Clarifying the Modern Standard for § 57.105 Attorney’s Fees – 2019

Florida law provides that under limited circumstances, a winning party can make a losing party pay its attorney’s fees as a sanction, even if they had no previous contractual agreement to do so. This abrogation of common law (i.e. the American Rule) arises from Florida Statutes § 57.105. After reading this article, if you have any questions as to the current standard for § 57.105 sanctions, please contact Bernhard Law Firm at www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, 786-871-3349.

Florida Statutes § 57.105 provides that both the losing party and losing party’s attorney must pay out when:

“The court finds that [they] 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 those material facts.”

§ 57.105(1)(a)–(b), Fla. Stat. (2018).

However, under the modern standard for § 57.105, merely losing a case, motion, or appeal is not a basis for sanctions under § 57.105. Cullen v. Marsh, 34 So. 3d 235, 242–43 (Fla. 3d DCA 2010) (“merely losing a case on the merits is not a basis for a section 57.105 fee award.”); Minto PBLH, LLC v. 1000 Friends of Fla., Inc., 228 So. 3d 147, 149 (Fla. 4th DCA 2017) (“Merely losing a case is not a basis for sanctions under section 57.105.”). Similarly, a court’s finding that a party’s interpretation of a legal document is incorrect does not entitle the other party to § 57.105 fees. Minto at 149 (citing Peyton v. Horner, 920 So. 2d 180, 183 (Fla. 2d DA 2006)).

Under the current standard, an award of fees pursuant to § 57.105 is only appropriate when the action is so clearly devoid of merit both on the facts and the law, as to be completely untenable. MC Liberty Express, Inc. v. All Points Services, Inc., 252 So. 3d 397, 403–04 (Fla. 3d DCA 2018) (rev’g order of 57.105 fees); Dep’t of Rev. ex rel. Marchines v. Marchines, 974 So. 2d 1085, 1090 (Fla. 2d DCA 2007) (rev’g on same); Langford v. Ferrera, 823 So. 2d 795, 796–97 (Fla. 1st DCA 2001) (rev’g on same); Pappalardo v. Richfield Hospitality Servs., Inc., 790 So. 2d 1226, 1228 (Fla. 4th DCA 2001) (rev’g on same).

Where an arguable basis existed for unsuccessful claims, even if “the claims were tenuous” or “feeble,” § 57.105 fees are not warranted. Minto at 149 (no sanctions even though “the claims were tenuous”); Frischer v. Quintana, 151 So. 3d 491, 492 (Fla. 3d DCA 2014) (no 57.105 sanctions even though the claims were “feeble,” and even where the lawsuit was filed almost 15 years after the applicable statute of limitations had run, where arguments for lack of accrual, though feeble, were not entirely devoid of merit).

Partial frivolity is not enough to warrant sanctions; even if a motion has portions that are frivolous, no sanction is appropriate as long as the motion alleges some justiciable issue. Muckenfuss v. Deltona Corp., 508 So. 2d 340, 341 (Fla. 1987) (holding presence of justiciable issue precluded 57.105 award of fees, notwithstanding finding that substantial portion of suit was meritless); Huie v. Dent & Cook, P.A., 635 So. 2d 111, 112–13 (Fla. 2d DCA 1994) (still good law as cited by Lake Hamilton Lakeshore Owners Ass’n, Inc. v. Neidlinger, 198 So. 3d 736, 736 (Fla. 2d DCA 2016)); Barber v. Oakhills Estates P’ship, 583 So. 2d 1114, 1115 (Fla. 2d DCA 1991); Schultz v. Lurie, 512 So. 2d 1003, 1004 (Fla. 2d DCA 1987).

An order awarding attorney fees as a sanction must include findings by the trial court that there were no justiciable issues of law or fact (“a complete absence”) and that the losing party’s attorney did not act in good faith based on the representations of his client. Cullen at 242–43; Minto at 149; Austin & Laurato, P.A. v. State Farm Fla. Ins. Co., 229 So. 3d 911, 913 (Fla. 5th DCA 2017) (rev’g for lack of proper findings); Jean-Pierre v. Glaberman, 192 So. 3d 613, 613 (Fla. 4th DCA 2016) (same); Jackson v. Jackson, 177 So. 3d 639, 641 (Fla. 2d DCA 2015) (same); Valdes v. Lovaas, 784 So. 2d 474, 475 (Fla. 3d DCA 2001) (same).

A finding that a party is entitled to recover attorney fees for raising unsupported claims or defenses must be based upon substantial, competent evidence presented at the hearing on attorney fees or otherwise before the Court and in the record. Swan Landing Dev., LLC v. First Tennessee Bank Nat’l Ass’n, 97 So. 3d 326, 328 (Fla. 2d DCA 2012) (rev’g for lack of substantial competent evidence on 57.105); Austin & Laurato at 913 (rev’g for same); Global Xtreme, Inc. v. Advanced Aircraft Ctr., Inc., 122 So. 3d 487, 491 (Fla. 3d DCA 2013) (rev’g 57.105 order for lack of evidence). In addressing a § 57.105 motion, unsworn representations by counsel about factual matters do not have any evidentiary weight in the absence of a stipulation. Global Xtreme at 491. Thus, an evidentiary hearing is required where there is no stipulation. Id.

Where there is some good-faith argument for an extension of existing law, and with a reasonable expectation of success, the Court cannot sanction the party or its attorney. Key Biscayne Gateway Partners, Ltd. v. Village Council for Village of Key Biscayne, 240 So. 3d 84, 87 (Fla. 3d DCA 2018) (rev’g 57.105 order as argument was presented with good-faith argument for extension of existing law with reasonable expectation of success).

If you have any questions as to the current standard for § 57.105 sanctions, please contact Bernhard Law Firm at www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, 786-871-3349.

Bernhard Law Firm

 

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