Lured by sunshine, sea levels and no state income tax (and great lawyers of course) lots of folks are getting ready to stake their claims in the Sunshine State. We thought this roadmap to the court system may help because, well, you never know...

SB270/HB21: THE FLORIDA LEGISLATURE'S PROPOSED CHANGES TO CHAPTER 558 REQUIRE PROPERTY OWNERS TO FULLY VET CLAIMS BEFORE FILING SUIT.

By Jordan Nadel and George Breur

If the intended purpose of Ch. 558 (a.k.a. Florida’s Construction Defect statute) is to reduce litigation and provide an opportunity to resolve construction defect claims pre-suit, the statute has woefully failed at its objective. The current pre-suit process under Ch. 558 is fairly easy to comply with but rarely results in a resolution. Instead, the outcome is generally a multi-party lawsuit involving every contractor, subcontractor, supplier, and design professional who set foot on the construction project. Such litigation is costly and time consuming, and generally difficult to advance given significant number of parties, adjusters, attorneys, and experts who inevitably become involved.

Senate Bill 270/House Bill 21 aims to make the pre-suit process more effective and limit this type of litigation by requiring property owners to provide added transparency and fully vet their claims before filing suit. To that end, several key changes to the statute have been proposed by the Florida legislature. First, under the proposed amendment, before sending a notice of claim, a property owner must exhaust any applicable warranty claims. Second, the proposed amendment now imposes a duty on the claimant to describe in specific detail (as opposed to the previous “reasonable” detail notice requirement) each alleged construction defect and include at least one photograph of the defect, as well as any repair estimates obtained. Third, if approved, the amended statute would require claimants to personally affirm knowledge of the alleged defects, subject to the penalty of perjury (sounds scary!).

No homeowner wants to be embroiled in years of litigation while their property remains leaking like a sieve. The amendment seeks to change exactly that. We hope these proposed changes will facilitate good faith participation and prompt pre-suit resolution of construction defect claims. If you have a construction defect claim, contact our team of construction litigation experts to make sure your claim is properly vetted, complies with the latest version of Ch. 558, and most importantly - doesn’t land you in jail for perjury.

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CREATIVE WAYS COMMERCIAL TENANTS CAN NAVIGATE POST PANDEMIC LITIGATION

With the arrival of the COVID-19 pandemic, the visceral reaction was for everyone to review their force majeure clauses. Certainly, it is worthwhile to review and analyze these provisions. In fact, Miami-Dade Circuit Court Judge Peter Lopez just granted a motion for summary judgment against retailer Guess? when it tried to get out of paying rent during the mandated closure of non-essential businesses last year. In that case, Judge Lopez found that the subject lease’s force majeure clause was unambiguous and clearly applied to government closures, such as those resulting from COVID-19. However, when a contract doesn’t unambiguously allocate the risk, a bigger question needs to be answered. Can an unforeseen event rise to a level which renders the contract unenforceable?  We think that the answer is, yes! Well, we are lawyers, so likely…yes!

Generally, a lease contains an express provision which restricts how a tenant may use its leased property, referred to as the “permitted use.” Unfortunately, government restrictions that sprung out of the pandemic precluded many tenants from operating their non-essential businesses as required by their lease’s permitted use (such as retail stores and restaurants), and made such uses temporarily illegal. Nevertheless, many landlords demanded that these tenants make rent payments, regardless of the tenant’s inability to legally use the leased premises. For some tenants, COVID-19 related restrictions remain in place and continue to impact operations.

Settled concepts of contract law may assist tenants in this situation. One such concept is that a contract cannot be illegal – parties cannot contract to engage in an illegal activity, even if the illegality arises after the contract was formed. For instance, the Fourth DCA held that a trial judge improperly enforced a lease when its permitted use required the tenant to operate the property as a casino with a specific type of game, and a change in the law following the execution of the lease rendered such games illegal.

It is also a cornerstone of contract law that when there are not mutual obligations, a contract is illusory. The logic behind this is that one party should not be required to perform when the other party does not have to do anything. In that context, a lease at its core requires a landlord to provide space for a permitted use and the corresponding obligation for the tenant is to make payment.  That beings so, does a tenant need to pay rent when a landlord cannot provide space that a tenant can use? We think such an agreement is one-sided and thus illusory.

The settled legal doctrines of illegality and illusory contracts are just some creative ways commercial tenants can navigate post pandemic litigation.

THE FLORIDA SECURITY OF COMMUNICATION ACT: MORE THAN JUST A WIRETAPPING STATUTE

By Daniel Maland and Yaniv Adar

The Florida Security of Communications Act, § 934.01, et seq. (“FSCA”), places Florida in the minority of states that requires all parties to consent before a communication can be intercepted, i.e., recorded. The FSCA is perhaps best known for serving as a useful tool for evidence suppression, as when applied properly, it can be used in both a criminal or civil context to exclude wrongfully recorded phone calls from being used in court. But the FSCA also has teeth, in that it, creates a private right of action for individuals who were wrongfully recorded to seek statutory damages of $1,000, punitive damages, and attorneys’ fees to victims of unlawfully intercepted communications.

Recently, the plaintiffs’ bar has been invoking the FSCA to sue conglomerates for data intercepted on the internet. Specifically, Plaintiffs are accusing website owners of intentionally intercepting, disclosing, and using sensitive information from putative class members, creating the potential of tremendous liability under the FSCA. Worried that your website may be affected? Reach out to Yaniv Adar or Daniel Maland for more information.