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Florida Banking Law Blog

Legal developments impacting banking, finance and loan enforcement in Florida

Welcome to the Florida Banking Law Blog!

Posted in Uncategorized

Rogers Towers, P.A. welcomes you to its Florida Banking Law Blog! A product of the firm’s Banking and Financial Services Practice Group, the blog will serve as a convenient way for us to share our expertise in banking-related legal issues. We represent banks and other providers of financial services in a broad range of matters throughout the state of Florida. As a result of our significant experience, we will have much to share in the upcoming blog posts and we hope that you will find these posts to be informative and beneficial to you in your respective positions in the industry. We appreciate your interest in the field and in Rogers Towers, P.A., and we look forward to your comments in response to our blog.

Depositions: “Invoking the Rule” To Exclude Persons From Attending Depositions

Posted in Uncategorized

Section 90.616, Florida Statutes, sets forth the procedure for excluding certain witnesses from a proceeding, referred to as “invoking the rule,” so that one witness does not potentially color the testimony of other witnesses.  Although witness sequestration during trial is routine, Florida law is less clear on whether attorneys can utilize this procedure during a deposition.  Currently, there is a circuit split on this issue and thus, for the moment, the procedure may depend on where the lawsuit is filed.

In Dardashti v. Singer, Florida had not yet implemented § 90.616, but the Fourth District Court of Appeal announced that the “unwritten rule” of sequestration applied to depositions, so a judge must exclude prospective witnesses upon request.  On the other hand, the First District Court of Appeal in Smith v. S. Baptist Hosp. of Florida, Inc., declined to apply the sequestration rule to depositions.  Instead, the court held that the party seeking to exclude prospective witnesses must obtain a protective order from the judge to that effect.  The court based its ruling on a comparison to the federal evidence and civil procedure rules, which apply the sequestration rule only to hearings and trials.

It is worth mentioning that the legislative notes for § 90.616 specifically reference the Fourth DCA’s opinion in Dardashti, rather than the First DCA’s opinion in Smith, which may suggest that the Legislature intended that the rule of sequestration should apply to depositions.  Still, practitioners handling cases within the First District may cite Smith in their attempts to “invoke the rule” of sequestration during depositions.

Finally, regardless of the application of the sequestration rule, certain categories of witnesses—a party (either an individual or a corporate party’s representative), a person whose presence is shown to be essential to the presentation of the party’s cause, or the victim or next of kin in criminal cases—may not be excluded.

Appealing Real Estate Taxes in Florida

Posted in State Tax Issues

As the old saying goes, there are two certainties in life: death and taxes.  For commercial real estate owners and developers, the latter is an inevitability that may be mitigated.  Each August, Florida property tax appraisers send out TRIM notices, or Notice of Proposed Property Taxes, advising all taxpayers of the proposed assessment on their properties.  These TRIM notices are critically important for a number of reasons: foremost being that the mailing of the notices opens a very short window in which a tax appeal may be filed.

The assessed value of a piece of real estate roughly approximates what the county property appraiser considers market value.  Often this assessment is higher than what the local market may support, or the property may have been affected by a diminution of value through declining market conditions or other factors.

Florida law provides a taxpayer the option of appealing the assessment in an administrative appeal before the Value Adjustment Board (VAB). The appeal is started by filing a Petition with the Clerk of the VAB.  As mentioned above, reading the TRIM notice is critical because the petition must be filed no later than the twenty-fifth day after the mailing of the TRIM notice (not the receipt).

Alternatively, a taxpayer may file a circuit court action to challenge the assessment.  Circuit court appeals are more costly, but if the case involves a complex legal or evidentiary issue, the twenty-five day appeal period is generally not feasible.  Further, value disputes before the VAB are generally heard by the very individuals who assessed the property in the first place.  Perhaps most importantly, in a court action, an attorney may subpoena witnesses to testify on the taxpayer’s behalf and may depose adverse witnesses before trial.  As a result, testimony and evidence that may be unobtainable in a VAB hearing may often be compelled in a circuit court appeal.

A circuit court action, however, is not without its time constraints.  Florida statutes provide that filing in circuit court is proper within sixty days from the date that the assessment being contested is certified for collection, or sixty days from the date that a decision is rendered by the VAB.  Importantly, the taxpayer must pay the assessment, even when such assessment is contested.  If the court determines that the taxpayer was not liable for the tax, the reduced portion of the assessment will be refunded to the taxpayer.

If you feel that your assessment is improper, it is critical that you speak with a real estate attorney as soon as you receive the TRIM notice.

The Inadvertent Error Defense to Violations of the Equal Credit Opportunity Act

Posted in Banking Operations

The Equal Credit Opportunity Act (the “ECOA”) prohibits creditors from discriminating against credit applicants based on race, religion, sex, national origin, marital status, and age among other things.  Penalties for violations of the ECOA were discussed in a previous blog post, where we also mentioned that not every failure to comply with the ECOA results in civil penalties.  Sometimes a failure to comply with the ECOA is the result of an “inadvertent error,” which is not considered a violation.

Defined in 12 C.F.R. § 1002.2(s), an inadvertent error is “a mechanical, electronic, or clerical error that a creditor demonstrates was not intentional and occurred notwithstanding the maintenance of procedures reasonably adapted to avoid such errors.”  Creditors should understand this defense has very limited utility, as it only applies to specific violations of the ECOA as set forth in 12 C.F.R. § 1002.16(c), such as certain notification requirements, a failure to retain certain records, or misinterpretation of a code on a credit report.

To rely on the inadvertent error defense, the creditor bears the burden of proving its procedures are designed to avoid and subsequently prevent these types of inadvertent errors. A creditor must show more than just the “maintenance of procedures reasonably adapted to avoid such errors.”  Further, 12 C.F.R. § 1002.16(c) requires that inadvertent errors under §§ 1002.9 (notifications) and 1002.10 (furnishing of credit information on creditor’s spouse) must be “correct[ed] as soon as possible.”  Although a specific timeframe is not set forth in the statute, one court noted that two months from the time of discovery to corrective action was too long.  Courts have also held that where a creditor refused to correct an inadvertent error under § 1002.9 (notifications), it was not entitled to use the defense.

Regardless of whether a creditor’s failure to comply with the ECOA is the result of an inadvertent error, it is wise for a lender to correct the violation immediately, and put procedures in place to avoid subsequent errors.