|North Florida Chapter News and Information|
|Chapter President's Letter|
|By Anna Shea, Senior Counsel Corporate Compliance, Privacy, Risk, & Information Security Counsel, Fidelity National Information Services, Inc.|
Dear Fellow ACC North Florida Members:
Our chapter had a terrific second quarter! We appreciate all of you continuing to support our chapter and are so thankful to each of the sponsors for their support, which continues the growth of our chapter. If you are interested in becoming a Board member, please contact me at firstname.lastname@example.org . We look forward to seeing you at our upcoming events!
President ACC North Florida Chapter
|Return to Top|
|Upcoming Events & Past Events Recap|
|By Alisha Pieraccini, ACC Board of Directors (Assistant General Counsel, Florida Blue)|
Past Chapter Event Recap:
On May 4, 2017, Nelson Mullins hosted a CLE presentation "Understanding the Growth of Alternative Legal Services" at the Ceremonial Court Room at the State Attorney Office. HUGE thank you to our sponsor for such a wonderful event!
Do you have pictures from a past event to include in the newsletter? Please send those to Anna.Shea@fisglobal.com.
Please be sure to check our Chapter page for additional information on upcoming events by clicking here.
Upcoming ACC National Events:
Mini MBA for In-House Counsel, September 12-14, 2017, Boston, MA - The ACC Annual Meeting offers the best value in corporate legal education. This two-and-a-half-day program introduces the important business skills you need to succeed in today's competitive environment. Explore the essential business skills to enhance and sharpen your management knowledge in critical MBA disciplines: accounting, finance, strategy, and organizational behavior. A capstone project at the end of the course will allow you to practice and apply your new skills. More info ...
Finance and Accounting for In-House Counsel, September 25-27, 2017, Boston, MA - This 2.5-day course will build that confidence by teaching the key terms, core tools, and practical techniques of finance and accounting. Collaborate with world-class faculty at the prestigious Boston University Questrom School of Business, as you learn alongside rising corporate counsel from industries and corporations worldwide. Strengthen your confidence in your organization: make accounting and finance your strength. More info ...
2017 ACC Annual Meeting, October 15-18, 2017, Washington, D.C. - The world's largest gathering of in-house counsel. Fulfill your annual CLE/CPD requirements and meet with thousands of your peers and legal services providers during three days of intensive programming on current legal issues. More info ...
|Return to Top|
|World Affairs Council - Upcoming Events|
|By Barbara Johnston, ACC Board of Directors (General Counsel, Regency Centers)|
Distinguished Voices / Global Issues Evenings - Save the date!
Tuesday, September 19
The New Global Economic Reality:
How North Korea and Terrorism Play Key Roles
Chairman of the U.S. Securities and Exchange Commission (2005-2009)
Tuesday, October 3
Shanghai, Mumbai, Dubai or Goodbye:
The Emerging World Revolution and What it Means for America
Senior Fellow, Johns Hopkins Foreign Policy Institute
Tuesday, November 14
The Global Outlook:
America, China and Beyond
U.S. Managing Editor, The Financial Times
Tuesday, February 27
The Future of Intelligence
General Michael Hayden
Former Director, NSA, CIA
Tuesday, April 10
A Presidential Look at Latin America and Mexico's Perspective on Hemispheric and Bilateral Relations
President of Mexico (2006-2012)
|Return to Top|
|ACC Mentoring Program Update|
|By Monique Brown (Deutsche Bank), Assistant VP ACC North Florida|
The Community Involvement Committee had a successful first year of its Mentoring Initiative. This program was created to increase the chapter’s impact in the community. In partnership with the Jacksonville Public Education Fund and William M. Raines High School, the committee served a group of 12 students consisting of high school juniors and seniors. These students were able to visit corporations around the city and be exposed to corporate careers, including those in legal. On Thursday, May 25, 2017, chairman of the committee, Monique Brown, presented the 8 graduating seniors with a scholarship on behalf of the chapter. All twelve of the students were presented with a plaque recognizing their participation during the program for the 2016 – 2017 school year.
|Return to Top|
|Welcome to our NEW ACC North Florida Members!|
|John Price, ACC Vice-President (Senior Counsel, Data Privacy, CenterPoint Energy)|
Brian Neal Whittaker - Attorney - Macquarie Group
Susan Novak - Legal Counsel - Regency Centers
Alexandria Vita Hill - General Counsel - Maple Street Biscuit Company
Christine Bell - Chief Operations Counsel - Acosta, Inc.
|Return to Top|
ACC North Florida Chapter is pleased to welcome our NEW Executive Director - Katharine B. Hartland!
|Welcome to Katharine Hartland - Our NEW Executive Director for the ACCNorth Florida Chapter|
Katharine B. Hartland is a Professor of Professional Skills at the Florida Coastal School of Law. She is the supervising attorney of the law school’s Business and Entrepreneurial Law Clinic, which she created and has directed since the fall of 2014. She also directs the school’s Summer in France Program in Clermont-Ferrand, France, a program she co-created in 2007. She speaks French fluently. In addition to running the clinic and the France program, Ms. Hartland has taught Contracts, Transactional Drafting, Lawyering Process, Legal Editing, and Florida Business Entities bar preparation courses. Ms. Hartland has presented lectures in teaching transactional drafting at various conferences for law professors, on ethics in transactional practice at the Jacksonville Bar Association Criser Transactional Seminar, and she frequently speaks on the topic of entrepreneurial law at Beaver Street Enterprises, Startup Jax, JaxCoe, SBA, SCORE, UNF Entrepreneurship course, and other events and resources partners for entrepreneurs in Jacksonville.
Prior to joining the law school faculty, Ms. Hartland worked as in-house counsel at Allstate where she drafted and negotiated corporate agreements and documents, managed litigation, assisted the claims and compliance departments with legal issues, and provided training to new agents in various legal topics. Before going in-house, Ms. Hartland worked in the corporate departments of LeBouef Lamb and McGuire Woods. She graduated from the University of Virginia in 1992 and the University of Florida College of Law in 1996. Ms. Hartland served as the Co-chair of the Transactional Law Section of the Jacksonville Bar Association from 2015-16, and served as the Chair of the Transactional Law Section from 2016-17. She also serves on the Board of Directors of the Jacksonville Community of Entrepreneurs. Ms. Hartland serves as Legal Counsel to the Friends of Hendricks, Inc., a not-for-profit corporation, and was recently named Executive Director to the Association of Corporate Counsel, North Florida Chapter.
|Return to Top|
|Thank you to our JALA Advanced Directives Night Volunteers|
We would like to thank the following attorneys for volunteering their assistance with the Jacksonville Area Legal Aid (“JALA”) Advanced Directives Night on June 22, 2017:
and Brian Goins
On the third Tuesday of each month, from June through November, we will be assisting JALA by providing advanced directive documents including a Durable Power of Attorney, Designation of Health Care Surrogate, Designation of Pre-need Guardian, and Living Will to clients of JALA. The ACC North Florida Chapter has committed to providing 3-5 attorneys each month to meet with clients and draft the four documents.
Thank you John, Lindsay, Slade, Kyle, George, and Brian for the generosity of your time and expertise with this important service!
|Return to Top|
|What Contractual Terms Really Matter Once a Lawsuit is Imminent: A Litigator’s Perspective|
|By: James O. Birr, III, Esq. (Jimerson & Cobb, P.A.)|
In many cases that end up in litigation, a contract is involved. Contracts that are clearly and concisely worded will save everyone lots of time and money should litigation ensue. Indeed, many legal battles are won or lost based on the terms of the operative contract. While every contract is different and each dispute nuanced, there are always certain contract provisions to consider when a lawsuit is brewing. These key contract provisions include: 1) prevailing party attorneys’ fees; 2) conditions precedent; 3) applicable law and venue; and 4) recoverable damages and limitations of liability.
I. Prevailing Party Attorneys’ Fees
Litigation can be expensive. Therefore, it is important to know whether a party can recover its attorneys’ fees if it prevails in litigation. In Florida, a party may only recover its attorneys’ fees if there is a statutory or contractual basis for doing so. Trytek v. Gale Industries, Inc., 3 So. 3d 1194, 1198 (Fla. 2009). Many contracts contain a prevailing party attorney’s fee provision that allows the party who prevails in the lawsuit to recover its attorneys’ fees from the non-prevailing party. Depending on the nature of the dispute and amount of damages at stake, a party with a strong case may still decide to forego litigation, if there is no ability to recover attorneys’ fees from the other party.
A carefully crafted contractual prevailing party attorneys’ fees provision should provide for: a) recovery of attorneys’ fees incurred in the underlying litigation; b) recovery of attorney’s fees in attempting to resolve the dispute prior to filing suit; c) recovery of attorneys’ fees incurred in determining the amount of attorneys’ fees to be awarded (once the prevailing party is determined); and d) recovery of attorneys’ fees incurred in any bankruptcy or appellate proceeding.
II. Conditions Precedent
The party seeking to enforce contractual terms bears the burden of proving it has satisfied all conditions precedent to perfect its claim. Griffin v. American General Life and Accident Insurance Co., 752 So. 2d 621, 623 (Fla. 2d DCA 1999). However, if a party refutes that all conditions precedent have been satisfied, that party will bear the burden of pleading and persuasion on that issue. Custer Medical Center v. United Auto Ins. Co., 62 So. 3d 1086, 1096 (Fla. 2010). Examples of contractual conditions precedent relate to: a) payment; b) submission of claims; c) default; d) termination; and e) dispute resolution. Failure to understand and comply with all conditions precedent can be the difference in winning and losing a lawsuit.
For example, many contracts require that, prior to litigation, parties must first mediate their disputes. Thus, simply filing a lawsuit, without first satisfying the condition precedent of mediation, will likely result in a court staying or possibly dismissing the prematurely filed lawsuit.
Another common contractual condition precedent involves notice of default. Many contracts require the non-defaulting party to provide notice and opportunity for the other party to cure its default. A party’s failure to follow the notice and opportunity to cure provision can result in an improper default, resulting in damages. Similarly, the defaulting party, who receives the default notice and fails to timely cure, may not be in a strong legal position should a lawsuit ensue. Therefore, it is critical, once a lawsuit is imminent, to make sure all applicable conditions precedent have been satisfied.
III. Choice of Law and Venue
Well drafted contracts articulate the law that will control the terms of the contract. These “choice of law” provisions allow parties to decide, on the front end, how the contract will be interpreted. When a contract is silent on the choice of law, parties will spend much time and money arguing to a court the law that should apply. Reviewing the contract’s choice of law provision before a lawsuit is filed allows the parties to better evaluate the potential outcome of any litigation.
Similarly, a party facing potential litigation must review the contact’s venue provision (locale where that lawsuit must be filed). These types of provisions require that a lawsuit must be filed in a specific court in a specific state or with an arbitration entity, such as the American Arbitration Association or JAMS. It is also important to understand whether the contractual venue provision is permissive or mandatory. If permissive, the parties may be able to litigate in a forum other than what is specified in the contract. If mandatory, the parties will be required to litigate only in the locale specified in the contract. Michaluk v. Credorax (USA), Inc., 164 So. 3d 719, 722 (Fla. 3d DCA 2015).
IV. Recoverable Damages and Limitations of Liability
Some contracts exclude or limit the types of damages a party may recover. When faced with a potential lawsuit, parties must understand and evaluate what they stand to lose or recover. In some instances, the contract may limit a party’s recovery of consequential damages (lost profits, loss of goodwill, or loss of reputation). In others, the contract may cap damages to a certain dollar amount, provide that a party may only look to certain real property for the recovery of its damages, and/or that a party cannot hold the individual employees or principals liable for damages.
For example, construction contracts may attempt to eliminate the liability of an individual design professional. In Florida, section 558.0035 of the Florida Statutes provides a mechanism for architectural and engineering firms to limit their individual design professional employees’ personal liability. As another example, some contracts will limit or even eliminate a party’s ability to recover damages for delays. Contracts may also limit damages to only those covered by a policy of insurance. All of these types of provisions warrant careful consideration when faced with the threat of litigation. After all, if you cannot recover much in the way of damages, there may be no point in litigating.
Another limitation of liability consideration involves indemnity. Many contracts contain indemnity provisions that require one party (indemnitor) to make good on any loss, damage or liability incurred by the other party (indemnitee) to the contract. Wendt v. La Costa Beach Resort Condominium Ass’n., Inc., 64 So. 3d 1228, 1230 (Fla. 2011). Sometimes contracts even require the indemnitor to defend, hold harmless and indemnify the indemnitee for the indemnitee’s own bad acts. Indemnity provisions that protect indemnitees against their own negligence can be valid, though they are disfavored. Federal Ins. Co. v. Western Waterproofing Co. of America, 500 So. 2d 162, 163 (Fla. 1st DCA 1986). Thus, in the context of potential litigation, it is important to understand whether you are the indemnitor or indemnitee for the claims.
From the outset of a business relationship, parties should know and understand the contract that governs their relationship. When a lawsuit is imminent, parties should review the above-referenced contract provisions in order to evaluate and strategize how best to handle the litigation.
James O. Birr, III (Joby) is an AV-Preeminent rated, board certified lawyer whose practice focuses on business litigation and construction law. Jimerson & Cobb, P.A. is an award winning law firm with a practice emphasis on litigation and specialized experience in the financial services, real estate development and construction, and manufacturing and distribution sectors. Jimerson & Cobb, P.A. has been named to the Jacksonville Business Journal’s 50 Fastest Growing Companies each year for the past four years, and in 2016 was honored as the 28th fastest growing law firm in the country. Mr. Birr’s online profile can be found here.
|Return to Top|
|An Overview of Free Internet Resources for Legal and Legislative Updates|
|By Charles B. Jimerson, Esq. (Jimerson & Cobb, P.A.)|
For an in-house
lawyer, I have to imagine that the move from private practice to a corporate
legal department can be a real culture shock when it comes to resources
available to stay abreast of legal developments. After all, the field of law is
continually in a state of transformation; laws can be amended or enacted and
slip right through the cracks before you have time to realize it affected your
company. Wouldn’t it be nice to have all the relevant legal and legislative
updates pertaining to your area of law bookmarked or sent right to your email
daily- all for free? The list below is a
jumping off point for in-house lawyers who wish to stay well-informed of the
evolution of the law on a limited (or non-existent) research budget.
Statutes, Case law and Court Documents
Legal Information Institute
(LII)- A non-profit dedicated to providing free and open access to legal
materials and housed through Cornell Law School. It offers access to federal
and state statutes, cases, U.C.C. materials, the CFR and other legal materials.
A free legal research website updated daily and containing millions of legal
opinions from federal and state courts. For courts that this site gets content from on
an ongoing basis, alerts can be set up so that an email is sent whenever there
is a new opinion matching the search query.
Scholar – This Google feature offers free searching for, and full text of,
published court opinions that can be filtered by jurisdiction. This feature
also offers text search of law review articles and secondary sources.
- This browseable and searchable database provides resources and links for both
state and federal codes and cases, as well as secondary sources. Further, it offers RSS court updates to which
one may subscribe to receive email alerts. FindLaw also provides blog blasts to
subscribers for different areas of the law, such as tax, business, and
Public Library of Law – From Fastcase,
this free legal research database offers all cases from the U.S. Supreme Court
and Courts of Appeal, cases from all 50 states back to 1997, federal statutory
law and codes from all 50 states, regulations, court rules, and, constitutions.
This site provides free access to a variety of legal information, including
cases law, statutes, regulations, articles, opinion summaries, a newsletter,
and limited access to Federal District Court dockets.
Publishing Office (FDsys) – This site provides access to official Federal
Government publications, including the U.S. Constitution, Code, Regulations,
Bills, Congressional Hearings, Committee Reports, and Congressional Debates.
Federal and Florida Legislative Updates
– This site offers access to a wide range of government documents and
information, including legislation, committee reports, and congressional
records. For updates on legislative
activity, sign up for email alerts to receive notifications for events such as
bills presented to the president, what is on the House or Senate floor today,
and posting of the latest blog from the Law Library of Congress blog.
– The free feature of this site offers individuals monitoring of their home
state legislature and the U.S. Congress.
For free, LegiScan provides individuals a personal monitoring list with
saved searches from the national legislative search engine, and also private RSS
feeds that send email alerts regarding certain bills placed on the individual’s
Watch – This site offers detailed legislative updates after the end of each
Florida legislative session, and provides these updates as it relates to a
number of different categories, including tax law, education, economic
development, and the environment. It
also provides blog posts relating to happenings within the Florida legislature.
– This site provides a free service of tracking legislation of particular
interest for updates, and offers free email alerts when something occurs
related to that legislation. Further, it
publishes the status of federal legislation, information about all
representatives and senators in Congress including voting records, and original
research on bills and votes. The sites
boasts that it “tracks the United States congress and helps Americans
participate in their national legislature.”
Free Full-Text Online Law Review/Journal Search – This free search engine
through the American Bar Association searches the full-text of over 400 online
law reviews and law journals, as well as document repositories holding academic
papers and related publications such as Congressional Research Service Reports.
Journal – This site offers legal news, law blogs, and a digital version of
the latest issue of the ABA journal.
Through its RSS feeds subscription, it emails the latest legal news
headlines and articles related to different legal topics, such as the business
of law, legal technology, and law in popular culture, every weekday morning.
Note that the Florida Bar also publishes The Florida Bar Journal, which
provides monthly articles pertaining to various issues affecting Florida
lawyers and their clients.
Review Commons – This site offers over 200,000 articles and over 300
open-access law reviews for free. The
search option allows you to search the text of all articles and journals on
Library of Congress Guide to Law
Online – This is a compilation of internet links, and a portal of internet
sources of interest to legal researchers.
While compiling the list, emphasis was put on providing sites that offer
the full text of laws, regulations, and court decisions.
Cornell Law Library Legal Search Engine
– This site is a legal search engine, searching the “legal internet,” and it
also provides research guides and blogs.
Fun and Informative Legal Blogs
This is a free internet service that partners with the top lawyers, law firms,
and other scholarly sources around the world to deliver legal updates and
analysis to its readers daily. The website
gives you the option to tailor their free a la carte services to any area of
law in any jurisdiction you wish. This database
features more than 80,000 authors and blogs.
Forum on Corporation Governance and Financial Regulation – This free blog
forum offers thousands of blogs on topics related to corporate law, including
boards of directors’ duties, mergers and acquisitions, accounting and
disclosures, and legislative and regulatory developments.
The FindLaw Corporate Counsel Blog
– Tailored specifically to the In-House lawyer, this site offers blogs written
and directed to the practice as corporate counsel. By subscribing, this site provides email
blasts with all of the latest blogs posted.
Solutions Blog - Corporation Counsel –Another blog tailored specifically to
the In-House lawyer, this blog offers articles, webinars, and other resources
for the corporate legal professional. By
subscribing, the site will provide email blasts with all of the latest blog
The internet has
quickly become an attorney’s best friend; the aforementioned services and
websites make life easier for a modern day lawyer. Staying plugged in with these free resources will
assist you in lessening your workload by cutting down on research time needed
to stay up-to-date of amended or newly enacted laws. Using what is already
available for free will undoubtedly keep the bean counters happy as well.
Charles B. Jimerson is an A-V rated, board certified lawyer whose practice focuses on business litigation, construction law, banking law and eminent domain law. Jimerson & Cobb, P.A. is an award winning lawfirm with a practice emphasis on litigation and specialized experience in the financial services, real estate development and construction, and manufacturing and distribution sectors. Jimerson & Cobb, P.A. has been named to the Jacksonville Business Journal’s 50 Fastest Growing Companies each year for the past four years, and in 2016 was honored as the 28th fastest growing company in the country. Mr. Jimerson’s online profile can be found at: http://www.jimersoncobb.com/attorneys/charles-b-jimerson/
|Return to Top|
|Drones: Commercial Use and Regulation|
|By Leslie A. Wickes, Esq. (Adams and Reese LLP)|
The commercial drone industry is exploding. According to a report released by PwC earlier this month, the global market for commercial drone use is estimated to increase from $2 billion currently to $127 billion by 2020. A drone is a type of unmanned aircraft system controlled by a remote pilot. Small drones under 55 pounds can now house powerful cameras, infrared sensors, thermal imaging, GPS trackers, mobile phone interceptors, facial recognition technology, and license plate readers. The commercial uses of drones range from consumer and supply chain delivery to inspection of disaster sites and difficult-to-reach assets, such as telecommunication towers and windmills. The primary concerns arising out of the use of drones are privacy and safety. Drones can interfere with aircraft, crash into property or people, be used to spy, stalk or harass, or simply be a nuisance.
The regulatory framework for drone use is evolving but still fragmented. The United States Government has exclusive jurisdiction over the country’s airspace. The Federal Aviation Administration is charged with regulating U.S. airspace and all aircraft. The FAA’s regulatory reach takes on a new dimension, however, when considering that a drone may hover outside your bedroom window. In the 1946 decision of United States v. Causby, the United States Supreme Court addressed a chicken farmer’s claim that the government planes taking off and landing as low as 83 feet over his farm caused the death of his chickens and constituted a “takings” under the Fifth Amendment. Though not defining a landowner’s right to airspace with specificity, the Court ruled for the farmer and held that the United States’ jurisdiction over aircraft was limited to navigable airspace – that “airspace above the minimum safe altitudes of flight”—at that time well over 83 feet. The Court reasoned that landowners have a right to prevent intrusion of the usable airspace above their private property. Other courts have assessed liability against drone operators for trespass and nuisance using similar reasoning.
Following Causby, navigable airspace was considered in most contexts to be 500 feet. But despite the Causby decision, the FAA’s official position is that it has the authority to regulate all airspace from the ground up. The FAA considers “any contrivance invented, used, or designed to navigate, or fly in, the air,” to be aircraft within its jurisdiction – including drones. As aircraft, the FAA requires that all drones that weigh more than 0.55 pounds and are operated outside be registered with the FAA and marked with a registration number. In 2012, Congress tasked the FAA with developing a comprehensive plan for the safe integration of drones into the national airspace system. The FAA has implemented regulations governing small commercial drone use, updated most recently in August 2016. The Small UAS Rule (Part 107), codified at 14 C.F.R. Part 107, permits the commercial use of drones that weigh over 0.55 pounds and less than 55 pounds without any advance authorization, as long as the drone:
- does not fly above 400 feet;
- either flies in Class G airspace or flies with permission of air traffic control;
- does not fly at a speed above 100 miles per hour;
- is operated by a person with the required FAA certificate after preflight inspection;
- operates during the daytime;
- is flown while in the visual line of sight of the operator;
- yields to manned aircraft;
- is not flown from a moving vehicle; and
- weighs less than 55 pounds including any external cargo.
A drone operator may request a waiver from the operating restrictions in the Small UAS Rule. The request must describe the relief sought and explain why the exemption would not harm public safety. A waiver request should be submitted at least 90 days in advance of the planned flight. Over 900 waivers have been granted. Approved waivers can be viewed here
Operators of drones weighing over 55 pounds, and thus outside the Small UAS Rule, must petition the FAA for permission to operate the drone without obtaining the airworthiness certificate and registration ordinarily required to operate an aircraft. The petition is filed under Section 333 of the Federal Modernization and Reform Act of 2012 (FMRA). The FMRA grants the Secretary of Transportation the authority to determine whether an airworthiness certificate is required for a drone to operate safely. The petition must provide supporting information about the design and characteristics of the drone to be used, the qualifications of the personnel who will operate it and the intended manner and area of use. Exemptions have been granted to companies in a variety of industries, including construction, forestry, oil & gas, search and rescue, railroad, agriculture, insurance, news media, telecommunications and real estate. As of yet, no waivers or exemptions have permitted commercial delivery of packages beyond the visual line of sight of the operator.
While the FAA’s rules are designed to address safety, the FAA advises the rules are not intended to address privacy concerns, as such concerns are beyond its charge and better addressed by the individual states. Congress may not necessarily agree. On March 15, 2017, Senator Ed Markey, D-Mass, introduced the Drone Privacy and Transparency Act of 2017. Senator Markey expressed concern about a potential situation in which drones could gather, through facial recognition, the identities of persons shopping at particular stores to sell to advertisers or gather the license plate numbers of vehicles at a health clinic and sell that information to a health insurer. His proposed Act would require that every commercial user of a drone disclose to the FAA detailed information about each flight – where, when, purpose, and whether information will be collected, sold or otherwise used. The Act has not passed, but it raises interesting issues regarding ownership of data collected by drones.
State and local governments are not waiting on Congress to address privacy issues. More than 20 states have passed legislation governing drone use, focused on privacy, property rights and use of drones by law enforcement. A number of states have also enacted legislation limiting the operation of drones near critical infrastructure, such as power plants. The scope of federal preemption remains unclear. Even in the absence of legislation, the common law of trespass, nuisance, negligence and invasion of privacy are likely avenues for landowners or others who contend they have been aggrieved by drones.
For businesses considering the use of drones, economic and compliance considerations will inform whether to own and operate the drones or engage a third party drone service. In either event, it will be necessary to revisit liability, property, worker compensation, privacy and cybersecurity insurance coverages to ensure new risks are addressed adequately.
Further, businesses should anticipate substantial activity as legislators in the U.S. and abroad work through issues raised by advanced drone technology. In the meantime, global research and development continues. Amazon recently announced a new research branch outside Paris, focused upon development of an air traffic control system for low altitude flight, to prevent in-flight collisions between drones and buildings, trees, antennas and the nemesis of the aviation industry – those “non-collaborative flying objects,” otherwise known as birds.
Leslie A. Wickes, Esq.
Leslie A. Wickes
serves as Special Counsel and Partner-in-Charge of the Jacksonville Office at Adams and Reese LLP. Her practice focuses on contracting, regulatory and litigation matters, particularly in the industries of insurance, advertising and technology.
|Return to Top|
|Potential Risks and Liabilities Faced by Mortgage Lenders in Today’s Condominium Market in Florida|
From the late 1990s until the end of 2007, Florida experienced a spectacular residential condominium boom--adding tens of thousands of units to the market. The expansion was widespread throughout state, and at the height of the expansion, a proposed project with several hundred units would sell out in one day. Numerous buyers became "flippers" who had no intention of closing on their unit, but rather expected to assign their contract for a significant profit over their original contract price. As the full effects of the financial crises were felt in 2008, the residential condominium market was devastated. Unit values at many projects had lost half or more of their pre-construction value. Even the most experienced developers were pushed to the limit and forced to hand-over their projects to their construction lenders. Many projects were subject to significant litigation between unit purchasers and developers and lenders. Pre-construction purchasers were desperately looking to void upside down contracts and receive a return of their deposit. Attorneys specializing in these types of plaintiffs cases began to appear and suits were filed and litigated by the thousands.
|By Melissa Turra, Esq. and Ilana Strickon, Esq. (Holland & Knight LLP)|
By 2012, the residential condominium market throughout the state had begun to stabilize, and in some markets, particularly South Florida, many luxury units were trading at prices in excess of the pre-construction pricing from the last cycle. At some projects, lenders taking back the projects actually made a profit (over and above full repayment of the loan) after selling out the remaining inventory. With the market stabilizing and a continuing influx of foreign capital, new projects have been built or are under construction throughout Florida’s core markets; however many developers have had to innovate and modify the traditional capital structure of a condominium project.
Escrow Deposit Structure and Developer Remedies During Prior Cycle
During the prior cycle, most developer purchase contracts required purchasers to make deposits in the range of 20% of the purchase price (with 10% of the purchase price typically remaining in escrow during the term of the contract) and contained a liquidated damages clause that allowed the developer to retain some or all of the buyer's deposit as liquidated damages. Under Florida law, courts will generally uphold liquidated damages clauses up to 30-35% of the purchase price. Any liquidated damages clause that exceeds this percentage threshold is at risk of being found unconscionable by a Florida court; and therefore, an unenforceable liquidated damages penalty. As such, purchase contracts for projects that were not registered under the Interstate Land Sales Full Disclosure Act (“ILSA”) provided that upon the buyer's failure to perform the developer was entitled to retain the buyer's 20% deposit as agreed upon liquidated damages, and purchase contracts for projects registered under ILSA provided that upon buyer’s failure to perform the developer was entitled to retain 15% of the purchase price (thus the developer kept 15% of the purchase price and then returned the remaining 5% to the buyer). Since that time, condominiums have become exempt from registration under ILSA, so the rationale for the 15%-20% distinction in liquidated damages amount is no longer relevant. Facing the forfeiture of their deposits, thousands of unit purchasers alleged defenses to their obligation to close under their purchase contracts. While some purchasers were successful, the majority were not. In some cases, these disputes were settled with negotiated settlement agreements--often involving price reductions and other incentives in exchange for the buyer closing.
Escrow Deposit Structure and Developer Remedies During Current Cycle
As money for new projects became increasingly difficult to obtain, condominium developers turned to other countries for inspiration in structuring new deals. As an alternative to traditional bank financing developers have adopted a structure familiar to Latin Americans, in which purchasers of these new units are required to make deposits ranging from 30% to 80% of the purchase price. Deposits typically must be made in stages based upon the status of completion of the project, such as ground-breaking, topping off, and completion of the building enclosures. The higher deposit requirements help ensure that purchasers close on their units. If purchasers are able to finance 50% of the purchase price at closing, buyers are not required to infuse additional equity to close on a unit.
Another significant change that has occurred since the last cycle with respect to many purchase agreements is that many developers have opted to provide for a method to calculate actual damages (as opposed to liquidated damages) in the event that a purchaser defaults using a damage determination methodology. The damage determination methodology factors in the resale price of the unit, brokerage and marketing expenses, interest on any unfunded deposits and interest on the purchase price following issuance of the temporary certificate of occupancy for the project. The actual damages, versus liquidated damages, approach is driven by the increased deposit structure and the courts’ position in Florida that liquidated damages provisions above 30-35% are typically unenforceable. A potential benefit to the actual damages calculation is that developers may be able to prove and retain actual damages in excess of 30-35%. Because buyers are less likely under this new model to walk away from a unit and more likely to seek a return of their deposit, a meltdown scenario would be more likely to involve prolonged litigation between developers and purchasers. It also places developers at risk of having to return some or even potentially a significant portion of the deposit if they are not able to prove their actual damages meet or exceed the deposit amounts.
Construction Financing by Mortgage Lenders Continues in Current Cycle
While a significant portion of a condominium project’s capital structure is supplied by the deposits made by unit purchasers, many developers nevertheless require supplemental financing secured by a mortgage lien on the condominium property. Under this structure, lenders are likely required to lend a smaller percentage of the overall capital required to complete a condominium project; however because of the greater risk of purchasers litigating over deposits in the event of a distressed project, lenders must also be wary of purchaser rights and potential lender liabilities in such instance.
Considerations with Respect to Escrow Deposits
In connection with a foreclosure or deed in lieu, a purchaser would generally not have recourse against the mortgage lender for any portion of the escrow deposit that was released from escrow, absent some type of fraud or bad faith on the lender’s part. The purchaser would be entitled to any portion of the deposit remaining in escrow, but would otherwise be required to seek relief against the developer/seller, not the lender. In order to solidify this position, the mortgage lender must take precautions to ensure that the unit purchaser does have an equitable lien that is potentially superior to the lender’s mortgage lien. Lenders must require their developer borrowers to include in each unit purchase agreement (i) an express subordination by the unit purchaser in favor of the lender’s mortgage lien and (ii) an express waiver of any equitable lien that a unit purchaser might otherwise be entitled to pursue. While Florida law generally recognizes the existence of an equitable lien in favor of a contract purchaser, there is a general body of case law that provides statutory and equitable liens may be waived by an unambiguous agreement of the parties. The United States District Court in the South District of Florida addressed the issue of a waiver of equitable liens by purchasers in an action brought by plaintiffs alleging, among other things, a declaration of a vendee lien (equitable lien) on the property to secure repayment of sums paid to the seller. The purchase contract at issue in this case included a waiver of liens. The court held that "there is no evidence of an intent to create a lien on the property. Rather, the Purchase Agreement expressly provides that Plaintiffs acknowledge they “have not acquired any right, title interest or lien right to the Property prior to Closing and agree not to file a lis pendens, claim of lien or any other document concerning any dispute” arising out of the Agreement. Accordingly, there cannot be an equitable lien arising out of the contract and there is no basis for a lien based in equity." Parra v. Minto Town Park, LLC, 2008 WL 4773272 (S.D. Fla 2008). While Florida courts have traditionally upheld a unit purchaser’s waiver of an equitable lien and subordination clauses, those cases have typically only involved deposits of 30% or less. It is uncertain whether the courts will reach the same outcome in cases that involve unit purchasers in this cycle, who in some instances have paid 70-80% of the purchase price before the developer defaults.
So long as the mortgage lien is deemed senior to unit purchasers, as has been upheld in the last cycle, then unless the mortgage lender takes an assignment of the unit purchase agreements or otherwise assumes obligations under the unit purchase agreements, then a unit purchaser would generally not have recourse against the lender for any portion of the escrow deposit that was released from escrow, absent some type of fraud or bad faith on the lender’s part. The buyer would be entitled to any portion of the deposit remaining in escrow, but would otherwise be required to seek relief against the developer, not the lender.
However, to the extent that the mortgage lender assumes the developer’s obligations under the purchase agreements, the lender would have a duty to perform under the purchase agreement, either by constructing and delivering the unit described in the purchase agreement or returning the unit purchaser’s deposit to the extent the lender elected to not perform under an agreement that it assumed. Accordingly, the lender should not assume any unit purchase agreements unless it intends to complete construction of the units and deliver the units under contract.
Considerations With Respect to Lender Liabilities Under the Florida Condominium Act
In the event of a distressed or failing project in which the condominium regime has not been legally created by recording the declaration of condominium, the lender would have a choice, at the time it takes title to the project (through foreclosure or deed-in-lieu), as to whether to proceed with creating the condominium regime. If the lender chose to proceed with recording the declaration, then the lender would be obligated under the Florida Condominium Act (the “Act”) to become the developer of the condominium and would assume all liabilities as the original developer including statutory construction defect liabilities under Section 718.203, Florida Statutes. The lender could instead elect to not record the declaration of condominium and to not proceed with the creation of the condominium regime. This would allow the lender to avoid any developer liabilities under the Act. If instead the declaration of condominium has been recorded (and therefore the condominium regime legally created) at the time the lender takes title to the distressed project, the lender would have a choice to either (i) terminate the condominium pursuant to the technical termination requirements of the Act or (ii) assume rights and obligations under the Act as either a “successor developer”, “bulk buyer” or “bulk assignee.”
Prior to 2010, any lender who took title to more than seven units in a Florida condominium regime became a successor developer as a matter of law, and assumed all obligations and liabilities of the original developer. In 2010, the Florida legislature enacted the Distressed Condominium Relief Act (Section 718.700 et. seq, Florida Statutes) in response to the massive downturn in the condominium market and the reluctance of foreclosing lenders to become subject to the accompanying liabilities of the original developer. Accordingly, a lender is no longer deemed to be a successor developer under the Act (or burdened by such liabilities) so long as (i) the lender receives an assignment of rights from the developer that complies with the Distressed Condominium Relief Act and designates the lender as either a bulk assignee or bulk buyer and (ii) the lender does not exceed the authority granted to it in such assignment. These statutory protections inure to the benefit of the mortgage lender and protect the mortgage lender from construction defect liability for work done prior to the lender taking title and other potential liabilities relating to the developer’s failure to properly fund assessments and/or its failure to properly resolve budgetary deficits. Accordingly, as part of the construction loan process, mortgage lenders should require a collateral assignment of developer rights assuring that the mortgage lender will qualify as a bulk buyer or bulk assignee in the event the lender ultimately takes title to a distressed condominium project.
and Ilana Strickon
, partners of the law firm of Holland & Knight LLP, represent condominium developers and construction lenders in connection with complex condominium projects throughout the State of Florida.
|Return to Top|
|Pursuing Diversity While Avoiding the Reverse-Discrimination Trap|
|By Scott S. Cairns and Cameron G. Kynes (McGuireWoods LLP)|
Does your company seek to promote
diversity in the workplace? Are you concerned about the lack of minorities or
women in senior management? If so, do you know how to draw the line between
lawful efforts that increase minority representation and unlawful reverse
discrimination? This article will explain where the law currently draws that
line and then provide practical guidelines to help your company stay on the
right side of it.
Diversity Initiatives v.
Affirmative Action Plans
To understand the legal landscape,
it’s important to first distinguish between diversity promotion efforts and
affirmative action plans. Diversity promotion efforts are voluntarily enacted
initiatives meant to provide specific, tangible business benefits, with the
change in the composition of the workforce merely a by-product of the process.
Some employers embrace such efforts so that their employees better reflect the
customers they serve. Others do so for the boost to creative problem solving
that can come from having a variety of perspectives. Whatever the reason, most
large employers have now put in place some form of diversity initiative.
By contrast, affirmative action
plans are remedial in nature and are often imposed involuntarily. They set out
an employer's strategy to proactively recruit, hire, and promote women,
minorities, disabled individuals, or veterans. Such plans are required of
federal contractors with 50 or more employees and contracts above $50,000. Courts
may also impose them to correct racial or gender imbalances in an employer’s
workforce. Employers may adopt such plans voluntarily, but generally only where
the employer is seeking to remedy past patterns of discrimination.
The Legal Landscape
Title VII is the federal law that
makes it an “unlawful employment practice” for any employer to discriminate
against employees “because of such individual's race, color, religion, sex, or
It applies equally to individuals in minority groups and those in the majority.
Reverse discrimination is most commonly understood to mean discrimination
against an individual due to membership in a majority group. And it’s through
reverse-discrimination cases that the legal boundaries of diversity promotion
efforts and affirmative action plans by private-sector employers have been
The cases generally fall into two
categories. On the one hand, there are cases where employers have policies that
consider race or gender in employment decisions to achieve numerical results. To
justify the consideration of minority status in employment decisions, the
employer must meet the high bar set in United
Steelworkers of America v. Weber and later affirmed in Johnson v. Transportation Agency. These cases hold that an
employment decision based on an applicant’s race or gender can only be
justified to “eliminate manifest imbalances in traditionally-segregated job
or where the employer has “a strong basis in evidence” to
believe its selection procedures would otherwise favor non-minorities. A recent
analysis of 44 reverse-discrimination cases found that the vast majority of
cases favorable to employees involved policies and practices subject to the Weber / Johnson standard.
On the other hand, there are
cases where employers have policies that involve efforts to increase
recruitment of diverse candidates or training of diverse employees. In these
cases, the employer’s actions are generally analyzed according to the less
stringent McDonnell Douglas
burden-shifting framework. Under that framework, the employee must first
establish a prima facie case of discrimination. The burden then shifts to the
employer, who must offer some legitimate, nondiscriminatory reason for the
challenged employment action. If this is met, the burden shifts back to the
employee to show that the reason articulated by the employer is a mere pretext
for unlawful discrimination.
The existence of an affirmative
action plan or diversity initiative may be used by employees to establish a
prima facie case. For example, a federal court denied summary judgment for FedEx
in a case brought by a white male former employee because it found that, among
other things, FedEx’s federally mandated affirmative action plan and diversity
initiatives suggested it favored minority groups. However, so long as employers’
efforts are focused on recruitment and training rather than hiring, the
employer will usually have an independent nondiscriminatory reason for the
challenged employment action. Under the McDonnell
Douglas framework, this negates the employee’s prima facie case. In the
same analysis of reverse-discrimination cases discussed above, it was found
that the vast majority of cases favorable to employers involved challenges to
diversity plans analyzed under the McDonnell
The Practical Guidelines
1. Focus on Recruiting, Not Hiring
Increasing the number of
qualified, diverse candidates who know about and apply for job openings is one
of the most effective ways to increase overall workforce diversity. It’s also
one of the least risky. Whether these efforts are part of an affirmative action
plan or a diversity initiative, courts apply much less scrutiny to recruiting
activities than they do to efforts that affect ultimate employment decisions. If
litigation arises, employers focused on recruiting efforts will likely avoid
the stringent Weber / Johnson
2. Don’t Impose Quotas
Efforts to promote diversity
should not include quotas or positions specifically set aside for minorities. While
aspirational diversity goals are permissible, mandated diversity quotas
generally are not. Even affirmative action plans required of federal
contractors expressly forbid quotas. To
avoid any misunderstanding, it’s important to clearly communicate this point to
managers and recruiters. And if diversity efforts are a factor in evaluating
performance for managers and recruiters, that performance should not be tied to
specific numerical targets.
3. Affinity Groups Do Not Increase Legal
Affinity groups can provide
valuable support to employees from diverse backgrounds in the workplace, and
they generally will not subject an employer to increased exposure to Title VII
liability. However, affinity groups based on race or gender should not provide
resources tied to employment opportunities or serve as a direct pathway to
4. Avoid Using Minority Status as a
The best defense to a
discrimination claim is evidence of a legitimate, nondiscriminatory reason for
the challenged employment action. In the hiring context, that means picking the
best candidate, regardless of race or gender. Courts are unlikely to
second-guess employment decisions based on identifiable differences between the
credentials of two candidates. As such, to avoid exposure to Title VII
liability, employers should avoid using minority status as a tiebreaker in
employment decisions. However, courts have suggested that policies allowing
minority status to be used as a tiebreaker may be permissible in the rare case
where two candidates are virtually indistinguishable on other grounds.
5. Be Careful About Internal Diversity
concerned about lack of diversity may be inclined to start their remedial process
by doing an internal workforce analysis to determine whether their workforce
has a statistically significant gender or racial imbalance. Unless conducted
under circumstances that would make such analyses protected by the
attorney-client privilege, they likely will be discoverable should the employer
be sued for discrimination. Courts have generally rejected the “critical self-analysis”
* * *
Of course, there is no single
formula for lawfully creating a more diverse and inclusive workforce. But any
company’s diversity initiatives and practices should abide by these general
|Return to Top|
|The State of Legal Protections for LGBTQ Employees|
|By: Kimberly Doud (Littler Mendelson P.C.)|
LGBTQ rights in the workplace and
employers’ corresponding obligations became more defined through three federal court
rulings this spring.
now, many courts have dismissed lawsuits alleging sexual orientation discrimination
under Title VII of the Civil Rights Act of 1964, a federal law proscribing employment
discrimination against an individual because of, among other things, his or her
example, on March 10, 2017, a three-judge panel of the U.S. Court of Appeals
for the Eleventh Circuit, which handles federal appeals in Florida, Georgia and
Alabama, held Title VII does not prohibit sexual orientation discrimination – a
ruling in step with many other federal appellate courts. InEvans v. Georgia Regional Hospital, Ms.
Jameka Evans, a lesbian who worked as a hospital security guard until her
resignation, alleged she was discriminated against because of her sex, sexual
orientation and gender nonconformity. Ms. Evans alleged it was “‘evident’ that
she identified with the male gender, because of how she presented herself –
‘(male uniform, low male haircut, shoes, etc.’).” She also alleged she was
targeted because she failed to “carry herself in a ‘traditional woman[ly]
manner.’” Upon a sua sponte review of the complaint, the magistrate judge recommended
the lawsuit be dismissed because Title VII does not prohibit sexual orientation
discrimination and the gender nonconformity claim was “just another way to
claim” sexual orientation discrimination. The district court, over Ms. Evans’s
objection and without further comment, adopted the recommendation and dismissed
Evans appealed. Although the Eleventh Circuit ruled the alleged gender
nonconformity discrimination was a viable claim under Title VII (and remanded
the case so Ms. Evans could amend her complaint to state the claim properly),
the court affirmed the dismissal of Ms. Evans’s sexual orientation
discrimination claim. The Eleventh Circuit disagreed with the position that
U.S. Supreme Court decisions allowing same-sex and gender nonconformity
discrimination under Title VII support sexual orientation claims. Instead, the
court opined, without a contrary en banc
ruling or U.S. Supreme Court precedent, it could not ignore binding precedent that
sexual orientation discrimination is not actionable under Title VII.
on April 4, 2017, the U.S. Court of Appeals for the Seventh Circuit, which
handles federal appeals in Illinois, Indiana and Wisconsin, declined to follow
the Eleventh Circuit and other federal courts, becoming the first federal
appellate court to hold sexual orientation discrimination is actionable under
Title VII as a form of sex discrimination. InHively v. Ivy Tech Community College of
Indiana, Ms. Kimberly Hively, a part-time adjunct professor, alleged she
was discriminated against based on her sexual orientation. Ms. Hively alleged
she was denied full-time employment and her part-time contract was not renewed because
she was openly lesbian. The community college moved to dismiss Ms. Hively’s
claims because sexual orientation is not protected under Title VII. The
district court agreed and dismissed the lawsuit.
Hively appealed. Initially, the Seventh Circuit panel, bound by legal
precedent, affirmed the dismissal. However, a majority of the Seventh Circuit judges
voted to rehear the case en banc. Recognizing it was beyond the court’s power to
rewrite Title VII to include a new protected category, the Seventh Circuit
instead evaluated “whether actions taken on the basis of sexual orientation are
a subset of actions taken on the basis of sex.” Analyzing the issue under both
comparative and associational theories, the court concluded they are. In
deciding only the issue before them, the Seventh Circuit overruled its previous
precedent and held “a person who alleges that she experienced employment discrimination
on the basis of her sexual orientation has put forth a case of sex
discrimination for Title VII purposes.” The Seventh Circuit reversed the
district court’s dismissal of the complaint and remanded the case for further
U.S. Supreme Court has not decided whether Title VII prohibits sexual
orientation discrimination as part of the law’s prohibition against sex
discrimination. While the conflict between Evans
and Hively creates a circuit court
split and sets the stage for possible U.S. Supreme Court resolution on this
issue, it also causes some uncertainty going forward. Regardless, state and
local laws in many jurisdictions already prohibit sexual orientation
discrimination. Resolution of the circuit court split likely will not impact
employment policies and procedures in those areas.
does not have a state law prohibiting sexual orientation discrimination in
employment. However, several Florida local governments have enacted
anti-discrimination ordinances that protect against sexual orientation discrimination.
As the law continues to evolve on legal protections afforded LGBT employees, Florida
employers should review their policies to ensure compliance with local
addition to the evolving state of Title VII sexual orientation discrimination
claims, over time employers may also face new challenges regarding the rights
of transgender employees under the Americans with Disabilities Act of 1990, as
amended. Title I of the ADA generally prohibits employment discrimination
against a qualified individual with a disability.
The ADA defines “disability” as a physical or mental impairment that
substantially limits one or more major life activities, as well as a record of
or being regarded as having such impairment. However,
the term “disability” specifically excludes “gender identity disorders not
resulting from physical impairments.” As
a result, historically, gender dysphoria has been specifically excluded from
the ADA’s protections.
on May 18, 2017, the U.S. District Court for the Eastern District of
Pennsylvania denied an employer’s motion to dismiss ADA claims based on gender
dysphoria. InBlatt v. Cabela’s Retail, Inc., Kate
Lynn Blatt, a transgender employee, alleged she was discriminated against, in
part, because of her gender dysphoria in violation of the ADA. The employer
moved to dismiss Ms. Blatt’s ADA claims and argued gender dysphoria was
excluded from the ADA’s scope. The district court disagreed. In doing so, the
court interpreted the ADA’s exclusions narrowly and noted, “Congress was
careful to distinguish between excluding certain sexual identities from the
ADA’s definition, on the one hand, and not excluding disabling conditions that
persons of those identities might have, on the other hand.” Because the court
found Ms. Blatt’s gender dysphoria to be a disabling condition, the court
denied dismissal. For now, the effect of this ruling varies significantly
depending on jurisdiction and specific circumstances. Even employers not bound by Blatt should recognize a possible trend
expanding cognizable ADA claims and engage in the interactive process with
employees requesting accommodations for gender dysphoria.
|Return to Top|