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Florida Supreme Court Update

Florida Supreme Court Report on Foreclosure Cases

On December 28, 2009, Chief Justice Peggy A. Quince, on behalf of the Florida Supreme Court, issued an Administrative Order essentially approving The Task Force on Residential Mortgage Foreclosure Cases’ recommendation to adopt a uniform statewide managed mediation program.  With limited opt-out provisions, the managed mediation program mandates that all cases involving foreclosure of homesteaded residential property be referred to a managed mediation program in each circuit.     

In November alone, an estimated 53,000 foreclosure actions were filed against Florida homeowners.  These cases are flooding Florida’s court dockets and clogging the judicial system.  As the Chief Justice states, “the crisis continues unabated.”  Contributing to the crisis is the fact that borrowers are frequently unable to reach their lender to discuss loan modification or workout options.  Also, borrowers complain that lenders repeatedly lose loss-mitigation paperwork.  The hope is that mandating mediation in residential foreclosure cases will facilitate document exchange and communication between borrowers and lenders and lead to settlement.     

 

Several circuits already require mediation in foreclosure cases.  The Collins Center for Public Policy is the managed mediation program manager for three of these circuits, the 1^st, 11^th and 19^th, and has settled 68% of the cases it has scheduled for mediation.  

Florida homeowners in foreclosure will now have the chance to work out a plan with their lender prior to losing their home.  Both borrower and lender are required to have a representative with full settlement authority present at mediation.  

Floridians that are past due on their home mortgages but have not yet been served with a foreclosure complaint can call the Florida Attorneys Saving Homes program to see if they are eligible for the services of a Florida Bar attorney to assist them in working with the lender to reach a settlement.  The number of homeowners needing assistance far exceeds the number of volunteer attorneys available.  The FASH program is seeking Florida attorney volunteers.

A copy of Administrative Order and Final Report and Recommendations of the Task Force on Residential Mortgage Foreclosure Cases can be found here.

Find out more about the Florida Attorneys Saving Homes program here.

Prepared by:    Monica Evans

    mevans@lawfla.com

    Thomas Howell Bateman, III

    tbateman@lawfla.com

Real Estate Law Update

Effective January 1, 2010 new regulations implementing the Real Estate Settlement Procedures Act (RESPA) went into full effect.  The new Rule updates the 30 year old RESPA rule and is intended to enhance disclosures to residential borrowers.  The Good Faith Estimate (GFE) and HUD-1 closing statement forms have been completely revamped by the U.S. Department of Housing and Urban Development (HUD).  A form GFE can be found here and a form HUD-1 can be found here.

 

The changes are complex and include potential penalties for noncompliance.  The new Rule mandates that lenders give borrowers more detailed and accurate cost disclosures. For instance, the lender’s origination and other fees on the GFE must match the fees given to the borrower on the HUD-1.  Unaffiliated entity fees can only increase 10% from the GFE to the HUD-1.   If such fees increase by more than 10%, the transaction can still close but the lender only has 30 days to reconcile and cure the defect.  The thought is that the new Rule will save borrowers’ money at closing, and will allow them to compare financing costs between lenders.

 

Mortgage brokerage fees must be disclosed along with the lender charges.  (This Rule goes into effect simultaneous with the new mortgage broker licensing requirements that anyone providing loan modification services in Florida must be licensed as a mortgage broker.)  Mortgage brokers cannot give a credit for a yield spread premium and charge for discount points in the same transaction.   

 

Under the new RESPA Rule, loan originators are required to provide borrowers with a GFE no later than three days subsequent to the loan originator’s receipt of all necessary information from the borrower.   

 

HUD has announced that it will exercise restraint in its enforcement of the new Rule for several months.  However, HUD urges all lenders and settlement agents to “make a good faith effort to comply with the new regulations beginning January 1.”   The new Rule will require more coordination between lenders and settlement agents.  

 

For more information call us or read HUD’s FAQs here. 

 

Prepared by:    Monica Evans

    mevans@lawfla.com

Election Law Update

Election Law

 

The case of Florida Elections Commission v. Davis, Case No. 1D09-3716 (Fla. 1st DCA) currently pending before the First District Court of Appeal presents an issue of first impression as whether the Division of Administrative Hearings (DOAH), when acting pursuant to the final order authority granted by the Legislature in cases involving violations of Florida’s election laws, can impose an administrative civil penalty for violation of those laws. 

 

In a final order rendered in Florida Elections Commission v. Davis, Case No. 08-6413 (DOAH July 13, 2009), which can be found here, the administrative law judge concluded that DOAH was without authority to impose a civil penalty when a violation of Florida’s elections laws is found to have occurred in an administrative hearing referred to the DOAH pursuant to Section 106.25(5), Florida Statutes.  Since Chapter 120 does not authorize DOAH to impose civil penalties, the administrative law judge reasoned, “DOAH has authority to impose an administrative fine if the substantive statute expressly authorizes the imposition of an administrative fine.” 

 

Finding no authority to impose an administrative fine, the administrative law judge concluded that the authority of DOAH was limited to fact-finding necessary to determine whether a violation of Florida’s elections laws occurred. Once a violation is determined in proceedings before DOAH, it would then be up to the agency, in this case, the Florida Elections Commission (FEC), to impose the fine. 

 

The FEC appealed the final order to the First District Court of Appeal.  In its initial brief, the FEC argued that when the Legislature gave DOAH final order authority in cases involving violations of Florida’s election laws, it also authorized DOAH to impose a civil penalty upon finding a violation.  Review of the case docket reveals that James Davis, the Respondent in the proceeding below, has not appeared in the proceeding or responded to the FEC initial brief.

 

Prepared by:    Mark Herron

    mherron@lawfla.com

Education Law Update

The Second District Court of Appeal held that a teacher has a right to have a lawyer present when being interviewed by School District staff as part of an investigation of misconduct.  Raven v. Manatee County School Board, Case No. 2D-081533 (Fla. 2d DCA December 2, 2009), which can be found here. The Court held that, under the circumstances of this case, the teacher was entitled to have his lawyer present for the investigatory interview. 

 

The Court based its decision on Section 120.62(2), Florida Statutes, which provides that anyone who appears before an “agency” of the State of Florida “in an investigation” has a right to counsel.  In this case, the Manatee County School Board (an “agency” within the meaning of the statute) had promulgated a School Board policy which provided that staff of the School District would investigate complaints of misconduct.  The Court held that this School Board policy had the effect of delegating the School Board’s investigatory authority to the School District.  Thus, the requirements of Section 120.62(2) applied to such investigations.

 

Whether a particular School District will be required to allow an employee to have his or her attorney present during an investigatory interview regarding alleged misconduct may ultimately depend upon the particular provisions of the rules of the School Board in that particular School District.

 

Prepared by:

Jim Dean

jdean@lawfla.com

Employers Beware - Two Weeks Notice Means Two Weeks of Work

On October 30, 2009 the Florida Supreme Court agreed to review Porter v. Florida Unemployment Appeals Commission, 1 So.3d 1101 (Fla. 1st DCA 2009), a case dealing with the denial of unemployment compensation benefits.   The case dealt with an employee who, after providing her employer two weeks written notice, was terminated prior to the conclusion of the two week notice period.  

Ms. Porter, who worked as a cook for  Allen Children Centers, provider her employer with two weeks written notice of her resignation.  Although the record is unclear as to whether the employer accepted Porter's resignation the employer did immediately run an ad to replace Porter.  The employer hired a new cook who was able to start work three days before the end of Porter's two week notice period.  Citing the inability to pay for two cooks the employer terminated Porter and told her to leave.  Porter filed for unemployment compensation and at a hearing before an appeals referee was denied benefits.  The appeals referee determined that Porter voluntarily left her position and was therefore disqualified from receiving benefits.  Ms. Porter appealed to the Unemployment Appeals Commission who affirmed the referee's decision. 

The Florida 1st District Court of Appeal, finding that the appeals referee's decision was not supported by competent and substantial evidence, reversed the decision of the Commission and ruled that Porter was eligible for unemployment compensation benefits.   The Court found that because Porter had provided a date certain for her resignation, that termination prior to that date could not be considered voluntary.   While the Court indicated that it found no other Florida cases addressing this issue it cited to a line of cases from other state courts and adopted the following holding:

" an employee whose employer terminates her employment prior to the effective date of her resignation has never left work voluntarily and therefore cannot be disqualified from receipt of benefits on that basis, even for the period following the employee's intended departure date."

Accordingly, employers, particularly those in the jurisdiction of the 1st DCA, should take care when terminating employees who have provided their employer with written notice of termination.

Prepared By:

Bill Dillon

wdillon@lawfla.com

Employment Law Update

On November 10, 2009, the Broward County School Board approved a settlement with Charlene Rebecca Blackwood, a former building inspector who had filed a Whistleblower claim against the School Board. Ms. Blackwood had alleged that she was fired in retaliation for blowing the whistle about building code violations on school construction projects.

Significantly, whereas Ms. Blackwood will receive a net monetary payment of $45,461 for lost wages from the School District, Ms. Blackwood’s attorneys are to receive $150,000 in attorney fees under the settlement.  Ms. Blackwood reportedly said that her case was never about getting a large financial settlement with the district.  This case illustrates how the amount of attorney’s fees in employment litigation cases can often far exceed the monetary amount being sought by the plaintiff. 

Many businesses and local governmental entities are beginning to use pre-suit mediation of employment disputes in an effort to resolve such claims before the parties incur so much attorneys fees that settlement becomes almost impossible.

An article from the South Florida Sun Sentinel on this story can be found here.

Prepared by:

James J. Dean

jdean@lawfla.com

 

Florida Supreme Court Update

Last week, the Florida Supreme Court issued an opinion in Larson & Larson P.A. v. TSE Industries, Inc., Case No. SC08-428 (Fla. Nov. 5, 2009), which can be found here. 

 

The majority opinion, authored by Justice Canady, held that the two-year statute of limitations for litigation-related legal malpractice claims can begin to run on one of two different accrual dates:  (1) on the entry of the underlying judgment when that judgment becomes final; or (2) on the entry of a subsequent, post-trial sanctions judgment.

 

Justices Polston, Labarga and Perry concurred with Justice Canady’s opinion, to the extent it held that the statute of limitations begins to run on the entry of the underlying judgment.  However, Justices Quince, Lewis, Canday, Polston and Labarga concurred with Justice Canady’s opinion, to the extent it held that the statute of limitations begins to run on the entry of a subsequent, post-trial sanctions judgment.

 

Justice Perry issued a partial concurring and dissenting opinion, stating that, in accordance with the prior precedent of Sivlerstrone v. Edell, 721 So. 2d 1173 (Fla. 1998), the statute of limitations should have run from the date the trial court’s underlying judgment became final for purposes of appeal. 

 

Justice Lewis issued a dissenting opinion, agreeing with the opinion of the lower court in TSE Industries, Inc. v. Larson & Larson, Inc., 987 So. 2d 687 (Fla. 2d DCA 2008), which, pursuant to Silverstrone, held that the statute of limitations begins to run from the date of the entry of a subsequent, post-trial sanctions judgment.  Justices Quince and Pariente concurred in Justice Lewis’ dissent.

 

Prepared by:  Rob Telfer

rtelfer@lawfla.com

Employment Law Update

The Fifth District Court of Appeal, on November 6, 2009, released a decision which addressed a question of first impression under the Public Employee Whistleblower’s Act, Section 112.3187 - .31895, Florida Statutes (2005).  The case, University of Central Florida Board of Trustees v. Richard Turkiewicz, Case No. 5D09-1243, is important because the Court held that a state-agency employee must first file the whistleblower claim with the Florida Commission on Human Relations, and allow the FCHR to investigate the matter, before the employee is permitted to file a lawsuit in court.  The court's opinion can be found here.

 

    Mr. Turkiewicz, UCF’s Director of Police and Public Safety, had been an exemplary employee for about 18 years.  However, after reporting alleged wrongdoing by the University, he was notified that he would not be reappointed to his position.  Instead of filing a whistleblower claim with the FCHR, Mr. Turkiewicz initiated an internal grievance under UCF’s university rules, and the grievance was heard by a Step One grievance panel, a UCF Vice President and ultimately by UCF President John C. Hitt.  Following denial of the grievance, Mr. Turkiewicz filed a lawsuit.

 

    The Fifth DCA held that Mr. Turkiewicz’s internal grievance proceeding did not satisfy the statutory requirement that the claim be submitted to the FCHR for investigation prior to filing suit in court.  The Court thus held that the Whistleblower complaint had to be dismissed. 

 

    Although the Florida Civil Rights Act, the Florida Whistleblower’s Act and other similar employment laws in Florida are liberally construed in favor of employees, the courts continue to dismiss such claims for failure of employees to exhaust administrative remedies in compliance with the statutes, prior to filing suit.

 

Prepared by: James J. Dean

jdean@lawfla.com

Enforcement of the Red Flags Rule Delayed Again - Attorneys Exempt?

On October 30, 2009, at the request of Members of Congress, the Federal Trade Commission announced that it is delaying enforcement of the Red Flags Rule until June 1, 2010.   The FTC's announcement may be viewed by clicking the following link:

http://www.ftc.gov/opa/2009/10/redflags.shtm

The Red Flags Rule requires creditors and financial institutions to implement programs to address identity theft.  The broad definition of "creditors", taken from the Fair Credit Reporting Act, has created a great deal of controversy by categorizing as creditors a number of business entities not commonly thought of as creditors.  Included among those businesses caught in the FTC's Red Flag web were hospitals, health care providers and attorneys.

Speaking of attorneys,  District Court Judge Reggie Walton of the Federal District Court for the District of Columbia entered an Order, also on October 30, 2009, granting the American Bar Association's Motion for Partial Summary Judgment in a case relating to the application of the Red Flags Rule to attorneys.  The ABA's motion alleged, among other things, that the FTC exceeded its statutory authority under the Fair and Accurate Credit Transactions Act of 2003 in violation of the Administrative Procedures Act.  The Order indicated that a Memorandum Opinion would be issued by the Court within 30 days of the date of the Order. 

A copy of the Court's Order may be view on the below link to the ABA website.

http://www.abanet.org/media/docs/ABA_v._FTC_Amended_Order.pdf

Prepared by:

Bill Dillon

Florida Board Certified Health Law Attorney

Ethics Law Update

There are several points at which Florida’s Code of Ethics and Florida’s elections laws overlap.  In a series of complaint proceedings made public on October 28, 2009, the Commission on Ethics addressed alleged violations involving the conduct of public officers and employees in using their public position or the property and resources within their trust to engage in political activity.  The alleged violations investigated by the Commission on Ethics involve Section 112.313(6), Florida Statutes, which prohibits misuse of public position.

 

The Commission found probable cause to believe that an employee of the Brevard County property appraiser’s office misused his position by holding a meeting in a county office building, during regular work hours, with subordinate employees asking them to help with a fundraising event for the local political party executive committee.  Complaint No.  07-72. (See also Section 104.41, Florida Statutes, Florida’s “little Hatch Act” and Section 106.15(4), Florida Statutes, which prohibits soliciting a political contribution in a building owned by a governmental entity.)

 

The Commission also found probable cause to believe that an employee of the Brevard County property appraiser’s office misused his position by soliciting one or more campaign contributions from his office during working hours.  Complaint No. 08-148. (See also: Section 106.15(4), Florida Statutes, which prohibits soliciting a political contribution in a building owned by a governmental entity.)

 

Finally, the Commission found probable cause to believe that an employee of the Brevard County property appraiser’s office misused his position by typing campaign-related letters during office hours.  Complaint No. 08-149.  (Section 106.15(3), Florida Statutes, which prohibits a candidate from using the services of any state, county, municipal officer or employee in furtherance of his or her candidacy during working hours.)

 

Prepared by: Mark Herron