CS/HB 813

1	A bill to be entitled
2	An act relating to award of attorney's fees; reenacting
3	and amending s. 57.105, F.S., relating to attorney's fees
4	and sanctions for raising unsupported claims or defenses;
5	providing an entitlement to fees and requiring compliance
6	with filing provisions; providing legislative intent;
7	providing applicability; providing for retroactive
8	applicability of a specified amendment; reenacting and
9	amending s. 768.79, F.S., relating to offer of judgment
10	and demand for judgment; allowing offers to be made by or
11	to any party or parties; requiring joint proposals to
12	state the amount and terms attributable to each party;
13	providing an exception when a party is alleged to be
14	solely vicariously, constructively, derivatively, or
15	technically liable; providing an exception for specified
16	parties in actions governed by the Florida Small Claims
17	Rules; providing legislative intent; providing
18	applicability; 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 derogation
25	of the common law American rule that each party in a lawsuit pay
26	its own attorney's fees, and
27	WHEREAS, the award of attorney's fees is a substantive
28	right that may be conferred only by the Legislature, and
29	WHEREAS, a substantive right created by the Legislature may
30	not be abolished by the courts, and
31	WHEREAS, the Legislature enacted chapter 99-225, Laws of
32	Florida, which amended both section 57.105, Florida Statutes,
33	and section 768.79, Florida Statutes, and
34	WHEREAS, the Legislature provided the standard for the
35	award of attorney's fees under section 57.105, Florida Statutes,
36	which provides that attorney's fees shall be awarded to the
37	prevailing party in a civil proceeding or action in which the
38	court finds that the losing party or the losing party's attorney
39	knew or should have known that a claim or defense when initially
40	presented to the court or at any time before trial was not
41	supported by the material facts necessary to establish the claim
42	or defense, or would not be supported by the application of
43	then-existing law to those material facts, and
44	WHEREAS, the standard for the award of attorney's fees
45	under section 57.105, Florida Statutes, is not whether the claim
46	or defense was "frivolous," and
47	WHEREAS, the application of a standard other than the
48	standard adopted by the Legislature for the award of a
49	substantive right encroaches upon the Legislature's right to
50	confer substantive rights, and
51	WHEREAS, it is the intent of the Legislature to preserve
52	and protect the separation of powers clause in section 3,
53	Article II of the State Constitution, NOW, THEREFORE,
54
55	Be It Enacted by the Legislature of the State of Florida:
56
57	Section 1.  For the purpose of manifesting the
58	Legislature's intent to confer the substantive right to the
59	award of attorney's fees, section 57.105, Florida Statutes, is
60	reenacted, and also that section is amended, to read:
61	57.105  Attorney's fee; sanctions for raising unsupported
62	claims or defenses; service of motions; damages for delay of
63	litigation.--
64	(1)  Upon the court's initiative or motion of any party,
65	the court shall award a reasonable attorney's fee to be paid to
66	the prevailing party in equal amounts by the losing party and
67	the losing party's attorney on any claim or defense at any time
68	during a civil proceeding or action in which the court finds
69	that the losing party or the losing party's attorney knew or
70	should have known that a claim or defense when initially
71	presented to the court or at any time before trial:
72	(a)  Was not supported by the material facts necessary to
73	establish the claim or defense; or
74	(b)  Would not be supported by the application of then-
75	existing law to those material facts.
76
77	However, the losing party's attorney is not personally
78	responsible if he or she has acted in good faith, based on the
79	representations of his or her client as to the existence of
80	those material facts. If the court awards attorney's fees to a
81	claimant pursuant to this subsection, the court shall also award
82	prejudgment interest.
83	(2)  Paragraph (1)(b) does not apply if the court
84	determines that the claim or defense was initially presented to
85	the court as a good faith argument for the extension,
86	modification, or reversal of existing law or the establishment
87	of new law, as it applied to the material facts, with a
88	reasonable expectation of success.
89	(3)  At any time in any civil proceeding or action in which
90	the moving party proves by a preponderance of the evidence that
91	any action taken by the opposing party, including, but not
92	limited to, the filing of any pleading or part thereof, the
93	assertion of or response to any discovery demand, the assertion
94	of any claim or defense, or the response to any request by any
95	other party, was taken primarily for the purpose of unreasonable
96	delay, the court shall award damages to the moving party for its
97	reasonable expenses incurred in obtaining the order, which may
98	include attorney's fees, and other loss resulting from the
99	improper delay.
100	(4)  A party is entitled to an award of sanctions under
101	this section only if a motion is by a party seeking sanctions
102	under this section must be served by a party seeking sanctions
103	under this section. Such motion shall but may not be filed with
104	or presented to the court unless, within 21 days after service
105	of the motion, the challenged paper, claim, defense, contention,
106	allegation, or denial is not withdrawn or appropriately
107	corrected. Any motion filed with the court that does not comply
108	with this subsection is null and void. This subsection is
109	substantive and shall not be waived except in writing. This
110	subsection shall not apply to sanctions ordered upon the court's
111	initiative.
112	(5)  In administrative proceedings under chapter 120, an
113	administrative law judge shall award a reasonable attorney's fee
114	and damages to be paid to the prevailing party in equal amounts
115	by the losing party and a losing party's attorney or qualified
116	representative in the same manner and upon the same basis as
117	provided in subsections (1)-(4). Such award shall be a final
118	order subject to judicial review pursuant to s. 120.68. If the
119	losing party is an agency as defined in s. 120.52(1), the award
120	to the prevailing party shall be against and paid by the agency.
121	A voluntary dismissal by a nonprevailing party does not divest
122	the administrative law judge of jurisdiction to make the award
123	described in this subsection.
124	(6)  The provisions of this section are supplemental to
125	other sanctions or remedies available under law or under court
126	rules.
127	(7)  If a contract contains a provision allowing attorney's
128	fees to a party when he or she is required to take any action to
129	enforce the contract, the court may also allow reasonable
130	attorney's fees to the other party when that party prevails in
131	any action, whether as plaintiff or defendant, with respect to
132	the contract. This subsection applies to any contract entered
133	into on or after October 1, 1988.
134	(8)  The provisions of this section create substantive
135	rights to the award of attorney's fees, and any procedural
136	provisions are directly related to the definition of those
137	rights. Any procedural aspects of this provision are intended to
138	implement the substantive provisions of the law.
139	Section 2.  The amendment to subsection (4) of section
140	57.105, Florida Statutes, is remedial in nature and is intended
141	to apply retroactively.
142	Section 3.  For the purpose of manifesting the
143	Legislature's intent to confer the substantive right to the
144	award of attorney's fees, section 768.79, Florida Statutes, is
145	reenacted, and also that section is amended, to read:
146	768.79  Offer of judgment and demand for judgment.--
147	(1)  In any civil action for damages filed in the courts of
148	this state, if a defendant files an offer of judgment which is
149	not accepted by the plaintiff within 30 days, the defendant
150	shall be entitled to recover reasonable costs and attorney's
151	fees incurred by her or him or on the defendant's behalf
152	pursuant to a policy of liability insurance or other contract
153	from the date of filing of the offer if the judgment is one of
154	no liability or the judgment obtained by the plaintiff is at
155	least 25 percent less than such offer, and the court shall set
156	off such costs and attorney's fees against the award. Where such
157	costs and attorney's fees total more than the judgment, the
158	court shall enter judgment for the defendant against the
159	plaintiff for the amount of the costs and fees, less the amount
160	of the plaintiff's award. If a plaintiff files a demand for
161	judgment which is not accepted by the defendant within 30 days
162	and the plaintiff recovers a judgment in an amount at least 25
163	percent greater than the offer, she or he shall be entitled to
164	recover reasonable costs and attorney's fees incurred from the
165	date of the filing of the demand. If rejected, neither an offer
166	nor demand is admissible in subsequent litigation, except for
167	pursuing the penalties of this section.
168	(2)  The making of an offer of settlement which is not
169	accepted does not preclude the making of a subsequent offer. An
170	offer must:
171	(a)  Be in writing and state that it is being made pursuant
172	to this section.
173	(b)  Name the party or parties making it and the party or
174	parties to whom it is being made.
175	(c)  State with particularity the amount offered to settle
176	a claim for punitive damages, if any.
177	(d)  State its total amount.
178
179	The offer shall be construed as including all damages which may
180	be awarded in a final judgment.
181	(3)  A proposal may be made by or to any party or parties
182	and by or to any combination of parties properly identified in
183	the proposal. A joint proposal shall state the amount and terms
184	attributable to each party.
185	(4)  Notwithstanding subsection (3), when a party is
186	alleged to be solely vicariously, constructively, derivatively,
187	or technically liable, whether by operation of law or by
188	contract, a joint proposal made by or served on such a party
189	need not state the amount and terms attributable to each party.
190	Acceptance by any party shall be without prejudice to rights of
191	contribution or indemnity.
192	(5)(3)  The offer shall be served upon the party to whom it
193	is made, but it shall not be filed unless it is accepted or
194	unless filing is necessary to enforce the provisions of this
195	section.
196	(6)(4)  An offer shall be accepted by filing a written
197	acceptance with the court within 30 days after service. Upon
198	filing of both the offer and acceptance, the court has full
199	jurisdiction to enforce the settlement agreement.
200	(7)(5)  An offer may be withdrawn in writing which is
201	served before the date a written acceptance is filed. Once
202	withdrawn, an offer is void.
203	(8)(6)  Upon motion made by the offeror within 30 days
204	after the entry of judgment or after voluntary or involuntary
205	dismissal, the court shall determine the following:
206	(a)  If a defendant serves an offer which is not accepted
207	by the plaintiff, and if the judgment obtained by the plaintiff
208	is at least 25 percent less than the amount of the offer, the
209	defendant shall be awarded reasonable costs, including
210	investigative expenses, and attorney's fees, calculated in
211	accordance with the guidelines promulgated by the Supreme Court,
212	incurred from the date the offer was served, and the court shall
213	set off such costs in attorney's fees against the award. When
214	such costs and attorney's fees total more than the amount of the
215	judgment, the court shall enter judgment for the defendant
216	against the plaintiff for the amount of the costs and fees, less
217	the amount of the award to the plaintiff.
218	(b)  If a plaintiff serves an offer which is not accepted
219	by the defendant, and if the judgment obtained by the plaintiff
220	is at least 25 percent more than the amount of the offer, the
221	plaintiff shall be awarded reasonable costs, including
222	investigative expenses, and attorney's fees, calculated in
223	accordance with the guidelines promulgated by the Supreme Court,
224	incurred from the date the offer was served.
225
226	For purposes of the determination required by paragraph (a), the
227	term "judgment obtained" means the amount of the net judgment
228	entered, plus any postoffer collateral source payments received
229	or due as of the date of the judgment, plus any postoffer
230	settlement amounts by which the verdict was reduced. For
231	purposes of the determination required by paragraph (b), the
232	term "judgment obtained" means the amount of the net judgment
233	entered, plus any postoffer settlement amounts by which the
234	verdict was reduced.
235	(9)(7)(a)  If a party is entitled to costs and fees
236	pursuant to the provisions of this section, the court may, in
237	its discretion, determine that an offer was not made in good
238	faith. In such case, the court may disallow an award of costs
239	and attorney's fees.
240	(b)  When determining the reasonableness of an award of
241	attorney's fees pursuant to this section, the court shall
242	consider, along with all other relevant criteria, the following
243	additional factors:
244	1.  The then apparent merit or lack of merit in the claim.
245	2.  The number and nature of offers made by the parties.
246	3.  The closeness of questions of fact and law at issue.
247	4.  Whether the person making the offer had unreasonably
248	refused to furnish information necessary to evaluate the
249	reasonableness of such offer.
250	5.  Whether the suit was in the nature of a test case
251	presenting questions of far-reaching importance affecting
252	nonparties.
253	6.  The amount of the additional delay cost and expense
254	that the person making the offer reasonably would be expected to
255	incur if the litigation should be prolonged.
256	(10)(8)  Evidence of an offer is admissible only in
257	proceedings to enforce an accepted offer or to determine the
258	imposition of sanctions under this section.
259	(11)  This section shall not apply to any party not
260	represented by an attorney in an action governed by the Florida
261	Small Claims Rules.
262	(12)  The provisions of this section create substantive
263	rights to the award of attorney's fees, and any procedural
264	provisions are directly related to the definition of those
265	rights. Any procedural aspects of this provision are intended to
266	implement the substantive provisions of the law.
267	Section 4.  It is the intent of this act and the
268	Legislature to accord the utmost comity and respect to the
269	constitutional prerogatives of Florida's judiciary, and nothing
270	in this act should be construed as an effort to impinge upon
271	those prerogatives. To that end, should any court of competent
272	jurisdiction enter a final judgment concluding or declaring that
273	a provision of this act improperly encroaches upon the authority
274	of the Florida Supreme Court to determine the rules of practice
275	and procedure in Florida courts, the Legislature hereby declares
276	its intent that such provision be construed as a request for
277	rule change pursuant to section 2, Article V of the State
278	Constitution and not as a mandatory legislative directive.
279	Section 5.  This act shall take effect July 1, 2007, and
280	the amendments to section 768.79, Florida Statutes, made by this
281	act shall apply only to offers made on or after that date.

CODING: Words stricken are deletions; words underlined are additions.