16 Fla. L. Weekly Supp. 188a
Online Reference: FLWSUPP 162MEJIA
Insurance — Personal injury protection — Attorney’s fees — Justiciable issues — Where at time of filing suit attorney for medical provider had actual and constructive knowledge that any claim by provider for PIP benefits had been extinguished by prior settlement months earlier, insurer’s attorney’s fees are assessed against attorney
VIRTUAL IMAGING SERVICES, INC., A/A/O LUZ MEJIA, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 08-19224 SP 23. December 9, 2008. Myriam Lehr, Judge. Counsel: Harley Kane, Kane & Kane; and Harriet Uris, for Plaintiff. Majid Vossoughi and Mitzi Espino, Majid Vossoughi, P.A., Miami, for Defendant.
ORDER GRANTING DEFENDANT’S MOTION FOR ATTORNEY’S FEES AND COSTS
THIS CAUSE came before the Court on the 24th day of November 2008 on Defendant’s Motion for Attorney’s Fees and Costs and was heard at 9:45 A.M. at the North Dade Justice Center, 15555 Biscayne Boulevard, Miami, Florida 33160.
Majid Vossoughi, Esq., and Mitzi Espino, Esquire appeared on behalf of the Defendant, United Automobile Insurance Company, and Harriet Uris, Esquire and Harley Kane, Esquire appeared on behalf of the Plaintiff, Virtual Imaging Services, Inc. Also present before this Court was attorney Alison Harke, Esquire appearing as expert for Defendant and Rafael Katz, Esquire as expert for the Plaintiff.
This Court reviewed Defendant’s Motion for Attorney’s Fees and Costs, as well as documents filed in support and in opposition to the matter before the Court, including but not limited to correspondence from Harley Kane, Esquire and the law firm of Kane & Kane to Plaintiff dated October 3, 2007 and having heard argument from counsel for both parties and being otherwise fully advised in the premises makes the following factual findings and conclusions of law.
FACTUAL FINDINGS
1. Plaintiff, Virtual Imaging Services, Inc., as assignee of Luz Mejia, filed the instant lawsuit on 05/20/2008 alleging Breach of Contract by Defendant for failure to pay No-Fault benefits and an Explanation of Benefits.
2. Defendant, United Automobile Insurance Company, on 07/01/08 served Plaintiff with its Motion for Summary Disposition Pursuant to Fla. Sm. Cl. R. 7.135 & Motion for 57.105 Attorney’s Fees seeking dismissal of Plaintiff’s claim within the twenty-one (21) day safe harbor provision of Fla. Stat. 57.105 due to Plaintiff’s prior global settlement of the claim. Plaintiff did not dismiss its claim against Defendant within the twenty-one (21) safe harbor provision of Fla. Stat. 57.105 but rather on 08/05/08 filed its Notice of Voluntary Dismissal with Prejudice of its claim against Defendant.
3. On 08/07/08 Defendant served Plaintiff with its Motion for Attorney’s Fees and Costs and a hearing on Defendant’s motion was coordinated by the parties and heard by the Court on 11/24/08.
4. On 11/17/08 Plaintiff’s counsel, Harley Kane, Esquire served Defendant with “Affidavit of Harley N. Kane, Esquire” and said sworn statement was served in “Opposition to Defendant’s Motion for Attorney’s Fees and Costs.” Affidavit of Harley N. Kane, Esquire in pertinent part makes the following sworn allegations: (i) “that UAIC had no right to settle this matter through any means other than through this law firm”; (ii) that “at no time prior to litigation being filed was the Law Firm of Kane & Kane placed on notice that UAIC believed that the above matter had been resolved”; (iii) that “Plaintiff’s lawsuit was not frivolous and was filed in good faith”; and (iv) that “UAIC should not be awarded attorney fees and costs pursuant to FS Section 57.105 as they intentionally interfered with our representation of the client and settled this matter without our knowledge or authority.”
5. On 11/21/08 Defendant served Defendant’s Response to Plaintiff’s Various Motions and Affidavit in Opposition to Defendant’s Motion for Attorney’s Fees and Costs, and Motion for Sanctions. Attached to said response from the Defendant as Composite Exhibit “A” are two (2) letters from the law firm of Kane & Kane authored by Harley N. Kane, Esquire dated 10/03/07, both of which were not mentioned, referenced, or furnished to this tribunal by either the Plaintiff or the law firm of Kane & Kane and/or Harley N. Kane, Esquire. Subsequent to Defendant’s production of these letters, and at the hearing of 11/24/08, both of these letters were acknowledged by Harley N. Kane, Esquire.
6. Specifically, this Court finds that the letters authored by Harley N. Kane, Esquire, have a bearing on the issue before the Court and reflect directly on the sworn allegations of Harley N. Kane, Esquire and his affidavit to the contrary.
7. The first of the letters produced by the Defendant, authored by Harley N. Kane, and directed to the Plaintiff as of 10/03/07 states in entirety as follows:
Pursuant to your instructions, this will confirm that you have agreed with United Automobile to settle your pending claims, both filed and unfiled, for a certain sum for medical benefits (I do not know that figure) and $1,000.00 per file for attorney fees and costs for the cases I have filed on your behalf which have open medical benefits. To that end, I will not be continuing to work on them further. Please advise me if there are any developments to alter your instructions. Thank you.
8. The second of the letters produced by the Defendant, authored by Harley N. Kane, and directed to the Plaintiff as of 10/03/07 states in entirety as follows:
Please allow this to be a follow up to my first letter. To be clear, I am not going to impede your settlement. I understand that the fees on all your cases with United, with outstanding medical benefits, have been settled for $1000.00. Upon receipt of those funds, I will immediately file dismissals with prejudice in those matters. If you wish, I will forward either to you or Ron1 those dismissals to be held in escrow pending your receipt of the settlement funds. Upon the filing of these dismissals with the Court, those lawsuits are finished. Nothing further will be sought in those matters.
9. Accordingly, and contrary to the sworn allegations contained within Affidavit of Harley N. Kane, Esquire, this Court finds that Plaintiff was in fact represented by counsel in its global negotiations with Defendant; that Harley N. Kane and the law firm of Kane & Kane did in fact have actual, implied, and constructive knowledge of global settlement in October 2007 between Plaintiff and Defendant; that Harley N. Kane and the law firm of Kane & Kane did in fact have actual, implied, and constructive knowledge of the settlement of the instant matter; that Plaintiff’s lawsuit at inception was unsupported by material facts and the application of then-existing law to those material facts as necessary to establish Plaintiff’s claim due to the prior settlement of the claim; and that the law firm of Kane & Kane in fact was to be compensated for its pending lawsuits on claims actually settled between the parties.
10. Based on the foregoing, this Court finds that Plaintiff’s claim, when initially presented, was unsupported by material facts necessary to establish the claim and the application of then-existing law to those material facts.
LEGAL ANALYSIS
1. Fla. Stat. 57.105(1) provides:
(1) 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 partyin 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.
However, 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 as to the existence of those material facts. If the court awards attorney’s fees to a claimant pursuant to this subsection, the court shall also award prejudgment interest.
2. Fla. Stat. 57.105 provides for the basis of sanctions against parties and attorneys who assert a frivolous claim or defense or pursue litigation for purposes of delay. The purpose of the statute is to “discourage baseless claims, stonewall defenses, and sham appeals in civil litigation by placing the price tag of attorney’s fees awards on the losing party.” Murphy v. WISU Props., Ltd., 895 So.2d 1088, 1093 (Fla. 4th DCA 2004); Muckenfuss v. Deltona Corp., 508 So.2d 340, 341 (Fla. 1987) [quoting Whitten v. Progressive Cas. Ins. Co., 410 So.2d 501 (Fla. 1982)].
3. Use of the word “shall,” in context of statute establishing attorney fees for frivolous claims to be paid in equal amounts by the losing party and the losing party’s attorney, evidences the legislative intention to impose a mandatory penalty in the form of a reasonable attorney’s fee once the determination has been made that there was a complete absence of a justiciable issue raised by the losing party. Morton v. Heathcock,913 So.2d 662 (Fla. 3rd DCA 2005), rehearing denied, review dismissed 925 So.2d 1031; Wright v. Acierno, 437 So.2d 242 (Fla. 5th DCA 1983); Debra, Inc. v. Orange County, Florida, 445 So.2d 404 (Fla. 5th DCA 1984).
4. The Court finds that Defendant is the “prevailing party” for purposes of a fee award. The service of a voluntary dismissal with prejudice by Plaintiff makes the Defendant a “prevailing party” as regards to its entitlement to prevailing party attorney fees and court need not determine whether Defendant has conclusively shown that it would not have been found liable on dismissed claim had case been actually determined on its merits. Boca Airport, Inc. v. Roll-N-Roaster of Boca, Inc., 690 So.2d 640 (Fla. 4th DCA 1997), rehearing denied, review dismissed 698 So.2d 543. This being said, this Court is convinced that Defendant would not have been found liable on Plaintiff’s dismissed claim in light of the prior settlement of the claim.
5. Attorney fees are taxable under Fla. Stat. 57.105 after a voluntary dismissal if based upon a finding of a complete absence of a justiciable issue of either law or fact. Merrill Enterprises, Inc. v. Barkett Oil Co. of Florida, 421 So.2d 770 (Fla. 4th DCA 1982). See also; MacBain v. Bowling, 374 So.2d 75 (Fla. 3rd DCA 1979) (a voluntary dismissal will authorize an award of attorney fees under this section where trial court finds that there is a complete absence of a justiciable issue of either law or fact). Furthermore, for purposes of award of attorney fees for asserting frivolous claim or defense, frivolousness is measured when the claim or defense is initially presented. Carnival Leisure Industries, Ltd. v. Holzman, 660 So.2d 410 (Fla. 4th DCA 1995). However, under amended version of statute authorizing attorney fees for frivolous claims, a party may be subject to fees if a claim is not dropped or dismissed when it becomes evident it is no longer justiciable, even though it may not have been frivolous when filed. Albritton v. Ferrera, 913 So.2d 5 (Fla. 1st DCA 2005).
6. This Court finds that Plaintiff’s claim, when initially presented, was not only unsupported by material facts necessary to establish the claim but it was also unsupported by the application of then-existing law to those material facts. Any claim for PIP benefits on the part of Plaintiff was extinguished by virtue of prior settlement of the claim which occurred months prior to the filing of the instant lawsuit.
7. Accordingly, based on this Court’s analysis set forth above, it is
ORDERED AND ADJUDGED that Defendant’s Motion for Attorney’s Fees & Costs is Granted. This Court shall conduct a hearing on 02/11/09 @ 3:30 on the issue of amount of reasonable attorney’s fees to be paid to Majid Vossoughi, P.A.
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1At a hearing on Defendant’s Motion for Attorney’s Fees and Costs Defendant informed the Court that the reference to “Ron” within Harley N. Kane’s correspondence is a reference to Plaintiff’s attorney of choice for purposes of Plaintiff’s global settlement negotiations with the Defendant — Ronald Emanuel, Esquire.
