Section 57.105's new look: the Florida Legislature encourages courts to sanction unsupported claims and dilatory actions.

• Author: Gaffney, Gary S.

The Florida Legislature's recent overhaul of F.S. [section] 57.105 provides courts all over the state with a brand new tool to discourage lazy or unscrupulous litigants (and their legal counsel) from asserting unsupported claims or defenses, or acting in any way to delay civil proceedings. While the language of its predecessor made it the rare case when sanctions were imposed, the new statute alters the applicable standards considerably, and now provides Florida's courts with substantial authority to sanction litigants--and their attorneys--for taking any unsupported position or action to delay the judicial process. Unlike the prior version of [section] 57.105, the new statute applies to any claim or defense, and to any dilatory action; and it may be raised at any time--even by the court sua sponte. And, unlike "Rule 11" (its federal counterpart), the new [section] 57.105 currently (1) provides no "safe harbor" with which challenged litigants and counsel might avoid being sanctioned by simply withdrawing the offending paper or action within a certain period of time.

Since [section] 57.105 has been substantially changed, it is unlikely that prior case law will provide courts or practitioners with much guidance as to what will be expected of them under its demanding new standards. This article reviews the new statute with the aim of offering some direction for bench and bar alike. The authors take a quick look at the language of the new [section] 57.105 and then suggest some possible answers to the myriad questions concerning its substantive and procedural applications. Model forms are provided to assist practitioners and courts in implementing the new statute in practice. Finally, the authors explore the recent decision out of the Fourth District Court of Appeal, the first appellate court in the state to interpret the new law, Forum v. Boca Burger, Inc., 788 So. 2d 1055 (Fla. 4th DCA 2001).

The New Statute

The new [section] 57.105, which became effective on October 1, 1999, (2) provides as follows:

57.105 Attorneys' fee; sanctions for raising unsupported claims or defenses; 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 to be paid to the prevailing party in equal amounts by the losing party or 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 claim or defense when initially presented to the court or at any time before trial:

1. Was not supported by the material facts necessary to establish the claim or defense; or

2. 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) Paragraph (1)(b) does not apply 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.

(3) 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 in obtaining the order, which may include attorney's fees, and other loss resulting from the improper delay.

(4) The provisions of this section are supplemental to other sanctions or remedies available under law or under court rules.

(5) If a contract contains a provision allowing attorney's fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney's fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract. This subsection applies to any contract entered into on or after October 1, 1998.

The New Standard

Unlike its predecessor, which required the movant to establish that a challenged action was completely "frivolous," (3) the new statute has two distinctly separate--and more easily satisfied--standards: 1) a "knew or should have known" (4) standard B under [section] 57.105(1), that requires courts to impose sanctions for any claim or defense that the losing party knew or should have known (5) was not supported by the facts or law necessary to establish its viability, and 2) a new "unreasonable delay" standard under [section] 57.105(3), that provides for the imposition of sanctions without regard for the substantive merits of a particular pleading or motion, and which applies whenever the court determines that the action was primarily undertaken to cause "unreasonable delay" in the proceedings. (6)

In essence, the new statute subjects civil litigants to sanctions for asserting any position that does not find substantial support in both fact and law, or for taking any action seen as "intended" to delay the proceeding. In subsection (1), the legislature has heightened (or perhaps reiterated) counsel's duty of legal and factual diligence. (7) While the prior statute limited the court's power to award fees to only those situations in which the movant was actually able to establish "a complete absence of a justiciable issue of either law or fact" (the so-called "frivolous" action), (8) the new standard calls for the imposition of sanctions in any situation where the court finds that the losing attorney or litigant "should have known" that the challenged claim or defense was not "supported" by the facts, or by the application of then-existing law to those facts. (9) And, while the old [section] 57.105 required the movant to establish that the entire action was without merit, the new statute can be applied to any individual claim or defense in the proceeding, and a motion for sanctions may be filed at any time. (10)

The new subsection (1) requires the movant to establish that the offending party either "knew" or "should have known" that the claim or defense being challenged was not founded on fact or the applicable law. As such, [section] 57.105(1) can actually be applied in at least two different situations: 1) where a party (or counsel) has asserted "facts" which cannot be substantiated by the evidence or testimony; or 2) where an otherwise accurate set of facts does not support the particular theory of law to which it is ascribed. Reflecting the Bar's "ethical" rules, which have almost always required attorneys to conduct a thorough presuit investigation of the facts and law, (11) this new statute is certain to encourage civil litigants (12)--and their counsel--to conduct more intensive investigations and research than have been conducted in the past. These investigations must delve into both the facts and the applicable law for each and every claim (or defense) a party seeks to assert.

Even if the facts and applicable law have been represented correctly, a court may still impose sanctions under [section] 57.105(3) if it finds that the party or lawyer has taken an action for the "primary purpose" of causing "unreasonable delay" to the proceedings. (13) This section is obviously intended to discourage the now all-too-common "delay tactics" used by unscrupulous (or lazy) litigants and their counsel. Although the statute does not specify which actions fall within its scope, it is conceivable that sanctionable conduct under this subsection might include tactics like: making unjustified objections at depositions; (14) improperly instructing clients not to answer nonprivileged questions; (15) filing dilatory motions for protective orders (especially those purposely filed at the last minute); (16) setting an unreasonable number of depositions; drafting overbroad discovery requests; interposing unexplained objections to discovery requests; (17) providing overbroad or unnecessarily voluminous discovery responses; failing to properly identify discovery responses (or simply responding with a generalized reply, such as "available for inspection and copying upon request," when a more specific response is appropriate); (18) or moving for time extensions to assert claims or defenses without justifiable grounds. (19)

Quite conceivably, subsection (3) could also be utilized to sanction dilatory "motions to continue" which fail to provide justifiable grounds for the requested continuance, or for overbroad motions to dismiss (i.e., those which provide no true guidance as to the actual grounds being asserted or have no chance of success), for filing unduly lengthy witness and exhibit lists, or for failing to provide useful addresses for those witnesses. (20)

It is important to remember that when applying [section] 57.105(3), the court is not to look to the substantive merit of the challenged action, but only to its "primary" purpose, that is, the court is only to determine whether the objectionable action was taken to "unreasonably delay" the proceeding. As with subsection (1), the motion can be made at any time, but unlike subsection (1), subsection (3) appears to require that an evidentiary hearing be held before the court imposes any sanctions. (21) When a purposeful delay is found, the statute provides that the court "shall" award the movant attorneys' fees, reasonable expenses, and...