On July 1, 2024, Florida Session Law 2024-44 (the Act) takes effect, providing homeowners a swift new process for removing unauthorized persons (squatters) from their property without judicial action. The new law, passed unanimously by the Florida Legislature, is in response to high-profile squatter cases nationwide and creates criminal penalties for persons unlawfully occupying residential property and refusing to leave when asked.
Cause of Action for Wrongful Removal
Critics of the Act warn that the new non-judicial remedy raises due process concerns and that unscrupulous landlords may use it as a shortcut to the regular eviction process. However, the Act creates a civil cause of action for a wrongly removed person to regain possession and recover from the landlord actual damages and statutory damages equaling three times the fair market rent of the dwelling, in addition to court costs and reasonable attorneys’ fees.
Source: New Florida Law Leads the Way in Ending Squatter Scams, Practical Law Legal Update w-042-9583
Practical Law Connect: New Florida Law Leads the Way in Ending Squatter Scams
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Identifying the cause of action requires consideration of two factors – the legal theory and remedy . In the United States, CoA is defined from the standpoint of the rights of plaintiffs and duties of defendants with the breach of duty that resulted in loss and damage .
To institute a lawsuit, a plaintiff must prove all the elements of CoA including wrongful action such as threats . However, wrongful action alone does not trigger a CoA – It is the existence of the injury, damage, or loss that happened due to that wrongful action.
The following 6-step process gives attorneys confidence to specify CoA for their particular case.
1. Establish the existence of a legal possessory right
2. Determine defendant’s legal duty to act
3. Prove wrong or violation toward the plaintiff
4. Establish the concurrence of right, duty, and wrong
5. Prove damage or loss
6. Demonstrate concurrence of wrong and damage
1 – Existence of a legal possessory right in the plaintiff over the matter
The possessory rights, in this case, mean that the plaintiff’s legal right exists and where the defendant’s act affects that right.
For instance:
Case example: Colavito v New York Organ Donor Network, Inc .
The court ascertained the cause of action essentially with regard to the conversion in this matter. The court reasoned that for the cause of action to arise, the plaintiff’s possessory right or interest must exist and the defendant must have dominion over the property or interference with it, in derogation of the plaintiff’s rights.
Back to steps
2 – Corresponding legal duty in the defendant toward the plaintiff
The second element of the cause of action corresponds to the primary right of the plaintiff. This duty may arise from a contract or may be imposed by positive law independent of the contract, or it may arise ex contractu or ex delictu (consequences from breaching the contract).
There are several ways to determine whether the defendant had a duty to act:
Case example: Solomon v. Bates (N. C.)
In this case, the theory involves directors that are trustees for creditors, and individually owe a legal duty to them. The directors were wrong acting in a fraudulent, negligent, mismanagement affecting the creditor’s rights.
Case example: Purcell vs R.R 108 N.C 414
The court gave the verdict that the failure to discharge the duty required by the laws was a wrong caused by the defendant’s negligence -tort- and is properly united by the tort by fraud and deceit form part of the complaint.
3 – Wrong or violation of the plaintiff’s right, or breach of duty on the part of the defendant
Duty is the action which is to be done or not done by the person in obligation of it. A cause of action arises wherever there is proof that there was the existence of a duty towards the plaintiff by him which he failed to procure resulting in a breach. For instance, negligence as a Tort is a breach of duty that is not desired by the plaintiff but committed by the defendant.
The Wrongful Act or Omission forms part of the action that leads to affecting the right of the plaintiff.
Case example: Hart v. Hanson , 14 N.D. 570, 105 N.W. 942 (1905)
The defendants were directors of the State Bank of Northwood, the plaintiff and his assignors became sureties on the such-depositary bond, and the same was delivered to and accepted by the county. County funds were thereupon deposited in the bank and were closed by the state authorities by reason of its insolvency. Here the defendant’s activities are part of the question since they acted fraudulently, as they already knew the insolvency of county funds but they remained silent . They were also the trustees in whose name the creditors invested money. Consequently, the directors were held completely liable to creditors.
When the defendant intentionally interferes with the rights of the plaintiff they lay the foundation for the lawsuit with the cause of action.
Case example: Davenport v. Underwood
The court held the defendant liable. The bank directors were held responsible for causing losses for the bank as they were directly liable to depositors on the grounds of fraud and negligence while performing the corporation’s duties.
Case example: Delano v. Case
In this case, the defendant committed a wrongful act on the ground of negligence. The court ruled that the purpose of cause of action could exist where there has been a liability in the right of the corporation to be enforced.
4 – Concurrence of right, duty, and wrong
According to Salmond “no right can exist without any corresponding duty and vice versa”.
Every person is rendered some rights which are granted to him against individuals or some against the public at large. These rights cannot be taken away. On the other hand, it’s the duty of individuals around him to let him enjoy his right by doing or restraining from doing anything which may hinder it. Rights and duties exist simultaneously.
A right is an interest protected by the law or the state, and it’s the duty that mandates the protection of the right. But when the protection is infringed by a failure to follow the duty, it gives rise to the wrong committed and hence, to a cause of action. This renders another right to claim the damage suffered for the one whose right was infringed.
5 – Damage
When the duty obliged is not performed, the right is infringed causing loss or damage and can be claimed with the cause of action that arose. Damages can be defined as the injury caused or loss incurred by the plaintiff due to the failure of the defendant and can be remedied by issuing the cause of action claiming damages.
Case example: Marzetti v. Williams (1830) 1 B & Ad 41
This case stated that every contract implies a duty to be performed by the parties and in the event of breach, cause of action arises against the party at fault mandating the use of the maxim, Ubi jus ibi remedium . Where there is action given by law, there are damages to the violated right.
6 – Concurrence of wrong and damage
The maxims damnum sine injuria and injuria sine damnum are elaborative of the relationship between the wrong and damage. Damnum sine Injuria refers to damages without injury or damages where there is no infringement of any legal right in spite of the loss which might have been incurred.
On the other hand, Injuria sine damno refers to infringement of legal right without causing any harm, loss, or damage to the plaintiff. Whenever any legal right is infringed, the plaintiff or the one who suffers can bring a cause of action against the one who infringed the right. Therefore, damages are the result of the cause of action through an actionable wrong.
Case example: Clark v. McClurg 215 Cal 279
In order to establish that there was breach of duty, the plaintiff must not only prove the existence of actionable wrong but also damages thereof. It was emphasized that the concurrence of actionable wrong and damages are important for the cause of action to be advanced.
Case example: Mogul Steamship Co Ltd v McGregor, Gow & Co [1892] AC 25
This case established that immoral acts done in a lawful manner led to no legal injury, hence no damages to be claimed by the plaintiff, and no point of the cause of action.
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Although this guide is limited in scope and purpose, it’s clear that your own duty as a lawyer is to be well-versed with the facts of a case and to competently analyze similar cases where possible. This demands significant time and effort in both research and analysis, and understandably so. Yet the energy spent in gathering pertinent definitions and requirements don’t need to be so cumbersome.
The steps laid out above to specify causes of action serve only as basic principles so you can confidently proceed to the next phase of thorough analysis and file a lawsuit.
Originally published on November 17, 2022
The content appearing on this website is not intended as, and shall not be relied upon as, legal advice. Although this content was created to provide you with accurate and authoritative information, it was not necessarily prepared by attorneys licensed to practice law in a particular jurisdiction. It is general in nature and may not reflect all recent legal developments. Thomson Reuters is not a law firm and an attorney-client relationship is not formed through your use of this website. You should consult with qualified legal counsel before acting on any content found on this website.
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More answers.
Siba diqer and justin ward write for the australian restructuring, insolvency & turnaround association journal (volume 32 #01 2020) on pricing, structure and the practicalities involved in the purchase of causes of actions belonging to a company and those conferred on the liquidator by the corporations act 2001 (cth)..
The first of March marked the second anniversary of the changes to the Corporations Act 2001 (Cth) (Act) permitting an external administrator to assign rights to sue.
The Australian Government proposed the reform in the hope that the ‘sale of rights of action may enable the value in such rights to be realised’ [1] .
This article is based on our experience over the past two years of purchasing claims through our LCM Recoveries program as an alternative to traditional litigation funding.
It explores the causes of action which can be assigned, the pricing of an assignment, structuring the assignment, and the answers to some practical queries that are frequently raised in relation to claim purchases.
At the outset, it is important to note that the ability to assign claims has provided liquidators with an additional tool to maximise creditor outcomes.
This has been achieved through the:
Liquidators have the power to sell causes of action belonging to the company [2] and causes of action conferred on the liquidator by the Act. [3] Actions belonging to the company which are assignable include:
Causes of action conferred on the liquidator by the Act, which may be assigned, include claims relating to:
A company’s statutory causes of action which are not otherwise assignable cannot be assigned merely because of the liquidation of the company. For example, a claim in respect of misleading and deceptive conduct cannot be assigned [11] , and there is conflicting authority on whether a breach of director duties claim under s 180 to 184 of the Act is assignable [12] .
Once assigned, the plaintiff named in the action will be the assignee instead of the liquidator or the company.
In pricing claims purchased by LCM, liquidators have relied on a discounted cashflow methodology to ascertain the present value of the claim. This process relies upon the preparation of a cashflow model which recognises cash outflows (legal fees, liquidator’s fees, disbursements, after-the-event insurance, funding and other costs) and cash inflows (claim value less settlement discount), which are then discounted at an appropriate discount rate to provide a current value of the claim.
In our experience, the use of this methodology allows for a clear and transparent pricing assessment, which can be objectively supported and justified to creditors and, if necessary, to the court. (Although any approval pursuant to s 477(2B) of the Act is unlikely to include a review of the commerciality of the transaction [13] and, in any event, we consider that the above approach would satisfy a liquidator’s obligations when exercising their powers pursuant to s 477 of the Act [14] ).
The purchase may be structured in a number of ways, including:
Regardless of the structure agreed, in our experience, the assignment of the cause of action has resulted in an earlier distribution to creditors and a much lower level of risk for liquidators.
A number of queries are often raised in relation to the practical aspects of a claim purchase, including:
Can the liquidator provide documents in relation to the claim to the assignee?
Yes. As discussed above, a liquidator may assign its right to sue under the Act [15] and ‘sell or otherwise dispose of, in any manner, all or any part of the property of the company’ [16] including a chose in action [17] . Pursuant to s 477(2)(m) of the Act, a liquidator may ‘do all such other things as are necessary for winding up the affairs of the company and distributing its property’.
By way of analogy, in order to sell the business of the company, certain financial records of the company must be provided to the purchaser. Similarly, in order to sell a claim and distribute the proceeds, certain financial records can be provided to the assignee. This is because the assignee must have access to certain documents in order to be in a position to run the purchased claim, much like the purchaser of a business requires company records to run the business.
Will confidentiality and privilege be preserved?
Yes. It is standard practice to enter into a confidentiality agreement prior to accepting documents in support of a funding application or potential assignment. The purpose of this agreement is to preserve confidentiality, the assignor’s privilege and the parties’ common interest privilege.
Both assignor and assignee ‘share an interest in the successful prosecution of the litigation and the advice given in relation to the litigation’ [18] . Nevertheless, when purchasing a claim by way of assignment, the assignee will often obtain its own independent legal advice.
Will the liquidator need to stay involved and how is that relationship governed?
Although uncommon, in some circumstances there may be a need for the liquidator to provide assistance to the assignee following an assignment.
In matters involving LCM, this issue has been resolved through provisions in the deed of assignment which allow LCM to obtain the liquidator’s services at their standard hourly rate, effectively on the basis of a consultancy. The structuring of the relationship in this way does not prevent the liquidator from finalising the relevant administration.
The changes to the Act allowing the sale of liquidators’ claims (along with the existing rights to assign company claims) have provided a significant change in the funding dynamics of insolvency claims.
In our experience, the ability to assign claims has resulted in improved outcomes for creditors and stakeholders generally. It has provided liquidators with additional flexibility and, notwithstanding some areas of uncertainty, is generally achieving the stated goal of enabling ‘the value in such rights to be realised’ [19] .
1 Secretary to the Treasurer and Attorney-General, Parliament of Australia, Proposals Paper: A modernisation and harmonisation of the regulatory framework applying to insolvency practitioners in Australia, (2011) 39.
2 Corporations Act 2001 (Cth) s 477(2)(c).
3 Insolvency Practice Schedule (Corporations) s 100-5.
4 Pentridge Village Pty Ltd (in liq) v Capital Finance Australia Ltd [2018] VSC 633; CGS Owners of Strata Plan No 5290 v CGS & Co Pty Ltd (2011) 81 NSWLR 285.
9 s 588FDA.
11 Pentridge Village Pty Ltd (in liq) v Capital Finance Australia Ltd [2018] VSC 633; Aquatic Air Pty Ltd v Siewert [2015] NSWSC 928.
12 Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233 compared with Re Novaline Pty Ltd (in liq) (2011) 282 ALR 49.
13 McLean v Elvapine Aberglasslyn Road Pty Ltd [2008] NSWSC 484.
14 Wentworth Metals Group Pty Ltd v Leigh and Owen (as liquidators of Bonython Metals Group Pty Ltd): In the matter of Bonython Metals Group Pty Ltd (in liq) [2013] FCA 349.
15 Insolvency Practice Schedule (Corporations) s 100-5.
16 s 477(2)(c).
17 s 9 (definition of ‘property’).
18 Slea Pty Ltd v Connective Services Pty Ltd [2017] VSC 361 [32].
19 Secretary to the Treasurer and Attorney-General, Parliament of Australia, Proposals Paper: A modernisation and harmonisation of the regulatory framework applying to insolvency practitioners in Australia, (2011) 39
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Global Corporate Limited v Dirk Stefan Hale [2017] EWHC 2277 (Ch)
A recent judgment re-iterates the importance of carefully drafting a deed of assignment when assigning claims.
In Global Corporate , the liquidators of a company assigned certain claims by way of a deed of assignment to Global Corporate Limited (the “ Assignee ”). The Assignee (the Applicant in this case) then brought several claims against the company’s former director and shareholder.
Two of the Assignee’s claims were dismissed because, as the High Court held, only the claims expressly set out in in the transfer documentation were transferred to the Assignee. As the other claims had not been provided for in the deed of assignment, they failed for lack of standing.
Powerstation UK Ltd (the “Company”) entered liquidation in November 2015 and liquidators were appointed.
The liquidators identified various claims against a former director of the Company. The claims related to payments to the former director which, in the liquidators’ view, constituted an unlawful dividend or, in the alternative, a transaction at an undervalue.
The Assignee agreed to purchase the claims from the liquidators. The assignment of claims was recorded in a deed of assignment dated 25 August 2016 between the liquidators and the Assignee (the “ Deed ”). Under the terms of the Deed, the liquidators assigned the ‘claim’. ‘Claim’ was defined as (emphasis added) “a potential debt to the company comprising alleged illegal dividends and/or transactions at an undervalue ”.
The Assignee subsequently brought claims against the former director on the basis that the payments to him constituted either:
On the unlawful dividends claim, the judge, His Honour Judge Matthews, concluded that the Company’s articles did not allow the former director to declare provisional dividends capable of being subsequently re-categorised (which the judge found was the nature of the payments made to the former director). Therefore, whatever the payments were, they were not dividends and so could not be unlawful. This removed the Assignee’s prospects of seeking recovery of unlawful dividends pursuant to section 847 of the Companies Act 2006.
The transaction at an undervalue claim failed on the basis that sufficient consideration had been given.
On the remaining claims (misfeasance and preference), HHJ Matthews said that the Assignee did not have standing as the Deed did not mention these claims.
At para 45 HHJ Matthews said, in respect of the misfeasance claim:
‘There is some difficulty here with the applicant’s title to sue, since the deed of assignment did not on its face extend to any claim in respect of director’s misfeasance.'
At para 66 HHJ Matthews noted that, as regards the preference claim:
‘The applicant is not an assignee of any claim of the company or the liquidators in respect of a preference...The first reference to a claim to set aside a preference that I have been able to find in the documents comes out in the application notice of 12 September 2016... But this cannot operate so as to confer on the applicant a title to sue that he otherwise would not have.’
HHJ Matthews emphasised that a preference claim could not be implied into the Deed due to the material differences between a transaction at an undervalue and a preference. If the Assignee wanted to acquire a right to bring a preference claim, the Deed should have expressly mentioned it.
At para 67 HHJ Matthews commented that:
‘A preference is not the same as a transaction at an undervalue, and neither is there necessarily an example of the former every time there is the latter. If the applicant wished to take an assignment of the claim to set aside a preference, it should have drafted the deed of 25 August 2016 so as to achieve this end.’
Finally, the court held that while the liquidators of the Company did retain the right to bring a claim to set aside a preference, they were not parties to the application and an effective order could therefore not be made.
Consequences
This case highlights the importance of thoroughly reviewing the deed of assignment where claims are being acquired.
Only those rights of action expressly mentioned in a deed of assignment will be transferred to the assignee. The court will not allow an assignee to bring an action which has not been included in the wording of the assignment. Further, the court will not imply alternative causes of action into deeds of assignment where those actions have material differences from those actually transferred.
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Definition of cause of action.
Specific causes of action, cause of action elements, answering a complaint and causes of action, consulting an attorney, related legal terms and issues.
IMAGES
COMMENTS
A large class of plaintiffs engages you to bring a common action against a defendant or set of defendants. As counsel, you resolve to combine the plaintiffs' various claims into a single lawsuit. In this article, we touch on some of the traditional approaches, such as a class action, joinder, consolidation, relation, and coordination. To that list, we add as an approach the assignment of ...
Insolvency office-holders are able to assign bare causes of action without attracting any public policy which prohibits trafficking in litigation. They can even assign a cause of action back to the bankrupt on the basis that he might have legal aid and/or on terms that he account for a percentage of any recoveries in the litigation1. But there is a logically anterior question - is the cause ...
An assignment of a legal claim occurs when one party (the "assignor" ) transfers its rights in a cause of action to another party (the "assignee" ). 1. The Supreme Court has held that a private litigant may have standing to sue to redress an injury to another party when the injured party has assigned at least a portion of its claim for ...
This note explains how a claim or cause of action may be assigned, whether by legal assignment or equitable assignment. It sets out the situations in which an assignment may be effected, including assignment in the context of an administration, liquidation or bankruptcy. The note provides guidance on drafting an assignment as well as the practical considerations, such as the recovery of costs.
An assignment is the act of transferring to another all or part of one's property, interest, or rights.7 While the early common law rejected all assignments of a cause of action, regardless of whether it was based in contract or tort, that restriction eventually shrank until courts could state the modern rule was that "assignability of ...
The rubric of rights to constitutional remedies encompasses diverse elements, including (1) the jurisdiction of a court to hear a claim, (2) the existence of a cause of action, 3 and (3) the availability of judicial relief. But the complex interrelationships among these elements should not obscure the practical and conceptual dependence of ...
Resource ID 1-522-7861. This note explains how a claim or cause of action may be assigned, whether by legal assignment or equitable assignment. It sets out the situations in which an assignment may be effected, including assignment in the context of an administration, liquidation or bankruptcy. The note provides guidance on drafting an ...
An assignment of a chose of action, such as a cause of action in litigation, is not enforceable under Irish law if it "savours of" maintenance or champerty. "Savours of", as explained by Murray J, means that the assignment offends the same public policy as maintenance and champerty. Champerty means an agreement to fund or support ...
Assignment of a claim or cause of action. This note explains how a claim or cause of action may be assigned, whether by legal assignment or equitable assignment. It sets out the situations in which an assignment may be effected, including assignment in the context of an administration, liquidation or bankruptcy.
As a matter of practicality, the assignment of a cause of action may occur, regardless of whether or not the assignor has actually commenced suit at the point of assignment. It is the accrual of the cause of action that matters; once that occurs, then the assignment may take effect.
On September 15, 2016, the New York Appellate Division, First Department, issued a decision addressing the foregoing principles holding that one of the plaintiffs lacked standing to assert claims because the assignment of the right to pursue remedies did not constitute the assignment of claims.
A cause of action is a set of predefined factual elements that allow for a legal remedy . The factual elements needed for a specific cause of action can come from a constitution, statute, judicial precedent, or administrative regulation. For instance, in New York, the "cause of action" necessary for conversion are 1) the existence of the ...
In the absence of any modern and authoritative pronouncement from the High Court as to the assignability of causes of action, particularly causes of action in contract and in tort, there is a divergence in approach to the question of assignability between courts in the Federal and State jurisdictions.1 Generally, the Federal Court has displayed a more restrictive approach to the question of ...
This Practice Note considers how you may assign a claim or cause of action in law or in equity, including the specific issues to consider when drafting the assignment, such as recoverable losses and costs liability post-assignment.
An assignment of a legal claim occurs when one party (the assignor) transfers its rights in a cause of action to another party (the assignee ). 1. The Supreme Court has held that a private litigant may have standing to sue to redress an injury to another party when the injured party has assigned at least a portion of its claim for damages from ...
Sample 1. Assignment of Causes of Action. The Progressive Contractor hereby offers and agrees to assign to the Department all rights, title, and interest in and to all causes of action it may have under Section 4 of the Xxxxxxx Act (15 U.S.C. § 15), arising from purchases of goods, services, or materials pursuant to this Agreement or any ...
Cause of action (COA), is a commonly used acronym and the epicenter of a lawsuit. The significance of the term lies in the fact that a trial can begin only after its existence is established. Clarifying a general legal issue with a specific CoA is one of the trickiest questions to answer among the host of other questions related to any given ...
On October 18, 2012, Appellee filed a motion to dismiss for failure to state a cause of action, claiming Appellant failed to satisfy a condition precedent required by § 559.715, Fla. Stat., Assignment of Consumer Debts, because it failed to notify Appellee of the assignment of debt at least 30 days prior to bringing suit to collect the debt.
It explores the causes of action which can be assigned, the pricing of an assignment, structuring the assignment, and the answers to some practical queries that are frequently raised in relation to claim purchases.
Further, the court will not imply alternative causes of action into deeds of assignment where those actions have material differences from those actually transferred.
In general, there are here too four possible combinations of assignment, namely an equitable assignment of an equitable chose in action, an equitable assignment of a legal chose in action, the legal assignment of an equitable chose in action, and the legal assignment of a legal chose in action.205 Also, like England and Canada, each of the ...
The assignment of a cause of action is usually documented in a Deed of Assignment. Depending on the terms of the deed, the assignment might also be subject to additional conditions such as approval of creditors or the Court. This is particularly the case if the assignment is intended to last more than three months.
A cause of action may come from an act or failure to act, breach of duty, or a violation of rights, and the facts or circumstances of each specific case often have a significant effect on the case.
WASHINGTON, D.C. - The Federal Election Commission (FEC) announced on July 29 that it has agreed to settle a complaint originally filed by Campaign Legal Center Action (CLCA) and Common Cause Georgia (CCGA) and issued a $14,500 fine to the Georgia Republican Party (Georgia GOP) for failing to report its receipt of illegal in-kind contributions from a nonprofit called True the Vote during the ...