Beth E. Berg

A condominium association told the Florida Supreme Court on Tuesday that an insurer can't sue for damages to an owner's unit, arguing a 2021 state law that went into effect provided immunity from a negligence lawsuit stemming from a policy claim brought afterward. Representing the Grove Isle at Vero Beach Condominium Association Inc., Debbie Maken of Lydecker LLP said during oral arguments in Tallahassee that a state law amending statute 627.714(4) that went into effect in July 2021 barred Universal Property & Casualty Insurance Co. from enacting its right to subrogation by filing a lawsuit in place of the unit owner because her client waived the same right against the owner. In April 2022, Universal sued Grove Isle in Indian River County, Florida, state court over negligence after a water sprinkler damaged Dolores Senko's condo in August 2021. Universal appealed a November 2022 summary judgment ruling in favor of the association, although Florida's Second and Fourth district courts of appeal issued opposing opinions regarding 627.714(4) and created a certified conflict. "There's a reason the Second District found that 627.714(4) was only prospectively applied," Maken said Tuesday. "The amendment here attaches consequences to events that took place after the effective date of the statute, which is July 1, 2021. Hence, there are no concerns with retroactive application." Universal issued Senko a homeowner's policy in April 2021, and the policy had a subrogation provision giving Universal the right to sue for negligence in the event the company paid Senko a loss for her claims, court filings show. In June 2021, Florida passed Senate Bill 630, which eliminated subrogation rights in individual unit owners' policies against associations if a condo association's policy doesn't provide the same rights against the unit owners. In the lower court case, Universal argued the statute's amendment was unconstitutional if retroactively applied. The insurer added it still had a subrogation right since the policy was issued two months before S.B. 630 went into effect. On appeal, the Fourth District Court of Appeal majority in 2024 reversed the lower court's decision after finding Universal's rights were applied retroactively, although the dissenting opinion stated there wasn't retroactivity because the insurer could not have known a claim would occur at the time the policy was issued in April 2021. Grove Isle brought the case up to the Florida Supreme Court in 2024, saying the Fourth District Court of Appeal's opinion conflicted with an opinion the Second District Court of Appeal issued in March of that year in Universal Property and Casualty Ins. Co. v. Laguna Riviera Condominium Association , which held that 627.714(4) was prospective and barred the insurer's negligence claims. During Tuesday's arguments, Florida Supreme Court Justice John D. Couriel told Maken that most contracts are "forward-looking in some sense." "They require performance," Justice Couriel said. "There will be some expectation, and it would seem to me that we would have to have some way to say these expectations, while perhaps not fully realized, are nonetheless subject to some protection. Help me understand what makes subrogation different." Justice Charles T. Canady said the Florida Legislature generally avoids changing existing contracts, saying contracts aren't "absolutely sacrosanct," but are something that should be protected. Maken responded that whom the insurer gets to sue is "an ancillary thing" and that the Legislature left the contract intact. She added that the statute's amendment had a conditional effect, saying the law granted Grove Isle a defense because the association gave up subrogation against Senko. Nancy W. Gregoire Stamper of Birnbaum Lippman & Gregoire PLLC, arguing for Universal, told the state high court that a "contract is not a matter of legislative grace" unless the contract is illegal. Stamper said the state Legislature didn't eliminate subrogation, but instead eliminated Universal's policy right, which it purchased. She compared the issue to assignment of benefits, which are also subrogation. The Legislature could have eliminated Senko's right to sue for a tort, which, in this case, is her right to sue for water damage, but didn't, Stamper said. "We bought a right," Stamper said. "The right still exists." Grove Isle is represented by Debbie Maken, Shaun R. Koby and Forrest L. Andrews of Lydecker LLP. Universal is represented by Nancy W. Gregoire Stamper of Birnbaum Lippman & Gregoire PLLC and Beth E. Allen of Kubicki Draper. The case is Grove Isle at Vero Beach Condominium Association Inc. v. Universal Property & Casualty Insurance, case number SC2024-0764, in the Supreme Court of the State of Florida.

Oct 7

3 min

A litigation trustee for bankrupt data analytics company Near Intelligence Inc. has sued New York-based digital ad company MobileFuse LLC in the U.S. Bankruptcy Court for Delaware, alleging a multiyear circular payment conspiracy that cost Near more than $50.7 million. According to the 10-count bankruptcy adversary complaint, the scheme involved MobileFuse's "round-tripping" of payments from Near Intelligence back to the source in order to inflate Near's apparent value ahead of its planned go-public merger with a special purpose acquisition company. "No business rationale existed for Near to make such large monthly payments to MobileFuse; nor was there a legitimate reason for Near to calculate payments to MobileFuse based on amounts MobileFuse owed Near," the trustee said. Nevertheless, a secret agreement involving three individuals at each business saw MobileFuse line up monthly payments totaling $15 million annually by the end of June 2021, and then at least $25 million per year afterward, the complaint said. "There is no evidence that MobileFuse provided any goods or services to Near beyond the arrangement set forth in the 2020 services agreement," which MobileFuse co-founder and CEO Ken Harlan "had conceded would cost Near less than $43,000 in a 'normal' month," the complaint said. Near Intelligence declared Chapter 11 bankruptcy in December 2023. Its plan of reorganization was approved last year by U.S. Bankruptcy Judge Thomas M. Horan in Delaware. The complaint docketed on Thursday was filed in the name of Near Intelligence plan administrator and litigation trustee Drivetrain LLC. Two Near Intelligence executives — founder and former CEO Anil Mathews and ex-Chief Financial Officer Rahul Agarwal — were charged with fraud and conspiracy in August in the U.S. District Court for the Southern District of New York in connection with the allegations. Harlan was also charged with the same counts. The executives, as well as three others not named in the New York action, allegedly exchanged "fake invoices along with inflated payments" that made publicly traded Near Intelligence's revenues from privately held MobileFuse appear more than 10 times higher, the New York indictment said. "The managers of Near and MobileFuse repeatedly described the two companies as important strategic partners," the bankruptcy complaint said. In reality, the bankruptcy complaint said, three managers at each company strategized instead on pumping up Near Intelligence's apparent value — Mathews, Agarwal and President Shobhit Shukla on the Near side, and MobileFuse co-founders Val Katayev and Harlan, as well as its Finance Director Matt Sessanta. Katayev was aware of MobileFuse's big jump in revenue after the scheme was set in motion, "going as far as to publicly brag about MobileFuse's drastically increased revenue on social media," the complaint said. Keys to the round-tripping included agreements allowing MobileFuse to use Near Intelligence's data and for Near to use MobileFuse's services, as well as the acquisition by Near executives of a 10% stake in MobileFuse for $2 million "through personal investment vehicles," the complaint said. The Near Intelligence executives, meanwhile "kept the payment scheme" and related details hidden from others in the company, with Sessanta and Harlan described as helping to "deceive Near's own internal controls and conceal the extent of the Near-MobileFuse relationship," according to the complaint "The sham payments' sole purpose was to fund MobileFuse's payments back to Near. But MobileFuse actually owed those payments to Near pursuant" to the agreements between the two companies, the complaint said. "Had respondents not caused Near to make the sham payments, Near would have had another $25.67 million in additional cash." Payments became more difficult to obscure as time passed, the complaint said, noting that banks and auditors began "sniffing around" and asking questions about the Near-MobileFuse relationship. Those involved allegedly resorted to "misdirection," the complaint said, including wiring sham payments to MobileFuse through commercial foreign exchange MonFX to avoid scrutiny, and using false documentation and postdated agreements. "One of the more egregious examples was a purported data license agreement between Near and MobileFuse stating that it had been signed and became effective on June 30, 2020. In reality, this document was not created until February 2022, when Agarwal had Near's legal department create an undated draft," the complaint said. Drivetrain LLC is represented by Bradford J. Sandler, Beth E. Levine and Peter J. Keane of Pachulski Stang Ziehl & Jones LLP, and Eric D. Madden, Brandon V. Lewis and Brian J. Bah of Reid Collins & Tsai LLP. The bankruptcy case is In re: Near Intelligence Inc. et al., case number 1:23-bk-11962, in the U.S. Bankruptcy Court for the District of Delaware. The adversary case is Drivetrain LLC, as plan administrator of the Litigation Trustee of the Near Intelligence Inc. et al., Litigation Trust v. MobileFuse LLC, case number 25-52298, in the U.S. Bankruptcy Court for the District of Delaware.

Sep 5

4 min

Amazon delivery drivers who claim the e-commerce giant skimmed from their tips are asking a Seattle federal judge to revive claims under Massachusetts state law, arguing that drivers from that state may be eligible for "significant relief" beyond what they received through a 2021 settlement between Amazon and the Federal Trade Commission. The request, filed Tuesday on behalf of Philip Sullivan, a Massachusetts-based plaintiff in the case, seeks to reinstate a claim under the Massachusetts Tips Act and certify a class of roughly 3,500 Amazon Flex drivers who made deliveries in that state between January 2017 and August 2019. U.S. District Judge Barbara Jacobs Rothstein in October 2024 allowed the drivers' suit to proceed under the Washington Consumer Protection Act, dismissing claims filed under laws in other states. But this past July, she declined to certify the proposed nationwide class of 150,000 drivers. Now that Massachusetts drivers' claims won't proceed under Washington law, the plaintiffs said in Tuesday's filing, the court should reopen the earlier claim under the Massachusetts Tips Act and certify the class of Massachusetts drivers. Judge Rothstein said in her July order that the plaintiffs had failed to show that a class action was better than other methods of obtaining relief, pointing to the 2021 FTC settlement and noting that proceeding as a class action would be costly and duplicative. The Massachusetts claim is superior for two reasons, the plaintiffs said in their new filing. First, Massachusetts drivers would be entitled to mandatory triple damages under the state's tips law, which they said goes beyond what the FTC settlement included. Washington's law, by contrast, would have awarded only discretionary damages. The court ruled when denying the nationwide class that "the possibility of recovering damages" under the Washington law wasn't sufficient for duplicating the FTC settlement. "For the Massachusetts claim, it is not a mere 'possibility' of recovery that has gone unrealized — it is automatic triple damages," the plaintiffs argued Tuesday. A Massachusetts class is also "frankly, much more manageable" than a nationwide class, the drivers said. "The class likely has approximately 3,500 members who are owed approximately $122 each in compensatory (treble) damages, and their claims can be litigated in a straightforward manner," they said. The drivers claimed in their lawsuit filed in 2021 against Amazon.com Inc. and Amazon Logistics Inc. that the companies lied about drivers keeping 100% of delivery tips. Massachusetts drivers under the FTC settlement received reimbursement of tips totaling $1.6 million, or an average of $61 per driver, according to the new filing, which cites an agency website. "The Massachusetts Amazon Flex drivers have not been made whole under the Massachusetts Tips Act—they are entitled to seek automatic triple damages as a matter of Massachusetts public policy," the plaintiffs argued. Counsel for the parties did not immediately respond to requests for comment Wednesday. Amazon also did not immediately reply. Philip Sullivan and other plaintiffs are represented by Hillary Schwab, Brant Casavant and Brook Lane of Fair Work PC and Beth E. Terrell, Toby J. Marshall and Jennifer Rust Murray of Terrell Marshall Law Group PLLC. Amazon.com Inc. and Amazon Logistics Inc. are represented by Andrew DeCarlow of Morgan Lewis & Bockius LLP and Walter F. Brown, Shawn M. Estrada, Marco A. Torres, Amy L. Barton, and Matthew Patrick Merlo of Paul Weiss Rifkind Wharton & Garrison LLP. The case is Cain et al. v. Amazon.com Inc. et al., case number 2:21-cv-00204, in the U.S. District Court for the Western District of Washington.

Nov 19

3 min

Bill Howell, a partner in Sidley’s Dallas office, has been named a finalist in the “Attorney of the Year” category at D CEO’s Mergers & Acquisitions Awards 2024. The annual Mergers & Acquisitions Awards, now in their 11th year, honor the “top acquisitions, dispositions, and other financial transactions in North Texas in 2023—and the dealmakers who made them happen.” Bill is the head of the Corporate, M&A, and Private Equity practice in Dallas. He advises clients on a broad range of corporate and transactional matters. He represents issuers and investment banking firms in various corporate finance transactions, including initial public offerings, secondary and follow-on equity offerings, registered and private offerings of debt securities, venture capital investments, and other financings. He has extensive experience in complex mergers and acquisitions, tender offers involving publicly traded entities, strategic alliances, and joint ventures. Bill also advises clients on corporate governance, periodic reporting requirements, stock exchange rules, and other compliance matters. Additionally, Avantax’s US$1.2 billion take-private sale to Cetera has been named a finalist in the “Deals of the Year: $1 Billion +” category. Sidley represented Avantax, Inc. (NASDAQ: AVTA), a leader in tax-focused financial planning and wealth management, in its acquisition by Aretec Group, Inc. d/b/a Cetera Holdings, the holding company of Cetera, a financial advisor Wealth Hub. Under the terms of the agreement, holders of Avantax common stock received US$26.00 in cash per share, without interest and subject to required withholding taxes. The all-cash transaction closed November 2023. The Sidley deal team was led by M&A partners Beth E. Berg and Scott R. Williams.~~Bill Howell, a partner in Sidley’s Dallas office, has been named a finalist in the “Attorney of the Year” category at D CEO’s Mergers & Acquisitions Awards 2024. The annual Mergers & Acquisitions Awards, now in their 11th year, honor the “top acquisitions, dispositions, and other financial transactions in North Texas in 2023—and the dealmakers who made them happen.” Bill is the head of the Corporate, M&A, and Private Equity practice in Dallas. He advises clients on a broad range of corporate and transactional matters. He represents issuers and investment banking firms in various corporate finance transactions, including initial public offerings, secondary and follow-on equity offerings, registered and private offerings of debt securities, venture capital investments, and other financings. He has extensive experience in complex mergers and acquisitions, tender offers involving publicly traded entities, strategic alliances, and joint ventures. Bill also advises clients on corporate governance, periodic reporting requirements, stock exchange rules, and other compliance matters. Additionally, Avantax’s US$1.2 billion take-private sale to Cetera has been named a finalist in the “Deals of the Year: $1 Billion +” category. Sidley represented Avantax, Inc. (NASDAQ: AVTA), a leader in tax-focused financial planning and wealth management, in its acquisition by Aretec Group, Inc. d/b/a Cetera Holdings, the holding company of Cetera, a financial advisor Wealth Hub. Under the terms of the agreement, holders of Avantax common stock received US$26.00 in cash per share, without interest and subject to required withholding taxes. The all-cash transaction closed November 2023. The Sidley deal team was led by M&A partners Beth E. Berg and Scott R. Williams.

Feb 21

2 min

Avantax’s US$1.2 billion take-private sale to Cetera won “Deal of the Year” in the $1 Billion + category at D CEO’s Mergers & Acquisitions Awards 2024. Sidley represented Avantax, Inc. (NASDAQ:AVTA), a leader in tax-focused financial planning and wealth management, in its acquisition by Aretec Group, Inc., d/b/a Cetera Holdings, the holding company of Cetera, a financial adviser Wealth Hub. Under the terms of the agreement, holders of Avantax common stock received US$26.00 in cash per share, without interest and subject to required withholding taxes. The all-cash transaction closed in November 2023. The Sidley deal team was led by M&A partners Beth E. Berg and Scott R. Williams. Additionally, Bill Howell, a partner in Sidley’s Dallas office, was a finalist for “Attorney of the Year” at D CEO’s Mergers & Acquisitions Awards 2024. The annual Mergers & Acquisitions Awards, now in their 11th year, honor the “top acquisitions, dispositions, and other financial transactions in North Texas in 2023 - and the dealmakers who made them happen.”~~Avantax’s US$1.2 billion take-private sale to Cetera won “Deal of the Year” in the $1 Billion + category at D CEO’s Mergers & Acquisitions Awards 2024. Sidley represented Avantax, Inc. (NASDAQ:AVTA), a leader in tax-focused financial planning and wealth management, in its acquisition by Aretec Group, Inc., d/b/a Cetera Holdings, the holding company of Cetera, a financial adviser Wealth Hub. Under the terms of the agreement, holders of Avantax common stock received US$26.00 in cash per share, without interest and subject to required withholding taxes. The all-cash transaction closed in November 2023. The Sidley deal team was led by M&A partners Beth E. Berg and Scott R. Williams. Additionally, Bill Howell, a partner in Sidley’s Dallas office, was a finalist for “Attorney of the Year” at D CEO’s Mergers & Acquisitions Awards 2024. The annual Mergers & Acquisitions Awards, now in their 11th year, honor the “top acquisitions, dispositions, and other financial transactions in North Texas in 2023 - and the dealmakers who made them happen.”

May 14

1 min