22 Fla. L. Weekly Supp. 1064a
Online Reference: FLWSUPP 2209SCHRInsurance — Attorney’s fees — Claim or defense not supported by material facts or applicable law — Fact that medical provider voluntarily dismissed case prior to hearing on insurer’s motion for summary judgment alleging that assignment of benefits was defective and did not confer standing on provider does not entitle insurer to attorney’s fees under section 57.105 where there is case law on both sides of standing issue — Notwithstanding use of word “shall” in statute, statute does not mandate awarding of fees until movant proves that losing party or its attorney knew or should have known that claim or defense was not supported by material facts or applicable law and was not initially presented to court as good faith argument for extension, modification, or establishment of new law with reasonable expectation of success
SILVER CONSULTING SERVICES, INC. D/B/A SILVER CHIROPRACTIC A/A/O BRITTANY SCHREIBER, Plaintiff, v. UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2014-SC-3186, Division CC-Q. March 26, 2015. Dawn Hudson, Judge. Counsel: Adam Saben, Shuster & Saben, Jacksonville, for Plaintiff.
ORDER DENYING DEFENDANT’S MOTION FORATTORNEY FEES PURSUANT TO F.S. 57.105
THIS CAUSE having come before the Court for hearing on January 29, 2015, on Defendant’s Motion for Attorney Fees pursuant to F.S. 57.105, and the Court having considered the motion, applicable case law, and the arguments of counsel finds as follows:
The Defendant filed a Motion for Summary Judgment and Motion for Sanctions pursuant to F.S. 57.105 alleging that the Plaintiff’s assignment of benefits was defective and “based on binding case law on this issue” the Plaintiff had no standing. Prior to the hearing on the Motion for Summary Judgment, the Plaintiff voluntarily dismissed its case. However, the Defendant claims it is still entitled to sanctions pursuant to F.S. 57.105.
Florida Statute 57.105 states, in pertinent part:
57.105. Attorney’s fee; sanctions for raising unsupported claims or defenses; exceptions; service of motions; damages for delay of litigation
(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:
(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.
(2) [not applicable to this discussion]
(3) Notwithstanding subsections (1) and (2), monetary sanctions may not be awarded:
(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.
(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.
Sanctions pursuant to F.S. 57.105 are to be awarded “with restraint” to ensure that it serves the purpose for which it was intended, which is to discourage baseless claims and not to cast a chilling effect on use of the courts. Swan Landing Development, LLC v. First Tennessee Bank National Association, 97 So.2d 326 (Fla. 2d DCA 2012) [37 Fla. L. Weekly D2225a]. Defendant’s position is that the mere dismissing of this case warrants the awarding for sanctions pursuant to F.S. 57.105. If such a low standard were the benchmark, then such sanctions could be awarded in almost any case where a party voluntarily dismisses a case. Florida courts have stated that the mere voluntary dismissing of a case does not trigger such sanctions. See, Executive Centers of America, Inv. v. Durability Seating & Interiors, Inc. 402 So.2d 24 (Fla. 3d DCA 1981). To accept the Defendant’s position would be inconsistent with the mandate in Swan Landing and would result in a chilling effect on use of the courts.
The Defendant also states that sanctions should be awarded because the Plaintiff’s assignment of benefits was not supported by the application of “then-existing law.” The Defendant presents some cases to this Court to support its position as to standing. However, the Plaintiff presents case law showing that the same assignment confers standing. Therefore there is some case law on each side of this issue. If there is case law to support the positions of both parties, then the Court cannot find the Plaintiff’s assignment was not supported by “then-existing law” on the issue. In fact, Plaintiff presents at least six orders from sister courts finding that this same counsel prevailed on this same issue1 in other cases raising the same “defect”, including one prior order where Plaintiff’s counsel prevailed on this same issue with the same defense counsel2.
Even assuming that the Plaintiff produced no case law supporting its position as to standing, the Defendant (as the movant) bears the burden to prove, pursuant to F.S. 57.105(3), that the Plaintiff was not presenting “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,” under F.S. 57.105. In this case, there is evidence showing that the case law supports the Plaintiff’s position that the assignment of benefits was proper.
The Defendant also attempts to impress upon this Court that once a case is dismissed, the awarding of a sanction pursuant to a properly filed F.S. 57.105 motion is mandatory by the inclusion of the word “shall” in the statute.3 The Defendant’s position is contrary to binding case precedent. In Morton v. Heathcock, 913 So.2d 662 (Fla. 3rd DCA 2005) [30 Fla. L. Weekly D2163a], the Third District stated:
“Use of the word “shall”. . .evidences the legislative intention to impose [sanctions] once the determination has been made that there was a complete absence of a justiciable issue raised by the losing party.”
Morton, at 668. (emphasis added).
Applying this analysis to the current version of F.S. 57.105, the mandate of awarding a sanction is predicated on the movant meeting its burdens and the Court making a finding, based on substantial and competent evidence, of all the requisite factors enumerated in F.S. 57.105, including the absence of those factors in subsection (3) of F.S. 57.105. In this case, the Defendant proved none of the factors in F.S. 57.105(1) and failed to prove the absence of factors in F.S. 57.105(3).
An award of sanction pursuant to F.S. 57.105 is not a default. To the contrary, it is a tool to by used by Court only in the most extreme circumstances. Litigants must be free to have access to courts, and attorneys cannot be deterred from bringing lawful claims, issues, or defenses on behalf of their clients, or from their obligation as an advocate to zealously assert their client’s interests. Moakley v. Smallwood, 826 So.2d 221 (Fla. 2002) [27 Fla. L. Weekly S175b]. Defendant has not established evidence to warrant awarding F.S. 57.105 sanctions in this case. A modest review of existing case law would have revealed that the Plaintiff’s assignment of benefits was supported by existing case law. Granting F.S. 57.105 sanctions in this case would have a chilling effect that courts are cautioned not to promote. The Defendant’s motion is DENIED.
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1Defendant alleged that the Plaintiff’s assignment of benefits was a “mere” direction-to-pay, which Plaintiff’s counsel prevailed on in at least six other motions for summary judgment based on the same “defect”.
2See, Advanced 3D Diagnostics a/a/o Nicuoly Jean Phillipe v. USAA Casualty Insurance Company, 21 Fla. L. Weekly Supp. 344b.
3See paragraph 15 of the Defendant’s Motion for Sanctions, wherein it boldfaces the word “shall” in arguing sanctions are to be awarded.
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