below the threshold for disqualification, the Court reasoned, that the mere fact that a Facebook “friendship” exists provides no significant information about the nature of any relationship between the Facebook ‘”friends.”  The Court further noted that “[n]o reasonably prudent person would fear that she could not receive a fair and impartial trial based solely on the fact that a judge and an attorney appearing before the judge are Facebook “friends” with a relationship of an indeterminate nature.”

Florida courts, including the Supreme Court, have long recognized the general principle of law that an allegation of mere friendship between a judge and a litigant or attorney appearing before the judge, standing alone, does not constitute a legally sufficient basis for disqualification.  Why should Facebook “friendships” be any different?


  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.

 

Gil v. Winn Dixie Appeal

Here is the Southern District of Florida, this past year has been filled with a monumental increase in Americans with Disabilities Act (“ADA”) Title III cases focused on businesses’ web sites.  Ever since the Gil v. Winn Dixie trial, businesses that maintain a web site have been subject to lawsuits (sometimes repeatedly) over their web sites not being accessible under the ADA.  Plaintiffs have been targeting big businesses, small businesses, mom and pop businesses, basically any business that maintains a web site that connects, in even minimal fashion, to its physical location.

Businesses that want to avoid litigation or simply improve accessibility of their web site for visually impaired customers (or other disabled customers) are in a conundrum since there are no federal regulations that set forth the minimum requirements for a web site to comply with the ADA.  Rather, federal courts have generally seemed inclined to impose Web Content Accessibility Guidelines (“WCAG”)  2.0 AA as the accessibility standard in their Court orders finding that businesses must make their web sites accessible.

In the Gil case, Winn Dixie appealed the District Court ruling to the United States Court of Appeals for the Eleventh Circuit.  Oral argument in the Gil case recently took place on October 4, 2018, and you can listen to it here (30 minutes long).

I was particularly interested in the due process argument regarding the WCAG standards during the appellate oral argument in Gil.   Appellate counsel for Winn Dixie argued that there was no fair notice to Winn Dixie as to which regulations might apply to a particular web site which creates a due process issue for businesses across the country.

The appellate judges seemed very interested in how businesses can comply with WCAG 2.0 standards since it is an ever changing standard.  The appellate judges also questioned how businesses can comply with WCAG 2.0 since the standards are more guidance than standards with no hard and fast rules (unlike the ADA regulations for physical spaces).  One of the panel judges during oral argument raised the below question.

How does a company ever know its in violation if it doesn’t know the standard?

Department of Justice Letter

Also, of interest in this arena, the Department of Justice (“DOJ”) has responded, in letter form, to questions from members of Congress about web site accessibility litigation.

The DOJ made some important points in its recent letter.

First, the DOJ reiterated and confirmed its position that the ADA applies to the web sites of businesses that are considered public accomodations.

The Department first articulated its interpretation that the ADA applies to public accommodations’ websites over 20 years ago. This interpretation is consistent with the ADA’s title III requirement that the goods, services, privileges, or activities provided by places of public accommodation be equally accessible to people with disabilities.

Second, the DOJ makes that point that even though there are no specific web site accessibility regulations promulgated by the Federal government a public accomodations’ web site still needs to be accessible.

Additionally, the Department has consistently taken the position that the absence of a specific regulation does not serve as a basis for noncompliance with a statute’s requirements.

Third, the DOJ did provide a little positive news for businesses.  The DOJ letter states that businesses have flexibility in making their websites accessible.  And, most importantly, a business’ “failure” to comply with WCAG 2.0 AA or any other voluntary standard does not necessarily mean that a web site is ADA non-compliant.  It will be interesting to see if any forthcoming judicial rulings adopt this language in permitting businesses to meet their ADA obligations in more flexible ways.

Absent the adoption of specific technical requirements for websites through rulemaking, public accommodations have flexibility in how to comply with the ADA’s general requirements of nondiscrimination and effective communication. Accordingly, noncompliance with a voluntary technical standard for website accessibility does not necessarily indicate noncompliance with the ADA.


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.

Perishable Agricultural Commodities Act (“PACA”) creates a trust to protect produce suppliers.

In a recent S.D. of Florida Bankruptcy Case, the issue before the Court was whether a PACA trust is the type of trust that gives rise to actionable fiduciary capacity under Section 523(a)(4) – the exception to discharge of debt “for fraud or defalcation while acting in a fiduciary capacity”.

Although the Court admitted that the decision was “a close one,” it concluded that a PACA trust does not satisfy the requirements for finding “fiduciary capacity” under Section 523(a)(4).  The Court found that a PACA trust falls short because (1) it does not require segregation of assets unless and until a court orders segregation after a showing of dissipation; and (2) the trust assets may be used for non-trust purposes.

The Court reasoned that language of § 523(a)(4) is clear that only debts incurred while acting in a fiduciary capacity are nondischargeable.  Accordingly,  the hallmarks of a technical trust relationship must exist prior to any alleged defalcation for a trust to be considered a technical trust.  Applying that standard, the Court concluded that a PACA trust is not a technical trust until a court imposes additional duties and restrictions after a prior showing of malfeasance by produce dealers.   As a result, the Defendant produce dealers’ debt to the Plaintiff produce suppliers could not be excepted from discharge under § 523(a)(4) of the Bankruptcy Code.


  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 an excellent decision for preference targets, the Eleventh Circuit recently held in the case of Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC) that the new value defense, under Section 547(c)(4), does not require new value to remain unpaid.

In reaching this conclusion, the 11th Circuit has found common ground with the Fourth, Fifth, Eighth, and Ninth Circuits which also reject the idea that § 547(c)(4) requires new value to remain unpaid.

This opinion should result in a meaningful reduction of preference exposure for vendors and others that continue to extend credit and transact business with financially troubled debtors.  In fact, vendors may be incentivized to continue extending short-term credit without fear of having all the payments they receive for newly delivered goods clawed back.

Yet another benefit (for practitioners) – complicated “remains unpaid” preference analysis spreadsheets will soon be distant memory (at least in the 11th Circuit).  Thank you 11th Circuit!


  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.

 

 

 

According to the AIA, the 2017 document set simplifies the payment provisions found in the older documents.  In order to simplify the payment provisions, the AIA merely reorganized the items to be listed in a payment application such that those that are to be included in the payment applications are listed first, followed by a list of those items that are to be deducted. The AIA also added an express retainage provision that provides an area to exclude certain common items from retainage, such as general conditions or insurance.

The revised AIA A101 language requires the Owner to pay the contract amount “allocable to the work.” The references to completed percentages of the work and a schedule of values are de-emphasized in contrast to the 2007 documents.

The A102 continues to use percentage of the work and schedule of values for billing purposes. Contractors are instructed to deduct from payment applications any amount that the Contractor does not intend to pay to a subcontractor.


W Mason is an partner with the law firm Fox Rothschild LLP. W is Board Certified in Construction Law by the Florida Bar Association. W focuses his practice on construction and business litigation. You can reach W at (561) 804-4432 or wmason@foxrothschild.com.

I’ve written a post for Fox’s In the Weeds blog.  See my post which addresses a recent Court ruling that upends Florida’s medical marijuana license system.

 


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.