FLORIDA STATE CASES
- Forum Selection Clause – Forum selection clause in construction contract will not be enforced where third party defendant would be forced to testify in two venues. Forum selection clauses in contracts are generally mandatory, however, there are exceptions to the mandatory transfer rule when there are compelling reasons not to enforce the provision. Avoiding multiple lawsuits, minimizing judicial labor, reducing the expenses to the parties, and avoiding inconsistent results are a few compelling reasons not to enforce a forum selection clause. In this case, the 5th DCA held that requiring witnesses to testify in the original venue and the new venue was a compelling reason not to enforce the forum selection clause. Love’s Window & Door Installation, Inc. v. Acousti Engineering Co., ---So. 3d ---, 2014 WL 4471631, Case No. 5D14-1555 (Fla. 5th DCA September 12, 2014).
- Construction Liens – “Investors cannot grant mortgages, contract for the improvement of the property mortgaged, and then use a network of companies to purchase and foreclose the mortgage for the primary purpose of extinguishing the construction liens that increased the value of the property”. The Third DCA reversed a trial court’s final summary judgment of foreclosure which terminated a contractor’s construction liens. Developer entered into a construction contract for the construction of luxury homes on its property and entered into a construction loan with Sun Trust Bank. After Developer failed to pay for the work, the contractor recorded two statutory construction liens and filed an action to foreclose the liens. An individual in the developer’s corporation created another corporation (“New Corporation”) which purchased the construction loan. The New Corporation then filed an action to foreclose its construction loans against the Developer as well as foreclose the construction liens. Florida law holds that a person cannot obtain a loan from a bank, incur additional liens and junior mortgages on the property, purchase the mortgage back from the bank, and foreclose on the mortgage “for the primary purpose of eliminating the additional liens and junior mortgages.” The Third DCA took this rule one step farther and reasoned that “what investors cannot do indirectly through a single company, investors cannot do indirectly through a network of companies.” The timing of events created an inference that the New Corporation’s creation was solely to purchase the Sun Trust loan, file a subsequent foreclosure action, and defeat the Contractor’s construction lien. Such facts precluded the entry of summary judgment of foreclosure. CDC Builders, Inc. v. Biltmore-Sevilla Debt Investors, LLC, --- So. 3d ---, 2014 WL 4628515, Case No. 3D13-603 (Fla. 3d DCA Sept. 17, 2014).
- Substituted Service of Process – Substituted service unauthorized if personal service can be obtained through reasonable diligence such as verbally communicating with the defendants: Section 48.181(1), Fla. Stat. permits a party to effectuate substituted service of process by delivery of process to the Florida Secretary of State when a Florida resident conceals his/her whereabouts. However, substitute service is unauthorized if personal service could be obtained through reasonable diligence. Here, the president of Plaintiff’s corporation was in regular telephone and text conversations with defendants and knew that defendants were out of state on an extended business trip. Plaintiff’s failure to ask defendants where they could be served was fatal to its resort to substituted service and the default judgment was inappropriate. Coastal Capital Venture, LLC v. Integrity Staffing Solutions, Inc, 39 Fla. L. Weekly D1967b, Case No. 2D13-2915 (Fla. 2d DCA September 12, 2014)