CASE LAW AND STATUTORY UPDATE: RECENT CASES AND SECTION 57.105 ATTORNEY’S FEES Prepared and Presented By: Joseph A. Corsmeier, Esquire Joseph A. Corsmeier, P.A. 2454 McMullen Booth Rd, Ste. 431 Clearwater, Florida 33759 Office:(727) 799-1688 Fax: (727) 799-1670 firstname.lastname@example.org Joseph A. Corsmeier practices in Clearwater with the Law Office of Joseph A. Corsmeier, P.A. He previously was a partner in the law firm of Tew, Barnes & Atkinson and served as Staff Counsel for the Tampa office of The Florida Bar from 1990 to 1998 and as an Assistant State Attorney for the Sixth Judicial Circuit from 1986 to 1990. Mr. Corsmeier’s practice currently consists of Bar and Professional admission and disciplinary defense, expert opinion and testimony on ethics and professionalism issues workers’ compensation and labor law. CASE LAW AND STATUTORY UPDATE: RECENT CASES AND SECTION 57.105 ATTORNEY’S FEES I. Inherent Authority of Court to Sanction Offending Attorneys. A. Moakley and Diaz and Recent Cases. 1. Moakley v. Smallwood, 826 So.2d 221 (Fla. 2002). Florida Supreme Court opinion held that courts have inherent authority to sanction bad faith conduct of attorney pursuant to the inequitable conduct doctrine by requiring the attorney to personally pay fees of opposing party, however, the court must first comply with due process requirements outlined in the opinion.1 Opinion quashed the trial order imposing sanctions on the attorney personally. 2. Diaz v. Diaz, 826 So.2d 229 (Fla. 2002). Florida Supreme Court opinion held that court has inherent authority to impose sanctions personally upon an attorney for bad faith conduct under limited circumstances, however, the court did not make specific factual findings of bad faith conduct by the attorney and the record did not support such a finding. Opinion quashed the order imposing sanctions on the attorney and remanded on other grounds. 3. T/F Systems, Inc. v. Malt, 814 So.2d 511 (Fla. 5th DCA 2002). Opinion reversed a trial court order awarding attorney’s fees pursuant to the court’s inherent authority and remanded for evidentiary proceedings consistent with the Moakley decision. In a footnote, the opinion noted that neither party raised the applicability of Section 57.105, however, the court observed that the “inequitable conduct doctrine” used in analyzing the basis of the inherent authority to impose 1 Sanctions must be supported by detailed, highly specific factual findings, the attorney’s fees must be directly related to the fees and costs incurred by the opposing party, and there must be notice and an opportunity to present witnesses and other evidence. 2 sanctions may have been rendered obsolete by the 1999 amendment to Section 57.105 which broadened the application of the statute. 4. North County Company v. Bologna, 816 So.2d 842 (Fla. 4th DCA 2002). Opinion vacated portion of trial court order awarding attorney’s fees under court’s inherent authority and remanded for evidentiary hearing in compliance with Moakley. 5. Sumlar v. Sumlar, 827 So.2d 1079 (Fla. 1st DCA 2002). Opinion reversed award of attorney’s fees in dissolution matter for evidentiary hearing in compliance with Moakley and Diaz, as well as a determination of the parties’ needs and ability to pay if the award is imposed against a party. 6. Department of Revenue v. Barry S. Franklin & Associates, P.A., (2003 WL 1720100 (Fla. 3d DCA April 2, 2003)). Opinion reversed award of attorney’s fees under the inherent authority of the court because the findings of fact in the trial court’s order did not comply with the requirements of Diaz and Moakley. II. Attorney’s Fees under Section 57.105 Florida Statutes. A. 1999 Amendment to Section 57.105. 1. Sanctions, including attorney’s fees, may be imposed in equal amounts against an attorney and the party for raising unsupported claims and defenses. a. the claim may be initiated by the court or raised by motion of any party; b. sanctions may be imposed if the court finds that the losing party or the losing party’s attorney knew or should have known that the claim or defense was not supported by the material facts necessary to establish the claim or defense or would not be supported by the application of then-existing law and the material facts; c. the losing party’s attorney is not personally responsible if he or she has acted in good faith, based on the representations of the client as to the existence of material facts; d. sanctions do not apply if the attorney initially presented a claim or defense as a good faith argument for extension, modification, or reversal of existing law or establishment of new law with a reasonable expectation of success; e. party moving for sanctions must serve the motion 21 days prior to filing and allow opposing party an opportunity to withdraw or correct the claim or defense; f. sanctions are supplemental to any other remedies or sanctions available by law or court rules; g. court can award attorney’s fees to whichever party prevails in contract action. B. Recent cases addressing Section 57.105, as amended (1999). 1. O’Grady v. Potash, 824 So.2d 904 (Fla. 3d DCA 2002). Indemnification of fees by thirty-party defendant does not affect entitlement to attorney fees under Section 57.105, as amended. 2. Gahn v. Holiday Property Bond, Ltd. and HPB, 826 So.2d 423 (Fla. 2d DCA 2002). Trial court order denying motion for attorney fees reversed and remanded with instructions to trial court to hold evidentiary hearing to determine when defense counsel knew about defendant’s business activities and business relationships in Florida when he filed the motion to dismiss complaint and quash service of process due to lack of personal jurisdiction as well as the appropriate amount of fees incurred by the plaintiff in defending the complaint against the motion to dismiss and quash service. No discussion of attorney/client confidentiality issues with regard to determining what defense counsel knew or learned about defendant’s business activities and business relationships. The standard for appellate review of a trial court order denying motion for attorney fees under Section 57.105, as amended, is abuse of discretion. 3. Bridgestone/Firestone, Inc. v. Herron, 828 So.2d 414 (Fla. 1st DCA 2002). Trial court order denying motion to dismiss for lack of personal jurisdiction and awarding attorney’s fees under Section 57.105 affirmed and motion for appellate attorney’s fees granted. Evidence sufficient to show that motion to dismiss was plainly without merit and could not be sustained under any interpretation of the law. Section 57.105, as amended, authorizes an award of attorney’s fees “at any time” during a civil proceeding or action, therefore, in interlocutory appeal, appellate fees may be assessed. (See at id: Forum v. Boca Burger, Inc., 788 So.2d 1055 (Fla. 4th DCA 2001), review granted, 817 So.2d 844 (Fla. 2002. 4. Goldfisher v. Ivax Corporation, 827 So.2d 1110 (Fla. 3d DCA 2002). Stockholder brought suit against corporation which resulted in the removal of a “poison pill” clause from corporation’s stockholder documents and appealed trial court’s denial of fees because request for fees had not been pled in complaint. Appellate opinion affirmed trial court order denying fees and also denied corporation’s request for appellate fees under Section 57.105 because neither the lawsuit nor the appeal were “totally without merit.” 5. Andzulis v. Montgomery Road Acquisitions, Inc., 831 So.2d 237 (Fla 5th DCA 2002). Trial court ordered attorney’s fees to be paid by the plaintiffs under Section 57.105. The order did not require one-half of the fees to be paid by plaintiff’s counsel even though the order found “a complete absence of a justiciable issue of either law or fact raised (in) the complaint” and the complaint was “devoid of merit.” Appellate opinion reversed the order and held that the trial court was required to assess one-half of the fee award against the attorney for lack of a justiciable issue. Opinion further held that burden is on attorney who made the claim or defense to show good faith and not on the moving party to show bad faith or absence of good faith in order to avoid breaching “the rather impermeable wall of attorney-client privilege.” 6. Cowgill v. Bank of America, 831 So.2d 241 (Fla. 2d DCA 2002). Trial court entered summary judgment against the plaintiffs on the ground that the claim was barred by the statute of limitations and awarded fees to defendants under Section 57.105. Plaintiffs appealed and appellate opinion affirmed summary judgment and reversed the award of attorney’s fees because the claim was arguably supported by material facts and then-existing law. 7. Read v. Taylor, 832 So.2d 219 (Fla. 4th DCA 2002). Trial court awarded attorney’s fees under Section 57.105, as amended. Appellate opinion reversed the order of the trial court stating that the statute still is intended to address the issue of frivolous pleadings and that “it appears from the record...that these claims were not so completely lacking in merit as to warrant an award of fees under Section 57.105.” 8. Mullins v. Kennelly, 2003 WL 21471719 (5th DCA June 27, 2003). Trial court assessed attorney’s fees sanctions ½ against plaintiff and ½ against plaintiff’s attorney after personal injury suit was dismissed for lack of prosecution. Plaintiff’s attorney appealed and argued, inter alia, that if attorney’s fees were to be assessed, the sanction should be solely against the plaintiff, his client. The 5th DCA reversed the award of fees, stating that Section 57.105 cannot be applied to conduct prior to the effective date of the statute and that a dismissal for lack of prosecution is not an adjudication on the merits, therefore, 57.105 sanctions cannot be imposed. In dicta, the opinion expressed concern that the attorney may have had a conflict of interest under Bar Rule 4-1.7 in arguing that, if fees were assessed, the sanction should be imposed solely against his client. 9. Inquiry Concerning a Judge re: Charles W. Cope (Fla. May 29, 2003). The Supreme Court of Florida approved a public reprimand for the Circuit Judge but denied the judge’s request for attorney’s fees to be imposed as a sanction against the Judicial Qualifications Commission (JQC) under Section 57.105. The judge argued that the sanctions should be imposed because certain charges were unfounded. The opinion noted that Section 57.105 applies only to civil proceedings and it had never applied 57.105 to JQC proceedings or any other administrative proceedings. Further, even if the statute applied, the judge would not be entitled to fees because, although the JQC did not prevail on some of the claims under the heightened clear and convincing standard, the charges were not such that the JQC prosecutor knew or should have known lacked merit. 10. Barna v. Barna, 2003 WL 21537438 (Fla. 4th DCA July 9, 2003). Attorney represented husband in dissolution matter. After dissolution was granted, the attorney filed “Motion For a Declaratory Judgment, Temporary Injunctive Relief, Permanent Injunctive Relief, Recusal and Certiorari Because the Post dissolution Permanent Spousal Support Provisions of Florida Statutes Chapter 61 Violate the Florida Constitution.” The trial court denied the motion and later granted the former wife’s motion for fees under Section 57.105. In awarding fees, the trial court rejected the attorney’s argument that his actions did not require the former wife’s participation and found that the motion was irrelevant, frivolous, and brought only to advance the cause of an unrelated client, the Alliance For Freedom From Alimony, Inc. The trial court further made the award without regard to the cost burden to the former wife. The 4th DCA upheld the award of fees under 57.105. 11. Kerzner v. Lerman, 2003 WL 21697432 (Fla. 4th DCA July 23, 2003). Complaint was stricken as a sham pleading and defendant moved for attorney’s fees as sanction under Section 57.105. The motion sought attorney’s fees from the plaintiff but did not mention or seek fees from plaintiff’s attorney. The plaintiff appealed, claiming, in part, that the trial court erred in not assessing ½ of fees against his lawyer. The 4th DCA affirmed the award, stating that the statute allows the party to seek fees only against the other party and that the defendant waived her ability to seek a joint fee award against plaintiff and counsel. The opinion also observed that there is an ethical concern and that the statute “appears to set up and inherent conflict” between the attorney and client when fees are sought. The client may be unaware that the statute allows the court to require that ½ of the fee award be assessed against the attorney and there is certainly no incentive for the attorney to advise the client if the opposing party did not request that fees to be assessed against both in the motion.
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