IN THE SUPREME COURT OF FLORIDA SC NO: DCA NO: 3D

Transcription

1 IN THE SUPREME COURT OF FLORIDA SC NO: DCA NO: 3D OVERNIGHT SUCCESS CONSTRUCTION, INC., -vs- Plaintiff/Petitioner, PAVARINI CONSTRUCTION CO., INC. and UNITED STATES FIDELITY AND GUARANTY CO., Defendants/Respondents. / ON APPEAL FROM THE THIRD DISTRICT COURT OF APPEAL JURISDICTIONAL BRIEF OF APPELLANT Thomas F. Pepe, Esquire Florida Bar No PEPE & NEMIRE, P.A. Attorneys for Appellant 1450 Madruga Avenue, Suite 202 Coral Gables, Florida (305) (telephone) (305) (facsimile)

2 TABLE OF CONTENTS CONTENTS PAGE TABLE OF CITATIONS...-ii- TABLE OF OTHER AUTHORITY...-iii- INTRODUCTION STATEMENT OF THE CASE AND FACTS SUMMARY OF ARGUMENT ARGUMENT CONCLUSION PROOF OF SERVICE CERTIFICATE OF COMPLIANCE TABLE OF CITATIONS CASES PAGE Adkins v International Union of Elec., Radio & Mech. Workers, AFL-CIO_CLC, 789 F.2d 330 (6 th Cir. 1985) Association of Frigidaire Model Makers v. General Motors Corp., 573 F. Supp. 236 (S.D. Ohio 1983) Chatmon v. Woodard, 492 So.2d 1115, 1116 n.2 (Fla. 3 rd DCA 1986) Department of Children and Families v. M.G., 838 So.2d 703 (Fla. 5 th DCA 2003) , -8- Flea Market, U.S.A., Inc. v. Cohen, ii

3 490 So.2d 210 (Fla. 3 rd DCA 1986) Green v. Walsh, 21 F.R.D. 15, 20 (E.D. Wis. 1957) Harris v. Secretary, U.S. Dep't of Veterans Affairs, 126 F.3d 339, 343 (D.C. Cir. 1997) Hayden v. Feldman, 159 F.R.D. 452 (S.D.N.Y.1995) Kronfeld v. First Jersey Nat=l Bank, 638 F. Supp. 1454, 1460 (D.N.J. 1986) O=Rear v. American Family Life Assurance Co., 139 F.R.D. 418, 421 (M.D. Fla. 1991) Pollux Marine Agencies, Inc. v. Louis Dreyfus Corp., 455 F. Supp. 211, 216 (S.D.N.Y. 1978) United Service Corporation v. Vi-an Construction Corp., 77 So. 2d 800, 804 (Fla. 1955) , -5-, -8- TABLE OF OTHER AUTHORITY OTHER AUTHORITY PAGE Fla. R. Civ. P (2) Rule 1.190(e), Fla. R. Civ. P iii

4 INTRODUCTION The appellant in its brief shall refer to the parties as they stood in the trial court below. Therefore, the Petitioner, Overnight Success Construction, Inc. shall be referred to as the "plaintiff" or "Overnight", and the Respondent, Pavarini Construction Co., Inc. shall be referred to as the "defendant" or The intervenor, BAC Funding Corporation shall be referred to as or The decision of the third district court of appeal is attached to the Appendix of this Jurisdictional Brief on Plaintiff/Petitioner=s appeal from said decision. References to the opinion will be indicated by the letter followed by the opinion=s own page number. STATEMENT OF THE CASE AND FACTS The underlying suit began in June of 2001 when Overnight sued Pavarini. BAC Funding Corporation was Overnight's lender and the holder of an assignment of Overnight's account receivables. (A. 2). In January of 2002, six months after suit was filed, Pavarini made a settlement offer which Overnight rejected but which was accepted by BAC. BAC was not a party to the suit initially but BAC eventually intervene approximately one year after Pavarini had made its settlement offer. No action was taken by Pavarini to enforce its offer of settlement for almost two years after it had been rejected by Overnight but accepted by BAC. Furthermore, Pavarini waited until shortly before the re-scheduled trial date of - 1 -

5 March 15, 2004, before Pavarini moved, on December 24, 2003, to amend its affirmative defenses. (A. 2). Overnight objected to Pavarini=s motion to amend, that was filed almost two years after BAC had accepted the Pavarini settlement offer, on the ground that Overnight was financially prejudiced by two years of litigation. (A. 3). The trial court granted the motion to amend, and ultimately entered judgment in Pavarini's favor, but it denied Overnight's request for those attorney's fees and costs that Overnight had incurred before the amendment was filed. (A. 2). Overnight had appealed the trial court's order which granted Respondent/Pavarini=s motion to add the affirmative defense of settlement and which denied Overnight=s motion to condition the amendment on the payment of compensation to Overnight for the litigation costs caused by the delay. The third district rendered a decision on this appeal on November 15, 2006 to which Overnight filed a motion for clarification, a motion for rehearing and a motion for rehearing en banc. On May 9, 2007 the district court issue a new clarified opinion (A. 1-2) but the court denied Overnight=s motion for rehearing en banc. (A. 1) and denied the relief that Overnight had sought. (A. 3). The third district=s decision held that the trial court did not abuse its discretion when it granted the amendment without conditioning the amendment on the payment of attorney's fees and costs in favor of Overnight. (A. 2). The third district found that, despite the delay of two years, despite the fact that the case had been - 2 -

6 previously set for trial, and continued once, and despite the fact that the re-scheduled trial date was only two and one half months away, Overnight was not prejudiced in any way. (A. 3). The court held that: AFlorida law does not support Overnight's contention that the trial court should have pre-conditioned the amendment on the payment of attorney's fees and costs. To hold otherwise would unfairly penalize the prevailing (A. 3). SUMMARY OF ARGUMENT Overnight was financially prejudiced when the trial court allowed Pavarini to amend its affirmative defenses and add a case dispositive defense, without balancing the equities and compensating Overnight for Overnight=s attorney=s fees and costs that it had incurred during the two years of delay. Rule 1.190(e) provides for the amending of pleadings out of time, but only Aupon such terms as may be just@. The third district court of appeal=s holding that AFlorida law does not support Overnight=s contention that the trial court should have pre-conditioned the amendment on the payment of attorney=s fees and costs@ because A[t]o hold otherwise would unfairly penalize the prevailing party@ expressly and directly conflicts with the holding in Department of Children and Families v. M.G., 838 So.2d 703 (Fla. 5 th DCA 2003) and United Service Corporation v. Vi-an Construction Corp., 77 So. 2d 800, 804 (Fla. 1955). ARGUMENT - 3 -

7 In Department of Children and Families v. M.G., 838 So.2d 703 (Fla. 5 th DCA 2003), the district court found that a trial court has the authority to precondition the granting of a motion upon the payment of litigation expenses incurred by reason of the filing of a tardy motion. There, the district court held that: the trial court did not abuse its discretion when it concluded that a continuance was necessary so the issue of dependency could be fully and properly litigated. [citation omitted ]. It was not the request for a continuance, however, but its timing that led to the assessment of attorney's fees against the Department.@ *** AUnder these circumstances, the trial court had the authority to assess attorney's fees occasioned by the belated request for a continuance.@ [Emphasis added] This holding of the fifth district is in direct conflict with the decision of the third district which states that under no circumstances does the trial court have authority to precondition a motion on the payment of expenses incurred because it would be unfair to the prevailing party. In the M.G. case, no one knew who would be the prevailing party at the time that the motion for continuance was preconditioned on the payment of the nonmoving parties attorney=s fees. Likewise, in the Overnight case, the trial court had no way of knowing whether Pavarini would ultimately prevail if the court granted Pavarini=s motion to amend its affirmative defense. Hence it is not the unfairness to the prevailing party that is at issue but the unfairness to the non-moving party who has suffered because of the dilatory conduct of the moving party. The third district=s decision also expressly and directly conflicts with the decision in United Service Corporation v. Vi-an Construction Corp., 77 So. 2d 800, 804 (Fla. 1955). In United Service the court held - 4 -

8 that in determining what terms are just, the court must be guided by the firmly settled principle that Awhere one of two innocent parties must suffer a loss, the loss must fall on the one whose negligence or conduct contribute the greater to the loss@. The decision of the third district, on the other hand, holds that the loss must fall on the non-prevailing party even though the negligence of the prevailing party Acontributes the greater to the loss@. The decision in the Overnight case gives no importance to the prejudice that was caused to Overnight, an innocent party, but, instead, it rewards the guilty party for its negligence. This is contrary to not only to the. supreme court=s decision in United Service Corporation v. Vi-an Construction Corp., 77 So. 2d 800, 804 (Fla. 1955), but it is also contrary to the rule that allowed Pavarini to amend its affirmative defenses in the first place. 1 Consequently, where a party seeks to amend its answer to raise a case dispositive defense after an unexplained two year delay, the rules of civil procedure give the trial court authority to condition the granting of leave to amend on the payment of the cost of litigation that were incurred during the preceding two years. Such terms are just because: AA party must make strategic decisions about how to proceed, and can plot 1 See Chatmon v. Woodard, 492 So.2d 1115, 1116 n.2 (Fla. 3 rd DCA 1986) in which the court cites the language in Rule 1.190(e), Fla. R. Civ. P. which authorizes the trial court to allow an amendment Aupon such terms as may be just@. Judge Swartz concluded, in the Chatmon decision, that Aterms that may be just@ may include the award of attorney=s fees and costs incurred by the non-prevailing party due to the delay in the filing of a case dispositive affirmative defense

9 its course adequately only if it can anticipate which issues will dispose of the case. Failure to raise an affirmative defense in pleadings deprives the opposing party of precisely the notice that would enable it to dispute the crucial issues of the case on equal Harris v. Secretary, U.S. Dep't of Veterans Affairs, 126 F.3d 339, 343 (D.C. Cir. 1997). Overnight=s request to be compensated for the litigation expenses under the circumstances of this case, is not unprecedented. The Florida Rules of Civil Procedure support Overnight=s contention that the trial court had authority to order Pavarini to pay Overnight=s litigation costs. Rule 1.190(e), Fla. R. Civ. P., creates authority for the trial court to place conditions on the granting of leave to amend. The rule states that A... in the furtherance of justice, upon such terms as may be the court may permit a pleading to be amended. [Emphasis added]. Hence, the court may set terms and conditions which must be met before a party is granted leave to amend. This same line of reasoning was followed by Judge Schwartz in Chatmon v. Woodard, 492 So.2d 1115, 1116 n.2 (Fla. 3 rd DCA 1986). See also Flea Market, U.S.A., Inc. v. Cohen, 490 So.2d 210 (Fla. 3 rd DCA 1986)(AWe find no abuse of discretion in the order under review, which conditioned granting the appellant=s eve-of-trial motion for continuance upon the payment of the appellees= attorney=s fees caused by the delay.@). In Chatmon v. Woodard, 492 So.2d 1115, 1116 n.2 (Fla. 3 rd DCA 1986) the court noted that it may have been appropriate to have conditioned permitting the amendment of a case dispositive affirmative defense on the defendant=s payment of the additional costs and expenses incurred by the plaintiff that were caused by the tardiness in asserting the - 6 -

10 defense. However, this opinion was relegated to a footnote because the plaintiff did not seek that relief in the trial court. The federal courts have also made the payment of the expenses of litigation a condition for the granting of leave to amend an affirmative defense when the defense is case dispositive. See Adkins v International Union of Elec., Radio & Mech. Workers, AFL-CIO_CLC, 789 F.2d 330 (6 th Cir. 1985)(AHere, plaintiffs were not prejudiced in their prosecution of their claim, but they were prejudiced to the extent that they litigated the case when a timely assertion of the defense would have made these costs unnecessary. Their remedy was to recover their costs of litigation, and that is what the district court ordered@). See the lower court decision referred to in the Adkins case, Association of Frigidaire Model Makers v. General Motors Corp., 573 F. Supp. 236 (S.D. Ohio 1983)(APlaintiffs= attorney should have the opportunity to be reimbursed for any actual expenses of litigation and preparation for trial he incurred, which expenses might not have been incurred had Defendants asserted their ultimately valid defense in a more timely fashion@). See also Kronfeld v. First Jersey Nat=l Bank, 638 F. Supp. 1454, 1460 (D.N.J. 1986); Green v. Walsh, 21 F.R.D. 15, 20 (E.D. Wis. 1957); O=Rear v. American Family Life Assurance Co., 139 F.R.D. 418, 421 (M.D. Fla. 1991); Hayden v. Feldman, 159 F.R.D. 452 (S.D.N.Y.1995); Pollux Marine Agencies, Inc. v. Louis Dreyfus Corp., 455 F. Supp. 211, 216 (S.D.N.Y. 1978)(the issue was moot because the court ruled on the amendment before the defendant could accept the pre

11 condition). CONCLUSION The Overnight=s petition for discretionary review of the decision of the third district should be granted the third district=s decision expressly and directly conflicts with the decisions in the cases of Department of Children and Families v. M.G., 838 So.2d 703 (Fla. 5 th DCA 2003) and United Service Corporation v. Vi-an Construction Corp., 77 So. 2d 800, 804 (Fla. 1955). Dated:, Respectfully submitted, PEPE & NEMIRE, P.A. Attorneys for Plaintiff/Appellant 1450 Madruga Avenue, Suite 202 Coral Gables, Florida Telephone: (305) Facsimile: (305) By THOMAS F. PEPE, ESQ. Florida Bar No PROOF OF SERVICE I hereby certify under penalty of perjury that on this day of, 2007, I caused to be placed in the United States First Class Mail, Postage Prepaid copies of AAppellant=s Brief" addressed as follows: Vincent F. Vaccarella, Esq. Vincent F. Vaccarella, P.A. F. Malcolm Cunningham, Jr., Esq. Cunningham Law Firm, P.A. 400 Australian Avenue Suite West Palm Beach, FL 33401

12 18851 NE 29 th Avenue Harbour Center - Suite 304 Aventura, FL By Thomas F. Pepe, Esquire CERTIFICATE OF COMPLIANCE Counsel for the Appellant certifies that the brief complies with font requirements of Fla. R. Civ. P (2). By Thomas F. Pepe, Esquire - 9 -

13 OVERNIGHT SUCCESS CONSTRUCTION, INC., -vs- IN THE SUPREME COURT OF FLORIDA Plaintiff/Petitioner, PAVARINI CONSTRUCTION CO., INC. and UNITED STATES FIDELITY AND GUARANTY CO., Defendants/Respondents. SC NO: DCA NO: 3D / ON APPEAL FROM THE THIRD DISTRICT COURT OF APPEAL APPENDIX TO JURISDICTIONAL BRIEF OF APPELLANT Thomas F. Pepe, Esquire Florida Bar No PEPE & NEMIRE, P.A. Attorneys for Appellant 1450 Madruga Avenue, Suite 202 Coral Gables, Florida (305) (telephone) (305) (facsimile) I N D E X - 1 -

14 PAGE Opinion of the Third District Court of Appeal rendered on May 9,

15 Third District Court of Appeal State of Florida, January Term, A.D Opinion filed May 9, Not final until disposition of timely filed motion for rehearing. No. 3D05_2696 Lower Tribunal No. 01_15067 Overnight Success Construction, Inc., Appellant, vs. Pavarini Construction Co., Inc. and United States Fidelity and Guaranty Co., Appellees. An Appeal from the Circuit Court for Miami_Dade County, Peter R. Lopez, Judge. Pepe & Nemire, and Thomas F. Pepe, for appellant. Vincent F. Vaccarella, and Jordan M. Keusch; F. Malcolm Cunningham, Jr., and Amy L. Fischer, for appellees. Before GERSTEN, GREEN and RAMIREZ, JJ. PER CURIAM. ON MOTION FOR REHEARING Appellant Overnight Success Construction, Inc.'s motion for rehearing, and Overnight's request for clarification of this Court's November 15, 2006 opinion to correct scrivener's errors are granted. Accordingly, we withdraw the prior opinion

16 issued November 15, 2006, and issue the following clarified opinion in its place. Overnight appeals the entry of an adverse summary judgment and the denial of its motion for rehearing. We affirm, finding no abuse of discretion in the trial court's granting of appellee Pavarini Construction Co., Inc.'s motion to amend affirmative defenses, and no support for the award of attorney's fees and costs in favor of Overnight as the non_prevailing party below. The underlying suit began in June of 2001 when Overnight sued Pavarini, its contractor. BAC Funding Corporation was Overnight's lender and the holder of an assignment of Overnight's account receivables. In January of 2002, Pavarini made a settlement offer to BAC which Overnight subsequently rejected. BAC intervened in the Overnight and Pavarini lawsuit over one year later. On December 24, 2003, almost two years after Overnight filed suit and shortly before the re_scheduled trial date of March 15, 2004, Pavarini moved to amend its affirmative defenses. The trial court granted the motion to amend. During the subsequent nineteen months, the court continued trial several times during which the parties also conducted discovery of the underlying contract claims. The court ultimately entered judgment in Pavarini's favor, and denied Overnight's request for attorney's fees and costs incurred before the amendment. 2

17 Overnight argues that the amendment caused it undue prejudice and that it was entitled to attorney's fees and costs incurred prior to the amendment. We cannot agree that the amendment caused Overnight any prejudice on the record before us, and there is no support in Florida law for the payment of attorney's fees and costs in Overnight's favor under these circumstances. The standard of review of an order granting a motion to amend is abuse of discretion. See Yun Enters., Ltd. v. Graziani, 840 So. 2d 420, 422_23 (Fla. 5th DCA 2003). Rule 1.190(a), Florida Rules of Civil Procedure, provides for leave to amend pleadings when justice so requires. The decision to grant leave to amend rests upon the trial court's discretion, and any doubts should be resolved in favor of the amendment. See Thompson v. Jared Kane Co., 872 So. 2d 356, 360 (Fla. 2d DCA 2004). Here, there is no reversible abuse of discretion in light of the amount of time that elapsed between the day on which Pavarini made its settlement offer to BAC and the filing of Pavarini's motion to amend, during which no substantial litigation transpired between Overnight and Pavarini. Furthermore, there is no justification for the award of attorney's fees and costs in Overnight's favor. Florida law does not support Overnight's contention that the trial court should have pre_conditioned the amendment on the payment of attorney's fees and costs. To hold otherwise would unfairly penalize the prevailing party. We therefore affirm the trial court's rulings in all respects. 3