McGlinchey’s Commercial Law Bulletin is a biweekly update of recent, unique, and impactful cases in state and federal courts in the area of commercial litigation.
Ohio
Public Records Law
The State Ex Rel. Ames, Appellant, v. Baker, Dublikar, Beck, Wiley & Mathews et al., Slip Op. 2022-Ohio-3990.
In this mandamus action to the Ohio Supreme Court, the Court found that Ohio’s public records still covered private entity request laws.
The Bullet Point: As the Ohio Supreme Court noted, private entities could be subject to Ohio’s public records request laws under the quasi-agency theory. Traditionally, that test required a determination that “(1) a private entity prepare[] records in order to carry out a public office’s responsibilities, (2) the public office [be] able to monitor the private entity’s performance, and (3) the public office ha[ve] access to the records for this purpose.” Recently, however, the Supreme Court modified the test and concluded that “when a requester has adequately proved the first prong of the quasi-agency test, the requester has met his burden: proof of a delegated public duty establishes that the documents relating to the delegated functions are public records.”
Tax Foreclosure
Antonious v. Selvaggio, 11th Dist. Lake No. 2022-Ohio-4056.
In this appeal, the Eleventh Appellate District affirmed the trial court’s decision to grant summary judgment on a defendant’s cross-claim for tax foreclosure. The Court’s finding was that its purported noncompliance with Ohio law requiring written notice of the sale to be sent failed to raise a genuine issue of material fact for trial.
The Bullet Point:
“‘Ohio’s tax certificate legislation, R.C. 5721.30 through 5721.43, allows a county government to sell tax certificates to private investors. A tax certificate entitles the certificate holder to the first lien on the real property. A property owner can redeem the certificate and remove the lien by paying the certificate holder the purchase price plus interest, penalties, and costs. If the property owner fails to redeem the certificates, the tax certificate holder may initiate foreclosure proceedings on the real property after complying with certain statutory requirements.'” To demonstrate entitlement to judgment on a tax foreclosure claim, the party must submit evidence to show:
- The purchase of the tax liens,
- The amounts due,
- The statutory notice of intent to foreclose, and
- Documents indicating that the defendant is the owner of the property.
While a prior version of the tax foreclosure statute indicated that the county treasurer would send written notice after selling a tax certificate, the Eleventh District noted that the statute’s express language makes clear that this is not a condition precedent to tax foreclosure. Rather, a tax certificate becomes effective upon “sale and delivery.” R.C. 5721.35(A). The county treasurer’s written notice obligation under R.C. 5721.33(K) expressly arises “[a]fter selling tax certificates.”
Abrogating common law indemnification
Total Quality Logistics, v. JK & R Express, LLC, 12th Dist. Clermont, No. 2022-Ohio-3969.
In this appeal, the Twelfth Appellate District reversed the trial court’s decision to grant the defendant judgment on the plaintiff’s claim for indemnification.
The Bullet Point: This appeal follows an appeal to the Supreme Court by the appellant seeking an answer to the question of whether common law requirements for indemnification apply when the parties’ rights are governed by a contract that includes an indemnification provision. In that appeal, the Ohio Supreme Court held that common law indemnification does not apply “when the parties express a clear intent to abrogate those common-law requirements in their contract.” On remand, the trial court found that the parties’ agreement did not evidence a clear intent to abrogate common law indemnification duties. On appeal, the Twelfth Appellate District disagreed and, focusing on the plain language of the agreement between the parties, found a clear intent to abrogate the common law indemnification requirements.
Florida
Enforceability of Arbitration Agreements
Bodie v. Cricket Wireless, LLC, No. 2D22-64 (Fla. 2d DCA Nov. 16, 2022)
The Second District affirmed a trial court’s order compelling arbitration in an action under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA).
The Bullet Point: Under Florida law, an arbitration agreement may be unenforceable when it defeats the remedial purpose of a statute or prohibits the plaintiff from obtaining meaningful relief under the statutory scheme. Here, the appellant maintained that an arbitration agreement containing a class action waiver and a prohibition on representative actions was unenforceable because it defeated the FDUTPA’s remedial purpose. The appellant accordingly challenged the trial court’s order compelling arbitration. On appeal, the Second District issued a per curiam decision affirming the order. The concurring opinion made clear that the arbitration provision prohibiting representative actions for declaratory and injunctive relief on behalf of nonparties is enforceable, and the class action waiver does not undermine the FDUTPA’s remedial purpose. This is because the FDUTPA’s plain language does not give a blanket right to litigate on a class-wide basis, a right for an individual to seek “public” injunctive relief, nor does it authorize an individual to bring an FDUTPA action on behalf of another. In reaching this conclusion, the concurrence contrasts the individual remedies available under FDUTPA with those available to an “enforcing authority.”
Forum Selection Clauses
EcoVirux, LLC v. BioPledge, LLC, No. 3D21-1801 (Fla. 3d DCA Nov. 16, 2022)
The Third District examined whether the forum selection clause in a contract was mandatory or permissive.
The Bullet Point: Under Florida law, permissive forum selection clauses constitute nothing more than consent to jurisdiction and venue in the named forum, while mandatory forum selection clauses provide a mandatory and exclusive place for future litigation. The determination as to whether a clause is mandatory or permissive is a matter of pure contractual interpretation, with the conclusion hinging on whether the language employed evinces the parties’ clear intent to limit venue. In the absence of such language, a clause is deemed permissive.
In this case, the forum selection clause provided the “exclusive venues” for any disputes that “may be brought.” The primary issue on appeal is whether this clause was mandatory such that any action arising under the contract could only be maintained in the named forum. The Third District held that it was, noting that courts consistently construe clauses containing the word “exclusive” as mandatory. The Third District further concluded that while the phrase “may be brought” could be interpreted as permissive, it cannot be considered in isolation and does not detract from the parties’ expressed intention to limit venue. Accordingly, the Third District affirmed the trial court’s order dismissing the appellant’s lawsuit.
Pleading Punitive Damages Against A Corporation
Grove Isle Ass’n, Inc. v. Lindzon, No. 3D22-913 (Fla. 3d DCA Nov. 10, 2022)
The Third District concluded that the plaintiff failed to satisfy the requirements for establishing entitlement to assert a claim for punitive damages against a corporation.
The Bullet Point: Pursuant to section 768.72, Florida Statutes, no claim for punitive damages shall be permitted unless there is a reasonable basis for recovery of such damages. The statute provides that a defendant can be held liable for punitive damages only if the trier of fact finds, by clear and convincing evidence, that the defendant was personally guilty of intentional misconduct or gross negligence. To impute an individual defendant’s liability onto a corporation, the plaintiff must also establish that the corporation (a) actively and knowingly participated in such conduct; (b) knowingly condoned, ratified, or consented to such conduct; or (c) engaged in conduct that constituted gross negligence and that contributed to the loss, damages, or injury suffered by the claimant. Here, the Third District concluded that the plaintiff’s amended complaint failed to satisfy any of the three alternative requirements for establishing entitlement to assert a claim for punitive damages against a corporation. Accordingly, the order granting the plaintiff’s motion for leave to amend his complaint to assert a claim for punitive damages was reversed.
