Memorandum to Client
January 2012
INSURANCE
PROCEEDS: BE CAREFUL WHAT YOU ACCEPT
Sometimes, what you see is what
you get, especially if you do not take steps to protect yourself. For
example, will accepting payment from an insurance company for a property
damage claim ban additional claims relating to the same loss or incident?
If a Florida association community accepts payment from its insurance
company without reservation the answer is probably yes.
This issue was recently addressed
by an appellate court in United Property and Casualty Insurance Co. v.
Valladares, 36 Fla. L. Weekly D2309 (Fla. 3rd DCA, October
19, 2011). In United Property, the Valladares’ home suffered
water damage resulting from a broken pipe. After a dispute over the amount
of damages, United Property eventually issued an insurance proceeds check
to the Valladares which referenced United Property’s claim number. The
Valladares accepted the check for the property damage claim without
reservation for any other claim.
After receiving United Property’s
payment, the Valladares sued United Property for breach of their insurance
contract alleging United Property failed to pay for the loss of use of the
home before repairs were completed. The Valladares claimed the home was
uninhabitable. The trial court entered judgment in favor of the Valladares
for loss of use benefits.
The Florida appellate court
reversed for the insurer United Property, finding that the Valladares
accepted an offer for settlement of the claim without reserving any rights
to other claims for damages. The court noted that the Valladares could
have objected to the settlement payment and reserve their right to claim
additional damages. However, because the check for payment was accepted
without reservation, the Valladares could not seek an additional payment.
Florida community associations
should take note, before accepting an insurance settlement check, the
association should ensure that all claims are resolved or proper steps are
taken to retain claims.
MEDIATION: WHO
HAS THE AUTHORITY TO SETTLE?
Mediation, proven
to be a valuable tool, allows parties to meet and to reach a voluntary
resolution with a settlement, frequently saving the parties and the courts
valuable resources, especially time and money. Nearly all Florida
community association restriction litigation requires mediation before
trial. Is your Florida association prepared for mediation? Is your
association going to have to pay sanctions for not being prepared?
To assist in the
mediation process, the Supreme Court of Florida recently amended Florida
Rule of Civil Procedure Rule 1.720. Some of the changes which
Florida community associations should be aware of include the following:
* A party
representative having full authority to settle with respect to all
the issues in the case must attend mediation. This person(s) must
also have the legal capacity to execute a binding settlement
agreement on behalf of the party.
* Ten days
before the mediation, each party shall file a written notice
identifying the person(s) who will attend the mediation as a party
representative, and confirming that those persons have settlement
authority.
* If a party
fails to appear at mediation or fails to file a confirmation of
authority, the court, upon motion, will impose sanctions on the
party failing to appear.
What does this
mean for Florida community associations? When an association is a party to
a case that is proceeding to mediation, the association’s directors
should approve a motion at a properly noticed meeting delegating to a
certain person or persons full settlement authority. Keep in mind, this
information must be provided well in advance of mediation to the
association’s counsel so the designation of party representatives notice
can be prepared and timely filed.
FLORIDA
CONSUMER COLLECTION PROTECTION ACT:
ASSOCIATIONS MUST COMPLY
Does a Florida community
association that is attempting to collect delinquent assessments have to
comply with the Florida Consumer Collection Protection Act ("FCCPA"),
Ch. 559, Fla. Stat., even though the association is not a
debt collector? The answer appears to be yes.
As presented to the appellate
court in Morgan v. Wilkins, 36 Fla. L. Weekly D2524 (Fla. 1st
DCA, November 16, 2011), Morgan did not fully pay a debt for the services
she allegedly received. The creditor business filed a small claims action
against Morgan. Morgan
filed a countersuit against the business seeking
damages for alleged violations of
the FCCPA. The business moved to dismiss the suit on the grounds that the
business was not a debt collector. The trial court granted the business’s
motion to dismiss the claim.
The Florida appellate court
reversed, finding that the FCCPA, specifically §559.72 Fla. Stat.,
prohibits certain practices while attempting to collect a consumer debt
and applies to "any person who offers or extends credit creating a
debt or to whom a debt is owed." While not a debt collector, the
business was a person to whom a debt was owed. Thus, the business was
required to comply with the FCCPA.
Florida community associations
will want to take note of this case and ensure that their debt collection
efforts are in compliance with the FCCPA! If the association has any
questions about the requirements of the FCCPA, the association should
consult with the association’s counsel.
FIRM NEWS
The firm’s offices will be
closed on Monday, January 2, 2012 in observance of New Year’s Day and on
January 16, 2012 in observance of Martin Luther King, Jr.'s birthday.
his information is provided for general information
purposes only, and may not be relied upon and is provided without
obligation or fee. It is distributed to the firm's association clients to
provide a general comment of recent legal changes. This information is not
legal advice, representation counsel or opinion. 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. 8
2011 by Gelfand & Arpe, P.A.
