FLORIDA LAW WEEKLY

VOLUME 43, NUMBER 33

CASES FROM THE WEEK OF AUGUST 17, 2018

TRIAL COURT ERRED IN AWARDING SECTION 57.105 FEES WITHOUT MAKING FINDINGS BASED ON SUBSTANTIAL COMPETENT EVIDENCE IN THE RECORD THAT THE ACTION WAS FRIVOLOUS OR SO DEVOID OF MERIT AS TO BE COMPLETELY UNTENABLE--ORDER ALSO FAILED TO PROPERLY APPORTION FEES AND COSTS AMONG THE LOSING PARTIES AND THEIR ATTORNEYS.

MC Liberty Express v. All Points Services, Inc., 43 Fla. L. Weekly D1808 (Fla. 3rd DCA August 8, 2018):

Plaintiff sued defendants alleging breach of an oral contract, conspiracy, fraud, unjust enrichment and violations of the Florida Deceptive and Unfair Trade Practices Act.

The defendant unsuccessfully moved to dismiss the complaint. The defendant sent the plaintiff a proposed motion for sanctions along with a “safe harbor” letter pursuant to section 57.105. The letter informed the plaintiff of the reasons why the lawsuit should be dismissed, noting the legal bases (preemption, time barred, and improper parties).

The trial court granted defendant’s motion for summary judgment. The trial court then ordered the parties to try to resolve the section 57.105 motion, but they were unable to reach an agreement. The trial court conducted a hearing and issued two orders granting the motion for sanctions against the plaintiff and the law firm, joint and severally.

The purpose of section 57.105 is to discourage baseless claims, stonewall defenses and sham appeals in civil litigation, by placing a price tag through attorney’s fees awards on losing parties who engage in those activities. Historically, the court could award attorney’s fees under section 57.105 only when there was a complete absence of a justiciable issue of either law or fact.

However, as part of the 1999 Tort Reform Act, and in an effort to reduce frivolous litigation, the legislature revised the statute. Under the new version, the statute broadened the remedies that were previously available. Unlike its predecessor, the amended statute no longer requires a party to show a complete absence of a justiciable issue of fact, but instead allows recovery of fees for “any claims or defenses that are unsupported.”

Notwithstanding the amendments, Florida courts have continued to caution that section 57.105 must be carefully applied to ensure that it serves the purpose for which it was intended--to deter frivolous pleadings. Thus an award under section 57.105 requires more than the moving party succeeding in obtaining a dismissal of the action or the entry of summary judgment in its favor.

Also, a party does not need to have conclusive evidence to prove its case at the time of filing in order to avoid sanctions. Where a party reasonably believes a factual basis for its claim exists, it is entitled to proceed with those claims and seek to prove those facts. If attempts to prove the facts are fruitless, this is still not cause for sanctions where the party’s initial belief was well founded.

There is nothing in the amendments or the subsequent case law to suggest the trial court may award section 57.105 fees without making explicit findings. The court must find that the action was “so frivolous or so devoid of merit both on the facts and the law as to be completely untenable.” The Third District observed that the burden is “a heavy one.” Additionally, the trial court’s findings must be based on substantial competent evidence that is either contained in the record or otherwise before the court.

In this case, the trial court failed to make the proper findings. The plaintiff contended the trial court also erred by failing to apportion the fee award as required by the statute.

In this case, the trial court’s order had properly imposed joint and several liability for the full amount upon the appellant parties and the law firm. There should be a proper apportionment which requires an award to be paid “in equal amounts” by the losing party and the losing party’s attorney.

NON-FINAL ORDER DENYING THE MOTIONS TO DISMISS OF CITY EMPLOYEES AND POLICE OFFICERS BASED ON INDIVIDUAL IMMUNITY NOT APPEALABLE WHERE THE ORDER MADE NO FINDINGS REGARDING IMMUNITY--QUESTION CERTIFIED REGARDING THE SPECIFICITY WITH WHICH A COURT MUST DENY A MOTION FOR IMMUNITY BEFORE INTERLOCUTORY REVIEW PURSUANT TO 9.130(a)(3)(C)(x) IS PERMITTED.

Key v. Almase, 43 Fla. L. Weekly D1804 (Fla. 3rd DCA August 8, 2018):

The underlying tort action arose out of a head-on automobile collision that resulted in four fatalities. The accident allegedly occurred because a police officer was pursuing a crime suspect in a high speed chase. The defendants, who were all city employees, moved to dismiss the complaint based on immunity under section 768.28(9)(a).

The trial court denied the motion, but nothing in the order specifically stated that the city employees were not entitled to immunity.

Although an order denying a motion to dismiss is a non-final order and not typically reviewable on appeal, Florida Rule of Appellate Procedure 9.130(a)(3)(C)(x) does allow appeals of non-final orders that determine as a matter of law that a party is not entitled to immunity under section 768.28(9).

In this case, the order made no such finding. The Third District observed that the First District has recently determined that appellate review was improper of orders denying summary judgment which did not explicitly determine as a matter of law that the defendants (in those instances, they were officers with the Florida Highway Patrol) were not entitled to sovereign immunity.

The First District certified the question as one of great public importance to the Florida Supreme Court, and the Third District joined that certification of these consolidated cases.

TRIAL COURT DID NOT ERR IN DENYING THE MOTION TO DISMISS ON GROUND OF FORUM NON CONVENIENS BASED ON CONFLICTING EXPERT OPINION REGARDING THE ADEQUACY OF THE ALTERNATIVE FORUM.

Villafane v. Maradona, 43 Fla. L. Weekly D1816 (Fla. 3rd DCA August 8, 2018):

The parties in the case were citizens of Argentina. They had married, separated and divorced there. However, there were issues regarding the marital settlement agreement, and the properties listed therein. It was alleged that the ex-wife had misappropriated some of the money and used it to purchase condominium units in South Florida.

The ex-wife moved to dismiss the lawsuit filed in Miami, asserting that pursuant to forum non conveniens, Argentina was the proper venue for the case. She alleged that both parties had resided and maintained their financial affairs there, and all witnesses were there. She had filed an affidavit that contained the legal opinion of an Argentinian lawyer. The ex-husband responded to the motion with his own affidavit and that of an Argentinian legal expert which conflicted with that, stating that the action in Argentina would be time barred.

The trial court denied the motion to dismiss. It found that the statute of limitations in Argentina pursuant to one of the experts, would have already expired. The ex-wife contended that was error, and even if the statute had expired, Argentina was still an adequate alternative forum.

The trial court’s finding that the ex-husband could not bring his claims in Argentina based on the country’s statute of limitations was supported, even though the opinions of the legal experts were conflicting. The trial court’s ultimate conclusion that Argentina was not an adequate alternative forum, heeded the words of Kinney, finding that Florida has an interest in avoiding forcing a plaintiff into a forum where the statute may have expired. The court affirmed the trial court’s ruling.

TRIAL COURT DID NOT DEPART FROM ESSENTIAL REQUIREMENTS OF LAW BY GRANTING MOTION TO AMEND COMPLAINT TO ASSERT A CLAIM FOR PUNITIVE DAMAGES--THERE WAS NO FAILURE TO COMPLY WITH THE PROCEDURAL REQUIREMENTS OF SECTION 768.72.

Robins v. Colombo, 43 Fla. L. Weekly D1821 (Fla. 3rd DCA August 8, 2018):

As a general rule, petitioners seeking certiorari relief must show that the trial court’s non-final order departs from the essential requirements of law, thus causing material injury to the petitioner throughout the remainder of the proceedings, and effectively leaving no adequate remedy on appeal. When courts apply that standard of review to orders granting leave to amend to add claims for punitive damages, courts limit their reviews to whether the procedural requirements of section 768.72 have been followed.

In looking at this case, the court found the petitioner did not demonstrate that the trial court failed to comply with the procedural requirements. The record established that plaintiff’s motion to amend contained a proffer, and referred to and relied upon testimony, answers to interrogatories and exhibits attached to the motion. Further, the trial court ordered granting the motion to amend was consistent with section 768.72(1) based upon a “reasonable showing by evidence in the record or proffered by the claimant.”

The defendant’s remaining arguments focused on the sufficiency of the evidence rather than compliance with the procedural requirements. That is a matter beyond the appellate court’s authority to review on certiorari.

The defendant also claimed that the trial court failed to afford him an adequate hearing before ruling on the motion. While the hearing on the motion to amend lasted only a short time, the trial court did not preclude or prohibit the petitioner from making any argument it wished to make in opposition to the motion.

Nor did the petitioner/defendant lodge any objection to the court’s procedure or assert at the hearing that it was in any way foreclosed from presenting an argument in opposition to the motion to amend. Instead, it appears from the review of the hearing transcript, that the petitioner decided to await argument on a summary judgment motion that immediately followed, believing that a favorable ruling on summary judgment would render the plaintiff’s request to amend moot.

The court concluded that under Rule 1.190(f) (claims for punitive damages), the petitioner/defendant was afforded a reasonable and meaningful opportunity to be heard on the merits of the motion to amend.

The petitioner also asserted certiorari relief was appropriate because the plaintiff failed to attach to their motion a proposed amended pleading, and instead proposed to amend the complaint by interlineation. Rule 1.190(a) provides that if a party files a motion to amend a pleading, the party shall attach the proposed amended pleading to the motion, something that has been required to be mandatory.

However, because the petitioner/defendant never objected to this amendment by interlineation, raising it for the first time on appeal, the party waived the claim (absent a showing of fundamental error). Had the petitioner raised the issue in the trial court with a contemporaneous objection, the asserted defect could easily have been cured by converting the interlineated amendment to a more formal pleading.

NOTE: I think there are two important take-aways from this case:

First, it is imperative that a claim for punitive damages be reflected, not by interlineation, but by the attaching of an amended pleading with allegations supporting punitive damages, and a prayer for relief seeking them.

Second, while earlier case law suggests that a proffer is enough for punitive damages, and that a hearing is not even necessary, this case suggests that it is much safer to have a hearing in order to comply with Rule 1.190(f).

NO ABUSE OF DISCRETION IN DISMISSING THE LIABILITY INSURER’S INTERVENTION IN THE TORT LAWSUIT BROUGHT AGAINST ITS INSURED--THE INSURER LACKED A DIRECT AND IMMEDIATE INTEREST IN THE STATE COURT LAWSUIT.

Houston Specialty Insurance Co. v. Vaughn, 43 Fla. L. Weekly D1828 (Fla. 2nd DCA August 10, 2018):

The defendant insured was in the business of pressure washing, roof coating and ancillary roof-related services. It was insured by a Houston Specialty Insurance Company commercial liability policy. In 2012, while applying a protective coating to a mobile homes roof for the defendant, the plaintiff fell rendering him paraplegic.

Initially, the insurer agreed to investigate and defend the claims, but later informed the insured of a policy exclusion eliminating coverage for bodily injury to the company’s employees, and an endorsement that would reduce any limits of coverage if the plaintiff were an independent contractor.

The insurer filed a declaratory judgment action in the middle district seeking a determination as to its duty to defend and indemnify its insured.

Shortly after filing the declaratory judgment action, the insurer moved to intervene in the state court lawsuit. The insurer wanted to submit special interrogatories and verdict forms relevant to the plaintiff’s employment status. The insurer feared having to re-litigate the entire tort lawsuit and its declaratory judgment action if the jury found in favor of the plaintiff. Thus, the insurer asserted that limited intervention was proper to avoid conflicting findings or verdicts of inconsistent results.

The insured informed the insurer at some point that they had retained separate counsel in rejecting the defense the insurer was offering. Further, due to the insurer’s position on coverage, the insureds had negotiated an agreement with the plaintiff to resolve his claims through non-binding arbitration resulting in a final judgment entered for the plaintiff.

The arbitrator found the plaintiff to be 80% responsible for his own injuries, but awarded him net damages of $2.1 million and $200,000 to his minor son for loss of consortium (the plaintiff was rendered paraplegic in the accident). The insurer objected to the award.

The first declaratory judgment action was tried, and the jury found that the plaintiff was an independent contractor at the time of the accident. The insurer unsuccessfully appealed that judgment.

As a result of those developments, the plaintiff filed a second motion to dismiss the insurer’s intervention in his state court claim (a trial de novo had been filed for it) which the trial court granted.

The Second District concluded that the trial judge did not err in dismissing the insurer’s intervention. Because the order dismissed the insurer as a party, it was the functional equivalent of an order denying a motion to intervene.

Rule 1.230 provides that anyone claiming an interest in pending litigation may at any time be permitted to assert a right by intervention, but the intervention shall be in subordination to, and in recognition of, the propriety of the main proceeding, unless otherwise ordered by the court in its discretion. Despite the rule’s seemingly expansive language, intervention is not unrestrained.

The Florida Supreme Court has established a two-part test for determining whether intervention is proper. The trial court must first make a preliminary determination as to whether the “interest asserted is appropriate to support intervention.” The trial court must then “consider a number of factors including the derivation of the interest, any pertinent contractual language, the size of the interest, the potential for conflicts or new issues, and any other relevant circumstance.” The two-step analysis is a compromise among the competing and fluid interests that are at stake in tort litigation.

In light of the interest asserted by the insurer within the context of the long and ponderous litigation history surrounding the state court lawsuit, the court concluded that the trial court’s decision to deny intervention was not an abuse of discretion (noting that reasonable people could differ as to the decision).

The insurer had no direct and immediate interest in the state court lawsuit (only the plaintiff and the insured were the parties with a direct and immediate interest). Instead, the insurer had a speculative or contingent interest that could come to fruition only if the trial court entered a judgment against the insured parties, and then either the plaintiff or the insured parties through separate legal action seek enforcement of the judgment against the insurance company through claims of breach of contract or bad faith. At that point though, the insurer can assert its defenses.

If the possibility of owing up to the policy limits based upon entry of an adverse judgment was itself a sufficient basis to allow intervention, insurers would be impermissibly permitted the “unhindered and unfettered opportunity to intervene in innumerable tort cases.” That is exactly what the insurance company in this case wanted; to interject itself directly into the plaintiff’s tort lawsuit.

The court concluded that such a result in light of the legislature’s intent to prevent the introduction of such prejudicial information from being introduced to the jury means that it does not make sense that it should be intervening. Courts have to be continually concerned that insurance coverage not be introduced to the jury because of its potential to adversely impact the issues of liability and damages.

Even though the resolution of the factual disputes might be material, the insurer elected to litigate those factual disputes in federal court in the declaratory judgment action. The denial of the intervention was proper.