The world – not the property – is what changed

FLORIDA LAW WEEKLY

VOLUME 47, NUMBER 20

CASES FROM THE WEEK MAY 20, 2022

COURT AFFIRMS TRIAL COURT’S RULING FINDING THAT COMMERCIAL POLICY DID NOT COVER ECONOMIC LOSSES SUFFERED DURING THE COVID-19 PANDEMIC

Commadore, Inc. v. Certain Underwriters at Lloyd’s, 47 Fla. L. Weekly D1044 (Fla. 3^rd DCA May 11, 2022):

A restaurant and bar located in Coconut Grove filed a claim with its commercial property insurer for the business income losses it suffered after having to suspend operations during the Covid-19 pandemic. The policy did not contain a virus exclusion. Still, its plain language did not cover claims for business income losses, unless the losses arose from a suspension of operations “caused by direct physical loss or damage of property.”

Because the court found that loss of intended use alone did not constitute “direct physical loss,” and which requires actual, tangible alteration to the insured property for coverage to be triggered, the trial court ruled correctly that there was no coverage.

As the Third District explained, “in short, the difference between GreenStreet’s loss of use theory and something clearly covered – like a hurricane – is that the property did not change. The world around it did, and for the property to be usable again, no repair or change can be made to the property – the world must change.”  Citing, Town Kitchen LLC v. Certain Underwriters at Lloyd’s, 522 F. Supp. 3^rd at 1222. A painful reality indeed.

ERROR TO ADMIT EVIDENCE AND ARGUMENT WHICH ESSENTIALLY IMPERMISSIBLY PIERCED THE CORPORATE VEIL – DISSIMILIAR CONDUCT FROM THE CONDUCT BY WHICH THE INJURED PARTY IS HARMED CANNOT BE THE BASIS FOR A PUNITIVE DAMAGE AWARD – FINALLY, COURT REJECTED ARGUMENT THAT U.S. SUPREME COURT’S DECISION LEGALIZING SAME SEX MARRIAGE SHOULD BE APPLIED RETRO-ACTIVELY TO ENABLE A PLAINTIFF TO BECOME THE SURVIVING SPOUSE OF THE DECEDENT

Philip Morris v. Rintoul, 47 Fla. L. Weekly D1052 (Fla. 4^th DCA May 11, 2022):

After this tobacco trial, the Fourth District reversed the compensatory and punitive verdict, addressing several issues important to “non” tobacco cases.

Before trial, the defendants moved to preclude evidence regarding JUUL e-cigarettes and other JUUL products. They argued there was no evidence to show that the decedent had used those products, and those products had nothing to do with the Engle progeny cases.

The defendants acknowledged that Philip Morris is a subsidiary of Altria Group, Inc. and that Altria had made a $12.8 billion minority investment in JUUL, giving it thirty-five percent interest in December of 2018. Still, Philip Morris did not control JUUL.

Although Philip Morris put JUUL coupons on Marlboro packages, and made their customer list available to JUUL for sending coupons, the defendants argued that they could only be punished for their own conduct, and even the plaintiff’s expert testified that the JUUL products had not harmed the decedent who died from smoking cigarettes.

At trial, the trial judge allowed the plaintiff to introduce evidence and argument regarding JUUL on the theory that it was probative as to the issue of punitive damages, demonstrating continued misconduct of the defendants.

Plaintiff alleged that Philip Morris engaged in joint marketing efforts with JUUL, by providing JUUL coupons and sharing shelf space. The trial court found that the evidence of marketing JUUL products and e-cigarettes as an alternative nicotine delivery device was in concert with the type of conduct which harmed the decedent.

The court reversed. It found that admitting JUUL evidence against the defendant required disregarding corporate entities, essentially allowing the piercing of the corporate veil. It also found that the sole evidence showing a joint marketing effort between JUUL and the defendant was, at best, dissimilar to the acts upon which liability for the decedent’s death were predicated, and thus punished the defendants for conduct which did not actually harm the decedent.

To pierce the corporate veil, litigants must prove three factors by preponderance of the evidence: (1) the shareholder dominated and controlled the corporation to such an extent that the corporation’s independent existence was in fact non-existent and the shareholders were, in fact, alter egos of the corporation; (2) the corporate forum must have been used fraudulently or for an improper purpose; and (3) the fraudulent or improper use of the corporate forum caused injury to the claimant.

The court found there was no evidence offered to pierce the corporate veil and therefore admitting evidence about JUUL and the joint marketing efforts was error.

On a different note, the plaintiff asserted that he and the decedent had been together since 1982, but did not marry until it was legal in 2015. Plaintiff wanted the Supreme Court’s decision to be applied retroactively to establish a marriage pre-existing 1996 when the decedent’s COPD first manifested.

The court refused finding that Florida does not recognize common-law marriages. Although the decedent and the plaintiff lived together for years and purchased property together, they never attempted to obtain a marriage license anywhere else. The court found that merely moving in together was common among many couples, both same sex and heterosexual, but such conduct did not create a marriage.

Because juries cannot create marriages in Florida, the court found it could not recognize a marriage where it did not exist, and refused to recognize the plaintiff as the surviving spouse.

ERROR TO DENY MOTION FOR PROTECTIVE ORDER SEEKING TO PREVENT THE PLAINTIFF FROM  DEPOSING THE FOUNDER OF AN ELECTRONIC CIGARETTE COMPANY FOR THE PURPOSES OF GATHERING INFORMATION REGARDING THE COMPANY’S RELATIONSHIP TO THE ACTUAL DEFENDANT

JUUL Labs, Inc. v. Feldman, 47 Fla. L. Weekly D1061 (Fla. 4^th DCA May 11, 2022):

The defendant sought a protective order to prevent the plaintiff from deposing the founder of JUUL Labs. The plaintiff wanted the deposition to obtain information regarding the relationship between JUUL and Philip Morris and its parent company, Altria Group, Inc.

The plaintiff hoped this evidence would help support her punitive damages claim against Philip Morris. However, the court wrote that it has now held that such JUUL evidence is irrelevant to the issues raised against Philip Morris in smoking cases, and reversed the trial court’s order to the extent it denied defendant’s motion for protective order.