Senate Bill sb1726c1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
By the Committee on Commerce; and Senator Baker
577-2117-07
1 A bill to be entitled
2 An act relating to award of attorney's fees;
3 reenacting and amending s. 57.105, F.S.,
4 relating to attorney's fees and sanctions for
5 raising unsupported claims or defenses;
6 providing an entitlement to fees and requiring
7 compliance with filing provisions; providing
8 legislative intent; reenacting and amending s.
9 768.79, F.S.; allowing offers to be made by or
10 to any party or parties; requiring joint
11 proposals to state the amount and terms
12 attributable to each party; providing
13 exceptions when a party is alleged to be solely
14 vicariously, constructively, derivatively, or
15 technically liable; providing legislative
16 intent; providing for specified retroactive
17 applicability; providing applicability;
18 providing an effective date.
19
20 WHEREAS, the legislative power of the state is vested
21 solely in the Legislature of the State of Florida, and the
22 Legislature is the only branch of government constitutionally
23 authorized to confer substantive rights, and
24 WHEREAS, shifting fees to the losing party is in
25 derogation of the common law American rule that each party in
26 a lawsuit pay its own attorney's fees, and
27 WHEREAS, the award of attorney's fees is a substantive
28 right that may only be conferred by the Legislature, and
29 WHEREAS, a substantive right created by the Legislature
30 may not be abolished by the courts, and
31
1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 WHEREAS, the Legislature enacted chapter 99-225, Laws
2 of Florida, which amended both section 57.105, Florida
3 Statutes, and section 768.79, Florida Statutes, and
4 WHEREAS, the Legislature provided the standard for the
5 award of attorney's fees under section 57.105, Florida
6 Statutes, which provides that attorney's fees shall be awarded
7 to the prevailing party in a civil proceeding or action in
8 which the court finds that the losing party or the losing
9 party's attorney knew or should have known that a claim or
10 defense when initially presented to the court or at any time
11 before trial was not supported by the material facts necessary
12 to establish the claim or defense, or would not be supported
13 by the application of then-existing law to those material
14 facts, and
15 WHEREAS, the standard for the award of attorney's fees
16 under section 57.105, Florida Statutes, is not whether the
17 claim or defense was "frivolous," and
18 WHEREAS, the application of a standard other than the
19 standard adopted by the Legislature for the award of a
20 substantive right encroaches upon the Legislature's right to
21 confer substantive rights, and
22 WHEREAS, it is the intent of the Legislature to
23 preserve and protect the separation of powers clause in
24 section 3, Article II of the State Constitution, NOW,
25 THEREFORE,
26
27 Be It Enacted by the Legislature of the State of Florida:
28
29 Section 1. Section 57.105, Florida Statutes, is
30 reenacted and amended to read:
31
2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 57.105 Attorney's fee; sanctions for raising
2 unsupported claims or defenses; service of motions; damages
3 for delay of litigation.--
4 (1) Upon the court's initiative or motion of any
5 party, the court shall award a reasonable attorney's fee to be
6 paid to the prevailing party in equal amounts by the losing
7 party and the losing party's attorney on any claim or defense
8 at any time during a civil proceeding or action in which the
9 court finds that the losing party or the losing party's
10 attorney knew or should have known that a claim or defense
11 when initially presented to the court or at any time before
12 trial:
13 (a) Was not supported by the material facts necessary
14 to establish the claim or defense; or
15 (b) Would not be supported by the application of
16 then-existing law to those material facts.
17
18 However, the losing party's attorney is not personally
19 responsible if he or she has acted in good faith, based on the
20 representations of his or her client as to the existence of
21 those material facts. If the court awards attorney's fees to a
22 claimant pursuant to this subsection, the court shall also
23 award prejudgment interest.
24 (2) Paragraph (1)(b) does not apply if the court
25 determines that the claim or defense was initially presented
26 to the court as a good faith argument for the extension,
27 modification, or reversal of existing law or the establishment
28 of new law, as it applied to the material facts, with a
29 reasonable expectation of success.
30 (3) At any time in any civil proceeding or action in
31 which the moving party proves by a preponderance of the
3
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 evidence that any action taken by the opposing party,
2 including, but not limited to, the filing of any pleading or
3 part thereof, the assertion of or response to any discovery
4 demand, the assertion of any claim or defense, or the response
5 to any request by any other party, was taken primarily for the
6 purpose of unreasonable delay, the court shall award damages
7 to the moving party for its reasonable expenses incurred in
8 obtaining the order, which may include attorney's fees, and
9 other loss resulting from the improper delay.
10 (4) A party is entitled to an award of sanctions under
11 this section only if a motion is by a party seeking sanctions
12 under this section must be served by a party seeking sanctions
13 under this section. Such motion shall but may not be filed
14 with or presented to the court unless, within 21 days after
15 service of the motion, the challenged paper, claim, defense,
16 contention, allegation, or denial is not withdrawn or
17 appropriately corrected. Any motion filed with the court which
18 does not comply with this subsection is null and void. This
19 subsection is substantive and shall not be waived except in
20 writing. This subsection does not apply to sanctions ordered
21 upon the court's initiative.
22 (5) In administrative proceedings under chapter 120,
23 an administrative law judge shall award a reasonable
24 attorney's fee and damages to be paid to the prevailing party
25 in equal amounts by the losing party and a losing party's
26 attorney or qualified representative in the same manner and
27 upon the same basis as provided in subsections (1)-(4). Such
28 award shall be a final order subject to judicial review
29 pursuant to s. 120.68. If the losing party is an agency as
30 defined in s. 120.52(1), the award to the prevailing party
31 shall be against and paid by the agency. A voluntary dismissal
4
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 by a nonprevailing party does not divest the administrative
2 law judge of jurisdiction to make the award described in this
3 subsection.
4 (6) The provisions of this section are supplemental to
5 other sanctions or remedies available under law or under court
6 rules.
7 (7) If a contract contains a provision allowing
8 attorney's fees to a party when he or she is required to take
9 any action to enforce the contract, the court may also allow
10 reasonable attorney's fees to the other party when that party
11 prevails in any action, whether as plaintiff or defendant,
12 with respect to the contract. This subsection applies to any
13 contract entered into on or after October 1, 1988.
14 (8) The provisions of this section create substantive
15 rights to the award of attorney's fees, and any procedural
16 provisions are directly related to the definition of those
17 rights. Any procedural aspects of this provision are intended
18 to implement the substantive provisions of the law.
19 Section 2. Section 768.79, Florida Statutes, is
20 reenacted and amended to read:
21 768.79 Offer of judgment and demand for judgment.--
22 (1) In any civil action for damages filed in the
23 courts of this state, if a defendant files an offer of
24 judgment which is not accepted by the plaintiff within 30
25 days, the defendant shall be entitled to recover reasonable
26 costs and attorney's fees incurred by her or him or on the
27 defendant's behalf pursuant to a policy of liability insurance
28 or other contract from the date of filing of the offer if the
29 judgment is one of no liability or the judgment obtained by
30 the plaintiff is at least 25 percent less than such offer, and
31 the court shall set off such costs and attorney's fees against
5
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 the award. Where such costs and attorney's fees total more
2 than the judgment, the court shall enter judgment for the
3 defendant against the plaintiff for the amount of the costs
4 and fees, less the amount of the plaintiff's award. If a
5 plaintiff files a demand for judgment which is not accepted by
6 the defendant within 30 days and the plaintiff recovers a
7 judgment in an amount at least 25 percent greater than the
8 offer, she or he shall be entitled to recover reasonable costs
9 and attorney's fees incurred from the date of the filing of
10 the demand. If rejected, neither an offer nor demand is
11 admissible in subsequent litigation, except for pursuing the
12 penalties of this section.
13 (2) The making of an offer of settlement which is not
14 accepted does not preclude the making of a subsequent offer.
15 An offer must:
16 (a) Be in writing and state that it is being made
17 pursuant to this section.
18 (b) Name the party making it and the party to whom it
19 is being made.
20 (c) State with particularity the amount offered to
21 settle a claim for punitive damages, if any.
22 (d) State its total amount.
23
24 The offer shall be construed as including all damages which
25 may be awarded in a final judgment.
26 (3) A proposal may be made by or to any party or
27 parties and by or to any combination of parties properly
28 identified in the proposal. A joint proposal shall state the
29 amount and terms attributable to each party.
30 (4) Notwithstanding subsection (3), when a party is
31 alleged to be solely vicariously, constructively,
6
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 derivatively, or technically liable, whether by operation of
2 law or by contract, a joint proposal made by or served on such
3 a party need not state the apportionment or contribution as to
4 that party. Acceptance by any party shall be without prejudice
5 to rights of contribution or indemnity.
6 (5)(3) The offer shall be served upon the party to
7 whom it is made, but it shall not be filed unless it is
8 accepted or unless filing is necessary to enforce the
9 provisions of this section.
10 (6)(4) An offer shall be accepted by filing a written
11 acceptance with the court within 30 days after service. Upon
12 filing of both the offer and acceptance, the court has full
13 jurisdiction to enforce the settlement agreement.
14 (7)(5) An offer may be withdrawn in writing which is
15 served before the date a written acceptance is filed. Once
16 withdrawn, an offer is void.
17 (8)(6) Upon motion made by the offeror within 30 days
18 after the entry of judgment or after voluntary or involuntary
19 dismissal, the court shall determine the following:
20 (a) If a defendant serves an offer which is not
21 accepted by the plaintiff, and if the judgment obtained by the
22 plaintiff is at least 25 percent less than the amount of the
23 offer, the defendant shall be awarded reasonable costs,
24 including investigative expenses, and attorney's fees,
25 calculated in accordance with the guidelines promulgated by
26 the Supreme Court, incurred from the date the offer was
27 served, and the court shall set off such costs in attorney's
28 fees against the award. When such costs and attorney's fees
29 total more than the amount of the judgment, the court shall
30 enter judgment for the defendant against the plaintiff for the
31
7
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 amount of the costs and fees, less the amount of the award to
2 the plaintiff.
3 (b) If a plaintiff serves an offer which is not
4 accepted by the defendant, and if the judgment obtained by the
5 plaintiff is at least 25 percent more than the amount of the
6 offer, the plaintiff shall be awarded reasonable costs,
7 including investigative expenses, and attorney's fees,
8 calculated in accordance with the guidelines promulgated by
9 the Supreme Court, incurred from the date the offer was
10 served.
11
12 For purposes of the determination required by paragraph (a),
13 the term "judgment obtained" means the amount of the net
14 judgment entered, plus any postoffer collateral source
15 payments received or due as of the date of the judgment, plus
16 any postoffer settlement amounts by which the verdict was
17 reduced. For purposes of the determination required by
18 paragraph (b), the term "judgment obtained" means the amount
19 of the net judgment entered, plus any postoffer settlement
20 amounts by which the verdict was reduced.
21 (9)(7)(a) If a party is entitled to costs and fees
22 pursuant to the provisions of this section, the court may, in
23 its discretion, determine that an offer was not made in good
24 faith. In such case, the court may disallow an award of costs
25 and attorney's fees.
26 (b) When determining the reasonableness of an award of
27 attorney's fees pursuant to this section, the court shall
28 consider, along with all other relevant criteria, the
29 following additional factors:
30 1. The then apparent merit or lack of merit in the
31 claim.
8
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 2. The number and nature of offers made by the
2 parties.
3 3. The closeness of questions of fact and law at
4 issue.
5 4. Whether the person making the offer had
6 unreasonably refused to furnish information necessary to
7 evaluate the reasonableness of such offer.
8 5. Whether the suit was in the nature of a test case
9 presenting questions of far-reaching importance affecting
10 nonparties.
11 6. The amount of the additional delay cost and expense
12 that the person making the offer reasonably would be expected
13 to incur if the litigation should be prolonged.
14 (10)(8) Evidence of an offer is admissible only in
15 proceedings to enforce an accepted offer or to determine the
16 imposition of sanctions under this section.
17 (11) The provisions of this section create substantive
18 rights to the award of attorney's fees, and any procedural
19 provisions are directly related to the definition of those
20 rights. Any procedural aspects of this provision are intended
21 to implement the substantive provisions of the law.
22 Section 3. It is the intent of this act and the
23 Legislature to accord the utmost comity and respect to the
24 constitutional prerogatives of Florida's judiciary, and
25 nothing in this act should be construed as an effort to
26 impinge on those prerogatives. To that end, should any court
27 of competent jurisdiction enter a final judgment concluding or
28 declaring that a provision of this act improperly encroaches
29 upon the authority of the Florida Supreme Court to determine
30 the rules of practice and procedure in Florida courts, the
31 Legislature hereby declares its intent that such provision be
9
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 construed as a request for a rule change pursuant to section
2 2, Article V of the State Constitution and not as a mandatory
3 legislative directive.
4 Section 4. The amendment to subsection (4) of s.
5 57.105, Florida Statutes, is remedial in nature and is
6 intended to apply retroactively.
7 Section 5. This act shall take effect July 1, 2007,
8 and the amendments to s. 768.79, Florida Statutes, made by
9 this act shall apply only to offers made on or after that
10 date.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
10
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2007 CS for SB 1726
577-2117-07
1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bill 1726
3
4 This Committee Substitute (CS) differs from the bill as filed
in the following manner:
5
- Reenacts and amends s. 57.105, F.S., to:
6
1. Require a party who seeks fees to file a motion in
7 order to be entitled to those fees;
8 2. Provide that a motion not complying with the
provisions of the statute is null and void;
9
3. Provide that the amended subsection is substantive
10 and may only be waived in writing; and
11 4. Provide that the subsection does not apply to
sanctions ordered on the court's initiative.
12
5. Provide that any procedural provisions are directly
13 related to the definition of those rights, and
applies these rights retroactively.
14
- Amends s. 768.79, F.S., to permit a vicariously,
15 constructively, derivatively, or technically liable party
to make a joint offer that is not apportioned, and that
16 accepting such an offer will not affect the rights of
contribution or indemnity. In addition, the CS states
17 that s. 768.79, F.S., creates substantive rights, and any
procedural provisions are directly related to the
18 definition of those rights.
19 - Provides that if a court determines that this act
improperly encroaches on the authority of the Florida
20 Supreme Court to determine the rules of practice and
procedure, the Legislature declares its intent that the
21 provision be considered a request for a rule change.
22 - Makes the CS effective July 1, 2007, and states that
amendments made to s. 768.79, F.S., are applicable to
23 offers made on or after that date.
24
25
26
27
28
29
30
31
11
CODING: Words stricken are deletions; words underlined are additions.