16 Fla. L. Weekly Supp. 144a

Online Reference: FLWSUPP 162CRUZ

Insurance — Personal injury protection — Attorney’s fees — Justiciable issues — Although trial court erred as matter of law in applying language of pre-1999 version of statute when denying insurer award of attorney’s fees under section 57.105, order denying fees is affirmed where there is no reasonable probability that trial court’s decision would have been different had it applied correct legal standard due to lack of evidence of services performed, reasonableness of fee, or action’s frivolousness

CLARENDON NATIONAL INSURANCE COMPANY, Appellant, v. DEFRAN MEDICAL ASSOCIATES, A/A/O ANIA G. CRUZ, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 08-028 AP. L.C. Case No. 05-011773 SP 05. December 15, 2008. An Appeal from the County Court of the Eleventh Judicial Circuit, Miami-Dade County, Shelley J. Kravitz, Judge. Counsel: Stuart B. Yanofsky, Stuart B. Yanofsky, P.A., for Appellant. David B. Pakula, David B. Pakula, P.A., for Appellee.

(Before REYES, VENZER AND LEBAN, JJ.)

(REYES, J.) Appellant Clarendon National Insurance Company (“Appellant”) appeals a final order denying its motion for attorney’s fees pursuant to § 57.105, Fla. Stat. (2006). Defran Medical Associates as assignee of Ania G. Cruz (“Appellee”) filed a breach of contract suit against Appellant for failure to pay insurance benefits pursuant to § 624.736(4)(b) (when required PIP benefits are due). In response, Appellant raised several defenses, including that box 31 of the HCPA forms submitted by Appellee did not set forth the professional license number, degrees or credentials of the physician or supplier, as required by the PIP statute § 627.736(5)(d), Fla. Stat. (2006) (charges for treatment). Appellant filed a motion for final summary judgment. Appellee did not file any opposition to the motion. One day prior to the scheduled hearing, Appellee faxed a notice of voluntary dismissal to Appellant. The order for voluntary dismissal, without prejudice, was filed on October 3, 2007. Appellant then filed a motion for attorney’s fees pursuant to § 57.105, contending that Appellee filed suit without conducting any investigation to determine whether its PIP suit had merit. The motion for attorney’s fees was denied.

On appeal, Appellant argues that the lower court failed to apply the correct legal standard in denying attorney’s fees. Appellant further argues that under the applicable legal standard, the lower court committed reversible error when it denied fees under § 57.105, Fla. Stat. (2007).

Standard of Review

In appellate proceedings the decision of a trial court has the presumption of correctness and the burden is on the appellant to demonstrate error. Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150, 1152 (Fla. 1979); Autustin v. Dade County School Bd., 766 So. 2d 406, 407 (Fla. 3d DCA 2000). Applegate also stands for the proposition that the trial court can be right for the wrong reasons. Somerset Village Limited Partnership v. Carlton, Fields, Ward, Emmanuel, Smith, etc., et al. 782 So. 2d 414, 416 (Fla. 3d DCA 2001). “The written final judgment by the trial court could well be wrong in its reasoning, but the decision of the trial court is primarily what matters, not the reasoning used.” Applegate, 377 So. 2d at 1152. Even when based on erroneous reasoning, a conclusion or decision of a trial court will generally be affirmed if the evidence or an alternative theory supports it. Id. However, a misconception by the trial judge of a controlling principle of law can constitute grounds for reversal. Id.

In order to properly review orders of the trial judge, appellate courts must recognize the distinction between an incorrect application of an existing rule of law and an abuse of discretion. Where a trial judge fails to apply the correct legal rule. . .the action is erroneous as a matter of law. This is not an abuse of discretion.

The appellate court in reviewing such a situation is correcting an erroneous application of a known rule of law.

Keats v. Keats, 511 So. 2d 1030, 1031 (Fla. 2d DCA 1987) (citing Canakaris v. Canakaris, 382 So. 2d 1197, 1202 (Fla. 1980)).

Misapplication of the Controlling Principle of Law

In this instance, this Court finds that the judge did not abuse her discretion in denying Appellant attorney’s fees under § 57.105. The judge instead erred as a matter of law when she applied the language of the pre-1999 attorney’s fees statute in making her decision to deny attorney’s fees. This Court will make its own determination as to the correctness of the decision of the lower court, regardless of the reasons or theories assigned to that decision. In re Yohn’s Estate, 238 So. 2d 290, 295 (Fla. 1970). “Therefore, if the lower court assigns an erroneous reason for its decision the decision will be affirmed where there is some other different reason or basis to support it.” Id. However, the doctrine that a proper judgment should not be reversed because of an erroneous reason is inapplicable when it appears that the trial court misconceived a controlling principle of law applicable to the cause, and accordingly, entered a judgment prejudicial to a party due to such error. Aronson v. Siquier, 318 So. 2d 452, 454 (Fla. 3d DCA 1975). Thus, our analysis turns on whether the judgment was prejudicial to the Appellant based on that erroneous application of the law, prejudicial to a point resulting in a miscarriage of justice. §59.041, Fla. Stat. (2007) (harmless error). After examining the record, this Court concludes that a miscarriage of justice has not occurred.

A review of the transcript indicates that the judge applied outdated¹ law in making her determination regarding the award of attorney’s fees. The trial judge stated that even if Appellant prevailed on the issue it did not necessarily prevail on the “significant issues of the case.” She further stated that the case was not “frivolous from its inception.” After the 1999 amendment to §57.105², a movant need only show that the party and counsel knew or should have known that any claim or defense asserted was not supported by material facts, or was not supported by an application of then-existing law. Airtran Airways v. Avaero Noise Reduction Joint, 858 So. 2d 1232, 1233 (Fla. 5th DCA 2003). This Court agrees with the Appellant who takes the position that the trial judge resolved the issues of attorney’s fees using an erroneous legal standard. While misconception by the trial judge can constitute grounds for reversal, a review of the record indicates that this was harmless error, as a determination under the current legal standard would have yielded the same result: a denial of attorney’s fees under § 57.105. Applegate, 377 So. 2d at 1152.

Appellant’s Motion Did Not Meet the Basic Procedural Requirements of §57.105

Evidence must be authenticated before it can be admitted into evidence. § 90.91, Fla. Stat. (2006). Section 57.105(3) requires proof by a preponderance of the evidence when moving for attorney’s fees. § 57.105(3), Fla. Stat. (2006). Merely attaching documents which are not sworn to or certified to, without more, fails to make the documents admissible. Bifulco v. State Farm Mut. Auto. Ins. Co. 693 So. 2d 707 (Fla. 4th DCA 2003). A fee award must be supported by competent substantial evidence which must include evidence detailing the services performed and the reasonableness of the fee. Faircloth v. Bliss, 917 So. 2d 1005, 1006 (Fla. 4th DCA 2006); Cohen v. Cohen, 400 So. 2d 463, 465 (Fla. 4th DCA 1981). In this case, Appellant’s Motion to Determine Entitlement to An Award of Attorney’s Fees Pursuant to § 57.105 only had the following attachments: (1) health insurance claim forms (medical bills) and (2) patient disclosure acknowledgement form 362. Accordingly, Appellant could not have prevailed on a motion for attorney’s fees without additional evidence.

Review of the 1999 Amendment

Next, we find that the case as filed was neither frivolous nor meritless. Appellant correctly argued that the amendment expands the scope of the statute to apply to actions that become frivolous after suit is filed. Gahn v. Holiday Property Bond, Ltd., 826 So. 2d 423, 429 (Fla. 2d DCA 2002); Weatherby Assoc., Inc. v. Ballack, 783 So. 2d 1138, 1141 (Fla. 4th DCA 2001). The post-1999 version of § 57.105 has greatly expanded the power of the courts to award fees against parties who assert claims or defenses without an adequate foundation in fact or law. Murphy v. Murphy, 944 So. 2d 487, 488 (Fla. 2d DCA 2006); Connelly v. Old Bridge Village Co-Op, Inc., 915 So. 2d 652, 656 (Fla. 2d DCA 2005). However, the revised statute, while broader than its predecessors, still addresses the issue of frivolous pleadings. Id.

Subsection (1) of the post-1999 statute authorizes an award of fees “at any time during a civil proceeding or action” that the court finds that the losing party was raising an unsupported claim or defense. § 57.105, Fla. Stat. (2007); Airtran Airways, 858 So. 2d at 1233. In the 57.105 hearing, Appellee argued that both of the issues regarding Box 31 and the disclosure acknowledgement form were areas of unsettled law. There would have been substantial arguments made by both sides (there were issues of the law that still needed to be resolved). During the hearing, Appellee explained that the reasons the case was dismissed involved personal and private concerns between the clinic and the attorney. Appellee further argued that the judge was going to have to make a summary judgment determination, finding no issue of law in Appellee’s favor. Appellee maintained that the trial court would not be able to resolve any legal issues for or against the Appellant because the case was voluntarily dismissed prior to the summary judgment determination. The trial court did not have to make findings, in fact or law, regarding Appellee’s claim. In addition, it did not have to decide when Appellee’s litigation activities became frivolous. Therefore, this Court is unable to determine from what period of time or for what actions the fees would be warranted.

Further, “the mere dismissal of a suit does not necessarily justify an attorney’s fee award if the suit can be considered to have been non-frivolous at its inception.” Hustad v. Architectural Studio, Inc., 958 So. 2d 569, 570 (Fla. 4th DCA 2007) (citing Murphy v. WISU Props., Ltd., 895 So. 2d 1088, 1094 (Fla. 3d DCA 2004). Because Appellant did not pay PIP benefits as contracted, it is evident that the Appellee initiated a legitimate cause of action. The cause of action did not cease to be frivolous throughout the proceeding.

Whether a claim is frivolous within the meaning of section 57.105, thus mandating the award of fees, is a matter left to the sound discretion of the trial court. Hustad, 958 So. 2d at 571. To exercise this discretion, the trial court must, during the fact-establishment process, inquire into what the losing party knew or should have known both before and after the suit was filed. Id. Even when the lawsuit is dismissed in its early stages, the movant under section 57.105 is entitled to present evidence and establish a record for the purposes of demonstrating entitlement to attorney’s fees. Id.

This Court notes that Appellant argued that the action was frivolous from its inception. Yet, it never provided any evidence of the action’s frivolousness to support its entitlement to attorney’s fees. Not every litigant who voluntarily dismisses a claim is subject to the sting of attorney’s fees pursuant to § 57.105. See Carnival Leisure Indus., Ltd. v. Holzman, 660 So. 2d 410, 410 (Fla. 4th DCA 1995). Since this is the case, this Court must affirm the trial court’s determination that Appellant was not entitled to an award of attorney’s fees.

This Court has determined after examining the record that, had the proper standard of the 1999 amendment to the §57.105 statute been applied, there is no reasonable probability that the trial court’s decision would have been different. Accordingly, we affirm the lower court’s ruling denying attorney’s fees pursuant to §57.105.

AFFIRMED. (VENZER, LEBAN, JJ., concurring.)

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¹§ 57.105(1), Fla. Stat. (1998) (attorney’s fees): The court shall award a reasonable attorney’s fee to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney in any civil action in which the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the complaint or defense of the losing party; provided, however, that the losing party’s attorney is not personally responsible if he or she has acted in good faith, based on the representations of his or her client. If the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the defense, the court shall also award prejudgment interest. [Emphasis added]

²§ 57.105(1), Fla. Stat. (2007) (attorney’s fees): Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that 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 those material facts. [Emphasis added]