March 2001

MEMORANDUM TO CLIENTS

CONTRACTS: VENUE, WHERE SUIT CAN BE BROUGHT

The exclaim of surprise is always amazing. An attorney is asked a question about a specific contract. The attorney responds that the contract must be reviewed before providing an opinion or answer. The inquirer responds with a look of surprise.

Why the surprise? It is hard to believe, perhaps even amazing, but many persons admit that they never read a contract before they signed the contract! But, the true "surprise" occurs when the inquirer suddenly realizes that the other party to the contract actually seeks to enforce the contract’s clear and unambiguous language..

The rule of law directing trial courts to enforce clear and unambiguous contract language even applies in twenty-first century disputes over cyberspace. For example, the decision in America Online, Inc. v. Booker, 26 Fla. L. Weekly D 386 (Fla. 3^rd DCA February 7, 2001), recites how Mr. Booker and another individual filed a lawsuit in Florida seeking class action status asserting that America Online breached the terms of their service agreement. The claim was that A.O.L. improperly charged subscriber members for time spent reading "pop up" advertisements. The Florida trial court certified the class action, allowing the claim to proceed to trial.

What is usually referred to as the "fine print" or the "boilerplate" was the focus of the appellate court decision. In this instance, A.O.L.’s agreement had what frequently is titled as the "venue" provision. Venue is a term normally used to designate the location where disputes must be brought, including the location where lawsuits must be filed. The A.O.L. agreement provided that "exclusive jurisdiction for any claim or dispute with A.O.L." was in Virginia. There was no mention that suit could be brought in Florida.

The appellate court acknowledged that contract venue "forum selection" clauses are presumed to be valid and are generally enforceable. The court explained that policy justifying enforcement is that the provisions provide for predictability in commerce. If Mr. Booker did not desire to have the forum in Virginia, then the court noted that he could have negotiated otherwise. While the ability of one subscriber to negotiate with an institution like America Online may seem illusory, the court indicated that there was always the potential of going elsewhere for service.

The important factor, whether you are a community association director, manager, business person or homeowner, is to read and understand your contracts. Courts are directed to enforce clear contract provisions. If the contract is not clear, then rewrite the provision.

Sometimes individuals are afraid to ask for a contract change. Many times even the business with the pre-printed "standard" contract form does not understand the terms or the terms were printed wrong. Ask for clarification and change and initial the contract. If you do not, then you have to live with your choice not to read!

TAXATION: JUSTICE FOR "TAXPAYERS FOR FAIRNESS, INC."

What happened to the lawsuit with the misnomer of the century: The State of Florida by and through Taxpayers for Fairness, Inc. v. 100 La Peninsula, et al.? This is the litigation seeking thousands of dollars in penalties from purchasers of properties at foreclosure sales. First, someone has actually counted the number of individually named Defendants. According to Circuit Judge Smith’s orders, there appears to be 850 individual condominium, homeowner and other "association" Defendants.

Second, the pleadings have been flying fast and furious. The litigation has been dismissed a second time in just over one month’s time. By an Order Dismissing Amended Complaint rendered February 15, 2001, the Amended Complaint was, as the title proclaimed, dismissed. The four page Order outlined many matters which the Defendants asserted required a dismissal. The Court noted that the Plaintiff did not allege, and in fact the Complaint asserted that the Plaintiff did not have knowledge of the correct amounts that should have been reported for the calculation of taxes; the amount of consideration upon the tax allegedly based was not stated; an allegation of a tax due based upon the "face amount" of a lien is inappropriate as the tax is not based upon the face amount; and, there were not sufficient facts justifying joinder of all of the individual defendants.

The Plaintiff is proverbially "behind the count." Another opportunity has been provided to amend the pleading. Text copies of the two dismissal orders can be found at the firm’s website, . Regarding the "bottom line," it is understood that few defendants, perhaps less than a dozen have paid any funds in response to the plaintiff’s demands. In fact, many defendants have joined into a motion requiring that to the extent any funds were paid to settle claims, the funds be segregated for proper application.

FIRM NEWS

The firm is proud to announce that Michael Gelfand has been inducted into the College of Community Association Lawyers. Acceptance into the College is after a lengthy evaluation and peer review process.

Attorney’s Title Insurance Fund has announced that at the Fund’s May 18, 2001 "Annual Fund Assembly" the "Condominium and Homeowners’ Association Law Update" speaker will be Michael Gelfand. The Fund Assembly is reputed to be the largest continuing legal education seminar in the State of Florida. Attorneys interested in attending the Assembly to be held in Orlando should contact Attorney’s Title Insurance Fund at (407) 240-3863.

Elizabeth Caswell, our Office Administrator, is a member of the Palm Beach Opera Company, and recently performed the leading role of Giovanna in their production of Rigoletto. She can be seen again in Otello, with performances April 6-10.

This information is provided for public information purposes only and is provided without obligation or fee. It is distributed to the firm's association clients to provide a general notice of recent legal changes. This information is not to be considered as legal advice. The changes in the law may not have been reviewed by Florida courts and may be subject to further challenge. Before taking any action you are urged to consult with counsel to ensure that your legal rights are protected.

© 2001 by Gelfand & Arpe, P.A.