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Article Excerpt
1999 Fla. Laws Ch. 225 ("tort reform" or the "act") amended and greatly expanded F.S. [section] 57.105. In theory, courts can now impose sanctions against clients and against their lawyers, for "[losing] any claim or defense ... not supported by the material facts ... or ... not supported by the application of the then-existing law."
This profoundly changes the rules for all civil and family trial lawyers and appellate lawyers. As stated in an April 2002 article: "Ladies and gentlemen, it is a new day. Go forth prepared and forewarned." (1)
Effective October 1, 1999, new [section] 57.105 brought Federal Rules of Civil Procedure "Rule 11 practice" to Florida state courts. We lawyers and our clients may be "sanctioned" if we lose "any claim or defense" and
the losing party or the losing party's attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
(a) was not supported by the material facts necessary to establish the claim or defense; or
(b) would not be supported by the application of then-existing law to these material facts.
For our clients, this may seriously erode Florida's version of the "American rule" on legal fees: "Generally, a court can only award attorneys' fees when such fees are `expressly provided for by statute, rule or contract.'" (2)
For lawyers, we now may have to pay one-half of the other side's attorneys' fees, if we lose "a claim or defense." (3) This may change how we all practice law, for good and for ill.
This change raises hard questions about how to perform our basic professional duties--to zealously represent our clients and keep their confidences.
Recent Cases Cautiously Interpreting [section] 57.105 as Written
The March 2002 Handbook on Discovery Practice (4) stated, "If the Florida courts take the language at face value, fee awards should become more common." Since then, all district courts of appeal have taken the Florida Legislature at its word, to one degree or another. (5)
* First DCA
In Bridgestone/Firestone, Inc. v. Herron, 828 So. 2d 414 (Fla. 1st DCA 2002), defendant Bridgestone Corporation moved to dismiss for lack of personal jurisdiction* Its motion was denied, and the First DCA upheld the denial on an interlocutory appeal (of a nonfinal order), ruling that Bridgestone Corporation had been previously ruled to be subject to Florida long-arm jurisdiction.
The First DCA then granted plaintiff's motion for appellate attorneys' fees under [section] 57.105, holding that [section] 57.105 now allowed such fees to be assessed "at any time before trial," and at the end of an appeal from a nonfinal order:
Section 57.105, Florida Statutes (1999), creates an entirely different kind of entitlement to attorneys' fees. The statute does not use the phrase "prevailing party" to mean the party who ultimately wins the case, but rather to refer to the party who defeats "any claim or defense." A decision requiring a party to prevail on the merits of the case in order to recover attorneys' fees, for the defense of a baseless interlocutory appeal would undermine the primary objective of the statute. As we have said. the major change in the statute is that it no longer requires a party to show a complete absence of a justiciable issue, but instead allows recovery of fees for particular claims and defenses that are unsupportable.
The First DCA rejected Bridgestone's contention that its "defense was initially presented to the court as a good faith argument for the extension ... of existing law ... with a reasonable expectation of success" ([section] 57.105(2)). "Bridgestone had no reasonable expectation of success. The argument made on appeal was not a novel argument designed to advance the state of the law; it was simply an argument without any possible merit."
The First DCA then ruled that the exception in [section] 57.105(1)(b)--where a lawyer can escape personal responsibility "if he or she has acted in good faith, based on the representations of his or her client as to the existence of these material facts"--did not apply, because "the material facts are settled in the record."
The First DCA then raised several problems with new [section] 57.105, cautioning that
the courts must apply [section] 57.105 ... carefully to ensure that it serves the purpose for which it was intended ["to decrease the cost of employing the civil justice system"]. If an order dismissing a claim or striking a defense routinely leads to a motion for attorneys' fees, the point of the statute would be subverted and, in the end, it might even have the reverse effect of making civil litigation more expensive. The need to adjudicate multiple fee claims in the course of a single case could create conflicts between lawyers and their clients, and it could take time away from the court's main objective; that is, to resolve the controversy presented by the case.
The First DCA did not suggest how (under the new [section] 57.105) lawyers should reconcile our obligation to represent our clients zealously, with the court's caution against "routine ... motion[s] for attorneys' fees." If the legislature has given parties the right to collect sanctions, and the courts allow us to obtain sanctions, how can we justify not moving for them?
* Second DCA
In Gahn v. Holiday Property Bond, Ltd., 826 So. 2d 423 (Fla. 2d DCA 2002), defendants first denied, but then conceded, long-arm jurisdiction. Plaintiffs unsuccessfully moved for fees and costs on this point. The Second DCA reversed the denial of fees, holding that
at the time the affidavits [contesting jurisdiction] were filed or at the latest during discovery, Appellees and their attorneys knew or should have known that their position on jurisdiction was wholly unsupported by material facts and existing law.
While lack of personal jurisdiction may have initially appeared to be a meritorious defense, facts disclosed during discovery made Appellees' jurisdictional challenge completely untenable. Nevertheless,...
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