Monday, October 28, 2013

Understanding The Benefits Of Discovery Mediation

By Hilary High

Some modern discovery situations are so complex and involve so many unknown factors that the only certainty is that it will be costly.  Add intractable positions to the mix, and litigants are often unable to resolve resulting discovery disputes.  In many situations, mediation offers a cost-effective, solution-based, and low-risk opportunity to resolve discovery disputes without a judge or special master’s involvement.

Why should litigants consider discovery mediation?

1.    It avoids judicial intervention.  Every “view from the bench” event or article urges litigants to resolve discovery disputes.  Discovery mediation forestalls negative attention, avoids adverse orders (and the risk of sanctions), shows collaboration, fosters professionalism, and builds credibility.

2.    It minimizes costs.  Discovery mediation can be as narrow or broad as needed.  Mediating an issue will cost less than obtaining a court order.  It minimizes unproductive conversations and correspondence between litigants, and it eliminates the need for motions, briefs, and reply briefs.  Litigants can informally educate a mediator about applicable rules and case law or about precedential, business, or industry implications.  They will also save money by not traveling to and attending hearings.  They may even agree to a telephonic mediation conference.

3.    It resolves discovery disputes quickly.  Hearing time ― much less enough time to work through complex or numerous discovery problems ― is hard to get and has a strict end time.  Mediators are available on short notice, nights, and weekends, and they can spend as much time as litigants need to resolve a dispute.  A mediated resolution allows litigants to move their case forward, instead of putting a case on hold pending a discovery hearing and order. 

4.    It offers flexibility.  A mediated agreement can accommodate contingencies, alternatives, and subsequent developments, and it can be revisited by the parties.  Unlike “court order” and “flexibility,” “mediated solution” and “flexibility” are not mutually exclusive.  If involving IT or other specialists helps litigants reach an agreement, mediation would allow their real-time involvement, compared to introduction of potentially obsolete or out-of-context affidavits or deposition testimony at a hearing.

5.    It is solution-oriented.  In court, real solutions may fall victim to advocacy and the court’s need to render a clear decision.  Practically speaking, mediated solutions formulated by the parties with the assistance of a neutral may be more effective.

6.    It is risk-free.  Discussions with the mediator are confidential.  Party-crafted solutions offer certainty that is unavailable in court.  Litigants worried an opponent will shirk a mediated discovery agreement may propose reducing it to an agreed order.  Finally, if mediation is unsuccessful, the parties may still seek court intervention.

Litigants who want to resolve a discovery dispute without judicial intervention should consider mediating it.  A professional neutral will help them work through contentious issues and craft workable solutions.

Friday, October 25, 2013

Solo And Small Firms – Representing Clients With Adverse Interests

By James A. Schmidt

A few days ago, I mentioned to Corrie Benfield, the Hillsborough County Bar Association’s new Lawyer magazine coordinator (Welcome, Corrie!), that the Solo-Small Firm Section would be late with its first column of the year because we were “short-handed.” Corrie graciously accommodated us. Now, as David Stamps and I write to tell you about what we have planned for the year, the “short-handed” comment seems to dovetail perfectly with those plans.

The section’s theme for this Bar year is to help our members improve how they use non-lawyers to build and strengthen their practices.  Non-lawyers are all around us.  They are an abundant resource and are often very keen to work with us.  By harnessing their interest and leveraging it properly, lawyers can become more effective in their practices, reduce unnecessary risks, and bring about a better work-life harmony.

So this year, our goal will be to have every lunch speaker and column author be a non-lawyer,  with each being from a different field. David and I have identified many non-lawyer roles that we feel are instrumental to the practice of law, including traditional and forensic accountants, financial advisors, technology professionals, and business coaches. This list is hardly complete, and because all of our programs and columns are not yet spoken for, we solicit your thoughts and suggestions for non-lawyers whom you use in your practices.

On September 25, we started our year off by partnering with the Marital & Family Law and Real Property, Probate & Trust Law Sections to host Patrick Dougherty, a CPA with The Florida Bar. Dougherty spoke about best practices for law office accounting and how to meet your trust accounting requirements with the greatest efficiency.

Please mark your calendars for our remaining lunches of the year on February 4 and April 22, the planning for all of which is underway. And stay tuned. We hope that our programming for the year will leave you feeling a bit less “short-handed.”

Wednesday, October 23, 2013

Second Chance: Florida’s 1973 – 1976 Cuban Lawyer Admission Project

By Harley Herman

As you entered your office this morning, the one document you probably did not look at was your license to practice law.  The idea that one day our system of law could end and we would lose our careers never enters our minds.  This happened to Cuban lawyers when they fled Cuba after Fidel Castro’s revolution.  They came to our shores, knowing that because their law schools taught the Civil Law of Cuba, not the American Bar Association Common Law courses, they were not eligible to join The Florida Bar. 

Forty years ago, on July 31, 1973, a Florida Supreme Court Order opened a door that brought the skills of these lawyers to Tampa and other Florida cities.  The court order authorized a special program of study as a prerequisite to taking the Bar exam.  The University of Florida’s law school created and taught a 21-month weekend course of study to acquaint Cuban lawyers with our Common Law system and its application to Florida law. 

Most Floridians were unaware of the unmet legal needs of Cuban refugees who fled to Florida and the wealth of legal talent we received during the exile.  Per the court’s findings, by 1973 only 40 Florida lawyers spoke Spanish, but the refugee population of Florida exceeded 300,000.  The number of Cuban lawyers and judges in Florida was so great that many retained the name and operations of the Havana Bar Association.

The 1973 order was sought after other alternatives proved inadequate.  Hillsborough County Bar Association President Reece Smith asked the Honorable E. J. Salcines to introduce Cuban lawyers to Tampa law firms. Without the ability to practice law, few options were available.  Carlton Fields employed Felipe Ramon Pacheco.  He established and organized the firm’s library and served as a translator for the firm.  His return to practice on December 18, 1975, became possible only when the court authorized the special law school program for Cuban lawyers.

Similarly, former Cuban Judge Adalberto Tosca worked at St. Joseph’s Hospital until then-State Attorney E. J. Salcines hired Tosca to interview and translate affidavits for criminal proceedings. He had left Cuba with $5 after he resigned his Cuban judgeship because the Cuban government informed him of the sentence of the people who appeared before him, prior to the defendants’ trials.  After the 1973 order, he became a Tampa lawyer on October 23, 1975.

The Tampa students held review sessions each week at the offices of Tampa attorney Luis Dial, Jr.     Upon completion of the program, the experienced former lawyers, judges, and law professors from Cuba joined young law students in taking the Miami Bar exam.  Pacheco, Tosca and others returned to join and enrich our legal community. 

Their struggle 40 years ago and dedication to our profession’s aspirations will soon be appropriately recognized. In upcoming ceremonies proposed for the University of Florida, the HCBA Diversity Committee, and the Tampa Bay Hispanic Bar Association, the few surviving Hillsborough Cuban lawyers who rejoined our profession and the HCBA members who assisted them will be recognized.

President's Message: Out Of Failure Comes Success

By Susan Johnson-Velez

“Our goal over the next four years is to make sure your son fails at something.” So began the speech by the president of my son’s high school at the freshmen parents’ meeting four years ago. “What?!” thought I and no doubt the majority of the parents in the room. But these are our precious sons, the ones whose self-esteems we have carefully constructed and cultivated, and painstakingly nurtured and protected. We don’t want them to fail.

From a very early age, most of us are taught how to be winners … how to succeed. All too often these lessons are further distorted with the false notion that everyone is a winner. Truth is, contrary to popular wisdom and the prevailing emotions that day, we should all welcome, even embrace, failure. Most of us are not taught, let alone encouraged, to fail. Why is failure considered so bad? Simply put, it doesn’t feel good, and it’s often associated with weakness. Most of us don’t wake up in the morning hoping that the day will bring failure. But maybe we should. Despite the negative connotation, failures actually give birth to greater life experiences and the chance to become bolder, more creative, and more courageous.

Basketball icon Michael Jordan admits to missing more than 9,000 shots, losing almost 300 games, and missing the game-winning shot 26 times during his career. But he credits those failures as the reason for his success. Thomas Edison is famously said to have failed with a thousand filaments before finally hitting on the right material for the incandescent light bulb. Without his persistence, I might very well be writing this article by very dim candlelight. To be certain, I am very thankful for the fruit of his failures.  

In the interest of full disclosure, I freely admit that I have failed many times. I have failed as a friend and as a parent. As a college student, I failed to make the required grade in many of the science and math classes that made up the curriculum for my pre-med track.  However, that failure allowed me to be honest with myself about where my true academic passions lay, to let go of my parents’ dreams for me, and to hone in on my own dreams for myself. And yes, as a lawyer here in Tampa, I failed in my first attempt at seeking election to the Hillsborough County Bar Association Board of Directors.  Indeed, these failures have led me to greater life experiences and have made me bolder, more creative, and more courageous.

All of the above experiences, along with many others, culminated in my becoming more open-minded, persistent, and audacious. In retrospect, that opening line at the freshmen parents’ meeting makes perfect sense. Why wouldn’t I want my son to begin the journey toward audacity, and the sooner the better? This time of year, and especially this month, as we reflect on things that we are thankful for, we often focus on our successes. Perhaps we should consider instead our failures and be thankful for them because in the end they may very well have led to our greatest successes.

Marital And Family Law: No Life Insurance? Tell Your Client Before The Ex Dies

By Bridget Remington

It is not uncommon for a child support or alimony obligor to agree, in a marital settlement agreement (MSA), to continue to maintain a life insurance policy that names the obligee as beneficiary, as security for future support payments.  Often obligors who already have such coverage in place want to provide this financial security for their minor children and even for their former spouses.

Unbeknownst to many people divorced before July 1, 2012, such provisions in their MSAs are trumped by § 732.703, Fla. Stat., which went into effect July 1, 2012, and applies retroactively.  For anyone who dies on or after the effective date, a “designation made by a decedent providing for the payment or transfer at death of an interest in an asset [including life insurance] to or for the benefit of the decedent’s former spouse is void as of the time the decedent’s marriage was judicially dissolved … if the designation was made prior to the dissolution … .” § 732.703(2), (9), Fla. Stat.

One exception is when the final judgment of dissolution of marriage requires the decedent to acquire or maintain the policy for the benefit of the former spouse or children of the marriage, only if other assets fulfilling the requirement do not exist upon the decedent’s death. § 723.703(4)(d), Fla. Stat.  The former spouse will have no rights to the estate unless the decedent has executed a will under which the former spouse is a beneficiary.  Still, whether other assets exist to “fulfill the requirement” will require a determination of whether the MSA requires the insurance to cover only the amount of unpaid support, and whether and to what extent the insurance was meant to secure child support versus alimony.  See Busciglio v. Busciglio, 116 So. 3d 620 (Fla. 2d DCA 2013) (Altenbernd, J., concurring) (describing complications that can arise without clear statutes governing life insurance in divorce proceedings). 

Another exception is when the final judgment prohibits the decedent’s unilateral termination or modification of the disposition of the asset.  § 723.703(4)(e), Fla. Stat.  It is not clear that this exception would apply when such a prohibition is stated in the MSA but not expressly stated in the judgment itself.  Further, would language simply requiring that the policy be maintained satisfy this exception? 

Given the questions presented by these exceptions, insurance companies likely will not pay anyone but rather file an interpleader action to determine the disposition of the death benefit.  Thus, the surviving former spouse will end up in court, despite having an MSA supposedly resolving these issues.

Until the constitutionality of the retroactive invalidation of existing contracts is successfully challenged, former clients with potentially affected MSAs should be advised of the law and possible remedial steps.  Some may simply ask their former spouses to re-affirm the pre-divorce beneficiary designation.  Otherwise, a motion to enforce the final judgment, premised on the statutory invalidation of the beneficiary designation, may spur a former spouse to action.  At the very least, former clients should provide a copy of the MSA and final judgment to the insurance company. 

Tuesday, October 15, 2013

Referral Service Attorneys Take Calls From Public On Fox 13 Morning Show

By John F. Kynes

It was nearing 7 a.m. on a recent Thursday inside the studios of WTVT, Fox 13, on Kennedy Boulevard. The “Good Day” show’s early morning broadcast team had been cheerily running through the latest news, weather, and traffic backups on the local bridges since well before dawn.

During a commercial break, one of the show’s producers told the group of 20 or so volunteers from the Hillsborough County Bar Association to quickly get seated at the rows of phone banks set up in the studio. Given the early morning hour, all the attorneys were surprisingly bright-eyed and alert. It was time for the morning show’s popular “Ask-A-Lawyer” call-in segment to begin.

“We started the ‘Ask-A-Lawyer’ segment in 1993, and it has been part of ‘Good Day’ ever since,” said John Hoffman, vice president and news director of Fox 13. “We think it’s a great value to our viewers, and judging by the number of calls we get, our viewers truly appreciate it.”

“Ask-A-Lawyer” airs the first Thursday of every month, and all the attorneys involved are members of the HCBA’s Lawyer Referral & Information Service (LRIS). The attorneys generously volunteer their time by fielding questions from “Good Day” viewers and offering free legal advice.

Attorney Larry Samaha said he has participated in the monthly program for “at least 10 years” and that he enjoys fielding calls from viewers on a wide range of topics. Everyone works together to help manage the high volume of phone calls that come into the studio during the broadcast, Samaha said.

Also, beginning a few months ago, viewers gained the ability to ask questions online via FOX 13’s Facebook page. Several attorneys, including Shazia Sparkman, sat at computers in the newsroom and answered questions in an online chat room set up by the station. “It’s pretty amazing,” Sparkman said, referring to the use of social media to respond directly to questions from the public.

Attorney Dale Appell has been a regular volunteer on the program for the past eight years. He says it has been a great opportunity “to develop relationships with like-minded people who don’t mind getting up early in the morning to help people with legal questions who can’t afford to get help anywhere else.”

“There’s also a good degree of camaraderie among the group,” Appell added.

Lupe Mitcham, the HCBA’s energetic LRIS director, helps coordinate the attorneys who participate each month and oversees LRIS on a day-to-day basis. “LRIS provides a great community service, and the legal referrals we provide also benefit the lawyers who participate,” Mitcham said.

In case you don’t know, the LRIS works like this: Individuals looking for legal advice call the LRIS at (813) 221-7780; an HCBA staff member briefly interviews the callers and assesses their situation; and, if appropriate, callers are then referred to a participating LRIS attorney for a 30-minute consultation, for a small fee, to discuss their legal problem.

Mitcham says the public can have confidence in the LRIS when they call because every attorney in the program has to meet certain qualifications and, depending on the practice area, has to have a certain level of trial experience. Plus, it is one of only two LRIS programs in Florida certified by the American Bar Association.

Last year, LRIS received just more than 14,000 individual calls from the public. Based on the information provided by callers, more than 4,800 legal referrals were made to participating attorneys in various practice areas, from bankruptcy to probate.

As an additional public service, the HCBA waives the initial consultation fees for callers who have certain legal problems, such as those involving Social Security, senior wills, torts, personal injury, workers’ compensation, and others. In addition, consultation fees are waived for all active-duty members of the military, no matter what their problem.

If you are interested in participating in the LRIS, or if you just want to learn more about this outstanding HCBA community program, please contact Lupe Mitcham directly at (813) 221-7783.

See you around the Chet.

Monday, October 14, 2013

Corporations - Derivative Vs. Direct/Individual Actions

By J. Kevin Carey and Michael L. Jones

There continue to be cases reflecting a fundamental misunderstanding with regard to individual liability in the context of actions involving corporations.  As the cases cited below make clear, in order to determine whether claims are derivative, which must be brought in the name of and on behalf of the corporation, or direct, which may be brought by shareholders individually, it is important to first identify the characteristics that define what constitutes and distinguishes derivative from direct/individual actions:

Derivative Actions:

1. “(A)ction brought by one or more stockholders of a corporation to enforce a corporate right or to prevent or remedy a wrong to the corporation.”  Alario v. Miller, 354 So. 2d 925, 926 (Fla. 2d DCA 1978); Doltz v. Harris & Assoc., 280 F.Supp.2d 377, 385 (E.D. Penn. 2003).

2. “(T)he gravamen of the complaint is injury to the corporation or to the whole body of its stock or property and not injury to the plaintiff’s individual interest as a stockholder.”  Alario, 354 So. 2d at 926; Doltz, 280 F.Supp.2d at 385.

3. “(T)he injury is primarily against the corporation, or the stockholders generally.”  Id.

4. “(T)he injury is the determining factor in deciding whether a claim is direct or derivative; if the injury is to the corporation, and only indirectly harms the shareholder, the claim must be pursued as a derivative claim.”  Fox v. Professional Wrecker Operators of Fla., Inc., 801 So. 2d 175, 178 (Fla. 5th DCA 2001).

Direct/Individual Actions:

1. “(A) direct action, or as some prefer, an individual action, is a suit by a stockholder to enforce a right of action existing in him.”  Alario, 354 So. 2d at  926; Doltz, 280 F.Supp.2d at 385.

2. An injury suffered directly by the stockholder, which is separate and distinct from that sustained by other stockholders.  Alario, 354 So. 2d at 926; Professional Wrecker Operators of Fla., Inc., 801 So. 2d at 179; Doltz, 280 F.Supp.2d at 385. 
In attempting to clarify any confusion, it is further noteworthy that derivative claims and direct/individual claims are not mutually exclusive.  A shareholder/officer/director of a corporation has a fiduciary duty to both the corporation and to fellow shareholders.  In some cases, the shareholder/officer/director has breached his/her fiduciary duty to the corporation as well as his/her fiduciary duty to other shareholders.  In that instance, a complaint may contain both derivative and direct/individual causes of action.  See, e.g., Doltz, supra; see also Sheridan Health Corp., Inc. v. Amko, 993 So. 2d 167, 171 (Fla. 4th DCA 2008) (citing Donahue) (“The fact that joint adventurers may determine to carry out the purpose of the agreement through the medium of a corporation does not change the essential nature of the relationship.”)

As recently as October 2012, the Fourth District Court of Appeals confirmed the ongoing viability of Donahue and SheridanBarreiro v. Braver, 98 So. 3d 746 (Fla. 4th DCA 2012).  Locally, Judge Herbert J. Baumann, Jr., also recently acknowledged the ongoing viability of Donahue/Sheridan in holding “that the parties’ decision to operate their real estate development venture [through corporations] did not eliminate the fiduciary duties that they owed to one another.” Order on  Motion to Dismiss, Jan. 30, 2013, Hills. Cty. Cir. Case No. 07-CA-15878.

Tuesday, October 1, 2013

Trial And Litigation: Enervating The Litigation Privilege

By Caroline Johnson Levine

Florida courts have historically provided absolute immunity to “judges, counsel, parties, and witnesses from liability for alleged defamatory statements made in the course of a judicial proceeding.” See Delmonico v. Traynor, ― So. 3d ―, SC10-1397, 2013 WL 535451 (Fla. 2013). In fact, the Florida Supreme Court had established in Myers v. Hodges, 44 So. 357 (Fla. 1907), “the principle of the litigation privilege in Florida, essentially providing legal immunity for actions” taken or statements made in the course of pending litigation. See Echevarria, McCalla, Raymer, Barrett, & Frappier v. Cole, 950 So. 2d 380 (Fla. 2007). However, the Supreme Court recently qualified or withdrew that privilege for attorneys in the type of circumstances demonstrable in Delmonico.

Daniel Delmonico sued Tony Crespo and Donovan Marine, Inc., because Delmonico believed that Donovan’s employee, Crespo, had defamed Delmonico. Crespo’s defamatory statements asserted that Delmonico had purloined Donovan’s clients by supplying female escorts to Delmonico’s potential customers. Consequently, Crespo and Donovan hired attorney Arthur Traynor to defend against Delmonico’s defamation lawsuit.

As the attorney defending and investigating the underlying Crespo suit, Traynor repeatedly alleged to potential witnesses that Delmonico had supplied prospective customers with female escorts and that Delmonico was being criminally prosecuted for the illegal activity. Based upon Traynor’s allegations, Delmonico’s customers chose to abrogate their business contracts with Delmonico, resulting in a documented financial loss of at least $7 million. Delmonico subsequently filed a defamation suit against Traynor, due to Traynor’s scandalous accusations made to potential witnesses in the Crespo suit. Traynor filed a motion for summary judgment in the new lawsuit against him and claimed that as an attorney defending an underlying lawsuit, his statements were absolutely privileged.

In Delmonico, the Supreme Court narrowed the absolute immunity privilege by finding that it applies in the types of legal proceedings that occur in a courtroom, in depositions, and in pleadings. However, the court refused to extend the privilege to “statements made by an attorney during ex-parte, out-of-court questioning of a potential, non-party witness while investigating matters connected to a pending lawsuit.” See Delmonico, 2013 WL 535451. Further, the court found that a “qualified privilege instead should apply to ex-parte, out-of-court statements, so long as the alleged defamatory statements bear some relation to or connection with the subject of inquiry in the underlying lawsuit.” Id. Importantly, a defendant’s qualified privileged “requires the plaintiff to establish express malice” by the defendant. Id. However, when the litigator’s defamatory statements are not related to the underlying lawsuit, the Supreme Court found that “the defendant is not entitled to the benefit of any privilege.” Id.  

Therefore, an attorney’s choice to defame parties in pending litigation could result in civil liability. Accordingly, a litigator must always consider whether his statements to non-party witnesses could be construed as defamatory, even if the statements are solely intended to elicit relevant information in an investigation.