Articles Posted in Business Litigation

Businesses involved in breach of contract cases will often dispute the meaning of contract terms.  A contract that may seem clear pre-dispute can often be interpreted differently after a dispute has arisen.  Litigation concerning whether a disputed contract term is ambiguous can be critical in how a case will ultimately be decided.  A business that can show to the court that an important contract term favors the business and is not ambiguous can potentially prevail on summary judgment without the time and expense of a trial.  On the other hand, a business which can show that a contract term is ambiguous can avoid summary judgment and provide “parol” evidence at trial to support the defendant’s interpretation of the contract term. Peter Mavrick is a Miami business litigation attorney, and also represents clients in business litigation in Miami and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

When the meaning of a contract term is clear, the Judge can interpret the contract without hearing evidence about what the parties believe the meaning of the term is.  “Under Florida law, courts must give effect to the plain language of contracts when that language is clear and unambiguous.” Homes & Land Affiliates, LLC v. Homes & Loans Magazine, LLC, 598 F. Supp. 2d 1248 (M.D. Fla. 2009).  “Whether a contract provision is ambiguous is a question of law, to be determined by the […] court.” Hancock v. Brumer, Cohen, Logan, Kandell & Kaufman, 580 So. 2d 782 (Fla. 3d DCA 1991).

“An agreement is ambiguous if as a whole or by its terms and conditions it can reasonably be interpreted in more than one way.” Haggin v. Allstate Invs., Inc., 264 So. 3d 951 (Fla. 4th DCA 2019); Hancock v. Brumer, Cohen, Logan, Kandell & Kaufman, 580 So. 2d 782 (Fla. 3d DCA 1991) (“An ‘ambiguous’ word or phrase in a contract has been defined as ‘susceptible of interpretation in opposite ways’ or ‘reasonably or fairly susceptible to different constructions’”).

An issue that can occur in business litigation is that the judge presiding over a lawsuit may be reassigned, retire or pass away. If that occurs, a successor judge will be appointed and he or she will take over the case. This can present a significant issue when a party seeks for the court to rehear or reconsider a prior ruling in light of new evidence or based on the predecessor judge’s failure to consider a point of law or fact that applied to the court’s determination. Businesses that encounter this circumstance in litigation should be aware that certain decisions by the predecessor judge may be heard by the successor judge and others may need to be appealed.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

In the case of Balva v. Ontario Wealth Mgmt. Corp., 241 So. 3d 869 (Fla. 4th DCA 2018), the business litigation involved a foreclosure trial.  The trial court entered a modified version of a proposed final judgment submitted by Ontario Wealth Management, Corp. (the “Bank”). The trial court modified the Bank’s proposed final judgment by crossing out the amounts listed for attorney’s fees and costs, as well as the reservation of ruling on that issue. The Bank filed a motion to amend the final judgment to include attorney’s fees and costs following an evidentiary hearing. For some unknown reason, the evidentiary hearing was scheduled before a second judge. The day before the scheduled hearing, the original judge entered an order denying the Bank’s motion to amend the final judgment to include attorney’s fees and cancelling the evidentiary hearing before the second judge. The parties were unaware of this order and proceeded with the evidentiary hearing. The second judge entered an amended final judgment awarding the Bank its attorney’s fees and costs. The defendant immediately appealed. The appellate court reversed the amended final judgment because the original judge made a definitive ruling on the issue of entitlement to attorney’s fees and the second judge abused his discretion in proceeding with the evidentiary hearing on this issue which was already decided.

In support of this decision, Balva cited the case of Drdek v. Drdek, 79 So.3d 216 (Fla. 4th DCA 2012), which quoted Groover v. Walker, 88 So.2d 312, 313 (Fla. 1956), as follows:

Arbitration is an alternate method of dispute resolution that can help parties avoid some of the expense and consequences of litigation.  Commercial contracts will often contain provisions requiring that any claims that arise between the parties be arbitrated.  When a dispute arises, the plaintiff will often reconsider its election to arbitrate and pursue matters in the courts to take strategic advantage of some of the traits favorable to plaintiffs in litigation, such as more liberal discovery practices.  Provided defendant timely moves to compel arbitration, the matter should be transferred to arbitration.  Sometimes, however, a plaintiff remains undeterred by a motion to compel arbitration and will issue discovery before the court can hear the motion.  Defendants need not kowtow before such a plaintiff’s gamesmanship and can request that the court stay discovery on the merits of a case while the motion to compel arbitration is pending.  Not only is such a motion to stay important to avoid discovery, but it ensures that the right to arbitrate is not waived.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Generally, the Court’s discovery rules are more permissive than in arbitration.  “[A] party’s ability to take depositions and to propound discovery requests is generally much more limited in arbitration than it is under the Florida or the federal civil rules.”  Green Tree Servicing, LLC v. McLeod, 15 So. 3d 682 (Fla. 2d DCA 2009); Florida Holdings III, LLC v. Duerst ex rel. Duerst, 198 So.3d 834 (Fla. 2d DCA 2016) (“Our court has recognized that discovery ‘is generally much more limited in arbitration’ and that ‘arbitrators have broad discretion as to grant or deny the ability to obtain discovery”).  As a result, plaintiffs may believe it to be in their strategic advantage to attempt to seek discovery on the merits of the case prior to a case being transferred to arbitration.

Section 682.03(6), Florida Statutes, specifically provides that once a Motion to Compel Arbitration has been filed, the court must stay “any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision [on arbitrability of the dispute].”  Particularly:

Handling business litigation in one’s home forum, as opposed to a remote location, can have significant strategic advantages and reduce the stress and hassle of litigation.  When a Florida business becomes involved in a lawsuit with an out-of-state opponent, that business may be forced to challenge the opponent’s invocation of an out-of-state forum or need to defend their own attempt to bring the case in Florida.  A recent article posted by Mavrick Law Firm discussed how it is necessary for a court to have personal jurisdiction over each of the parties. The court must also be the proper venue.  While each state has its own requirements concerning venue, federal courts all share the same requirements.  A federal case that makes business litigation claims that do not comport with these federal requirements risk dismissal or transfer to a different federal court where venue is proper.  Peter Mavrick is a Fort Lauderdale business litigation lawyer.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Federal court venue is determined exclusively by 28 U.S.C. § 1391.  28 U.S.C. § 1391 (a)(1) (“this section shall govern the venue of all civil actions brought in district courts of the United States”).  “When venue is challenged, the court must determine whether the case falls within one of the three categories set out in § 1391(b). If it does, venue is proper; if it does not, venue is improper, and the case must be dismissed or transferred under § 1406(a).”  Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49 (2013).

The statute states that:

Spoliation of evidence is a circumstance that may arise in business litigation when one party fails to preserve or intentionally destroys evidence after becoming aware of an imminent lawsuit.  Spoliation is defined as “[t]he intentional destruction, mutilation, alteration, or concealment of evidence [.]” SPOLIATION, Black’s Law Dictionary (11th ed. 2019).  Spoliation issues in business litigation sometimes arise because documents, both in paper and electronic format, are typically important cases in commercial litigation disputes.  Parties sometimes destroy or fail to preserve key documents that are important to determining what are the true facts in the lawsuit.  The range of remedies available for a party who has been aggrieved by another party’s destruction (or spoliation of evidence) depends on the severity of the wrongful act done and the prejudicial effect of the missing evidence.  When a case involves negligent spoliation, courts have utilized adverse evidentiary inferences and adverse presumptions during trial to address the lack of evidence. When a case involves intentional spoliation, courts have often stricken pleadings or entered default judgments. Martino v. Wal–Mart Stores, Inc., 908 So.2d 342 (Fla. 2005).  Peter Mavrick is a Fort Lauderdale business litigation attorney.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

In the case of Golden Yachts, Inc. v. Hall, 920 So. 2d 777 (Fla. 4th DCA 2006), William Scott Hall (“Hall”) fell while aboard a boat at Golden Yachts, Inc. (“Golden Yachts”). The boat’s cradle consisted of two “H-frames” manufactured by Water–Land Manufacturing, Inc., a co-defendant, and assembled with wood and hardware that Golden Yachts purchased from Home Depot. After the accident, Golden Yachts stowed the cradle’s component parts next to a storage container. A videographer filmed the boat yard where the cradle was stored. The manufacturer’s sales representative inspected and photographed the damaged boat cradle. About ten days after the accident, Hall’s counsel wrote to Golden Yachts and requested that all material from the cradle be preserved and offered to store the material if Golden Yachts was unwilling or unable. Golden Yachts hired an investigator, who photographed and measured the debris from the boat cradle and interviewed employees and other witnesses to the accident.

Hall and his wife filed a lawsuit against Golden Yachts for negligence and loss of consortium. Hall later amended the complaint to add the manufacturer as a defendant. Two years after the accident, both plaintiffs and the manufacturer requested inspection of the boat cradle debris. Golden Yachts set aside two H-frames that it believed were involved in the accident, but none of the wood or hardware could be located. The experts who previously examined the H-frames, determined that these were not the H-frames that were involved in the accident. Golden Yachts could not explain what happened, why the H-frames were not been securely stored, or how the second pair of damaged H-frames came into its possession. The investigator hired by Golden Yachts also purged his files. The investigator testified that his common business practice was to turn all investigative material over to the hiring party and then discard the records. Golden Yachts denied receiving the investigator’s photographs but produced some copies of some of the photographs. The plaintiffs amended their complaint to include a claim for spoliation of evidence against Golden Yachts. However, the Halls’ first-party spoliation claims were not allowed. The manufacturer then filed a motion for sanctions against Golden Yachts and requested an adverse inference jury instruction. An adverse inference jury instruction informs the jury that potentially self-damaging evidence was in the possession of a party and the party lost or destroyed the evidence. The trial court denied the motion for sanctions but granted the request for an adverse inference jury instruction. The jury found Golden Yachts was completely liable and a final judgment was entered. Golden Yachts immediately appealed.

Parties involved in a business litigation dispute may sometimes seek extraordinary remedies when they believe the circumstances warrant it.  A party will sometimes seek to enjoin or compel another’s conduct to prevent them from causing irreparable harm through their action or inaction.  In business litigation, one party often tries to get the court to order a party to refrain from a particular action or compel a certain action, such as, for example, a court order allowing one party use of an easement over a parcel of real estate or an order requiring a party to return personal property or real property to an opposing party in litigation.  Courts, however, are limited in their lawful authority to require an opposing party in business litigation to sign a contract.  A recent Florida case has explained that the court cannot require a person to enter into a contract which the person does not desire to enter into, even when the failure to do so would cause extraordinary harm.  Peter Mavrick is a Miami business litigation attorney.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Generally, business contracts are no different from any other type of contracts: they govern the terms of the relationship between the contracting entities which are enforceable by law.  Under Florida law, “[c]ontracts are voluntary undertakings, and contracting parties are free to bargain for—and specify—the terms and conditions of their agreement.” Okeechobee Resorts, L.L.C. v. E Z Cash Pawn, Inc., 145 So. 3d 989 (Fla. 4th DCA 2014).

Courts have consistently found that the freedom for a person or company to associate with others and agree to be bound by the agreed-upon terms of that association are important rights which the government cannot interfere with except the most extraordinary circumstances. “[I]t is a matter of great public concern that freedom of contract be not lightly interfered with.” City of Largo v. AHF-Bay Fund, LLC, 215 So. 3d 10 (Fla. 2017). “The right to contract is one of the most sacrosanct rights guaranteed by our fundamental law” Miles v. City of Edgewater Police Dep’t/Preferred Governmental Claims Sols., 190 So. 3d 171 (Fla. 1st DCA 2016).   “The right to make contracts … is both a liberty and property right and is within the protection of the guaranties against the taking of liberty or property without due process of law.”

Florida companies often transact business outside the State of Florida and abroad.  When those transactions go wrong, it can be important for both strategic and convenience reasons for the litigation to occur in Florida.  Peter Mavrick is a Fort Lauderdale business litigation lawyer.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

In the seminal precedent Venetian Salami Co. v. Parthenais, 554 So. 2d 499 (Fla. 1989), the Supreme Court of Florida stated in pertinent part:

In determining whether long-arm jurisdiction is appropriate in a given case, two inquiries must be made. First, it must be determined that the complaint alleges sufficient jurisdictional facts to bring the action within the ambit of the statute; and if it does, the next inquiry is whether sufficient “minimum contacts” are demonstrated to satisfy due process requirements.