The Week in Torts – Cases From the Week of September 3, 2021
Is She Too Important to be Deposed?
FLORIDA LAW WEEKLY
VOLUME 46, NUMBER 35
CASES FROM THE WEEK SEPTEMBER 3, 2021
NEW SUBSECTION TO RULE 1.280
IN RE: AMENDMENT TO RULE OF CIVIL PROCEDURE 1.280, 46 Fla. L. Weekly S241 (Fla. August 26, 2021):
The Florida Supreme Court on its own, addressed Rule 1.280 and the “Apex Doctrine,” which protects high-level corporate officers from the risk of abusive discovery, while still honoring the opposing litigants’ right to depose such persons if necessary. The doctrine as it has developed in common law in Florida has only protected high-level governmental officials, and the Court decided on its own motion to amend those rules to codify the Doctrine and apply its protections to private executives.
The rule change comes after Suzuki Motor Corp. v. Winckler, 284 So.3d 1107 (Fla. 1st DCA 2019) where the dissenting judge opined that the Doctrine should apply (and that the law has done so) in both the private executive AND governmental context.
Noting that efficiency and the anti-harassment principles which animate the doctrine are equally compelling in the private sphere, the Court ruled that the doctrine does not create a blanket prohibition on taking depositions of high-ranking corporate officials. Instead, the point of the doctrine is to balance the competing goals of limiting potential discovery abuse, with the desire to ensure litigants access to necessary information.
Properly applied, the doctrine prevents undue harassment and oppression of high-level officials, while still providing a party with several less intrusive mechanisms to obtain the necessary discovery. It allows the possibility of conducting the high-level deposition if warranted.
Under the rule, the person or party resisting the deposition has two burdens: (1) a burden to persuade the court that the would-be deponent meets the high-level officer requirement; and (2) the burden to produce an affidavit or declaration explaining the official’s lack of unique personal knowledge of the issues being litigated.
If the resisting person or party satisfies those burdens, and the deposition seeker still wants to depose the high-level officer, the deposition seeker bears the burden of persuading the court that it has exhausted other discovery, that such discovery is inadequate, and that the officer has unique personal knowledge of discoverable information. This application is consistent with how the Apex Doctrine is applied in the governmental context.
New Rule 1.20(h) is an alternative to Rule 1.280(c) for use in the limited context of depositions of high-level government and corporate officers. The new rule is not governed by the good cause standard of Rule 1.280(c), and imposes burdens of production and persuasion that are distinct from the burdens that play in Rule 1.280(c).
Government and corporate officials who cannot meet the new rule requirements or who choose not to try to, remain free to seek relief under Rule 1.280(c).
Justice LaBarga rejected the Supreme Court’s amendment made on its own motion, finding that the majority abandoned Florida’s longstanding refusal to afford special discovery protection to top-level corporate decision-makers.
While the rule becomes effective immediately, the Supreme Court gave interested persons 75-days from the date of the opinion to file comments (since the Court never published the proposed amendment or allowed for comments).
REMITTITURS AND ADDITURS AMENDED TO POST-TRIAL MOTION TOLLING PROVISIONS
IN RE: AMENDMENT TO FLORIDA RULE OF APPELLATE PROCEDURE 9.020, 46 Fla. L. Weekly S244 (Fla. September 2, 2021):
The court amended Florida Rule of Appellate Procedure 9.020 to include remittiturs and additurs, in an effort to clarify that timely authorized motions for remittitur or additur also toll rendition of the final judgment, just like the motion for new trial does.
ARBITRATION CLAUSE IN NURSING HOME ADMISSION AGREEMENT UPHELD DESPITE ARGUMENT ABOUT IT BEING “COST-PROHIBITIVE,” ABSENT PROOF OF PROCEDURAL UNCONSCIONABILITY THE ARGUMENT FAILED (THE COURT CERTIFIED CONFLICT) – AGREEMENT NOT VOID AS A MATTER OF PUBLIC POLICY WHERE THE ELIMINATION OF THE PLAINTIFF’S STATUTORY REMEDIES WAS BASED ON CIRCUMSTANCES OUTSIDE OF THE AGREEMENT
Wick v. Orange Park Mgt, 46 Fla. L. Weekly D1905 (Fla. 1st DCA August 23, 2021):
After the plaintiff’s mother died in a nursing home, she sued alleging negligence, wrongful death, and violation of the nursing home residence statutory bill of rights. The defendants moved to compel arbitration. The plaintiff opposed the motion arguing that the cost of arbitration was so expensive that it rendered the arbitration clause invalid, further arguing that it was void as a matter of public policy.
The plaintiff appealed the trial court’s order compelling arbitration, asserting the trial court erred in (1) concluding that prohibitive cost was not a stand-alone defense to arbitration; (2) that the agreement was not void as a matter of public policy; and (3) that requiring the plaintiff to arbitrate with persons who are not parties to the arbitration agreement was erroneous.
As an initial note, interestingly, the admission agreement actually contained an “optional” arbitration clause, which allowed the signatories to mark an X to void the clause (that was not done).
To answer whether the arbitration clause was valid in and of itself, the trial court had to consider contract defenses such as fraud, duress, or unconscionability. The plaintiff argued that the agreement was invalid because five years after the parties executed it, the cost of arbitration was too prohibitively expensive to prosecute the claims. The trial court inferred the plaintiff’s argument as one seeking to invalidate the arbitration agreement on grounds of unconscionability. Applying the traditional test for unconscionability, the trial court concluded that the plaintiff had the burden to prove both procedural and substantive unconscionability.
The plaintiff asserted she did not have to show procedural unconscionability because the cost of arbitration was a stand-alone defense and void as a matter of public policy.
The court agreed that the prohibitive cost of arbitration may invalidate an arbitration agreement when the cost prevents a party from effectively vindicating her statutory rights under Federal law. However, while the Supreme Court has recognized the effective vindication exception, it has repeatedly declined to apply it to invalidate agreements. The defense has also not been extended to claims arising under state law.
The Second and Fifth Districts have held that prohibitive cost is a stand-alone defense to an arbitration agreement, but the Fourth District has reached the opposite conclusion. The First District decided to follow the Florida Supreme Court’s instruction that traditional contract defenses of fraud, duress, and unconscionability are defenses, and when a party seeks to avoid arbitration asserts that the costs are prohibitive, that argument informs only the substantive unconscionability prong of the traditional test for unconscionability. Even if a party shows that the costs of arbitration are so high as to make the access to the forum impracticable, the court must also find procedural unconscionability, which was never asserted nor proved in this case.
The court also rejected the void against the public policy argument because the arbitration agreement, in this case, did not eliminate or limit the statutory remedy available to the plaintiff. Instead, the argument came solely based on the plaintiff’s own financial circumstances existing five years after the parties executed the agreement.
Nothing on the face of the agreement eliminated or limited any remedy available to the plaintiff, undermining her argument that it was void against public policy. The court affirmed but certified the question about whether “prohibitive cost” can be a stand-alone defense to an arbitration agreement governed by the Florida Arbitration Code.
ERRED IN ENTERING SUMMARY JUDGMENT FOR PLAINTIFF ON DEFENDANT’S ACCORD AND SATISFACTION DEFENSE
United Automobile Insurance Co. v. Rivero Diagnostic Center, 46 Fla. L. Weekly D1917 (Fla. 3rd DCA August 25, 2021):
United Auto issued a check to the provider for payment of medical services in PIP benefits for its insured. When the provider sued United Auto for failing to pay the full amount of the charges, United Auto raised the “accord and satisfaction” affirmative defense, arguing that the check issued stated it was in FULL & FINAL PAYMENT OF PIP BENEFITS in the “payee” line of the check and was then endorsed and cashed by the provider. Plaintiff asserted that the “FULL & FINAL” language was not conspicuous as required by Florida law and the trial court agreed.
Even though the “FULL & FINAL” language was included in the payee line on the check, the court found that satisfied the conspicuousness requirement and reversed the summary judgment entered for the plaintiff.