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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, PA welcomes readers to its new 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, PA and we look forward to your comments in response to our blog.  Again, welcome to the Florida Banking Law Blog!

Discovery and Social Media

Posted in Debt and Judgment Collection

The advent of social media has brought about many changes in the world of litigation, not the least of which is the availability of information that previously would have been impossible to discover.  It is hardly an exaggeration that between Facebook, Instagram, Twitter and other social media platforms, millions of people post their every move online.  In fact, there are “apps,” such as Foursquare, that update a user’s location in real time.  With this potentially unlimited record of a litigant’s daily behavior, practitioners are chomping at the bit to acquire such information.

Because the discovery of social media in litigation is so new, there is limited case law on the subject.  As the case law emerges, however, one of the leading questions revolves around what information can be considered “public” and what information is “private”.  Is a Facebook post public if the user has selected privacy settings which allow only a limited group of friends to read the post or see his or her pictures?

When faced with this question, Florida courts have noted that generally social media content is neither privileged nor protected by any rights of privacy.  Nevertheless, one party does not have a generalized right to rummage through information that another party has limited from public view.  Examined in the light of ordinary discovery rules, this limitation makes sense.

According to Florida’s Rules of Civil Procedure, litigants are required to produce only those items that appear reasonably calculated to lead to the discovery of admissible evidence.  Thus, in the social media context, Florida courts have held that parties attempting to discover admissible evidence may not engage in a “proverbial fishing expedition” in the hope that there might be something of relevance in the other party’s social media accounts.  In the context of personal injury cases, discovery of social media accounts are generally limited to posts subsequent to the injury, especially when the plaintiff’s physical condition is at controversy.

Although social media has revolutionized the amount of information potentially available for discovery, Florida courts have been cognizant of historic standards and limitations of discovery.  Simply believing that there may be incriminating evidence in the other party’s social media history will not carry the burden.  If there is an objection to such a discovery request, the non-objecting party must show that the disclosure of social media posts, pictures, or messages will lead to the discovery of admissible evidence.  As courts become more comfortable with the social media landscape, more concrete rules are inevitable.  For now, litigants should be guided by the ordinary principles of “pre-Facebook” discovery.

Written Document Retention and Destruction Policy Saves the Day (Again)

Posted in Debt and Judgment Collection

As we mentioned in our previous posts regarding document preservation, establishing a written document retention and destruction policy is essential to any company, large or small.  As with the Pradaxa case out of the Southern District of Illinois, a recent case out of the Northern District of New York, Research Foundation of SUNY v. Nektar Therapeutics, exemplifies the pivotal role such a policy has in the event of litigation.  RF SUNY brought complex breach of contract and breach of the implied duty of good faith and fair dealing actions against Nektar, but it was the defendant, Nektar which filed the instant spoliation motion.

Nektar alleged that the RF SUNY was grossly negligent for failing to preserve documents which “may have been relevant to future litigation” as well as being grossly negligent “in its efforts to preserve documents.” Nektar also alleged that RF SUNY failed to “to timely issue written litigation-hold notices,” “preserve all relevant backup-tape data,” and “suspend its auto-delete practices.”

In a brief memorandum opinion, the court disagreed with Nektar, instead finding that “RF SUNY had in place, since 2001, a comprehensive standard document preservation policy, issued both verbal and written litigation hold notices, preserved backup tapes of emails from before commencement and confirmed that no custodian had deleted any documents related to this matter.”  The court went on to note that even though RF SUNY’s document retention protocol had “some shortcomings,” RF SUNY was “at most, negligent in its effort to preserve evidence related to [the] litigation.”

The opinion also briefly addresses a subject that we have not yet touched on in this series of posts – the requirement of definiteness placed upon the party alleging spoliation.  As stated above, Nektar sought discovery of documents which “may have been relevant to future litigation.”  Indeed, Nektar admitted that it would be impossible for it to prove whether the documents were even relevant to the case at hand.  Nektar attempted to persuade the court to rely upon circumstantial evidence which it claimed was “likely to lead to a significant number of relevant conversations,” but the court was unpersuaded.

Much like the federal pleading standards after Twombly and Iqbal, spoliation motions are not vehicles for fishing expeditions.  When drafting such a motion, attorneys must be mindful of this “definiteness” requirement, or the motion risks being denied because it does not sufficiently allege that the destroyed documents were related to the pending litigation.

RF SUNY offers three lessons:  (1) If your company does not have a document retention and destruction policy, get one.  Fast.  If your company does have a policy, ensure that it is being followed as closely as possible.  (2) When filing a spoliation motion, ensure that the description of the documents, which you are claiming were destroyed is as definite as you can make it.  (3)  Lastly, it is important to understand that spoliation is a two way street – both the plaintiff and defendant must preserve documents through respective litigation holds.  For plaintiffs, this third point causes a bit of consternation when establishing the “trigger date,” as it is not always clear when litigation is “imminent” or “reasonably ascertainable” to the party that intends to file the lawsuit.

Complying with the Florida Consumer Collection Practice Act

Posted in Debt and Judgment Collection

In addition to ensuring compliance with the federal Fair Debt Collection Practices Act (FDCPA), lenders should take precautions to limit its exposure to claims under the Florida Consumer Collection Practices Act (FCCPA).  For example, lenders should:

 

  • Ensure that loan accounting systems accurately track the terms of loan modifications, forbearance agreements, and other loan documents at the time those documents are executed.

 

  • Establish written policies and procedures to reduce errors and to verify the accuracy of accounting systems.  Loan officers should ensure that the policies and procedures are routinely followed by all employees at all levels of a lender’s operations.

 

  • Periodically review the terms of loan documents to ensure that they are fully reflected in accounting systems.

 

  • Ensure that correspondence with debtors accounts for all loan modifications.  Be aware that automatically generated notices have greatest risk of not being accurate or up to date.

 

  • Avoid direct communication with borrowers whose loans are in default and who are also represented by counsel regarding the debt.

 

If a lender follows these guidelines, then it should be able to claim the protection of a “good faith” defense contained within the statutory text of the FCCPA.  To successfully raise this defense in court, a lender must establish (by a preponderance of the evidence) both (1) that the alleged violation of the FCCPA was not intentional, and (2) that the lender maintained procedures reasonably calculated to avoid errors.  For this reason, lenders should review their policies and procedures to ensure that their loan accounting systems consistently track the terms of loan documents.