October 2002 memorandum

Gelfand & Arpe, P. A.

October 2002

MEMORANDUM TO CLIENTS

TORTS: IMPROPER DUMPING CAN BE HAZARDOUS TO YOUR HEALTH AS WELL AS YOUR POCKETBOOK

What would happen if a painter dumps excess paint in your lake or elsewhere on your property? Liquids and chemicals frequently travel across property lines underground. Neighboring property may be contaminated by the paint that was dumped. Guess what, you may be liable for the damages whether or not you knew about the dumping. If you permitted the dumping, then you may end up in jail.

A recent appellate court decision emphasized the liability a landowner may face if hazardous substances are dumped on the owner’s property. In Easton v. Aramark Uniform and Career, Etc., 27 Fla. L. Weekly D1802 (Fla. 1^st DCA, August 6, 2002), chemical solvents first seeped into the groundwater on Aramark’s property. The chemicals then migrated into and damaged Easton’s property. Easton sued Aramark seeking damages and an injunction to stop the contamination. The trial court recognized that contamination to Easton’s property caused his property value to decrease by $153,000. Nonetheless, the court ruled for Aramark because there was no evidence Aramark caused the contamination on its own property.

The appellate court ruled that the trial court incorrectly applied Florida’s Pollution Discharge Prevention and Control Act §376.313(3) Fla. Stat. (2000). The court noted that the statute provides a cause of action for strict liability. If the contamination comes from your property, you are liable! Intent or knowledge is not relevant. The firm’s September 2001 Memorandum to Clients reviewed the decision in State v. Garay, 797 So. 2d 591 (Fla. 2^nd DCA, August 1, 2002), holding that it is a criminal offense in Florida to knowingly, by exhibiting reckless interference, or by gross careless disregard for human health, to dispose of hazardous waste at any place but a hazardous waste facility.

The Easton and Garay decisions emphasize the significant legal consequences that can result from improper disposal of hazardous substances. Associations must ensure that painters, roofers, unit and lot owners, and others utilizing hazardous substance do not dispose any hazardous wastes on their property. Civil and criminal liability may result. Additionally, contamination can create health issues and adversely impact property values. Further, insurers may seek to avoid coverage for improper disposal claims.

SALES TAX: NO DEAL IS TOO GOOD TO BE TRUE

Were you ever offered a discount if you pay in cash? Wonder what the catch was? Someone may be trying to avoid paying sales tax. As they say, there is no such thing as a free lunch.

A Florida court recently considered the prohibition against advertising "NO SALES TAX." In Starlite Diners, Inc. v. Oswalt, 27 Fla. L. Weekly D1866 (Fla. 5^th DCA, August 16, 2002), Starlight Diners, Inc. entered into a contract with Gregory Oswalt to construct and deliver a modular diner unit on Oswalt’s site. The contract stated that taxes were Oswalt’s responsibility. The Florida Department of Revenue assessed sales tax against Starlight for the sale. Starlight then sued Oswalt for breach of contract, claiming Oswalt agreed to pay the sales tax but refused to do so. Oswalt claimed Starlight told him there was no sales tax on the diner.

The appellate court held that the contract clearly and unequivocally provided for payment of the sales tax by the buyer of the diner. The court did point out that Florida Statute §212.07(4) provides that a dealer engaged in any taxable business may not advertise or hold out to the public that he "will absorb all or any part of the tax" or that "the tax will not be added to the selling price of the property." Nevertheless, Oswalt had to reimburse Starlight for the tax.

Everyone should be wary of any business offering a discount for a cash payment. If the transaction is taxable, pay the sales tax. If it sounds too good to be true, it probably is not true!

CORPORATE RECORDS: EX-MEMBERS MAY HAVE INSPECTION RIGHTS

Have problem members? Think you can eliminate the problem by abolishing your membership? Sometimes being too cute does not work. Even ex-members may have certain rights that cannot be taken away, such as the right to inspect corporate records.

In Raffinan v. Philippine Cultural Foundation, Inc., 821 So. 2d 1272 (Fla. 2^nd DCA, August 2, 2002), Maria and Jose Raffinan were members of the Philippine Cultural Foundation, a not-for-profit corporation. The Raffinans sought to inspect and copy corporate documents. After the Foundation denied their request to copy documents, the Raffinans sued the Foundation alleging that the Raffinans were entitled to inspect and review corporate records as members in good standing. The Foundation’s board of directors voted to terminate the Raffinans’ membership. While the case was pending, the Foundation amended its articles of incorporation abolishing all memberships. The Foundation argued the Raffinans had no right of access to the records because the Raffinans were no longer members and that they could not be reinstated as members because the Foundation abolished its entire membership.

The appellate court held the Raffinans could bring an action against the Foundation to enforce their right of inspection of the corporate records. Disbanding the membership did not take away their right of inspection or their right to claim attorney’s fees.

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.