Chapter 17-4 Attorney's Fees as a Sanction

17-4 Attorney's Fees as a Sanction

17-4:1 Court's Inherent Authority to Assess Attorney's Fees as a Sanction

Florida has long recognized a limited exception to the general American Rule in situations involving inequitable conduct, and the Florida Supreme Court has held that a court has inherent authority to impose sanctions, including attorney's fees, under the "inequitable conduct doctrine."⁹⁶ It is reserved for those extreme cases where a party acts "in bad faith, vexatiously, wantonly, or for oppressive reasons."⁹⁷ A trial court possesses the inherent authority to impose attorney's fees against an attorney for bad faith conduct during the course of litigation.⁹⁸ A trial court's exercise of its inherent authority must be based upon an express finding of bad faith conduct and must be supported by detailed factual findings describing the specific acts of bad faith that resulted in unnecessary incurrence of attorney's fees.⁹⁹ In addition, the amount of fees awarded must be directly related to the attorney's fees and costs that the opposing party has incurred as a result of the specific bad faith of the attorney, and the sanctioned attorney must be provided with notice and an opportunity to be heard before the sanction is imposed.¹⁰⁰ The Florida Supreme Court has recognized a court's authority to impose sanctions for bad faith of an attorney in foreclosure actions as early as 1920.¹⁰¹ An attorney may also be sanctioned in a foreclosure matter for acting in his own interest and not on behalf of his client.¹⁰² The attorney and his client may be held jointly responsible for the attorney's bad faith conduct, or the court in its discretion may apportion the order of attorney's fees against the attorney or the client based upon its determination of each party's participation in the bad faith conduct.¹⁰³ Despite the inherent authority of a court to award sanctions, if a "specific statute or rule applies, the court should rely upon the applicable rule or statute rather than on inherent authority."¹⁰⁴

17-4:2 Attorney's Fees for Raising Unsupported Claim or Defense or for Unreasonable Delay Under Fla. Stat. § 57.105(1) & (2)

Fla. Stat. § 57.105(1) provides a mechanism for a prevailing party to recover attorney's fees against a losing party and its attorney, if the court finds that the losing party or its attorney knew or should have known that a claim or defense when initially presented to the court (or at any time before trial) was a) 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.¹⁰⁵ In addition, the statute provides that a party may obtain an award of its reasonable expenses, which may include attorney's fees, incurred in obtaining an order determining that an opposing party's actions were frivolous or taken primarily for the purpose of unreasonable delay.¹⁰⁶ This statute has been found to be applicable in mortgage foreclosure actions, where the defendants and their counsel asserted defenses which they know or should have known are not supported by the material facts of the case, results in an award of costs and attorney's fees, plus "delay damages" in the form of interest on the note and mortgage while the case was delayed.¹⁰⁷ The filing of frivolous pleadings by an attorney related to the tender of a "unilateral note" by the borrowers in an attempt to "satisfy" a foreclosure judgment resulted in an award of sanctions against the borrowers and their attorney, and a suspension of the attorney by the Florida Bar for ethical...