21 Fla. L. Weekly Supp. 865a
Online Reference: FLWSUPP 2109CARMInsurance — Attorney’s fees — Appellate — Justiciable issues — Claim or defense not supported by material facts or applicable law — Where medical provider presented colorable argument for extension of existing law, and insurer and its counsel knew or should have known that provider’s conduct did not warrant motion for sanctions and attorney’s fees under section 57.105, insurer’s motion for sanctions is denied and provider is awarded appellate attorney’s fees for its defense against insurer’s motion
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, vs. MID FLORIDA IMAGING a/a/o ANGEL CARMONA, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Osceola County. Case No. 2010-AP-02. County Case No. 2004-SC-1807. December 11, 2013. Appeal of Osceola County Court Amended Final Judgment Awarding Attorneys’ Fees and Costs Ronald A. Legendre, County Judge. Counsel: Betsy E Gallagher, for Appellant. Kevin B Weiss, for Appellee.
(Before DAWSON, HIGBEE, POLODNA, JJ.)FINAL ORDER DENYING APPELLANT’S MOTIONFOR SANCTIONS PURSUANT TO FLA.STAT.
SECTION 57.105 AND GRANTINGAPPELLEE’S MOTION FOR SANCTIONS PURSUANTTO FLORIDA STATUTES SECTION 57.105
(DAWSON, Judge.) On July 26, 2013, this Court issued a decision affirming the trial court’s Final Judgment Awarding Fees and Costs. On August 21, 2013, the Court entered an Order Granting Appellee’s Motion to Tax Appellate Attorney Fees and Costs. On September 9, 2013, Appellant filed Appellant’s Motion For Rehearing of Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs arguing that this Court erred in awarding appellate attorney’s fees. On September 13, 2013, Appellee filed Appellee’s Response to Appellant’s Motion for Rehearing of Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs. On October 1, 2013, the Court entered an Order Granting Appellant’s Motion for Rehearing of Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs and Order Denying Appellee’s Motion to Tax Attorney’s Fees and Costs. On October 2, 2013, Appellant filed Appellant’s Motion for Appellate Attorney’s Fees Pursuant to § 57.105, Fla. Stat. On October 10, 2013, Appellee filed Appellee’s Response to Appellant’s Motion for Sanctions Pursuant to § 57.105, Fla. Stat. . Then on October 28, 2013, Appellee filed Appellee’s Motion for Sanctions Pursuant to Florida Statutes 57.105, Regarding Appellant’s Motion for Sanctions Pursuant to Fla. Stat. Section 57.105. Finally, on November 12, 2013, Appellant filed Response to Appellee’s Motion for Sanctions Pursuant to Florida Statutes 57.105, Regarding Appellant’s Motion for Sanctions Pursuant to Fla. Stat. Section 57.105. This Order addresses Appellant’s October 2, 2013, 57.105 Motion and Appellee’s October 28, 2013, 57.105 Motion. The Court reviewed both Motions, both Responses, is fully advised in the premises, and finds as follows:
A. Florida Statute § 57.105 states, in the pertinent part:
a. (1) Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, 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:
i. (a) Was not supported by the material facts necessary to establish the claim or defense; or
ii. (b) Would not be supported by the application of then-existing law to those material facts.
b. (2) At any time in any civil proceeding or action in which the moving party proves by a preponderance of the evidence that any action taken by the opposing party, including, but not limited to, the filing of any pleading or part thereof, the assertion of or response to any discovery demand, the assertion of any claim or defense, or the response to any request by any other party, was taken primarily for the purpose of unreasonable delay, the court shall award damages to the moving party for its reasonable expenses incurred in obtaining the order, which may include attorney’s fees, and other loss resulting from the improper delay.
c. (3) Notwithstanding subsections (1) and (2), monetary sanctions may not be awarded:
i. (a) Under paragraph (1)(b) if the court determines that the claim or defense was initially presented to the court as a good faith argument for the extension, modification, or reversal of existing law or the establishment of new law, as it applied to the material facts, with a reasonable expectation of success.
ii. (b) Under paragraph (1)(a) or paragraph (1)(b) against the losing party’s attorney 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.
B. An appellate court has authority to impose sanctions under Florida Statute § 57.105 for conduct occurring in the appellate court. Boca Burger, Inc. v. Forum, 912 So. 2d 561, 573 (Fla. 2005) [30 Fla. L. Weekly S539a]; Charlton v. Black Diamond Properties, 17 So. 3d 790 (Fla. 5th DCA 2009) [34 Fla. L. Weekly D1656a]. If a court awards fees pursuant to the statute, it must make an express finding that the claim was frivolous and, where the trial court imposes liability for the fee award against counsel, an express finding that the attorney was not acting in good faith based upon the representations of his client. See, e.g., Valdes v. Lovaas, 784 So. 2d 474, 475 (Fla. 3d DCA 2001) [26 Fla. L. Weekly D724b]; Weatherby Assocs., Inc. v. Ballack, 783 So. 2d 1138, 1143 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D873a]; Ferdie v. Isaacson, 8 So. 3d 1246, 1250 (Fla. 4th DCA 2009) [34 Fla. L. Weekly D898a].
C. In Appellant’s Motion for Appellate Attorney’s Fees Pursuant to § 57.105, Fla. Stat. Appellant seeks attorney’s fees because Appellee’s April 15, 2011 Motion to Tax Appellate Attorney Fees and Costs is meritless and Appellee failed to “voluntarily confess that the August 26, 2013 Order is erroneous or to concede to the Motion for Rehearing on Order Granting Appellee’s Motion to Tax Appellate Attorney’s Fees and Costs.” Appellant’s Motion for Appellate Attorney’s Fees Pursuant to § 57.105, Fla. Stat., pg. 7.
D. In Appellant’s Motion For Rehearing of Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs and Appellant’s Motion for Appellate Attorney’s Fees Pursuant to § 57.105, Fla. Stat., Appellant argues that a Court cannot award attorney’s fees for time spent litigating the amount of an award of attorney’s fee. This Court agrees that the Florida Supreme Court held in State Farm Fire & Casualty Co. v. Palma that the Court cannot award attorney’s fees for time spent litigating the amount of an award of attorney’s fee or the entitlement to a multiplier. State Farm Fire & Casualty Co. v. Palma, 629 So.2d 830 (Fla. 1993). In Appellee’s Response to Appellant’s Motion for Rehearing of Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs Appellee also agrees “that an insurer is not required to pay attorney’s fees for the time spent litigating entitlement to a multiplier.” Appellee’s Response to Appellant’s Motion for Rehearing of Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs, pg. 3. However, Appellee argued that attorney’s fees may be awarded when the insurer denies entitlement to specific hours and hourly rates. Id. Appellee argued that the issue on appeal was entitlement to attorney’s fees because Appellant denied entitlement to certain hourly rates and denied entitlement to 63.1 hours because the hours were incurred in another case. Id. at 3-4.
E. While the Court vacated the Order Granting Appellee’s Motion to Tax Appellate Attorney Fees and Costs and issued a new Order Denying Appellee’s Motion to Tax Attorney’s Fees and Costs, the Court did not find that Appellee’s Motion was meritless or frivolous. The Court granted a rehearing because the Court overlooked Appellant’s Response to Appellee’s Motion for Attorney’s Fees filed on May 23, 2011. Order Granting Appellant’s Motion for Rehearing or Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs and Order Denying Appellee’s Motion to Tax Attorney’s Fees and Costs, pg. 2. The Court found that “Appellant contested the amount of fees, specifically the hourly rates, the amount of hours, and the application of a lodestar multiplier. Appellant did not contest Appellee’s entitlement to fees.” Id. pg. 4. The Court did not elaborate on this finding.
F. Appellee’s argument that Appellant contested entitlement to fees is a compelling argument, particularly the argument that entitlement was at issue when Appellant argued that Appellee sought hours for work conducted in the Fluharty case. Appellant’s Fluharty argument did not an attempt to cut hours for clerical work, Appellant wanted to cut hours because Appellant contended Appellee already received payment for the hours claimed, in another case. This is a unique factual situation. This Court can see how another Court might interpret these facts to raise an issue of entitlement. The fact that this Court did not find that an issue of entitlement existed, does not mean that Appellee’s argument is meritless or frivolous.
G. The Ninth Judicial Circuit in a previous appellate opinion Mauricio Chiropractic West v. MGA Insurance Co. Inc. found that “Mauricio Chiropractic is entitled to an award of attorney’s fees that it incurred for litigating the issue of its failure to file a written motion for attorney’s fees and costs.” Mauricio Chiropractic West v. MGA Insurance Co. Inc., 20 Fla. L. Weekly Supp. 761a (August 2, 2012). This was an entitlement issue because MGA Insurance sought a complete denial of recovery and was not contesting the amount of fees. Id. This Court considered whether Appellant sought a complete denial of recovery when it argued that the hours were earned in the Fluharty case.
H. Appellee presented a meritorious argument in the April 15, 2011 Motion to Tax Appellate Attorney Fees and Costs and in the September 13, 2013 Response to Appellant’s Motion for Rehearing of Order Granting Appellee’s Motion to Tax Attorney’s Fees and Costs. The Court agrees with Appellee that the law remains unclear whether the complete denial of Appellee’s specified time entries qualifies as an entitlement issue rather than an amount issue. The Court agrees with Appellee that this analysis depends on the specific facts of each case. Appellee’s legal argument clearly sought to further expand and refine State Farm Fire & Casualty Co. v. Palma, 629 So.2d 830 (Fla. 1993). Asking this Court to award appellate fees against the Appellee for presenting a good faith interpretation of Palma only serves to intimidate attorneys from challenging existing law. Appellee had a reasonable expectation of success. Florida Statute § 57.105 is not designed to prevent attorneys from arguing for the establishment of new law or the expansion of existing law. Sanctions against Appellee are not appropriate.
I. The Court takes issue with Appellant’s overaggressive tactic to threaten Appellee. Entitlement to attorney’s fees is hotly contested in insurance cases and is a factual issue determined on a case by case basis. The Court agrees with Appellee that Appellant used Florida Statute § 57.105 to intimidate Appellee into withdrawing a good faith argument. Furthermore, Appellee conceded that attorney’s fees were not available for litigating the amount of fees and entitlement to a multiplier. Although this Court granted rehearing and vacated the order granting appellate fees to Appellee, it did not do so lightly, without close examination and deliberation. The Court never made a finding that Appellee’s position was frivolous or meritless when it vacated the Order Granting Appellee’s Motion to Tax Appellate Attorney Fees and Costs.
J. Appellant and Appellant’s Counsel knew or should have known that the issue before the Court was a justiciable issue and one that is debated in Florida courts. Appellant presented an improper argument in a baseless attempt to deceive this Court or otherwise engage in delay tactics. This is the behavior that the Florida Legislature sought to avoid in enacting Florida Statute § 57.105. This Court finds that Appellant’s Counsel knew or should have known that its claim for appellate fees under Florida Statute § 57.105 was not made in good faith when it filed its Motion for Appellate Attorney’s Fee Pursuant to Section 57.105, Fla. Stat.
K. Florida Statute § 57.105 should not be utilized to prevent attorneys from arguing for the establishment of new law or the expansion of existing law. The statute should be applied with restraint “to ensure that it serves the purpose for which it was intended.” Bridgestone/Firestone, Inc. v. Herron, 828 So. 2d 414, 419 (Fla. 1st DCA 2002) [27 Fla. L. Weekly D2173a]. The purpose of § 57.105 “is to discourage baseless claims . . . [and] not to cast a chilling effect on use of the courts.” Stevenson v. Rutherford, 440 So. 2d 28, 29 (Fla. 4th DCA 1983). In this context, § 57.105 should not be construed to discourage a party from pursuing a colorable claim for appellate fees. Appellee and Appellee’s Counsel presented a colorable argument and Appellant and Appellant’s Counsel knew or should have known that Appellee’s conduct did not warrant a motion for sanctions and fees under § 57.105.
Accordingly it is hereby, ORDERED and ADJUDGED that Appellant’s Motion for Appellate Attorney’s Fees Pursuant to § 57.105, Fla. Stat. is DENIED and Appellee’s Motion for Sanctions Pursuant to Florida Statutes 57.105, Regarding Appellant’s Motion for Sanctions Pursuant to Fla. Stat. Section 57.105 is GRANTED. The amount of appellate attorney fees to which Appellee is entitled, is to be determined by the trial court upon REMAND.
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