On Appeal: 11th U.S. Circuit says not admitting testimony was abuse of discretion


Case: Rosenfeld v. Oceania Cruises, Inc.

By Robert Morris
Daily Business Review

bio_image_wink_newWhile aboard the cruise ship M/V Nautica, Lydia Rosenfeld fractured her shoulder after falling on the ceramic floor near one of the ship’s self-serve dining areas. She brought a diversity action in federal court and claimed Oceana Cruises, the ship’s operator, should have chosen safer flooring in order to reduce the risk of a fall.

Rosenfeld’s expert, a floor safety specialist out of Australia, performed coefficient-of-friction tests on the flooring at the area of the fall. He was prepared to testify that “the flooring surface was not reasonably safe for a self-serve or bistro area, because it posed a high risk for those passing through the area to slip and fall.”

The trial court excluded Rosenfeld’s expert because, in the court’s opinion, Rosenfeld did not establish that her expert would “provide helpful analysis to the Court in understanding a matter of scientific, technical or specialized expertise.” But a jury instruction charged jurors to determine whether Oceania’s choice in flooring was inherently negligent.

Rosenfeld’s attorney, Michael A. Winkleman of Miami, remarked that the district court effectively “disallowed this entire theory [of inadequate flooring surfaces] by not allowing the proffered expert testimony,” which is important, Winkleman said, to establish “slip resistance and/or coefficient of friction.”

The 11th Circuit determined that the trial court impermissibly based its decision on the evidence’s weight and persuasiveness. Instead, it should have evaluated admissibility through a rigorous inquiry of its qualification, reliability and helpfulness of the evidence. Citing numerous cases where similar experts had been allowed testify, the 11th Circuit found that the expert’s testimony should have been admitted, leaving the weight and persuasiveness of it for the jury to decide.

In its appellate brief, Oceania claimed that Rosenfeld’s expert testimony was properly excluded because it had flawed methods, imprecise and unspecific conclusions, and incorrect assumptions about the location of the fall. The 11th Circuit passed on addressing the arguments, which attacked the evidence’s weight and persuasiveness, suggesting they could be employed by Oceania at trial.

The court supported its observations by indirectly quoting the U.S. Supreme Court’s ubiquitous Daubert v. Merrell Dow Pharmaceuticals decision: “Vigorous cross-examination, presentation of contrary evidence and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.”

The 11th Circuit held that the trial court abused its discretion and remanded for a new trial to give Rosenfeld the opportunity to submit expert testimony on Oceania’s choice of flooring.

4th District court of appeal
No expectation of privacy for cellphone user on public road

The state can use evidence of a person’s location by obtaining cell phone records in criminal prosecutions — even if the evidence is improperly obtained.

Shawn Alvin Tracey was arrested and then charged with a number of offenses in conjunction with a joint investigation of drug trafficking by the Drug Enforcement Administration and Broward County Sheriff’s Office.

A detective obtained authorization to use a pen register and a trap-and-trace device to record the telephone numbers of Tracey’s incoming and outgoing calls. Although it was not in the application for the order, the court directed the cellphone company to provide historical cell-site information, which showed the general location of the phone at the time calls were made.

In addition to the historical information, the real time cell-site information directly contributed to the charges that led to Tracey’s conviction. Before trial, Tracey unsuccessfully moved to suppress the real-time evidence.

On appeal the 4th DCA affirmed Tracey’s conviction even though the evidence was improperly obtained under state and federal statutes. This type of evidence, the court reasoned, falls outside the Fourth Amendment’s search-and-seizure protection because the government tracked Tracey on public roads — where he had no “legitimate expectation of privacy.”

The 4th DCA’s decision did not reach the question of whether the real-time information would be subject to a probable cause standard because the state did not even meet the lower “specific and articulable facts” standard. Unable to suppress such evidence, Tracey’s only recourse is the criminal or civil statutory remedies under Florida’s Security of Communications Act.

Case: Tracey v. State

Case no.: 4D09-3565

Appellant Lawyers: Carey Haughwout, Public Defender, and Tatjana Ostapoff, Assistant Public Defender, West Palm Beach

Appellee Lawyers: Pamela Jo Bondi, Attorney General, Tallahassee, and Sue-Ellen Kenny, Assistant Attorney General, West Palm Beach

11th U.S. Circuit court of appeals
Developer not entitled to disclosure exemptions

The appeals court affirmed the district court’s ruling that a condominium developer failed to prove it was exempt from the Interstate Land Sales Full Disclosure Act.

The plaintiffs, several condominium purchasers, entered into pre-construction purchase agreements and paid substantial deposits for units in a Stuart development, Harborage Yacht Condominiums. Harborage used an artist’s rendering of the development, called the Site Plan, to market the project.

The plaintiffs sued alleging Harborage violated the ILSFDA in two ways: Harborage did not provide a property report and it made material misrepresentations in the Site Plan. Harborage admitted it never provided a property report to plaintiffs before they signed the purchase agreements. But it claimed it was not required to provide the reports because of two exemptions that removed the project from ILSFDA. Properties are exempt when the contract requires the seller to erect the building within two years. And subdivisions are exempt when they contain fewer than 100 units.

One version of the purchase agreements applied to 36 units and required Harborage to complete the project within two years. Another version of the purchase agreement was used for the remaining 90 units in the project. But absent from this version was the two-year completion language because it applied to fewer than 100 units — a requirement to meet the second exception.

The 11th Circuit rejected Harborage’s arguments that the exemptions applied. The court found the two-contract method of disposing the units lacked any legitimate business purpose. Unable to prove such purpose, the court held Harborage’s method was impermissibly “adopted for the purpose of evading the ILSFDA’s requirements.”

Without the exemptions Harborage was subject to ILSFDA. The plaintiffs were entitled to the return of their deposits, as well as attorney fees and costs, because Harborage failed to timely provide the property report.

Case: Harborage Cottages-Stuart, LLLP v. Gentry

Case no.: 09-14636

Appellant Lawyer: Elliot H. Scherker, Greenberg Traurig, Miami

Appellee Lawyer: Edward George Guedes, Weiss Serota Helfman, Coral Gables

11th U.S. Circuit court of appeals
Defendant’s appeal doesn’t fly under Fair Sentencing Act

The court rejected Arthur Smith’s attempt to escape the sentence-appeal waiver in his guilty plea. A favorable decision would have cut his minimum sentence in half — from 120 months to 60 months.

Charged with 14 counts for his role in a South Florida drug-distribution ring, Smith pleaded guilty to one count of possession with intent to distribute 50 grams or more of cocaine base. The plea agreement contained a sentence-appeal waiver that was stipulated to have been “knowing and voluntary.”

The waiver contained three narrow exceptions that, if satisfied, would have allowed Smith to appeal. He met none of them. Rather, he argued that the Fair Sentencing Act of 2010 applied to his case, which was enacted after his offenses but before sentencing.

Despite its own decision in U.S. v. Rojas, which held that the FSA applied to criminal conduct before 2010, the 11th Circuit concluded that Smith’s sentence appeal waiver precluded reversal. It explained, “a waiver would be worthless if it covered only issues that lacked merit.”

Case: U.S. v. Smith

Case no.: 10-15044

Appellant Lawyers: Carol Herman, Anne R. Schultz, Wifredo A. Ferrer, Daren Grove, Andrea G. Hoffman, Kathleen M. Salyer and Cynthia R. Wood, U.S. Attorney’s Office, Miami

Appellee Lawyer: Philip Robert Horowitz, Law Office of Philip R. Horowitz, Miami

4th District Court of Appeal
Plaintiff may still seek damages after a settlement

Even though David McCabe received insurance and settlement proceeds after a downed Florida Power and Light power line set his house on fire, he still sought in damages.

In reversing the circuit court, the 4th DCA held that prior payments to McCabe did not prevent him from seeking additional damages. He never executed a full release in favor of FPL or the insurance entities that paid him. And McCabe’s damages could exceed policy limits or fall outside the purview of an insurance policy.

The court also disregarded FPL’s argument that McCabe’s rights were subrogated as a consequence of the payments FPL made and the releases it received from the insurance entities. This is because subrogation “is not available to an extent greater than the amount paid by the insurer, and then only after the insured has been fully indemnified.” But FPL may seek a collateral source set-off at the appropriate time.

Case: McCabe v. Florida Power and Light Co.

Case no.: 4D10-1306

Appellant Lawyer: Kenneth D. Cooper, Law Office of Kenneth D. Cooper, Fort Lauderdale

Appellee Lawyer: Juliet M. Roulhac, Florida Power and Light, Miami

11th U.S. Circuit court of appeals
Changes to complaint can revive right to arbitrate

After nine months of litigation, the district court had denied SunTrust’s motion to compel arbitration. Confronting an issue of first impression, the 11th Circuit reversed because Sara Krinsk significantly expanded the scope of litigation in her amended complaint, reviving SunTrust’s right to arbitrate.

Krinsk sued SunTrust after the bank suspended $400,000 of her $500,000 home equity line of credit. SunTrust argued that its decision was based the updated financial information Krinsk provided at the bank’s request. But Krinsk claimed the suspension was part of a SunTrust ploy to restore capital reserves.

The original complaint sought to define a class that included individuals over 65 who were similarly affected during a 3½-month period. The scope of the proposed class expanded in the amended complaint to include all Florida residents similarly affected during a period exceeding three years. The two complaints contained claims “based on the same operative facts.”

SunTrust expressly opposed arbitration before the complaint was amended and vigorously opposed class certification and discovery. The district court found that SunTrust “invoked the judicial process in litigating this case without any indication that it was contemplating arbitration,” thereby prejudicing Krinsk by causing expense and delay.

While the right to compel arbitration is not automatically renewed upon an amended complaint, the 11th Circuit held that when the amendment “unexpectedly changes the scope or theory of the plaintiff’s claims” that right is renewed. The court concluded that SunTrust could not have predicted Krinsk would expand the potential class — nine months into litigation — from hundreds of members to tens of thousands of potential members.

Case: Krinsk v. SunTrust Banks, Inc.

Case no.: 10-11912

Appellant Lawyers: Mark L. Knutson and Jeffrey R. Krinsk, Finkelstein & Krinsk, San Diego; James A. Wardell, Wardell & Quezon, Tampa

Appellee Lawyer: David Stockton Hendrix, GrayRobinson, Tampa

3rd district court of appeal
Teacher awarded attorney’s fees in labor dispute

Unions serving as exclusive bargaining agents must equally represent non-union employees in proceedings with their employers.

The United Teachers of Dade refused to represent Shawn Beigthol, a non-union teacher, at a performance-review proceeding with his employer, the School District of Miami-Dade County.

The 3rd DCA agreed with a hearing officer and the Florida Public Employees Relations Commission that UTD’s refusal violated the Florida Public Relations Act. UTD’s disparate representation policy for members and non-members, as the exclusive bargaining agent, served “to create and perpetuate a system which requires employees to become UTD members to obtain a benefit.”

As a right-to-work state, it is unconstitutional to force Florida residents to join unions. And substantial competent evidence supported the hearing officer’s decision that UTD committed an unfair labor practice by creating and implementing the policy.

But the 3rd DCA held that the hearing officer should have awarded Beigthol attorney fees and costs because UTD knew, or should have known, its policy violated long-established case law.

Case: United Teachers of Dade v. School District of Miami-Dade County

Case no.: 3D11-163

Appellant Lawyer: Patricia Ireland, Phillips Richard & Rind, Miami

Appellee Lawyers: Milton L. Chappell and Erin E. Smith, National Right to Work Legal Defense Foundation, Springfield, Virginia; Robert Boyd, Sachs Sax Caplan, Tallahassee

4th District court of appeal
Homeowner’s association accounting methods woefully inadequate

The 4th DCA reversed a foreclosure judgment after determining that a homeowners association and its accounting methods were “woefully inadequate.”

Problems arose after Wellesley at Lake Clarke Shores Homeowners Association misapplied and miscalculated Leah Saar’s outstanding assessments. In turn, the HOA overstated the amount Saar owed in its demand letters, claim of lien and complaint.

The HOA’s claim of lien stated Saar owed $1,076.49 in assessments, late fees, interest and attorney fees. The trial court entered a judgment that reflected the amount purportedly due to the association with Saar’s payments deducted.

But the record showed that the HOA overstated the amount set forth in the claim of lien and complaint, and only interest and attorney fees were outstanding. The 3rd DCA reversed the trial court’s judgment because Saar did not receive sufficient notice of the HOA’s actual claims.

The court observed that had the HOA applied the amounts Saar had paid, the dispute would have been over an “inconsequential amount” and the attorneys could not, in good faith, have filed to foreclose.

Case: Saar v. Wellesley at Lake Clarke Shores Homeowners Association

Case no.: 4D09-3301

Appellant Lawyer: Richard W. Glenn, Law Office of Richard W. Glenn, Palm Beach Gardens

Appellee Lawyer: Laurie G. Manoff, Dicker Krivok & Stoloff, West Palm Beach

3rd District Court of appeal
Condo deposits require separate escrow accounts

A condominium developer should have placed the purchasers’ pre-construction deposits that exceeded 10 percent of the purchase prices in a separate escrow account.

Like many who entered such pre-construction purchase agreements during Florida’s real estate glory days, the plaintiff purchasers sought to recover their deposits from the defendant developer and escrow agent. The developer failed to comply with Florida Statute 718.202, which allowed them to do just that.

The 3rd DCA was the first among Florida’s appellate courts to consider Double AA International Investment v. Swire Pacific Holdings, an oft-cited federal district court opinion, which interpreted the provisions of the statute that govern how deposits are escrowed.

The developers argued that a 2010 amendment controlled retroactively, given the Legislature’s intent “to clarify existing law.” If it did, the developer would not have run afoul of the controversial language because it claimed to keep separate accounting records for the two varieties of deposits that were placed in a single account.

But the purchasers claimed that it was impossible for the legislature to clarify a law made 25 years earlier. And the purchasers pointed out that the amendment impaired — impermissibly — their vested contract rights.

The 3rd DCA adopted the decision in Double AA, reversing the trial court because the developer was required to place all payments up to 10 percent of the sale price in one escrow account, and place all additional deposits in a second escrow account. Merely maintaining separate accounting records for the intermingled deposits is not enough under the statute. The contracts were therefore voidable.

Case: CRC 603, LLC v. North Carillon, LLC

Case no.: 3D10-2230 & 3D10-2231

Appellant Lawyers: Lawrence R. Metsch, The Metsch Law Firm, Aventura; Joseph E. Altschul, Joseph E. Altschul LLC, Fort Lauderdale

Appellee Lawyers: Neil J. Berman, Berman Rennert Vogel & Mandler, Miami; Cary A. Lubetsky, Krinzman Huss & Lubetsky, Miami