On December 21, 2023, I created a new Lawline 1-hour CLE on sexual harassment and sexual assault ("SASH") laws for U.S. vessels, You can check it out here at EMBARC on New SASH Reporting on U.S. Vessels: How Sexual Assault and Sexual Harassment is Reported in the Maritime Industry and Key Issues for All U.S. Flag Commercial Vessel Operators - Online CLE Course | Lawline. Any questions on the program or want to talk to me, you can email me at blog@miamimaritimelaw.co or by phone at 305.377.3700.
News Flash: Marine Insurance Forum Selection Clause Upheld in Florida
In Wello & Mom, LLC v. Clear Spring Prop. & Cas. Co., 2023 WL 8609239, 2023 Fla. App. LEXIS 8438 (Fla. 3d DCA Dec. 13, 2023, Florida’s Third District Court of Appeals, which encompasses Miami-Dade County has held that a policy's forum selection clause, which required that suits arising under the policy be subject to the exclusive jurisdiction of the federal courts, is enforceable.
On appeal, the insured contended the policy's forum selection clause should be deemed unenforceable as it was not negotiated and deprived it of the right to a jury trial, given the insurer had already filed a separate declaratory judgment action in federal court.
The court surprisingly found that there is a well-entrenched rule of federal admiralty law favoring the enforcement of forum selection clauses in maritime contracts, citing several well-known cases including M/S Bremen v. Zapata Off-Shore Co., Carnival Cruise Lines, Inc. v. Shute and Turner v. Costa Crociere S.p.A.. However none of the cases cited in the decision involved forum selection clauses in marine insurance policies, as claimed in the decision, and none of the cases squarely address Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310 (1955), which held that “the whole judicial and legislative history of insurance regulation in the United States warns us against the judicial creation of admiralty rules to govern marine policy terms…” Wilburn Boat also noted that the “control of all types of insurance companies and contracts has been primarily a state function since the States came into being.”
This latest ruling adds to the anticipation of SCOTUS’ ruling in Great Lakes Insurance SE v. Raiders Retreat Realty Co, LLC, No. 22-500, where the insurer is employing the same M/S Bremen argument requesting SCOTUS to uphold applying a choice of law clause calling for all cases against the insurer to be brought in New York State.
If you are interested in obtaining of copy of this decision or wish to discuss any matter involving marine insurance, please feel free to reach out to me at blog@miamimaritimelaw.co or 305.377.3700.
Florida Tort Reform Law: A Short Summary of Some of Its Consequences and Effects
On March 24, 2023, Florida’s Governor signed into law HB 837, transforming Florida tort law. With two important exceptions, the law applies to new lawsuits filed after March 24, 2023.
Salient Points of Select[1] Sections of the Law
· Medical Bills. The law limits the introduction of evidence for medical damages at trial. The law limits evidence of paid medical bills and future medical care to the amount paid or needed for services regardless of the source of the payment:
o Effects
Defense experts on the appropriateness of the amount of medical bills required.
Plaintiff-oriented doctors will rethink their medical treatment and billing approach.
Lower medical expenses should reduce non-economic damages awards and nuclear verdicts and increase settlements.
More reasonable life care plans.
Reduced abuse of letters of protection.
· Letters of Protection. If a Plaintiff receives medical services subject to a letter of protection, the plaintiff must disclose: a copy of the letter of protection; all billing for medical expenses, itemized and coded; whether the provider sold the accounts receivable to a third party, the name and dollar amount paid by the third party; whether the plaintiff had health insurance at the time of treatment and the identity of the health care coverage provider; and whether the claimant was referred for treatment under a letter of protection and, if so, the identity of the person who made the referral.
o Effect
Brings letters of protection out in the open. Before, the law stated that there was an attorney-client privilege in communications related to an attorney’s referral of a client for treatment. Juries will now hear about letters of protection, what they mean, the financial relationship they create and the doctor's financial interest in the case's outcome.
Comparative Negligence. The law changes Florida's comparative negligence system from a pure comparative negligence system to a modified one, so that a plaintiff who is more at fault for their injuries than the defendant may not generally recover damages from the defendant.
o Effect
Avoids outsized awards against nominally negligent defendants. In matters where the plaintiff was significantly at fault, plaintiffs will argue for more considerable damages so that defendants with low negligence pay an outsized portion of damages. However, defendants can now have a defense verdict if plaintiff found 51% at fault.
Bad Faith. The law modifies bad faith law to allow an insurer to avoid third-party bad faith liability if the insurer tenders the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of the claim.
o Effects
Ends “set-up” claims. Before this law, the system incentivized plaintiffs to devise situations that led to a bad faith claim to obtain larger settlements.
Reduce bad faith claims. Allowing insurers enough time to evaluate a claim will result in more comprehensive claims handling and fewer bad faith claims.
[1] For more information on Florida tort reform law, please feel free to reach out to me at mov@miamimaritimelaw.co or 305.377.3700.
The 4th DCA Reaffirms That A Contract Cannot Waive Strict Liability Claims
In Harrell v. BMS Partners, LLC, No. 4D22-121, 2022 Fla. App. LEXIS 7439 (4th DCA Nov. 2, 2022), the Florida’s Fourth District Court of Appeals has held that an exculpatory clause purporting to absolve a retailer of liability from strict liability in tort for injuries causes by defects in products it places on the market violates public policy.
The facts are as follows: Charles Randolph Harrel (the Plaintiff) purchased a Suzuki brand motorcycle from BMS Partners, LLC (the Defendant). The signed sales contract contained the following exculpatory language:
“releasing BMS from any liability or responsibility for personal injury, or death or damages to property… of which any damages caused by his ownership or by the negligence of BMS…taking motorcycle means expressly assuming risk of Danger that may be associated with the operation of the motorcycle on the streets… Indemnify and hold Harmless BDS from any and such claims or causes of action by whomever and whenever presented… I am aware that this is a release of liability and a contract between myself and BMS…”
Shortly, after receiving the motorcycle, the Plaintiff was involved in an accident and sustained serious bodily injuries. Plaintiff proceed to sue for negligent assembly, servicing, setting up, repair and/or inspecting the motorcycle, but more importantly, the Plaintiff sued Defendant as a seller in the stream of commerce under strict products liability and negligent produce liability arising out of manufacturing, design, defect and failure to warn of those defects. The Plaintiff included three strict product liability counts, as well as three negligent product liability counts but failed to add Suzuki as a defendant.
Breaking down the exculpatory clause. the court noted that while the Plaintiff agreed to release the Defendant for any liability or responsibility in any way for personal injury or death in the first sentence, the second sentence contained language limiting the scope of the release to claims which may be due or in part to have been caused by the negligence or gross negligence of D. Therefore, the count found that the parties agreed the exculpatory clause would only release liabilities sounding in negligence.
The court analyzed the current state of the law that as a matter of public policy, rather than contractual understanding, a duty should be placed on the manufacturers to warrant the safety of their products. The court found that it logically follows that an exculpatory clause purporting to absolve a retailer of liability from strict liability in tort for injuries causes by defects in products it places on the market violates public policy as a result.
The court rejected the Defendant’s assertion that the Plaintiff could still sue Suzuki ( the manufacturer) and this would therefore not violate public policy. The court found that as a retailer, the Defendant is within the motorcycle’s distributive chain and thus cannot insulate itself from strict liability in tort merely because the Plaintiff has other potential remedies available.
While this case is not “earth shattering”, it does reiterate the burdens retailers have in defending against strict liability claims for products they do not manufacture. We are beginning to see distribution contracts where the manufacturer is attempting to hold retailers solely responsible for defending these claims. We have successfully negotiated distribution contracts that remove these terms of the contract, as well as more fairly distribute the risk between those in the manufacturing/production/distribution/retail chain.
If you are interested in receiving a copy of this opinion or have questions regarding this opinion, please feel free to reach out to us at blog@miamimaritimelaw.co.