Ohio
Liquidated Damages
Pacetti’s Apothecary v. Rebound Bracing &
Pain Sol. Inc., 2d Dist. Greene, No.
2023-Ohio-93.
In this appeal, the Second Appellate District affirmed the trial
court’s decision finding that a late fee provision in a
contract was a penalty and not an enforceable liquidated damages
clause.
The Bullet Point: While parties are free to
enter into contracts that contain damages provisions, for public
policy reasons, sometimes such provisions are not enforceable.
“One such circumstance is when stipulated damages constitute a
penalty. Because the sole purpose of contract damages is to
compensate the nonbreaching party for losses suffered as a result
of a breach, [p]unitive damages are not recoverable for a breach of
contract unless the conduct constituting the breach is also a tort
for which punitive damages are recoverable.” To determine
whether a stipulated damages provision is for liquidated damages or
punitive in nature, courts apply the following test: “[w]here
the parties have agreed on the amount of damages, ascertained by
estimation and adjustment, and have expressed this agreement in
clear and unambiguous terms, the amount so fixed should be treated
as liquidated damages and not as a penalty, if the damages would be
(1) uncertain as to amount and difficult of proof, and if (2) the
contract as a whole is not so manifestly unconscionable,
unreasonable, and disproportionate in amount as to justify the
conclusion that it does not express the true intention of the
parties, and if (3) the contract is consistent with the conclusion
that it was the intention of the parties that damages in the amount
stated should follow the breach thereof.”
Specific Performance
Jomar Group LTD v. Brown, 5th Dist. Holmes, No.
2023-Ohio-98.
Here, the Fifth Appellate District affirmed the trial
court’s decision finding an enforceable contract existed
between the parties and ordering specific performance of the
same.
The Bullet Point: To be entitled to specific
performance, a party must establish the following: “[t]he
contract must be concluded, certain, unambiguous, mutual, and based
upon a valuable consideration; it must be perfectly fair in all its
parts; it must be free from any misrepresentation or
misapprehension, fraud or mistake, imposition or surprise; it
cannot be an unconscionable or hard bargain; its performance must
not be oppressive upon the defendant; and, finally, it must be
capable of specific execution through a decree of the
court.”
Standing to Foreclose
Deutsche Bank Nat’l Trust Co. v. Talliere,
8th Dist. Cuyahoga, No. 2023-Ohio-75.
In this case, the Eighth Appellate District affirmed the trial
court’s decision to grant the plaintiff judgment on its claim
for foreclosure, finding that it had presented sufficient evidence
that it had possession of the promissory note and thus standing to
foreclose.
The Bullet Point: As an initial matter, the
appellate court found that in a foreclosure action, the plaintiff
only needs to meet its burden of proof by a preponderance of the
evidence, not the heightened clear and convincing evidence standard
the defendant argued should apply. Regarding standing to foreclose,
standing is “[a] party’s right to make a legal claim or
seek judicial enforcement of a duty or right.” To have
standing in a foreclosure action, the plaintiff must be the
“hold[er of] the note and have an interest in the mortgage
when the foreclosure complaint is filed.” “Constructive
possession exists when an agent of the owner holds the note on
behalf of the owner.” “Consequently, a person is a holder
of a negotiable instrument, and entitled to enforce the instrument,
when the instrument is in the physical possession of his or her
agent.”
Florida
Fees and Costs Under the FDUTPA Are Discretionary
Gonzalez v. Nobregas, No. 3D21-1826 (Fla. 3d
DCA Jan. 18, 2023)
The Third District affirmed a trial court’s denial of fees
and costs under the Florida Deceptive and Unfair Trade Practices
Act (FDUTPA), Florida’s UDAAP statute.
The Bullet Point: FDUTPA vests the trial court
with discretion to award fees and costs to the prevailing party.
The factors a trial court may consider in determining fee
entitlement under the FDUTPA include: (1) the scope and history of
litigation; (2) the ability to pay fees; (3) whether an award of
fees would deter future conduct; (4) the merits of the respective
positions of the parties; (5) whether the claim was frivolous,
unreasonable, or groundless; (6) whether claims or defenses were
raised to frustrate or stall; and (7) whether the claim was brought
to resolve a significant issue under the FDUTPA. In this appeal,
the Third District examined whether the trial court abused its
discretion in denying fees and costs to the prevailing party in a
FDUTPA action.
The Third District concluded that based on the record, the
discretionary nature of prevailing party fees under FDUTPA, and the
analytical framework, the trial court did not abuse its discretion
in denying fees and costs under FDUTPA are discretionary. The Third
District also affirmed that a proposal for settlement was
ineffective at shifting fees and costs due to a failure to strictly
comply with Fla. Stat. § 768.79(2) and Florida Rule of Civil
Procedure 1.442. However, the Third District did reverse in part,
finding that Fla. Stat. § 57.041 makes recovery of costs
mandatory, unlike FDUTPA. In addition, the Accordingly, the denial
of fees and costs based on the FDUTPA claim was affirmed.
Injury in Fact Required for Standing in Florida
Saleh v. Miami Gardens Square One, Inc., No.
3D21-1724 (Jan. 11, 2023)
The Third District concluded the trial court properly dismissed
a complaint as legally insufficient for failure to plead an injury
in fact and that the Fair and Accurate Credit Transactions Act
(FACTA) requires an actual injury irrespective of the standing
analysis.
The Bullet Point: The Third District followed
the Fourth District’s 2022 opinion in Southam v. Red Wing
Shoe Co. Inc., 343 So. 3d 106 (Fla. 4th DCA 2022), finding
that in order to have the standing to pursue a claim in a Florida
Court the Plaintiff must have standing, and standing requires an
injury in fact. A mere violation of the statute, absent harm, does
not create a viable claim. This continues the trend of Florida
Court’s aligning with the federal Article III standard for
standing.
This appeal stems from the trial court’s dismissal of the
plaintiff’s FACTA claim, which was premised on two printed
receipts he received from the defendants that displayed the first
six and last four digits of his credit card account numbers. The
defendants moved to dismiss the action, arguing that the plaintiff
lacked standing because he failed to assert an injury in fact. The
plaintiff maintained he had standing because the defendants were
aware of the FACTA’s requirements and thus willfully violated
the statute. The trial court ultimately dismissed the action,
finding the plaintiff lacked standing because he asserted no legal
injury.
On appeal, the plaintiff conceded that he did not and cannot
establish he suffered actual harm based on the receipts because he
retained possession of them. The Third District, therefore,
concluded that he lacks standing to pursue his claim, agreeing with
the Fourth District that standing in Florida requires an injury in
fact. The Third District also found that irrespective of the
plaintiff’s standing, FACTA itself requires an actual injury
for a claim to exist, so the absence of any such injury supported
dismissal.
Successor Corporate Liability
J&R United Indus., Inc. v. Miron, No.
3D21-1781 (Fla. 3d DCA Jan. 4, 2023)
The Third District examined whether the liability of a selling
predecessor corporation could be imposed upon the buying successor
company.
The Bullet Point: The liability of a selling
predecessor corporation generally will not be imposed upon the
buying successor company unless: (1) the successor expressly or
impliedly assumes the obligations of the predecessor; (2) the
transaction is a de facto merger; (3) the successor is a mere
continuation of the predecessor; or (4) the transaction is a
fraudulent effort to avoid liabilities of the predecessor. The
imposition of liability pursuant to these exceptions is based on
the notion that no corporation should be permitted to avoid
liability through corporate transformation in form only. In this
case, the trial court found there was evidence to support the last
three exceptions and, after a bench trial, entered final judgment
against the successor corporation. On appeal, the Third District
affirmed the final judgment, concluding competent, substantial
evidence supports the trial court’s findings.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.