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Monday, March 20, 2006

APPELLATE COURT CHANGES ITS MIND IN REGARD TO WAIVER OF HOMESTEAD PROTECTION BY CONTRACT [FLORIDA]

In our December 1, 2005 posting, we discussed the Demayo case, under which Florida's Third District Court of Appeals promulgated a new exception to homestead protection against creditors. In the case, the Court allowed an individual to waive homestead protection in regard to collection of attorney's fees by reason of a waiver provision in a retainer agreement with the law firm. That posting discussed how such contractual waivers, if now given effect under Florida law, could have far reaching effects such as widespread use of such waivers in contracts.

The appellate court has rethought its position on the issue, and in an unusual move and on its own motion, has withdrawn its earlier opinion and replaced it with a new opinion that provides that such waiver by contract was NOT effective.

Some of the appellate judges do not want to give up on the issue, however. They have certified the issue as one of great public importance and thus seek the review of the Florida Supreme Court on the issue. Therefore, there may be more to come in this case.
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