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Florida Fifth DCA rejects claim of judicial estoppel as grounds for denying defendant in motor vehicle negligence case discovery as to whether a prior settlement was reached with plaintiff

On March 5, 2021, in Marrero v. Rea, No. 5D20-1612, the Florida Fifth DCA granted the certiorari petition of the defendant driver in a motor vehicle negligence case and quashed trial court orders which prohibited the parties from engaging in any discovery related to the defendant’s affirmative defense that the underlying personal injury claims were settled prior to suit being filed. The basis for the trial court’s ruling arose out of a complicated procedural history in which a UIM insurer, sued as a codefendant. Had previously removed the litigation to federal court based on diversity jurisdiction, premised on the UIM insurer’s status as a foreign entity. However, the federal district court determined that it could not conclude that it was more likely than not that the plaintiff had not previously settled with the defendant driver (the petitioner herein), and consequently remanded the case back to state court for lack of diversity jurisdiction because the plaintiff and the defendant driver were both Florida residents. In making this ruling, the district court had relied on a stipulation between the parties that no further discovery was necessary on the issue of whether a prior settlement had been reached between the plaintiff and the defendant driver and noted that the insurer’s letter responding to the initial demand letter was not a mirror-image, point-by-point acceptance of the original demand letter, nor were the checks cashed or release signed. Back in state court, the trial court relied upon the previous findings in federal court to deny any further discovery on the issue of whether there had been a prior settlement, reasoning that such discovery was precluded by the doctrine of judicial estoppel because of the parties’ federal court stipulation that no further discovery was necessary. The Fifth DCA disagreed, noting that in judicial proceedings, a party is not estopped from asserting a later inconsistent position “unless the party’s initial position was successfully maintained, quoting Leitman v. Boone, 439 So. 2d 318, 322 (Fla. 3d DCA 1983). The Fifth DCA pointed out that the defendant driver had not successfully maintained her position in federal court that no further discovery was necessary, as the district court found that there were in fact too many unanswered factual questions to permit entry of summary judgment in the defendant driver’s favor. The Fifth DCA cited another case, HFC Collection Center, Inc. v. Alexander, 190 So. 3d 1114, 1117–18 (Fla. 5th DCA 2016), wherein the Court granted a petition for certiorari because “we conclude[d] that the circuit court applied the wrong law,” when it employed judicial estoppel against a party whose initial position in the same lawsuit was revised once that position had been rejected by the lower court’s ruling. The Fifth DCA additionally noted that in applying judicial estoppel, the trial court treated the federal court’s denial of the defendant driver’s motion for summary judgment as though it was a binding, substantive ruling. In so doing, the trial court ignored the fact that the district court ultimately determined that it lacked subject matter jurisdiction. The Fifth DCA stated that It is well-settled law that a court lacking subject matter jurisdiction cannot make binding, substantive rulings beyond a determination that it lacks jurisdiction. Citing Strommen v. Strommen, 927 So. 2d 176, 179(Fla. 2d DCA 2006); Fla. Exp. Tobacco Co. v. Dep’t. of Revenue, 510 So. 2d 936, 943(Fla. 1st DCA 1987).

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