VOLUME XVII, NUMBER 9
September, 2005

FROM THE CORNER OFFICE

Due to Hurricane Wilma passing over our area on October 24, 2005, we are unable to provide you with our October and November issue.

The following presentations were made during the month of November:

Stephanie H. Luongo was a presenter in West Palm Beach , Florida with her seminar topic "Succeeding in Federal Court: What You Need To Know About Rules and Procedures."

Anna D. Torres was a presenter in a West Palm Beach , Florida seminar on "Taking and Defending Effective Depositions in Florida " .

If you are interested in any further information on the topics presented please feel free to call the office.

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SUPREME COURT REVIEW: SHOULD FLORIDA 'S IMPACT RULE BE ABOLISHED

The Florida Supreme Court granted review and briefing continues in Marjorie Willis v. Gami Golden Glades, LLC , 29 FLW D2039 ( Fla. 4 th DCA 2004). The Supreme Court granted review on the Fourth District Court of Appeal's decision holding that Florida 's impact rule precluded recovery by a hotel guest for psychological injuries sustained when she was robbed and assaulted at gunpoint. The trial court entered summary judgment in favor of the hotel Defendants on the grounds that the Plaintiff did not satisfy Florida 's impact rule. The Plaintiff suffered severe emotional distress as a result of a gunpoint assault allegedly due to the negligence of the defendants who failed to provide sufficient protection or adequate security for hotel guests. The Fourth District affirmed the summary judgment.

This case involved a hotel guest who sued the owners of a Holiday Inn after she was robbed and assaulted at gunpoint. The Plaintiff arrived at the hotel and was instructed by a security guard to park in a lot across the street as there was no room in the parking lot on the Defendant's property to park her car. The guard assured that the other lot was "safe," and refused to accompany the Plaintiff to the lot. As soon as the Plaintiff parked and stepped out of her car, she was assaulted by a gunman holding a gun to her head. The gunman instructed the Plaintiff to empty her pockets, made her lift her clothes, patted her down and stole her rental car. Following the assault, the Plaintiff went to the emergency room and remained under medical treatment for anxiety, depression, panic attacks and posttraumatic stress disorder, since.

Although the gun actually touched her head and the gunman actually touched her body as he patted down the Plaintiff, the Fourth District held that such unwelcome touching was not sufficient to satisfy the impact rule pursuant to authority of Ruttger Hotel Corporation v. Wagner , 691 So.2d 1177 (Fla. 3d DCA 1997). Thus, the Fourth District reluctantly affirmed the summary judgment, but certified several issues to the Supreme Court as a questions of great importance including, (1) whether a gun to the head or pat down by the assailant is sufficient to satisfy the impact rule, (2) whether an exception to the impact rule should be created in this type of assault and battery case, (3) whether the innkeeper-guest relationship is a special relationship under an exception to the impact rule and, finally, (4) whether the impact rule should be abolished altogether.

We will keep our eyes on this one as the Supreme Court's decision may result in a significant change in Florida tort law.

Anna D. Torres

MORTGAGEE'S ENTITLEMENT TO INSURANCE PROCEEDS AFTER FORECLOSURE

In the recently decided case, Lazslo Lenart v. OCWEN Financial Corp . , 29 FLW D466 (February 25, 2004), the Third District Court of Appeal addressed whether a property owner or the mortgage company was entitled to insurance proceeds after the mortgagee foreclosed on the property due to non-payment.

In December 1998, Lenart's insurer (FRPCJUA) denied a claim for fire damage to Lenart's home. At the time of the fire, OCWEN owned a mortgage on the property. Afterwards, Lenart ceased mortgage payments and a foreclosure action was filed on the mortgage. A summary judgment was entered against the property for $134,503.68. The parties stipulated that the market value for the property was $130,000.00 at the time of the foreclosure sale. However, on the date of sale the foreclosure judgment with accrued interest totaled $141,062.98, which created a deficiency of $11,062.98.

Some time after the foreclosure sale, Lenart settled his claim with the insurer for $90,000. The insurer included OCWEN on the issued check because OCWEN was a loss payee under the policy. OCWEN refused to endorse the settlement draft claiming entitlement to the full proceeds. Lenart sued OCWEN seeking the proceeds from the insurance claim.

The trial court granted a summary judgment in favor of OCWEN for the $90,000 settlement, finding that OCWEN's insurable interest created by the debt was not extinguished as a result of receipt of the foreclosure sale proceeds. The trial court cited Secured Realty Investment Fund, Ltd. III v. Highlands Insurance Co . , 678 So. 2d 852 ( Fla. 3d DCA 1996) to support its decision that where a mortgagee pursues foreclosure of property after a loss, if the debt is not satisfied by the foreclosure sale, the mortgagee is entitled to recover under the insurance policy as the "owner" of the property. The Third District reversed the summary judgment, noting that the trial court misread the holding of Secured Realty.

On appeal, the Third District recognized the difference between a pre-foreclosure loss and a post-foreclosure loss. The court looked to Nationwide Mut. Fire Ins. Co. v. Wilborn , 279 So.2d 460 ( Ala. 1973), which states that in a pre-foreclosure loss, "the mortgagee has a choice on how the debt is satisfied" as a loss-payable mortgagee. The loss-payable mortgagee may either receive payment from the insurance company for the policy limits or the mortgagee may foreclose on the property. If the mortgagee elects to receive proceeds from the insurance company then the debt is fully satisfied and the mortgagee does not have any further recourse. If the mortgagee elects to foreclose on the property and the foreclosure sale creates a deficiency, then the mortgagee may recover only the deficiency under the insurance policy.

The court concluded that at the time of the loss OCWEN'S insurable interest was that of a loss-payable mortgagee. Once OCWEN elected to foreclose on the property, its interest in the insurance proceeds was limited to any deficiency of the secured debt, plus interest that was not recouped in the foreclosure sale. The owner, Lenart, is entitled to the balance of the $90,000 settlement.

David K. McGill

EVIDENTLY, GOD HAS SOVEREIGN IMMUNITY

In the recent case of Hilda and John Gillet v. Watchtower Bible & Tract Society of Pennsylvania, Inc., et al. , 30 FLW D1221 (May 11, 2005), the Third District Court of Appeal wrote a very interesting decision involving Florida agency law in a case involving a Jehovah's Witness missionary. The facts of the case indicate that Maria Nunes attended a Field Service meeting of the members of the West North Miami Congregation of Jehovah's Witnesses at the home of Hilda and John Gillet in which Maria and the other Witnesses prepared for a day of canvassing and pamphleteering. At the meeting's conclusion the members were leaving the Gillet's driveway when Ms. Nunes accidentally backed into Hilda Gillet, knocking her into the roadway were she was struck by another car and seriously injured.

The Gillets sued Ms. Nunes for negligence and loss of consortium and also sued the various Johavah's Witness entities for the vicarious liability of their member. (Vicarious Liability is a legal standard by which an injured party may sue the employer or principal of an employee or agent for the acts of that employee or agent while engaged in the scope of business of the employer or principle). The Jehovah's Witness entities filed for summary judgment on the actions against them. The entities claimed that they could not be held liable for Ms. Nunes' actions since she was neither their employee nor agent, but, rather, was conducting the field work for "Jehovah God."

The trial court agreed with the entities and granted their motions for summary judgment. The appellate court affirmed the trial court's ruling holding that the essential legal elements of an agency relationship were lacking. That is, there are three elements which must be present in order for an agency relationship to exist. They are: (1) acknowledgement by the principal that the agent will act for him, (2) the agent's acceptance of the undertaking, and (3) control by the principal over the actions of the agent. The appellate court held that for over fifty years religious door-to-door canvassing and pamphleteering has been protected as a right under the First Amendment. Furthermore, the court stated that as Ms. Nunes was driving her own automobile during her missionary work, the church was, therefore, not in control of her actions, hence no agency relationship existed.

In a very cogent dissent, however, Judge Green issued a divergent point of view. Disagreeing with the majority's decision, Judge Green set forth several strong facts which supported the existence of an agency relationship between Ms. Nunes and the Jehovah's Witness entities. First, this type of Field Service, which is the hallmark of the Jehovah's Witnesses, is not merely a spiritual calling, but, rather, it is a requirement of the faith and failure to comply can lead to church discipline against an offending member. Second, congregants are mandated to distribute literature which is published and distributed by Watchtower New York and Watchtower Pennsylvania , the two central bodies of the Jehovah's Witness religion. Third, the members are given extensive training on how to conduct field service which is overseen by church Elders who are appointed by the Watchtower entities. Fourth, Watchtower also demands that members adhere to strict dress code and personal grooming guidelines lest they not be allowed to conduct field work. Lastly, and perhaps most dispositive, is the fact that members must solicit donations during field service which go directly to Watchtower New York .

Mindful of these circumstances, Judge Green then points out that the parties' characterization of their relationship is not controlling as to whether an agency relationship exists. On the contrary, if the parties' actions are attached with a legal consequence of agency, then such a relationship exists. The real determining factor, says Judge Green and the controlling case law, is the right of control possessed by the employer or principal over an employee or agent and not simply if that right of control is exercised, whereas, the entities not only had the right to control this field work, but, as is manifest by the facts of this case, exercised that control.

Finally, Judge Green refutes the majority's reliance on Ms. Nunes use of her own car to uphold the summary judgment ruling by citing several cases in which an agency relationship existed despite an agent using his/her own car during the scope of business, finally concluding that the majority was incorrect in its ruling and, at the very least, the decision in this case should have been left to a jury.