Source: http://www.fmglaw.com/FMGBlogLine/2017/06/
Timestamp: 2017-10-21 23:23:50
Document Index: 51059684

Matched Legal Cases: ['§ 812', '§ 2051', '§ 2051', '§ 2051', '§ 2051', '§ 2070']

2017 June Archive - FMGBlogLine
On June 26, 2017, the Supreme Court agreed to hear the Travel Ban cases when it reconvenes next fall. The Court has allowed the government to implement parts of President Trump’s second executive order which bans the entry of nationals of Iran, Libya, Somalia, Sudan, Syria and Yemen from the United States and suspend the admission of all refugees for 120 days.
In a narrow decision, the Supreme Court held that the travel ban cannot prohibit the entry of foreign nationals from the stated countries if they can credibly show:
A close familial relationship to a person in the U.S.; OR
A formal and documented relationship with a U.S. entity
This standard is also applied to all refugees hoping to enter the United States.
The Court’s order will go into effect on Thursday, June 29, 2017 and will remain in place until at least October 2017, pending final resolution of the case on its merits.
Florida Legislature Rewrites Laws for Condo Community Associations
Florida House Bill 1237, a bill which proposed significant changes to several laws governing condominium community associations, passed both houses of the Florida Legislature in the 2017 legislative session and is expected to go into effect as of July 1, 2017. The bill, written in response to public outcry over corruption and criminal activity in condo communities in South Florida, revised aspects of the Florida Statutes to prohibit certain conflicts of interest for condo boards and board members; apply criminal penalties for certain actions by board members; and impose new requirements for financial statements, recordkeeping, and elections, among other things. Here are just some of the key changes pertaining to conflicts of interest and newly criminalized activities:
An association is prohibited from hiring an attorney who also represents the management company for the association.
A board member, manager, or management company may not purchase a unit at a foreclosure sale resulting from the association’s foreclosure of its lien for unpaid assessments or take title in lieu of foreclosure.
An association, unless it is a timeshare condo association, may not employ or contract with any service provider that is owned or operated by a board member or officer, or any person who has a financial relationship with a board member or officer, or certain relatives of board members or officers, unless the board member or officer owns less than 1 percent of the equity shares.
If, after transfer of control to the association, 50% or more of the units in the community are owned by a party contracting to provide maintenance or management services to an association or by a board member or officer of such a party, the contract may be cancelled by majority vote of the unit owners other than the contracting party or the officer or board member of the contracting party.
Certain disclosures must be made by any officer or director proposing to engage in activity that is a conflict of interest. If the board votes against taking the action, the officer or director must notify the board in writing of his or her intention not to take the action or to withdraw from office. If the board finds an officer or director violated this provision, the officer or director shall be deemed removed from office.
A rebuttable presumption of a conflict of interest exists if, without prior notice, (1) a director or officer of an association or certain of their relatives enters into a contract for goods or services with the association or (2) a director or officer or certain of their relatives holds an interest in a corporation or other business entity that conducts business with the association or proposes to enter into a contract or other transaction with the association.
Newly Criminalized Activity
Officers, directors, and managers are prohibited from soliciting, offering to accept, or accepting any kickback for his or her own benefit or that of his or her immediate family, and violation of this provision is considered a violation of the criminal law. A violation of this provision may also subject an officer, director, or manager to civil penalties.
Forgery of a ballot envelope of voting certificate used in an election is a felony of the third degree and punishable by up to 5 years in prison.
The theft or embezzlement of funds of a condo association is considered a theft and punishable pursuant to Fla. Stat. § 812.014.
The destruction of or refusal to allow inspection or copying of an official record of a condo association in furtherance of a crime is punishable as tampering with physical evidence or as obstruction of justice.
An officer of director charged by information or indictment with a crime referenced above must be removed from office until the end of his or her period of suspension or the end of his or her term, whichever occurs first.
If a criminal charge is pending against the officer or director, he or she may not be appointed or elected to a position as an officer or director of any association and may not have access to the official records of any association, except pursuant to court order.
If the charges against the officer or director is resolved without a finding of guilt, the officer or director must be reinstated for the remainder of his or her term in office, if any.
These changes to the laws governing condo community associations will serve to complicate board and board member compliance with the new provisions. For guidance on these changes to condo association law or any aspect of Florida law governing community associations, please contact the attorneys in FMG’s Tampa office.
By: Zachariah E. Moura
California FAIR Plan Association v. Garnes (May 26, 2017) __ Cal.App.5th __ [218 Cal.Rptr.3d 246]
Hewing to the rule that “where an insurer’s policy contains terms that conflict with the law, the courts will decline to enforce the impermissible terms and read into the policy the terms required by statute,”[1] the Court of Appeal, First District, held in California FAIR Plan Association v. Garnes that Ins. Code § 2051, coupled with sections 2070 and 2071, sets a minimum standard of coverage that requires an insurer to indemnify its insured for the actual cost of the insured structure, minus depreciation, even if this amount exceeds the fair market value of the structure, where an open fire insurance policy pays “actual cash value,” and there has been a “partial” but not “total loss to the structure.”
The California FAIR Plan Association (“FAIR”) is an insurance industry placement facility and joint reinsurance association created by the California Legislature in 1968 to provide basic property insurance to homeowners who live in high risk or otherwise uninsurable areas. Marlene Garnes, residing in just such an area of Richmond — the “Iron Triangle” (named for the intersecting railroad tracks that frame it) — insured her family home through FAIR, with a policy limit of $425,000.
After her home was damaged (but not destroyed) by fire, Garnes submitted a claim to FAIR seeking indemnity for the costs required to repair her home, less depreciation, the net amount of which was $320,549. FAIR declined and instead paid her the $75,000 it determined represented the fair market value of her property in 2011, and filed a declaratory relief action against her regarding the interpretation of Ins. Code § 2051.
After the trial court granted summary judgment in favor of FAIR, the court of appeal reversed.
The FAIR Policy stated that if the cost to replace or repair a damaged dwelling exceeded its actual cash value, which the Policy defined as “Total Loss,” FAIR would pay the actual cash value, but in any other case, which the Policy described as “Partial Loss,” FAIR would pay the lesser of the cost to repair less reasonable depreciation or the actual cash value.
The court held that Ins. Code § 2051 provides mandatory minimum coverage under an open ACV fire insurance policy. Section 2051 provides that in the case of a “total loss to the structure,” recovery is limited to the lesser of the policy limit or a property’s “fair market value.” (§ 2051, subd. (b)(1).) However, where the loss is a “partial loss to the structure,” recovery is not limited to fair market value but instead is the lesser of the policy limit or “the amount it would cost the insured to repair, rebuild, or replace the thing lost or injured less a fair and reasonable deduction for physical depreciation based upon its conditions at the time of the injury.” (Ibid.)
Because Ins. Code § 2070 requires “[a]ll fire policies” to be on the standard form or provide coverage for fire losses that is “substantially equivalent to or more favorable to the insured than that contained in such standard form fire insurance policy,” the court held that the FAIR Policy was unenforceable to the extent that it purports to cap indemnity for partial losses at fair market value, or to treat a loss that did not destroy the structure as a “total loss.”
The decision may prod a lobbying effort to encourage the Legislature to amend section 2051 by inserting “fair market value” as a cap on recovery. Until then, given the dramatic difference in value to an impoverished homeowner when a fire-damaged home is deemed a “partial loss” rather than a “total loss”, it appears that there will be many factual disputes over what degree of damage qualifies as “total loss to a structure.”
[1] California FAIR Plan Association v. Garnes (May 26, 2017) __ Cal.App.5th __ [218 Cal.Rptr.3d 246], citing Howell v. State Farm Fire & Casualty Co. (1990) 218 Cal.App.3d 1446; Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 754; and Wildman v. Government Emp. Ins. Co. (1957) 48 Cal.2d 31, 39–40.
For any questions, please contact Zach Moura at [email protected].