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Dismissal as a Penalty in Your Florida Commercial Litigation Case

When you decide to pursue litigation as the means to resolve a commercial contract dispute, there are many things that can detour or, worse, derail your case. Some of these have nothing to do with the strengths or weaknesses of the factual part of your case. In two cases in which plaintiffs had suffered dismissals due to missteps, both entities were likely to face some form of penalty, although one likely much more severe than the other. A plaintiff from South Florida saw its case dismissed due to its erroneous actions, while a Tampa Bay plaintiff got its dismissal reversed because the statute called for a stay of the plaintiff’s case, rather than a dismissal.

The first case, heard by the Fourth District Court of Appeal, featured a contractor who was facing litigation in South Florida and potential liability for alleged construction defects in its work. The contractor filed its own claims against a wide array of opponents, asserting actions like indemnification and contribution.

Regarding the contractor’s claims against a roofing contracting business, the trial court ordered the two sides to go to mediation. The contractor, according to the court, didn’t show up for that mediation. Since the mediation was court-ordered, this was obviously problematic. The contractor made its situation worse, however, when it decided to file “in the court record” what one of the appeals judges described as “a false certificate concerning the mediation.” The judge described the contractor’s statements at the sanctions hearing as “false testimony to the court concerning appellant’s failure to comply with the mediation order.”

The skipped mediation, when combined with the multiple fabrications (which the court found were “willful”) led the trial court to issue a severe penalty. It wiped out the contractor’s pleadings in the case, which triggered a dismissal of the case. Despite an appeal, the contractor was not able to revive its action. The law gives trial judges considerable discretion in handling their cases, including when they are dealing with party misconduct. Even if the appeals court thought that the penalty was harsh, the trial court was within its discretion for taking the action it took.

The second case, heard by the Second District Court of Appeal, reached a different endpoint. In this case, the plaintiff was a Delaware corporation that sued a Florida corporation in Florida over the latter’s failure to make contractually required payments under the terms of an equipment lease. The problem the plaintiff faced in this case was allegations not of misconduct but of shortcomings related to mandatory filings. The defendant asked the trial court to dismiss the case on the ground that the plaintiff had never filed a “Certificate of Authority” to transact business in Florida with the state Division of Corporations.

The trial judge accepted this argument and threw out the case. This plaintiff was able to win its appeal, however. The statute governing certificates of authority does not allow courts to dismiss cases when plaintiffs are business entities that have failed to complete the Certificate of Authority filing. The statute only allows courts to stay cases until the non-compliant plaintiff successfully completes the Certificate of Authority filing process.

Whenever you are doing business in Florida, you have the possibility of becoming involved in commercial litigation in Florida. There are many things, wholly unrelated to the merits of your case, that can cause delay or worse (like dismissal). To make sure you avoid unnecessary pitfalls, you need on your side the skilled Florida commercial litigation attorneys at Stok Kon + Braverman. Our team has been helping litigants in commercial contract disputes for many years and is equipped to provide quality representation for your case.

Contact us online or by calling (954) 237-1777 to schedule your consultation.

More blog posts:

South Florida Court Hits Ex-Wife with $6.8M Judgment for Tying Up Assets With Injunction, Florida Business Lawyers Blog, Nov. 30, 2016

Judgment Creditor Stops Sale of Debtor’s Assets Due to Lack of Compliance with Florida’s Assignment Statutes, Florida Business Lawyers Blog, Nov. 16, 2016

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