I previously blogged on the standard for punitive damages in Florida.  To be entitled to an award of punitive damages, a plaintiff must show that the defendant’s conduct rises to a high level of culpability.

But what if a statute authorizes the recovery of punitive damages?  Certain statutes, like Florida’s unauthorized publication of likeness and wiretapping statutes, specifically provide for an award of punitive damages to a successful plaintiff.  As a result, some plaintiffs have argued that the culpability standard does not apply to claims for punitive damages brought pursuant to these statutes.

The Fifth DCA has rejected this argument and held that a statute authorizing punitive damages should be read in connection with Florida’s punitive damages standard.  In a recent case, James v. Intelligent Software Solutions, Inc., the USDC for the Middle District of Florida dismissed a plaintiff’s claims brought pursuant to a statute that authorized punitive damages where the facts were insufficient to show the defendant’s conduct was willful, wanton, or malicious.

Thus, regardless of statutory authorization, punitive damages still may only be awarded where a defendant’s conduct satisfies the culpability standard.

I’ve posted before here on the Oregon wedding cake case (not to be confused with the Colorado wedding cake case that went to the Supreme Court).

Now comes recent news that the Oregon Court of Appeals has upheld a $135,000 fine against two bakers, Melissa and Aaron Klein, who refused to bake a cake for same sex couple Rachel Bowman-Cryer and Laurel Bowman-Cryer who were getting married.

Carson Whitehead, Assistant Attorney General with the Oregon Department of Justice, represented Bureau of Labor and Industries. He argued the case turns on two simple facts:

The Kleins refused to provide the exact same service for a same-sex couple that they would with a heterosexual couple, and the denial of services was based on sexual orientation.

Here in Palm Beach County, Florida, bakeries are similar required to serve same-sex couples as set forth in Palm Beach’s anti-discrimination law, which was expanded in 2015.


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.

Miami is know for fun, sun, beaches and is a top spot for people looking to vacation or get together with friends or family for reunions and parties.  As a result, Miami-Dade County has been one of the busiest areas for peer-to-peer short term rentals.   The more short term rentals in a neighborhood the more complaints from neighbors regarding noise, parking, trash and other concerns.

Back in April, Miami-Dade reached agreement with Air BnB to collect bed taxes on the short term rentals listed on their platform.

Following the deal on taxes, Miami-Dade has now imposed regulations on the short-term rental market.

The new requirements include the following:

  • Hosts must apply for a certificate of use, which includes a “minimal” application fee.  Applicants will have to provide contact information for the property owner (who is also liable for any violations under the ordinance) and the short-term rental host, as well as the platform where the vacation rental will be listed.
  • In their applications, hosts will also have to certify that they will be collecting and remitting local tourist and state taxes, have permission from the property owner to rent short-term, carry insurance coverage on the property and have a vacation rental license with the Florida Department of Business and Professional Regulation.
  • Hosts will also have to acknowledge that the property owner is aware he or she risks losing a homestead exemption by renting short-term.
  • The certificate of use must be renewed annually and will be revoked, with few exceptions, if the property has three or more violations in the preceding 12 months.
  • If a host owns property within 2,500 feet from a school, the host will be required to ensure that a prospective guest is not a registered sexual offender or sexual predator.
  • Hosts must also maintain a register with the names and dates of all guests who stay at the home or apartment — including people invited to the property by the guests.  The maximum overnight occupancy at any short-term rental will not be permitted to exceed two people per room, plus two per property for a maximum of 12.  During the day, capacity is limited to 16 people.  This rule is designed to combat the problems with AirBnB “party houses” and other overcrowding problems.
  • Finally guests are expected to follow standard garbage procedures, noise restrictions (including no amplified sound outdoors), public nuisance laws and rules for pets, in coordination with the host. Guest parking is limited to two cars at a time on the property or on the street.  Again, violations are the responsibility of the property owner and can imperil the renewal of the certificate of use.
  • Fines for violations range from $100 for a first offense to $2,500 for a third offense within 24 months.  Five percent of all money collected from violations or fines will go into Miami-Dade’s Affordable Housing Trust.

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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.

I recently wrote in Fox Rothschild’s Consumer Law Ledger about a Florida appellate court’s ruling that the statute of limitations for a negligent appraisal claim begins to run on the date that the loan is funded, even if a loan default does not occur until much later.

I’ve been told that a Motion for Rehearing En Banc or for Certification for the Florida Supreme Court will be filed by the lender. So, we may not have heard the end of the Llano Financing Group, LLC v. Petit case just yet.

We’ll keep an eye on this one to see if there are any changes to this ruling.

A conspiracy requires the combination of two or more persons.  To state a claim for civil conspiracy, a plaintiff must show:

  1. An agreement between two or more parties,
  2. To do an unlawful act or to do a lawful act by unlawful means,
  3. The doing of some overt act in pursuance of the conspiracy, and
  4. Damage to plaintiff as a result of the acts done under the conspiracy.

A corporation is a legal entity, which can only act through its directors, officers and employees.  As a result, the intra-corporate conspiracy doctrine provides that agents cannot conspire with their corporate principal, because “it is not possible for a single legal entity consisting of the corporation and its agents to conspire with itself.”

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The intra-corporate conspiracy doctrine generally prevents a plaintiff from asserting a claim for civil conspiracy against agents and their corporations for internal agreements to commit wrongful conduct.  However, there is an exception, known as the “personal stake” exception, which provides that an agent may be liable for civil conspiracy if he or she has a personal stake in the activities that is separate from the corporation’s interest.  In other words, the agent must have acted in his or her own personal interest, “wholly and separately from the corporation.”

In Mancinelli v. Davis, the Fourth DCA recently considered whether a plaintiff sufficiently pled the personal stake exception in an action against a corporation and its CEO for civil conspiracy.  In finding that the CEO’s increased compensation resulting from the unlawful conduct was insufficient to establish the personal stake exception, the court said:

A personal stake must be more than just personal animosity on the part of the agent.  Moreover, the benefit to the agent must be more than incidental to the benefit to the principal.

However, in an action for civil conspiracy against a hospital and its chairman, the Third DCA found the complaint sufficiently pled the personal stake exception where it alleged that the defendants influenced patients to see the chairman instead of plaintiffs and refused to honor referrals to plaintiffs.  Thus, whether the exception applies and an action for civil conspiracy exists should be analyzed on a case by case basis.

I’ve posted before, here and here, regarding the dilemma business owners have when faced with a customer with a dog (fake service dog) or a customer with an animal (emotional support animal – which are not afforded the same protections as service dogs).  Many business owners simply don’t know how to respond or respond incorrectly (and generate bad press for themselves).  Many customers are fed up with fake service dogs everywhere and they resent businesses that do nothing as well and that means companies often can’t win.

Yesterday, there was an interesting article/editorial in The Hill regarding a proposal for creating a national certification database for service dogs.

What are your thoughts on a national certification program for service dogs?

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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.

Following up on my earlier post regarding fake service dogs, news from up north that Massachusetts is also considering a law to penalize those that pass off pets at service dogs.

The bill would makes passing a pet off as a service dog a civil infraction, carrying a $500 fine.

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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.

I previously blogged on the continuing existence of the independent tort doctrine in Florida.  In lawsuits between parties who bargained for their remedies in a contract, the independent tort doctrine will bar tort actions brought simply as a way around contract remedies.  To state a valid tort claim, the independent tort doctrine requires contracting parties to show a breach of a duty that exists separate and distinct from the contract.

Fraud is a tort action.  To state a claim for fraud, a plaintiff must show that:

  1. The defendant made a false representation concerning a material fact;
  2. The defendant knew the representation was false at the time it was made;
  3. The defendant intended that the representation would induce another to rely and act on it; and
  4. The plaintiff suffered injury in justifiable reliance on the representation.

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Often, a party attempts to assert a fraud action arising from representations made by another party in the course of contract negotiations.  But, false representations as to future conduct made during negotiations do not constitute actionable fraud.  Such a claim, known as “fraud in the performance,” is said to “merge” with the breach of contract claim.

For example, if the defendant promises to pay the plaintiff in the future in exchange for services performed today, and the defendant later fails to pay the plaintiff, the plaintiff would have a breach of contract action against the defendant.  The defendant’s broken promise, however, would not constitute fraud.

An exception exists where a representation is made as to future conduct without any intention of performing or “with the positive intention not to perform.”  Under these circumstances, a plaintiff would have an independent action for fraud.  In the example above, if the defendant did not have any intention of paying the plaintiff at the time the representation was made, the plaintiff would have a fraud action against the defendant.

A corporation is a legal entity separate and distinct from its shareholders.  The corporate form generally shields shareholders from personal liability for the corporation’s debts.

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However, shareholders cannot incorporate to limit their liability, and then use the corporate form to cover their fraud.  Under such circumstances, a party may seek to “pierce the corporate veil” and hold shareholders personally liable.  Florida courts are generally reluctant to disregard the corporate form and require a showing of improper conduct in the formation or use of the corporation.

To pierce the corporate veil, a plaintiff must prove three factors:

  1. The shareholder “dominated and controlled the corporation to such an extent that the corporation’s independent existence, was in fact non-existent”  and the shareholders were alter egos of the corporation;
  2. The corporate form was used for a fraudulent or improper purpose; and
  3. The fraudulent or improper use of the corporate form caused injury to the plaintiff.

If a plaintiff can prove these three factors, then a court may pierce the corporate veil.  For example, in Eagle v. Benefield-Chappell, Inc., the Fourth DCA held two shareholders personally liable when the corporation was used to fraudulently increase construction costs to result in a higher fee to the corporation.  A court may also pierce the corporate veil where a controlling shareholder causes the corporation to make distributions or otherwise depletes corporate assets for his or her personal benefit while the corporation is unable to pay its debt.

However, in declining to pierce the corporate veil absent a finding of fraud, the Third DCA stated that “mere ownership of a corporation by a few shareholders, or even one shareholder, is an insufficient reason to pierce the corporate veil.”  In a recent opinion, the Third DCA also affirmed that “even if a corporation is merely an alter ego of its dominant shareholder or shareholders, the corporate veil cannot be pierced so long as the corporation’s separate identity was lawfully maintained.”

Other improper conduct that may justify piercing the corporate veil includes commingling funds of the corporation with funds of other corporations, commingling corporate funds with personal funds, utilizing corporate assets for personal use, failing to adequately capitalize the corporation, and using the corporate form to hide assets or otherwise avoid liability.

If a party successfully pierces the corporate veil, the corporation and shareholder will be treated as one person under the law and any acts committed by either the corporation or the shareholder are treated as the acts of both.  Thus, if either the corporation or shareholder is bound by a contract, judgment, or otherwise, both the corporation and the shareholder will be equally bound.

On June 27, a massive ransomware attack now known as “Petya” spread across the globe in a similar fashion to the WannaCry cyberattack in May. In our recent Privacy & Data Security alert, Fox Chief Privacy Officer and Partner Mark McCreary breaks down what we know about the attack, how to address it if your organization falls victim to it, and how to minimize the risks of future attacks:

Petya Cyberattack ScreenshotYesterday’s worldwide cyberattack once again exploited a vulnerability that has been known to experts for many months. These attacks are sure to continue and the best defense is knowledge. Awareness of how malware works and employee training to avoid the human error that may trigger an infection can prevent your organization from becoming a victim.

This latest ransomware variant, referred to as “Petya,” is similar in many respects to the “WannaCry” ransomware that affected hundreds of thousands of computers in mid-May, using the same Eternal Blue exploit to infect computers. The purpose of this Alert is to provide you some information believed or known at this time.

How Is a Computer Infected?

Experts believe the Petya malware is delivered in a Word document attached to an email. Once initiated by opening the Microsoft Word document, an unprotected computer becomes infected and the entire hard drive on that computer is encrypted by the program. This is notably different from WannaCry, which encrypted only files.

Once Petya is initiated, it begins seeking other unprotected computers in the same network to infect. It is not necessary to open the infected Microsoft Word document on each computer. An infection can occur by the malware spreading through a network environment.

To read Mark’s full discussion of the Petya attack, please visit the Fox Rothschild website.

Mark also notes that “I continue to stress to clients that in addition to hardening your IT resources, the absolute best thing your business can do is train employees how to detect and avoid malware and phishing.  In-person, annual privacy and security training is the best way to accomplish this.”