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State Supreme Court
Lawyers put on notice
By Carl Jones
July 8, 2005
Anew Florida Supreme Court ruling means that attorneys in the state could be held to a higher standard of truth and ethics during trial and appeal.
A 5-2 decision Thursday in Boca Burger Inc. v. Richard Forum could mean that attorneys will have to pay the other side’s legal costs when they defend an appealed trial court order that they know to be wrong.
In a decision written by Justice Raoul G. Cantero III, the majority held that an appellate court can impose sanctions on an appellee or its counsel for “frivolous defense of a patently erroneous trial order.”
“Contrary to petitioner’s arguments, allowing sanctions against appellees or their counsel for defending indefensible orders requires the quintessentially professional act of admitting defeat when there is no chance of victory, or when victory will have been obtained at the price of integrity and truth,” Cantero wrote.
It also held that a plaintiff has a right to amend a complaint a single time before a response is filed, and that a trial court does not have the authority to refuse.
Also on Thursday, the Supreme Court ruled 6-1 that an arbitration clause in a travel company’s contract and signed by a mother on behalf of a minor was enforceable, thus blocking a wrongful death lawsuit filed by the father of the deceased boy.
The case, Global Travel Marketing v. Shea, involved a release form that Molly Bruce Jacobs signed on behalf of her 11-year-old son, Garrit, who was dragged from his tent by hyenas and killed during an African vacation in July 2000. In the waiver, Jacobs agreed to arbitrate all potential legal claims with Global, a Fort Lauderdale-based safari company.
The issue in the case is whether a parent can bind a child to arbitration when signing release forms allowing children to participate in commercial travel activities. The high court majority said that a parent can.
“In the absence of legislation restricting agreements to arbitrate the potential claims of minors, enforcement of these agreements in commercial travel contracts is not contrary to the public policy of protecting children,” the majority said in an opinion written by Chief Justice Barbara J. Pariente.
The ruling is a major victory for the travel and recreation industries, which contended that encouraging arbitration is good public policy because arbitration cases are resolved more quickly and result in lower damage awards than cases that go to trial.
The father, Mark Shea, backed by the plaintiff bar, had argued that a parent cannot bind a child to arbitration unless there is a compelling public policy interest to do so. Such interests could include obtaining access to health care or participating in team sports that teach children sportsmanship.
No authority to sanction
The Boca Burger case stems from a deceptive trade practices claim filed in Broward Circuit Court in 2000 against Boca Burger, a vegetarian food manufacturer based in Madison, Wis., that is owned by Kraft Foods. Dr. Richard Forum, a dentist, alleged the company was not properly listing all of its food ingredients on the packaging. Boca Burger filed a motion to dismiss, arguing that Forum’s complaint failed to state a cause of action and that the lawsuit was pre-empted by state and federal law.
When the motion to dismiss was heard, Judge Dorian Damoorgian voiced concerns about the amended complaint being filed without special permission. Deciding not to recognize the amended complaint, which addressed broader issues than the initial complaint, Judge Damoorgian approved the motion to dismiss the case. The judge agreed that the initial complaint raised issues that were pre-empted.
Dr. Forum appealed and the 4th District Court of Appeal reversed that decision. The appellate panel accused Boca Burger’s defense attorneys, Gordon James and Clifford Wolff of Heinrich Gordon Hargrove Weihe & James in Fort Lauderdale, of misleading Judge Damoorgian into believing that he had the discretion to dismiss the amended complaint. Rules of procedure, the appeals panel ruled, were clear that a judge had no such discretion. The 4th DCA also found that Boca Burger could not raise the pre-emption issue in a motion to dismiss.
On Thursday, the Supreme Court majority held that a plaintiff clearly has the right to file an amended complaint as long as an answer has not been filed. It reversed the 4th DCA, however, and held that Boca Burger could raise the federal pre-emption defense, or any other defense, in a motion to dismiss.
But the most closely watched element of the case in the legal community was how the Supreme Court ruled on the 4th DCA’s decision to impose sanctions on Boca Burger for its attorneys’ conduct at the trial level, and for defending what they knew was a erroneous trial court decision on appeal.
The justices ruled the 4th DCA had no authority to impose sanctions for actions at the trial level.
“The district court imposed sanctions on Boca Burger both for its conduct in the trial court and its conduct on appeal,” the majority said. “The trial court had not imposed sanctions for such actions, and no authority exists for an appellate court’s imposition of sanctions for conduct occurring in the trial court.”
The majority ruled that it could not parse the attorneys’ conduct between the appellate and trial level, so the case was remanded to the 4th DCA to reconsider the sanctions.
The majority, however, also ruled that a district court can sanction parties and their attorneys for their behavior on the appellate level. That power comes with a caveat.
“Appellate courts … should impose sanctions against an appellee only in rare circumstances,” the majority cautioned. “Moreover, because a district court of appeal is, in the vast majority of cases, the court of last resort, it should exercise great restraint in imposing appellate sanctions.”
Pariente and Justices Charles T. Wells, Harry Lee Anstead and Kenneth B. Bell concurred. But Justice R. Fred Lewis dissented on the sanctions issue, and was joined by Justice Peggy A. Quince.
Lewis wrote that the attorneys alleged to have misled the court were not defending the amended complaint issue on appeal, but rather defending the other important issues of the case. He wrote that the majority had not taken the trial court record into account, and that those transcripts show that the Boca Burger lawyers did not frivolously defend their position on appeal, but rather defended arguable points of law.
“I suggest that the majority view is … [a] dangerous precedent for the fair and open presentation of issues and argument by independent counsel which has historically been the backbone of the adversarial system through which this third branch of government fulfills its constitutional role,” Lewis wrote.
“This case has simply become misdirected and should not be remanded for sanctions, but returned to the trial court for the case to proceed,” Lewis concluded.
Attorneys for Richard Forum were initially happy about the decision, although they were still reviewing the opinion Thursday afternoon. “I think anyway you cut it it’s a win because ultimately they recognized that this conduct is wrong,” said Greg Lewen, of Miller Schwartz & Miller in Hollywood. He noted that it essentially provided a consequence for cases where a client had to appeal a decision that was obviously wrong.
A spokeswoman for Kraft did not return a call for comment.
“The bottom line is that the Supreme Court wanted to limit its ruling to the two substantive points and send the question of contempt back for the district court to consider, without addressing any of the underlying factual complexities that Justice Lewis was concerned with,” said appellate lawyer Joel Perwin.
Perwin said he thinks Lewis was loath to send the Boca Burger lawyers back to the same district court to defend their conduct again.
“The court struck sort of a middle ground in Boca Burger,” said Key Biscayne appellate lawyer John Crabtree, who was not involved in the case. “I think it will surprise some people and shift the paradigm a little, because there’s now a clearer duty to concede error.”
Waiving child’s rights
In the travel company case, the majority ruled that because an arbitration provision itself is not illegal, and because the mother in the case had the authority to enter into the contract on behalf of her son, the arbitration provision was “valid and enforceable.”
The father of the dead boy, Mark Shea, had sued the travel company, Global Travel Marketing, for wrongful death. Shea alleged the company did not use reasonable care when operating the safari trips and failed to warn the travelers of dangerous conditions. Global Travel asked the court to compel Shea to go to arbitration, based on the contract signed by Shea’s ex-wife.
The trial court ruled in the company’s favor but was reversed by the 4th DCA. The appellate panel held that parents could not waive their child’s right to litigation and therefore the arbitration agreement was unenforceable.
The 4th DCA said, and the high court agreed, that the issue before them was not necessarily about arbitration, but about who can be required to engage in arbitration.
But the Supreme Court majority said “the issue in this case concerns competing interests: that of the state to protect children and that of parents in raising their children. Where these interests clash on a concrete issue, such as the enforceability of a contract entered into on behalf of a minor child, the issue becomes one for the courts.”
Wells, Anstead, Quince, Cantero and Bell concurred.
Lewis dissented but did not author an opinion.
Carl Jones can be reached at cjones@alm.com or at (305) 347-6648.
Correction
This story incorrectly identified the trial judge in the case. While the court docket showed Broward Circuit Judge Dorian Damoorgian presiding in the Boca Burger case and granting the motion to dismiss, Circuit Judge Charles M. Greene actually granted the motion.
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