Morejon v. American Security Insurance
829 F. Supp. 2d 1258
M.D. Fla.2011Background
- Plaintiffs Augustin and Martha Morejon filed a sinkhole damage claim against Defendant American Security Insurance in state court in Hillsborough County, Florida.
- Defendant removed the action to federal court on the basis of diversity jurisdiction on November 4, 2011.
- Defendant invoked the Florida neutral evaluation process under Fla. Stat. § 627.7074 on November 7, 2011.
- The statute provides that neutral evaluation is nonbinding but mandatory if requested, tolls time requirements for 60 days, and that related court proceedings are stayed until completion of neutral evaluation.
- The court considers whether to stay the federal action pending neutral evaluation and administers the stay by administratively closing the case during the stay.
- Prior MD Fla. precedent recognizes staying cases during neutral evaluation and implementing administrative closure during the stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 627.7074 requires a stay in federal diversity action. | Morejon argues the statute is procedural and not applicable in federal court. | American Security contends the statute creates a condition precedent that must be followed, thereby mandating a stay. | Stay granted; statute applies as a condition precedent. |
| Whether Erie requires applying the Florida condition precedent in federal court. | Erie does not require applying Florida stay provisions in federal court. | Erie requires treating state-imposed conditions on diversity claims consistently with state law. | Erie requires enforcement of the Florida stay as to this diversity action. |
| Whether § 627.7074 is substantive or procedural for purposes of federal practice. | Statute is procedural and therefore non-applicable to federal action. | Statute creates substantive rights with procedural elements that aid resolution of the claim. | Statute is substantive with related procedural elements; applicable to federal action. |
| Whether there is a clash between Rule 62 and § 627.7074 justifying denial of stay. | Rule 62 governs stays on judgments and does not apply here. | No direct conflict; the Florida statute governs stays related to neutral evaluation. | No clash; statute-based stay valid and governing. |
Key Cases Cited
- Woods v. Holy Cross Hosp., 591 F.2d 1164 (5th Cir.1979) (Erie-based enforcement of pre-suit mediation/ADR as a condition precedent in diversity actions)
- Caple v. Tuttle’s Design-Build, Inc., 753 So.2d 49 (Fla.2000) (recognizing procedural provisions related to substantive rights do not violate separation of powers)
- McCarthy v. Mensch, 412 So.2d 343 (Fla.1982) (Legislature can mandate ADR and findings admissible; approved Woods-like framework)
- Edelson v. Soricelli, 610 F.2d 131 (3d Cir.1979) (courts may enforce state-mandated ADR conditions in federal action)
- Clark v. Sarasota County Pub. Hosp. Bd., 65 F.Supp.2d 1308 (M.D.Fla.1998) (state ADR-related conditions precedent applicable in federal diversity actions)
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (U.S.1958) (Erie doctrine governs application of state rules in federal actions)
- Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1981) (adopts former Fifth Circuit decisions as binding precedent)