26 Fla. L. Weekly Supp. 832a

Online Reference: FLWSUPP 2610THOMAttorney’s fees — Justiciable issues — Claim or defense not supported by material facts or applicable law — Insurance — Personal injury protection insurer’s motion for sanctions pursuant to section 57.105, alleging that provider’s presuit demand letter was deficient because it failed to provide insurer with exact amount at issue, lacked any basis in fact or law — Insurer knew, or should have known, that demand letter arguably complied with statute based on same or similar challenges raised in prior motions for summary judgment in sister courts — Insurer’s motion for sanctions denied — Provider’s motion for sanctions granted

WHOLE HEALTH CLINIC d/b/a HEALTHSOURCE OF TALLAHASSEE a/a/o JOSHUA THOMAS, (“HEALTHSOURCE”), Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, (“STATE FARM”), Defendant. County Court, 2nd Judicial Circuit in and for Leon County. Case No. 2016 SC 001743. December 13, 2018. Nina Ashenafi-Richardson, Judge. Counsel: Adam Saben, Shuster & Saben, Jacksonville, for Plaintiff. Edwin Valen, and Lisa Lewis, Cole, Scott & Kissane, Tampa, for Defendant.

ORDER DENYING DEFENDANT’S MOTION FORATTORNEY FEES PURSUANT TO F.S. 57.105 andGRANTING PLAINTIFF’S MOTION FORATTORNEY FEES PURSUANT TO F.S. 57.105

THIS CAUSE, having come before the Court for hearing on November 7, 2018, on Cross-Motions for Attorney Fees pursuant to F.S. 57.105, and the Court, having considered the motions, 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 pre-suit demand letter (“demand letter”) was deficient because it “failed to provide State Farm with the exact amount at issue, which is a condition precedent to the filing of any action for Personal Injury Protection benefits”. Further, in support of its Motion for Sanctions, State Farm claimed that the Plaintiff “knew or should have known that its lawsuit was not supported by material facts necessary to establish the Plaintiff’s claim.”¹ Plaintiff filed a Countermotion for Summary Judgment alleging that its demand letter satisfied the requirements of F.S. 627.736(10) and a Countermotion for Sanctions pursuant to F.S. 57.105 alleging that State Farm’s Motion for Sanctions was frivolous and its sole purpose was to have a chilling effect on the Plaintiff and its counsel, Shuster & Saben, from bringing lawful claims.² A hearing was held on November 7, 2018, wherein the Court granted Plaintiff’s Motion for Summary Judgment and denied Defendant’s Motion for Summary Judgment regarding the sufficiency of Healthsource’s demand letter. The Court then addressed Defendant’s and Plaintiff’s Countermotions for 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.

Florida appellate courts have spoken with clarity as to the limited circumstances in which 57.105 sanctions are warranted. 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] (“Swan Landing”). Thus, when reviewing a claim under F.S. 57.105, this Court’s initial inquiry is whether the non-movant’s claim, issue, or defense is: a) not supported by material facts necessary to establish the claim or, b) would not be supported by the application of then-existing law to those material facts.

A review of this case shows that both sides relied on the case of MRI Associates of America, LLC a/a/o Ebba Register v. State Farm Fire and Casualty Company, 61 So.3d 462 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D960b]. (“Ebba Register”). While the trial courts in Florida may be split on the level of compliance necessary to satisfy the condition precedent of F.S. 627.736(10), it is clear to this Court that the Plaintiff’s demand letter satisfied this requirement under a plain reading of F.S. 627.736(10) and Ebba Register. While the parties may advance divergent interpretations on existing case law, State Farm’s claim that the Plaintiff’s case was not supported by the application of then-existing law to the material facts in this case lacks credibility. Further, even assuming, arguendo, that Healthsource’s Motion for Summary Judgment was not supported by then-existing law, this Court would still be prohibited from awarding sanctions pursuant to F.S. 57.105 if the Court determined that the claim was initially presented 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. This Court need not reach this issue as summary judgment was granted in favor of Healthsource. However, this Court emphasizes the high standard to be met by the movant, State Farm, to warrant a finding of sanctions pursuant to F.S. 57.105. In Swan Landing, the Supreme Court stated, “section 57.105 should not be construed to discourage a party from pursuing a colorable claim under rule 1.540.” Id., at 329. “Where there is an arguable basis in law and fact for a party’s claim, a trial court may not sanction that party under statute on fee awards as a sanction.” Minto PBLH, LLC v. 1000 Friends of Florida, Inc., 228 So.3d 147 (Fla. 2d DCA 2017) [42 Fla. L. Weekly D2223a].

Having established that State Farm did not meet its burden pursuant to F.S. 57.105, the Court next looks at Plaintiff’s argument, to wit: that State Farm filed its motion solely to have a chilling effect on Healthsource and its counsel, Shuster & Saben, from filing lawful claims. Prior to the hearing on November 7, Plaintiff filed case law in support of its motion, including twenty-one orders from sister courts that ruled on the same (or similar) issue as that in this case. Each Order involved not only the identical or similar issues, but also involved the same law firm as counsel for Plaintiff in this case. In each Order, Shuster & Saben’s demand letter was found to satisfy the requirements of F.S. 627.736(10).³ Therefore, counsel for the Defendant knew or should have known that the Plaintiffs demand letter, arguably, complied with F.S. 627.736(10). This obvious conclusion is compounded by the fact that sixteen of the twenty-one Orders involved the same Defendant as in this case, State Farm. Every one of the Orders was published in the Florida Law Weekly Supplement, so counsel for State Farm was aware of these Orders prior to filing its Motion for Sanctions pursuant to 57.105. Thus, the Court is at a loss to understand how the Defendant or its counsel surmised that the Plaintiff’s demand letter in this case was not supported by “then-existing law”, warranting a motion for sanctions pursuant to F.S. 57.105.

Even assuming that the Plaintiff produced no case law supporting its position, 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, not only is there no evidence from the Defendant to meet its burden under F.S. 57.105(3), but, to the contrary, the evidence shows that the case law supports the Plaintiff’s position that the demand letter complied with F.S. 627.736(10). If any position was not supported by the application of “then-existing law,” it was that of the Defendant in the filing of its motion for sanctions pursuant to F.S. 57.105 in this case.

An award of sanction pursuant to F.S. 57.105 is not a default. To the contrary, it is a tool to be 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 any factor to warrant awarding F.S. 57.105 sanctions in this case. Even a modest review of existing case law would have revealed that the Plaintiff’s demand letter was, arguably, compliant with F.S. 627.736(10). The misuse or abuse of F.S. 57.105 motions promotes incivility amongst members of the Bar for which this Court has little patience. Therefore, the Court makes the following findings:

· The parties filed Countermotions for Sanctions based on F.S. 57.105. Both motions were timely filed and noticed and argument was heard by the Court by counsel for both parties.

· There was no objection to consideration of the Plaintiff’s Motion for Sanctions.

· The Defendant did not wish or request to provide additional evidence or testimony.

· There was no basis of fact or law for State Farm to file its motion for sanctions because it knew or should have known that Shuster & Saben’s demand letter, arguably, complied with F.S. 627.736(10) based on the same (or similar) challenges, mostly by State Farm, in prior motions for summary judgment in sister courts.

· The only reasonable conclusion for State Farm to advance its motion is that asserted by the Plaintiff in its countermotion for sanctions, to wit: that the Defendant sought to have a chilling effect on counsel for Plaintiff from zealously asserting its client’s interests.

Therefore, this Court denies Defendant’s Motion for Sanctions pursuant to F.S. 57.105. This Court grants Plaintiff’s Motion for Sanctions pursuant to F.S. 57.105(1) and pursuant to the inherent authority of the Court. Sanctions shall be levied against State Farm and its counsel in equal amounts and this Court reserves jurisdiction to determine the amount of sanctions should counsel fail to resolve the issue of quantum without the need for hearing.

__________________

¹See, Defendant’s Motion for Sanctions filed February 12, 2018, page 8.

²See, Plaintiff’s Countermotion for Sanction filed on June 29, 2018, pages 3-4.

³ Oasis Diagnostic Center, Inc. (Ania Roque) v. State Farm Fire and Casualty Co., 25 Fla. L. Weekly Supp. 976a (Fla. Miami-Dade Ct. Ct., Dec. 21, 2017) (review of a demand letter prepared by law firm of Shuster & Saben); Advanced 3-D Diagnostics, Inc. (Claudette Salmon) v. State Farm Fire and Casualty Co., 23 Fla. L. Weekly Supp. 263a (Fla. Orange Cty. Ct., June 22, 2015) (review of a demand letter prepared by law firm of Shuster & Saben); McGowan Spinal Rehab Center (Jaynell Cameron) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 708a (Fla. Duval Cty. Ct., Dec. 17, 2017) (review of a demand letter prepared by law firm of Shuster & Saben); St. Johns Medical Center a/a/o Melissa Brown v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 457a (Fla. Duval Cty. Ct., Oct. 22, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); Moore Chiropractic Center, Inc. (Payton Brule) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 266a (Fla. Clay. Cty. Ct., Sept. 16, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); Moore Chiropractic Center, Inc. (Robbie Borz) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 361a (Fla. Clay Cty. Ct., Aug. 28, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); Physicians Medical Centers Jax, Inc. (Melanie Wrenn) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 359a (Fla. Duval Cty. Ct., Aug. 25, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); Advanced MRI Diagnostic (Ricard Avendano) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 357a (Fla. Duval Cty. Ct., Aug. 15, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); North Florida Chiro. & Rehab. Center (Kenneth Brown) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 266b (Fla. Duval Cty. Ct., Aug. 28, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); Moore Chiropractic Center Inc. (Andrew Beal) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 265b (Fla. Clay Cty. Ct., Aug. 28, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); Neurology Partners, P.A., d/b/a Emas Spine & Brain Specialists (Scott Bray) v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 101b (Fla. Duval Cty. Ct. Aug. 7, 2014) (review of a demand letter prepared by law firm of Shuster & Saben); A.C. Rehabilitation Center, Inc. (Anisleydis Rivero) v. State Farm Mutual Automobile Ins. Co., 19 Fla. L. Weekly Supp. 890a (Fla. Miami-Dade Cty. Ct., Mar. 16, 2012) (review of a demand letter prepared by law firm of Shuster & Saben); EBM Internal Medicine (Bernadette Dorelien) v. State Farm Mutual Automobile Ins. Co. 19 Fla. L. Weekly Supp. 410a (Fla. Duval Cty. Ct., Feb. 8, 2012) (review of a demand letter prepared by law firm of Shuster & Saben); EBM Internal Medicine (Jasmine Gaskin) v. State Farm Mutual Automobile Ins. Co., 19 Fla. L. Weekly Supp. 382a (Fla. Duval. Cty. Ct., Dec. 9, 2011) (review of a demand letter prepared by law firm of Shuster & Saben); Mark S. Scherer, D.C., P.A. (Natasha Champagne) v. MGA Insurance Company, 19 Fla. L. Weekly Supp. 289a (Fla. Palm Beach Cty. Ct., Nov. 18, 2011) (review of a demand letter prepared by law firm of Shuster & Saben); Professional Diagnostic Reading (Sol Ivette Orengo-Reyes) v. United Svcs. Automobile Association, 19 Fla. L. Weekly Supp. 203a (Fla. Orange Cty. Ct., Aug. 29, 2011) (review of a demand letter prepared by law firm of Shuster & Saben); Kadosh Medical Services, Inc. (Davila Perez) v. State Farm Fire & Casualty Company, 19 Fla. L. Weekly Supp. 207b (Fla. Miami-Dade Cty. Ct., June 7, 2011) (review of a demand letter prepared by law firm of Shuster & Saben); Professional Diagnostic Reading (Vanessa Rosa) v. USAA Casualty Ins. Co., 19 Fla. L. Weekly Supp. 205a (Fla. Orange Cty. Ct., Mar. 28, 2011) (review of a demand letter prepared by law firm of Shuster & Saben); Venus Health Center (Omar Perez Vidal) v. State Farm Fire & Casualty Co. 18 Fla. L. Weekly Supp. 602b (Fla. Miami-Dade Cty. Ct., Mar. 11, 2011) (review of a demand letter prepared by law firm of Shuster & Saben); Feel Better Rehab, Inc. (Guillermo Vidal) v. United Automobile Ins. Co. 15 Fla. L. Weekly Supp. 375b (Fla. Miami-Dade Cty. Ct., Feb. 11, 2008) (review of a demand letter prepared by law firm of Shuster & Saben); Silver Consulting Svcs. (Brittany Schreiber) v. United Svcs. Auto. Assoc., 22 Fla. L. Weekly Supp. 1064a (Fla. Duval Cty. Ct., Mar. 26, 2015 (review of a demand letter prepared by law firm of Shuster & Saben).