MIAMI BUSINESS LITIGATION: DECLARATORY RELIEF TOOL

A business that is unsure about its contractual rights may be able to assert a claim for declaratory judgment. Under Florida Statute § 86.011, courts may “render declaratory judgments on the existence, or nonexistence: (1) of any immunity, power, privilege or right; (2) of any fact upon which the existence of nonexistence of such immunity, power, privilege, or right does not may depend . . . .” “The principal purpose of the Declaratory Judgment Act is to obtain a judgment on rights which have never before been determined.” Peregood v. Cosmides, 663 So. 2d 665 (Fla. 5th DCA 1995). Parties often seek declaratory relief to preempt a lawsuit they believe will be filed by an adverse party on the same subject matter. E.g., Price v. Tyler, 890 So. 2d 246 (Fla. 2004). A declaratory judgment determines “the rights and duties of the parties without the need to resort to a tort or contract action as a prerequisite to a judicial determination.”). The Miami business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

To obtain a declaratory judgment, a party must show the following:

• There is a bona fide, actual, present, practical need for the declaration;
• The declaratory judgment deals with a present, ascertained, or ascertainable state of facts or present controversy as to a state of facts;
• Some immunity, power, privilege, or right of the complaining party is dependent on the facts or the law applicable to the facts;
• There is some person or persons who have, or reasonably may have, an actual, present, adverse, and antagonistic interest in the subject matter, either in fact or law;
• The antagonistic and adverse interests are all before the court by proper process or class representation; and
• The relief sought is not merely the giving of legal advice by the courts or the answer to questions propounded from curiosity.

N.W. Center for Integrative Medicine & Rehabilitation, Inc. v. State Farm Mutual Automobile Insurance Co., 214 So. 3d 679 (Fla. 4th DCA 2017).

The first element is often disputed when a party brings a declaratory judgment action. See Atwater v. City of Weston, 64 So. 3d 701 (Fla. 1st DCA 2011). To show there is a justiciable controversy, the plaintiff must demonstrate that a good faith dispute exists and there is a present and practical need for the declaratory judgment. Florida Carry, Inc. v. City of Tallahassee, 212 So. 3d 452 (Fla. 1st DCA 2017).

Angelo’s Aggregate Materials, Ltd. v. Pasco County, 118 So. 3d 971 (Fla. 2d DCA 2013) is an example of a situation the parties disputed the existence of a judicial controversy. In Pasco, a business filed an application with the county for a conditional use permit to construct a landfill. While the application was pending, the county revised its land use plan. Under the revised plan, the business had to seek an amendment to the county’s land use designations to construct the landfill. The new requirement financially burdened the business and jeopardized the business’s investment. Accordingly, the business sought declaratory relief and claimed it had a vested right to the land use plan before the county changed it because the business’s application was submitted before the rule change. The court determined the cases presented a judicial controversy because the business and the county had a dispute over which legal framework applied to the permit for the landfill. Without a determination on the issue the business risked losing its investment.

Declaratory judgments can be sought in a variety of business disputes. For example, a party could seek a declaratory judgment to declare a non-compete agreement invalid, or a corporate shareholder could seek a declaratory judgment regarding the percentage share of a corporation owned by the shareholder. If a person ever doubts their legal rights in a business dispute, that person might have a valid cause of action for a declaratory judgment.

The Miami business litigation lawyers of the Mavrick Law Firm also represent clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.