Florida Business Litigation Blog



An Overview of Florida’s Deceptive and Unfair Trade Practices Act, Part I: What is FDUPTA, Who Does it Protect, Why is it Needed, and What is Actionable?

Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) was passed by the Florida Legislature in 1973, and was designed as a state law complement to the Federal Trade Commission Act. 15 U.S.C. § 45. FDUTPA, sometimes referred to as the “Little FTC Act,” provides private remedies based on consumer protection law, which encompasses unfair, deceptive, and unconscionable acts or practices. This article, part one of a three-part series, first addresses the purpose of FDUTPA and who the act seeks to protect, why the act is needed, and what is actionable under the act. Read Full Post

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Choose Your Own Adventure: Are Florida State Law Claims for the Wrongful Filing of Involuntary Bankruptcy Preempted by 11 U.S.C. § 303(i)?

The filing of an involuntary bankruptcy is a serious matter, and creditors rarely resort to this drastic measure when attempting to collect on a debt. The prospect of creditor liability for costs, attorney’s fees, damages, and possibly punitive damages makes involuntary petitions a risky endeavor. Involuntary bankruptcy is most often used when unsecured creditors suspect fraud on the part of a company. Otherwise, creditors typically pursue collection on their own claims directly, including through federal and state litigation. The end result of these collection attempts might actually end up “forcing” the company into bankruptcy, but it would be a voluntary bankruptcy and a creditor would not be subject to the same risks associated with an involuntary petition.

If an involuntary petition fails, the consequences are quite serious. First, once filed, an involuntary petition cannot be dismissed without a notice and an opportunity to be heard, even if the petitioning creditors and the debtor company agree. Further, if the involuntary petition is dismissed, the petitioning creditors can be liable for costs and attorney’s fees of the company. However, the most serious consequence results upon a court finding that the petition was filed in bad faith. In this case, the petitioning creditors can be liable as well for damages caused by the involuntary filing and even for punitive damages. These claims are almost always asserted exclusively in bankruptcy court, but this post examines whether it is appropriate for debtors who are the victim of a bad faith filing to pursue state law claims for damages, including malicious prosecution, abuse of process, and slander in Florida state court. Read on to explore whether these state claims are preempted by the remedy provided in 11 U.S.C. § 303(i) in Florida. Read Full Post

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Remedies for Creditors Under FUFTA Chapter 726 – Part II: How Much is a Fraudulent Transferree Liable For?

In Part I of this two-part series, we analyzed who may be liable under Florida’s Uniform Fraudulent Transfer Act (“FUFTA”) and the broad categories of what transferors and transferees may be liable for. In this blog post, we seek to asses exactly what those transferors and transferees may be liable for if a money judgment is imposed. Read Full Post

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Remedies for Creditors Under FUFTA Chapter 726 – Part I: Who May Be Liable

Simply put, Florida’s Uniform Fraudulent Transfer Act (“FUFTA”) is a “powerful remedy.” See Brandon C. Meadow’s in-depth blog, Are Florida’s Fraudulent Transfer Claims Subject to Equitable Tolling? But what good is this powerful remedy if creditors do not understand what exactly it can do for them in light of misconduct by debtors? This blog post seeks to show creditors what rights and options they have for unwinding transfers and obtaining payback against those who assets were fraudulently transferred to. Read Full Post

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Does Bartram v. U.S. Bank Have Any Application to Secured Commercial Loans?

The Supreme Court of Florida in Bartram v. U.S. Bank Nat. Ass’n, 2016 WL 6538647 (Fla. 2016) held that prior acceleration in a foreclosure action that was involuntarily dismissed was revoked by the involuntary dismissal, and therefore did not trigger the statute of limitations to bar future foreclosure actions. Additionally, the Court held in Singleton v. Greymar Assoc., 882 So. 2d 1004 (Fla. 2004) that the res judicata analysis applies equally to statute of limitations defenses and doesn’t prohibit the re-filing of a foreclosure action that was previously dismissed so long as the second foreclosure action is predicated on a subsequent default. At first glance, this decision appears to have broad application to any type of secured installment debt. If Bartram is broadly applied it could breathe life into ancient debt that was long ago considered time barred by commercial lenders. However, there are distinctions that may limit the application of Bartram to residential mortgage foreclosures. Future appellate decisions will address how broadly Bartram should be applied. This article addresses the best argument for narrow application and the best argument for broad application. If Bartram is applied broadly it could serve as a basis for commercial lenders to re-evaluate mortgages in default in which they previously declined to foreclose. It could also serve as a basis for commercial lenders to re-evaluate corporate policy directed toward secured property that currently has little value or corporate policy directed toward junior mortgages with current value that is insufficient to cover the senior lienholder. Read Full Post

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Loan Participation Agreements: Contract Drafting Perspectives for the Lead Bank

In a perfect world, all loans would be performing, and the lead bank and participant would share in the profits of a loan participation with minimal risk of loss. In the real world, a promising participation loan easily becomes a problem loan, and the lead bank and participant bank can find themselves embroiled in litigation against each other. Such litigation puts a substantial strain on the lead bank’s resources to enforce the loan documents against the defaulted debtor, at a time when the parties should be sharing resources for loss mitigation. One common reason a participant may sue a lead bank after borrower default is based upon the participant’s assessment of collectability. If the participant determines that the collateral is worthless or the borrower is otherwise judgment-proof, the participant may look to the lead bank to recover its share of participation in the failed loan. Read Full Post

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Key Considerations in Hiring an Employee Subject to a Non-Compete: Part II

As discussed in Part I of this blog series, some of the most qualified candidates for employment are often current or former employees of competitors in your industry. Non-compete agreements are helpful to employers who wish to control and limit the competitive activities that an employee may engage in after his or her employment ends. Once an employer has decided to offer employment to a current or former employee of a competitor, these are the most important considerations to make. Read Full Post

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The Apex Doctrine: What Is It and How Does It Affect Companies?

While a case is being litigated, the Florida Rules of Civil Procedure provide that a party may take the deposition of any person. When deposing a corporate party on general issues, the business designates a corporate representative to speak for it. However, parties deposing corporations, in all variety of cases, will sometimes demand that the president, CEO, or another high-ranking official sit for deposition. These employees are commonly referred to as “apex employees.” Obviously, these high-ranking officers of the company will sometimes have information relevant to the case. However, sometimes a party will seek to depose an opposing party’s apex employee simply to inconvenience and/or harass him, or in order to gain a tactical advantage: the officer may have to disrupt a busy schedule, or may have to travel a great distance at a substantial cost. The deposing party may also try to somehow embarrass the officer, which could potentially damage the company. Read Full Post

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Key Considerations in Hiring an Employee Subject to a Non-Compete: Part I

Most businesses find that some of the most qualified candidates for employment are current or former employees of competitors in their industry. Non-compete agreements are increasingly and frequently used to control and limit the competitive activities that a former employee may engage in after he or she leaves the former employer. Nowadays, a non-compete agreement seems commonplace in most employment contracts. Read Full Post

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Electronic Evidence, eDiscovery Case Law and the Attorney’s Role – Part I

The purpose of discovery within litigation is to uncover and ascertain the facts of a matter in order to argue the law based on those facts, and ultimately resolve the dispute before the court. In today’s world, evidentiary facts are often in digital form. The Internet of Things[1] connects common objects in our homes, places of work, and all points in between to the internet as information gathering sources. (Home alarm systems are a great example, which can track who arrives and departs from home and when; assigning distinct codes to each member of a household and sending text messages when the alarm is armed or disarmed.) Further, when people are moving from one place to the next, a large majority carry computers (mobile devices) around with them. For example, our smart phones tell us (and anyone else with access to our device) the best route to take to work and track where we park our cars. We are constantly plugged in, and therefore constantly creating a record of everything we do in what becomes digital/electronic evidence that is relevant if and when litigation arises. For more examples of electronic evidence, consider black boxes in vehicles, sensors, security cameras, home appliances, social media, websites, mobile devices, text messages, voice mail messages, chat history, e-mail, electronic documents and spreadsheets, mobile apps and games, and more. Handling all of this electronic evidence within the context of litigation is called Electronic Discovery (“eDiscovery” or “E-Discovery”). Read Full Post

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