In my last blog post, I wrote about the importance of including in a Florida business contract an “attorney’s fees” provision that permits a party to a contract to recover its attorney’s fees from the other party to the contract if it sues over the contract and “wins.” Moreover, I alluded to the existence of other important provisions in Florida business contracts, but did not specify those provisions. READ MORE
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An Essential Provision in Every Florida Business Contract: An “Attorney’s Fees” Provision
March 2, 2017
As a Fort Lauderdale commercial litigation attorney, my Florida business clients frequently request that I review and draft their contracts. In addition to capturing the parties’ intentions regarding the key aspects of the transaction for which their contract is drafted—and avoiding ambiguities and inconsistent provisions that might fuel a potential business dispute—most business contracts contain certain boilerplate terms that will be “virtually the same” in every contract. These provisions are included for good reason (they’re important!), even though lawyers may differ as to what they should say. READ MORE
Resolving Corporate Deadlock and Mismanagement: Receiverships (Part II)
February 20, 2017
I’ve previously written about Florida business litigation solutions for corporate deadlock, but, in that prior blog post, I addressed only a single method of resolving corporate deadlock and mismanagement: dissolution and liquidation of the corporation. In this post, I will describe a second, alternative solution: receivership. READ MORE
Florida Real Estate Litigation: Deed Defects and Curing Deed Defects
February 9, 2017
Few areas create real estate disputes in Florida more frequently than defective conveyances of Florida real estate. The topic often appears in the context of a challenge to the validity of a deed transfer after the grantor named in the deed has passed away. Of course, once the grantor is dead, he or she is no longer capable of executing a new deed to effectuate his or her wishes. Thus, beneficiaries of such a grantor’s estate usually stand to benefit from having the deed set aside, because the absence of the transfer increases the size of the estate in which they are entitled to share. READ MORE
How to (Legally) Resolve Corporate Deadlock and Mismanagement: Dissolution and Liquidation (Part I)
February 1, 2017
The great, late entrepreneur, Steve Jobs, once said, “Great things in business are never done by one person. They’re done by a team of people.” But what if that team of people can’t agree on how the business should be managed? What if one of the members of the team steals or mismanages the company’s assets, causing harm to the company? READ MORE
After 43 Years without a Change in the Law, the Timeframe to Cancel Mortgages Is Now 45 Days, Not 60
January 25, 2017
As a Fort Lauderdale commercial litigation lawyer, I proactively seek to assist my clients with monitoring changes in the law that might affect their businesses. One such change has occurred in Chapter 701, Florida Statutes, which pertains to assignments and cancellations of mortgages, and directly affects those involved in residential and commercial lending. READ MORE
Partnership Agreements: A Prenuptial Agreement for Business Partners
January 18, 2017
Just like a bride and groom entering into a marriage, many business partners, whether members of an LLC, shareholders of a corporation, or general partners of an actual partnership, enter into their new business venture with a high degree of optimism, believing that the partnership will be successful and that their partners will always be faithful to them and the partnership. As a Ft Lauderdale business lawyer focusing on business disputes, I know all too well that most partnerships eventually fail and that, while the partnership may last, many partners fail to deal with each other fairly. Indeed, there are often disputes over what should happen with the partnership assets, including its customers or clients, and how the company will operate prospectively, or if it will continue to operate at all. Is there a way to eliminate or reduce the likelihood of such a dispute? READ MORE
Chapter 727 ABC Proceeding — Lawyer Justin Carlin Prevails on Behalf of Creditor in Case of First Impression
August 31, 2016Earlier this month, the Fourth District Court of Appeal issued an opinion in Pro Finish, Inc. v. Estate of All American Trailer Manufacturers, Inc., — So. 3d —-,2016 WL 4132721 (Fla. 4th DCA 2016). Fort Lauderdale business lawyer Justin Carlin represented the appellant after handling the case at the trial level. The decision is important, because there is little case law on Chapter 727 assignment-for-the-benefit of creditors proceedings (so-called “ABCs”), and the proceedings have been widely used by debtors who don’t qualify for bankruptcy but who seek to evade creditors’ claims.
The opinion issued in the case can be found here. Here’s a portion of the Court’s ruling, which, for the first time in Florida, makes clear that the provisions of Chapter 727 are to be strictly construed and that the failure to adhere to those provisions renders the assignment void:
Chapter 727 “provide[s] a uniform procedure for the administration of insolvent estates, and . . . ensure[s] full reporting to creditors and equal distribution of assets according to priorities as established under [chapter 727].” § 727.101, Fla. Stat. (2013). Section 727.104(1), Florida Statutes, provides the form of the assignment and requires compliance with it. § 727.104(1), Fla. Stat. (2013); see Smith v. Effective Teleservices, Inc., 133 So. 3d 1048, 1050–51 (Fla. 4th DCA 2014). The June 11, 2013 Assignment did substantially follow the required form. “Section 727.104 . . . [also] requires the assignee to record the assignment in the public records as well as to file a petition and bond in the circuit court.” Moecker v. Antoine, 845 So. 2d 904, 910–11 (Fla. 1st DCA 2003). Subsection (2) requires that this be done within ten days after delivery of the assignment to the assignee. § 727.104(2), Fla. Stat.
Here, the record lacks evidence as to when the June 11, 2013 Assignment was recorded. The only record evidence of the June 11, 2013 Assignment is a copy attached to the ABC Proceeding petition. It does not indicate whether or when it was recorded. But, the creditor also argues the assignee failed to file the ABC Proceeding petition within the section 727.104(2) time limits. The creditor suggests the failure to timely petition the trial court for the ABC Proceeding “is in direct contravention of Chapter 727 and violates public policy, which favors the expedient payment of just debts to creditors and prompt notice to creditors of an assignment of the debtor’s assets.” We agree and reverse.
“There is little case law addressing chapter 727, and none addresses the issues presented here.” Lanier, 898 So. 2d at 144. However, “the provisions of an assignment which are inconsistent with the applicable statute are void, and the assignment as a whole is void where it fails to comply with such a statute, or is against public policy.” 21 C.J.S. Creditor and Debtor § 9 (footnotes omitted). Here, the assignee failed to file the petition in the circuit court within ten days of delivery of the assignment. The assignee petitioned for the ABC Proceeding on November 26, 2013, and signed the acceptance of the June 11, 2013 Assignment on July 15, 2013. Although the June 11, 2013 Assignment met the section 727.104(1) form requirements, the untimely filing invalidated the ABC Proceeding under section 727.104(2).
If you’re in need of a Fort Lauderdale business lawyer to assist you with a complex business litigation matter or appeal, call (954) 440-0901 or e-mail [email protected].
Partitioning Property: A Private Sale May Be Authorized Only by Agreement
February 3, 2016By: Justin C. Carlin
When property (such as real estate or a building) is co-owned and not capable of being divided in half (e.g., a house cannot be cut in half without ruining the house), either co-owner may petition the Circuit Court in which the property is located to have the property partitioned—i.e., sold by an Order of the Court, with the proceeds from the sale, after payment of the costs of the sale and attorneys’ fees associated with the partition action, divided between the co-owners in accordance with his or her proportionate ownership interest in the property.
The procedures for partitioning property are set forth in Chapter 64 of the Florida Statutes. In addition, there are several appellate court decisions that have interpreted that Chapter. Taken together, the rules for partitioning property are well-defined but, unfortunately, often misunderstood or misapplied, even by experienced lawyers and judges. Moreover, some of the rules are counter-intuitive, resulting in the erroneous application of the rules by trial courts and the implementation of nonsensical strategies by lawyers initiating or defending against partition actions. These patterns are illustrated by (among other things) the frequency at which appellate courts have reversed all or a portion of trial courts’ decisions relating to the partition of property. READ MORE
Standing–A Common Defense to Mortgage Foreclosure
December 15, 2015By: Justin C. Carlin
There is, unfortunately, a lot of misinformation among the public regarding mortgage foreclosure cases. As an attorney who has both prosecuted and defended mortgage foreclosure cases, I believe that those holding misconceptions about foreclosures can usually be placed into two groups—those who believe that there are virtually no defenses to a mortgage foreclosure case, and those who (for whatever strange reason) believe that they are unlikely to lose a foreclosure case (despite having not paid their mortgage for months) and, therefore, underestimate a lender’s ability to foreclose. In reality, banks and lenders rightfully win the overwhelming majority of mortgage foreclosure cases, but there are occasionally times when the borrower should (and does) win a foreclosure action.
By far, the most common defense to a foreclosure action is a lender’s purported lack of standing—i.e., the claim that the lender is not the party entitled to bring the foreclosure lawsuit. (An example of standing in the non-foreclosure context: A (but only A) is injured in a car accident caused by B‘s negligence. A would be legally permitted to bring a lawsuit against B, but C could not, because he has not suffered any injury as a result of B‘s negligence. An exception might exist if there was an assignment, by which A, for value or for some other reason, transferred his claim against B to C.) Standing is a legal defense that is often frivolously asserted in a mortgage foreclosure case, but it is occasionally (more often than some would expect) validly asserted. The legal principle not only prevents a borrower from potentially being sued twice on the same debt obligation, but it also prevents an entity that is not owed funds from a homeowner from forcing the sale of the homeowner’s property in satisfaction of a debt owed to someone else. READ MORE
