HD Law Partners Blog

When interpreting an insurance policy, the choice of law will often determine how a court will enforce that policy’s terms. In this context, choice of law refers to which state’s laws govern the policy. Or in some cases, whether federal law may also apply.

A recent decision from a federal judge here in Florida, Great Lakes Insurance SE v. Lassiter, provides a case in point. This insurance dispute involved both federal and state choice-of-law questions–specifically, what laws to apply to a boating accident.

A man named Lassiter leased a boat called Shmily from a corporate owner. Lassiter hired another named Russick to captain the boat. Russick, acting as Lassiter’s intermediary, applied for an insurance policy for the boat. In that application, Russick failed to disclose the fact Lassiter had a 15-year-old misdemeanor domestic violence conviction. This will become relevant later.

Employment is usually “at-will” in Florida. In other words, an employer is free to fire an employee, or an employee is free to quit and seek employment elsewhere. In many cases, a former employee will find work with another firm that is a direct competitor with the former employer.

Some employers want to protect themselves from this situation by having their key employees sign employment contracts with restrictive covenants. Common examples of such covenants include non-compete, non-solicitation, and nondisclosure clauses. But are such restrictive covenants actually enforceable in Florida?

The short answer is “yes.” Section 542.335 of the Florida Statutes does expressly state that a contract containing one or more restrictive covenants may be enforceable provided they are “reasonable in time, area, and line of business.” So what exactly does that mean?

The Rules Governing Non-Compete and Non-Solicitation Agreements

Policyholders are understandably upset when an insurance company denies their claim for coverage. This can lead to litigation, typically for breach of contract. But what about other equitable legal remedies? For instance, can you sue an insurer in Florida for unfair trade practices or “unjust enrichment”?

Federal Court Rejects Lawsuit Over Travel Insurance Policy for Canceled Flight

This issue came up in a recent decision from the U.S. 11th Circuit Court of Appeals, Arencibia v. AGA Service Company, which was asked to apply Florida law to a dispute arising from a travel insurance policy. The plaintiff in this case purchased a plane ticket from Miami to Bogota, Colombia. At the time he booked his ticket, he was offered optional travel insurance, which was issued by the defendant. The plaintiff elected to purchase the insurance.

The plaintiff later canceled his plane trip because a work commitment overlapped with his planned Colombia trip. The plaintiff believed his insurance was a “no fault” policy, so he could cancel his trip for any reason and still receive coverage. But the defendant later informed the plaintiff that the policy he purchased was “a named perils travel insurance program, which means it covers only the specific situations, events and losses included in” the policy. As the plaintiff’s reason for canceling his ticket–being required to work–was not covered, he was not entitled to coverage.

When you purchase a deeded timeshare, you are actually buying an interest in real property. As with any real estate purchase, many buyers finance their timeshares by taking out a mortgage loan. Additionally, many timeshare contracts require residents to pay certain maintenance fees and assessments, just as you would with any homeowners’ association.

So if you fail to pay your mortgage or maintenance fees on time, can your timeshare interest actually be subject to foreclosure? The short answer is “yes.” And under Florida law, timeshare holders may be subject to a quicker legal process than a normal residential foreclosure.

Judicial vs. Non-Judicial Foreclosure

When it comes to residential homeowners, Florida law requires a judicial foreclosure process. This means that the mortgage lender or homeowners’ association (HOA) must go to court and file a lawsuit against the homeowner. The homeowner has the right to contest the action in a formal court hearing. But if the homeowner does not contest the proceeding, or the judge decides the lender or HOA’s case has merit, the court can order the property sold at a foreclosure auction.

Last year, the Florida legislature adopted significant changes to the state’s property insurance laws. Among these amendments are a new requirement that commercial or residential policyholders file a notice with the state before suing an insurance company over its denial of a claim. This pre-suit notice must be given “at least 10 business days” before filing a lawsuit, but not before the expiration of a 90-day period during which the insurer has the right to review and either pay or deny the claim.

The purpose of the new pre-suit notice is to give the insurer additional time to investigate and review the claim and decide whether to either accept coverage, continue to deny coverage, or reinspect the property. Only if the insurer continues to deny the claim can the policyholder then file a lawsuit. If the insurer failed to file the pre-suit notice beforehand, however, the court is required to dismiss the lawsuit with prejudice.

Each year, thousands of people set sail on cruise ships out of Florida. Most of these cruisers enjoy a wonderful vacation. Unfortunately, some people sustain serious injuries on their trip, often due to the negligence of the cruise line.

Now, you can file a personal injury lawsuit against a cruise ship operator just as you would any other negligent property owner. But such cases are often handicapped by the terms of the ticket that was issued before the cruise even began. If you have ever taken a cruise, you know what we are talking about. Most cruise tickets include, or refer to, a lengthy “ticket contract” that you must agree to beforehand, similar to a terms of service on a commercial website. These contracts often contain language that can restrict or even prevent you from bringing a personal injury claim should the need arise.

A recent decision from a federal judge in Miami provides a case in point. In Roberts v. Carnival Corporation, the plaintiff was a passenger on the defendant’s cruise ship. During the cruise, the plaintiff slipped and fell on the ship’s pool deck. She called the ship’s infirmary and was told someone would come attend to her at the pool. But nobody ever came, the plaintiff said, and she then had to walk to the infirmary herself, only further aggravating her injuries.

As another hurricane season approaches here in Florida, it is a good idea for all homeowners to review their insurance coverage and understand what damages may–or may not be–covered by a storm. All insurance policies contain some form of deductible. But many policies that cover windstorm damage will also include a separate “hurricane deductible.”

Typically, a hurricane deductible applies separately from other deductibles applied to coverage for wind damage. A “hurricane” in this context means a storm system that has been declared as such by the National Weather Service. Typically, if the storm is named–e.g., Hurricane Irma–it will likely meet the legal definition of “hurricane” for insurance purposes.

Under Florida law, an insurance company can only enforce a hurricane deductible for such named storms. Specifically, the hurricane deductible may only be applied during a period beginning when the National Weather Service issues a “hurricane watch” or “hurricane warning” for the affected area, and ending 72 hours after the final warning or watch for any part of Florida terminates.

The most common reason for a person or group of persons to form a limited liability company (LLC) or corporation is to protect their personal assets from business creditors. In other words, if the business is sued, any judgment can only be collected against the assets owned by the business entity itself and not the individual owners.

But what about the reverse? If a member of an LLC has personal debts, can that creditor go after the business? The answer to these questions largely depend on the type of LLC we are talking about. Historically, you needed at least two “members” to form an LLC. But in recent years every state, including Florida, has amended their laws to permit the formation of LLCs with a single member. This allows many self-employed people to form a separate legal entity for their work.

Florida Has Special Rules for Single-Member LLCs

With a multi-member LLC, Florida law limits a creditor’s options for collecting an unpaid personal debt to seeking what is known as a “charging order.” This is basically a lien against the debtor member’s interest in distributions from the LLC. In multi-member LLCs it is common for the company to make periodic distributions of profits to members. With a charging order, a personal creditor can basically claim that money to satisfy the member’s debt.

As a general legal principle, if somebody files a lawsuit against you, and you fail to respond in any way, the trial court has the authority to enter a default judgment for the plaintiff. But even after a default judgment is entered, the defendant can still ask to set it aside based on grounds of “excusable neglect” under Florida law. The defendant must also show they have a “meritorious defense” to the underlying lawsuit and acted with “due diligence” to set aside the default.

A recent decision from the Florida Third District Court of Appeal, Universal Property & Casualty Insurance Company v. Dimanche, illustrates how these rules work in practice. This is an ongoing lawsuit over insurance coverage. The defendant issued a homeowners’ policy to the plaintiffs.

The plaintiffs filed a claim for damage to their property. The defendant did not pay. The plaintiffs subsequently filed a lawsuit, seeking approximately $65,000 in damages to repair their home.

The federal nature of our legal system means there are situations where a federal law may override or “preempt” a state law. This can, in turn, significantly affect the rights of private parties to civil litigation whose disputes are covered by such laws. Indeed, the question of whether preemption applies can itself lead to litigation.

Airline Faces Customer Class Action Over “Exit Fees”

A recent decision from the U.S. 11th Circuit Court of Appeals, Cavalieri v. Avior Airlines CA, provides a case in point. This case arose from a dispute over an extra fee added to an airline ticket. The defendant airline argued that federal law preempted any state breach-of-contract claim arising from the sale of said tickets.

Here is some additional background. The defendant operated flights from Miami to Venezuela. The tickets sold for said flights are a legal type of contract known as a “contract of carriage.” Here, the plaintiffs said they purchased their tickets for a certain price, only to be later told they needed to pay an additional $80 “exit fee” before boarding their flights.