3d DCA Watch -- The Not-So-Innocent, Elvis, and Judge Schwartz Edition

Hi kiddies, it's a chock-filled, action-packed 3d DCA Watch this week, so without further adieu let's jump right in and see what our resplendently robed coffee swillers to the south are up to:

Well, whaddaya know? In a single week the 3d decided to issue opinions on the enforceability of consumer arbitration clauses; the economic loss rule and fiduciary duty claims; and the standards for disqualification of a judge.

In other words, three of the most messed-up areas of 3d DCA jurisprudence -- and they're all repeats! Let's see how they did:

Hialeah Automotive v. Basulto:

We previously covered this consumer arbitration clause case here. (You may recall the ruling drove me to haikus to fully express my feelings.)

Well now the Court granted reconsideration and substituted this opinion, which in my view does not add too much. There is now some additional language regarding whether a clause in the Potamkin Dodge contract limits the right to obtain injunctive relief pursuant to FDUTPA, and also some interesting observations from Judge Cope regarding the need to establish both procedural and substantive unconscionability.

Punting on that question for now, Judge Cope writes:

Assuming arguendo that procedural unconscionability is required, that condition should be deemed to be satisfied where, as here, the arbitration clause is a non-negotiated provision contained in a pre-printed form.

Pssst -- don't tell Judge Shepherd about this language!

Hallock v. Holiday Isle:

Does anyone really understand the economic loss rule? And for now I'd like to restrict that question solely to our esteemed judiciary.

Hey, it's a joke! Tough crowd.....

This time a mystery contract was "exhumed" six years into the litigation. Question -- does that mean the fiduciary duty claim is in or out? Please keep your answer to 4000 words or less.

Here's what the 3d said:

Hallock cites our decision in Invo Florida, Inc. v. Somerset Venturer, Inc., 751 So. 2d 1263, 1266-67 (Fla. 3d DCA 2000), which quoted from Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999), stating that the economic loss rule “should not be invoked to bar well-established causes of actions in tort.” We then stated that “[b]reach of fiduciary duty is one of those well-established torts.” Invo Florida, 751 So. 2d at 1267. We concluded “that Moransais makes it clear that the economic loss rule has not abolished the cause of action for breach of fiduciary duty, even if there is an underlying oral or written contract.” Id.

Well that's pretty clear, right? Not so fast--

We further stated in Hallock I “that there is a genuine issue of material fact as to whether Holiday Isle breached its fiduciary duty to Hallock in opening a competing restaurant next door to Rip’s, the Steakhouse, and in diverting assets and employees from the partnership to the Steakhouse.” Id. at 463. The joint venture agreement expressly grants Tosun authority over the employees, where it states that “[a]ll personnel employed by the Venture shall be employees of Holiday Isle.” As the manager, Tosun was given the duty and authority to hire, place and supervise all employees. Likewise, Tosun had “full authority as to the conduct of the business.” This language is broad enough to encompass the moving of equipment and supplies. If Tosun cannot breach the agreement by moving equipment and reassigning employees, this conduct also cannot form the basis for a breach of fiduciary duty claim.

So the fiduciary duty cause of action exists, but cannot be pursued because the contract permits the complained-of conduct.

I hope that clears things up.

Clarendon v. Shogreen:

This PCA opinion is notable for three reasons -- 1) it involves the inestimable Susan Lerner; 2) the respondent's first name is ELVIS; and 3) it has a blistering Judge Schwartz dissent.

Here are the facts per the PCA opinion:

The petitioner seeks a writ of prohibition quashing both (1) a decision by three circuit judges of the circuit court appellate division who participated in a per curiam affirmance of a county court judgment against the petitioner, and (2) an order in which one of the three judges denied the petitioner’s motion to disqualify her. We deny the petition.

The county court judgment affirmed by the three-judge panel was for a personal injury protection claim for an amount of approximately $2400. One of the three appellate division panel members, years earlier and while in private practice, signed a county court small claims complaint (alleging damages between $100 and $500) against the petitioner. Her husband and then-partner in the small law firm sought sanctions against the petitioner and allegedly expressed an intention to put the petitioner out of business.

In the later case heard by the judge and her two circuit court colleagues, the petitioner did not learn which judges would comprise the appellate division panel until the day of argument on the appeal, but moved a few days later to disqualify that judge. Because the panel had already reached its decision to affirm the county court judgment, the circuit judge who was sought to be disqualified denied the motion to disqualify as moot. The petitioner sought prohibition here, and a prior panel of this Court quashed the order.

The panel seems to think that enough is enough:

We now deny that second petition. The litigants are headed toward the third anniversary of a county court case against an insurer for a claim of approximately $2400. Employing the standard of review for disqualification of an appellate judge, we deny the petition on the authority of Carlton. Even assuming the appellate judge’s spouse stated that he intended to “put Clarendon out of business,” a $2400 claim could hardly achieve this.

But Judge Schwartz disagrees:

In my judgment, the antagonism and antipathy of the judge and her ex-partner-spouse towards the petitioner, as demonstrated by the record, which included, among other things, a statement by her husband that as a result of Clarendon’s actions in defense of a suit brought by their law firm that “he intended to ‘put Clarendon out of business,’” makes it impossible to sustain that ruling. Hence, I would grant prohibition.

Wow! The judge isn't done -- Judge Schwartz then drops this bomb of a footnote:

The fact that an action being maintained by the judge’s law firm against Clarendon for several months was voluntarily dismissed, without explanation, on the very day argument was held in the appellate division of the circuit court surpasses all innocent explanation.

"Surpasses all innocent explanation" -- that's a new one on me.

Three gueses as to who he's referring to?