HB 367

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
40	initially presented to the court or at any time before trial,
41	was not supported by the material facts necessary to establish
42	the claim or defense or would not be supported by the
43	application of 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, subsection (4) of that section is amended, and
61	subsection (8) is added to that section, to read:
62	57.105  Attorney's fee; sanctions for raising unsupported
63	claims or defenses; service of motions; damages for delay of
64	litigation.--
65	(1)  Upon the court's initiative or motion of any party,
66	the court shall award a reasonable attorney's fee to be paid to
67	the prevailing party in equal amounts by the losing party and
68	the losing party's attorney on any claim or defense at any time
69	during a civil proceeding or action in which the court finds
70	that the losing party or the losing party's attorney knew or
71	should have known that a claim or defense when initially
72	presented to the court or at any time before trial:
73	(a)  Was not supported by the material facts necessary to
74	establish the claim or defense; or
75	(b)  Would not be supported by the application of then-
76	existing law to those material facts.
77
78	However, the losing party's attorney is not personally
79	responsible if he or she has acted in good faith, based on the
80	representations of his or her client as to the existence of
81	those material facts. If the court awards attorney's fees to a
82	claimant pursuant to this subsection, the court shall also award
83	prejudgment interest.
84	(2)  Paragraph (1)(b) does not apply if the court
85	determines that the claim or defense was initially presented to
86	the court as a good faith argument for the extension,
87	modification, or reversal of existing law or the establishment
88	of new law, as it applied to the material facts, with a
89	reasonable expectation of success.
90	(3)  At any time in any civil proceeding or action in which
91	the moving party proves by a preponderance of the evidence that
92	any action taken by the opposing party, including, but not
93	limited to, the filing of any pleading or part thereof, the
94	assertion of or response to any discovery demand, the assertion
95	of any claim or defense, or the response to any request by any
96	other party, was taken primarily for the purpose of unreasonable
97	delay, the court shall award damages to the moving party for its
98	reasonable expenses incurred in obtaining the order, which may
99	include attorney's fees, and other loss resulting from the
100	improper delay.
101	(4)  A party is entitled to an award of sanctions under
102	this section only if a motion is by a party seeking sanctions
103	under this section must be served by a party seeking sanctions
104	under this section. Such motion shall but may not be filed with
105	or presented to the court unless, within 21 days after service
106	of the motion, the challenged paper, claim, defense, contention,
107	allegation, or denial is not withdrawn or appropriately
108	corrected. Any motion filed with the court that does not comply
109	with this subsection is null and void. This subsection is
110	substantive and may not be waived except in writing. This
111	subsection does not apply to sanctions ordered upon the court's
112	initiative.
113	(5)  In administrative proceedings under chapter 120, an
114	administrative law judge shall award a reasonable attorney's fee
115	and damages to be paid to the prevailing party in equal amounts
116	by the losing party and a losing party's attorney or qualified
117	representative in the same manner and upon the same basis as
118	provided in subsections (1)-(4). Such award shall be a final
119	order subject to judicial review pursuant to s. 120.68. If the
120	losing party is an agency as defined in s. 120.52(1), the award
121	to the prevailing party shall be against and paid by the agency.
122	A voluntary dismissal by a nonprevailing party does not divest
123	the administrative law judge of jurisdiction to make the award
124	described in this subsection.
125	(6)  The provisions of this section are supplemental to
126	other sanctions or remedies available under law or under court
127	rules.
128	(7)  If a contract contains a provision allowing attorney's
129	fees to a party when he or she is required to take any action to
130	enforce the contract, the court may also allow reasonable
131	attorney's fees to the other party when that party prevails in
132	any action, whether as plaintiff or defendant, with respect to
133	the contract. This subsection applies to any contract entered
134	into on or after October 1, 1988.
135	(8)  This section creates substantive rights to the award
136	of attorney's fees, and any procedural provisions are directly
137	related to the definition of those rights. Any procedural
138	aspects of this provision are intended to implement the
139	substantive provisions of the law.
140	Section 2.  The amendment to subsection (4) of section
141	57.105, Florida Statutes, made by this act is remedial in nature
142	and is intended to apply retroactively.
143	Section 3.  For the purpose of manifesting the
144	Legislature's intent to confer the substantive right to the
145	award of attorney's fees, section 768.79, Florida Statutes, is
146	reenacted and amended to read:
147	768.79  Offer of judgment and demand for judgment.--
148	(1)  In any civil action for damages filed in the courts of
149	this state, if a defendant files an offer of judgment that which
150	is not accepted by the plaintiff within 30 days, the defendant
151	shall be entitled to recover reasonable costs and attorney's
152	fees incurred by her or him or on the defendant's behalf
153	pursuant to a policy of liability insurance or other contract
154	from the date of filing of the offer if the judgment is one of
155	no liability or the judgment obtained by the plaintiff is at
156	least 25 percent less than such offer, and the court shall set
157	off such costs and attorney's fees against the award. Where such
158	costs and attorney's fees total more than the judgment, the
159	court shall enter judgment for the defendant against the
160	plaintiff for the amount of the costs and fees, less the amount
161	of the plaintiff's award. If a plaintiff files a demand for
162	judgment that which is not accepted by the defendant within 30
163	days and the plaintiff recovers a judgment in an amount at least
164	25 percent greater than the offer, she or he shall be entitled
165	to recover reasonable costs and attorney's fees incurred from
166	the date of the filing of the demand. If rejected, neither an
167	offer nor demand is admissible in subsequent litigation, except
168	for pursuing the penalties of this section.
169	(2)  The making of an offer of settlement that which is not
170	accepted does not preclude the making of a subsequent offer. An
171	offer must:
172	(a)  Be in writing and state that it is being made pursuant
173	to this section.
174	(b)  Name the party or parties making it and the party or
175	parties to whom it is being made.
176	(c)  State with particularity the amount offered to settle
177	a claim for punitive damages, if any.
178	(d)  State its total amount.
179
180	The offer shall be construed as including all damages that which
181	may be awarded in a final judgment.
182	(3)  A proposal may be made by or to any party or parties
183	and by or to any combination of parties properly identified in
184	the proposal. A joint proposal shall state the amount and terms
185	attributable to each party.
186	(4)  Notwithstanding subsection (3), when a party is
187	alleged to be solely vicariously, constructively, derivatively,
188	or technically liable, whether by operation of law or by
189	contract, a joint proposal made by or served on such a party
190	need not state the amount and terms attributable to each party.
191	Acceptance by any party shall be without prejudice to rights of
192	contribution or indemnity.
193	(5)(3)  The offer shall be served upon the party to whom it
194	is made, but it shall not be filed unless it is accepted or
195	unless filing is necessary to enforce the provisions of this
196	section.
197	(6)(4)  An offer shall be accepted by filing a written
198	acceptance with the court within 30 days after service. Upon
199	filing of both the offer and acceptance, the court has full
200	jurisdiction to enforce the settlement agreement.
201	(7)(5)  An offer may be withdrawn in writing that which is
202	served before the date a written acceptance is filed. Once
203	withdrawn, an offer is void.
204	(8)(6)  Upon motion made by the offeror within 30 days
205	after the entry of judgment or after voluntary or involuntary
206	dismissal, the court shall determine the following:
207	(a)  If a defendant serves an offer that which is not
208	accepted by the plaintiff, and if the judgment obtained by the
209	plaintiff is at least 25 percent less than the amount of the
210	offer, the defendant shall be awarded reasonable costs,
211	including investigative expenses, and attorney's fees,
212	calculated in accordance with the guidelines promulgated by the
213	Supreme Court, incurred from the date the offer was served, and
214	the court shall set off such costs in attorney's fees against
215	the award. When such costs and attorney's fees total more than
216	the amount of the judgment, the court shall enter judgment for
217	the defendant against the plaintiff for the amount of the costs
218	and fees, less the amount of the award to the plaintiff.
219	(b)  If a plaintiff serves an offer that which is not
220	accepted by the defendant, and if the judgment obtained by the
221	plaintiff is at least 25 percent more than the amount of the
222	offer, the plaintiff shall be awarded reasonable costs,
223	including investigative expenses, and attorney's fees,
224	calculated in accordance with the guidelines promulgated by the
225	Supreme Court, incurred from the date the offer was served.
226
227	For purposes of the determination required by paragraph (a), the
228	term "judgment obtained" means the amount of the net judgment
229	entered, plus any postoffer collateral source payments received
230	or due as of the date of the judgment, plus any postoffer
231	settlement amounts by which the verdict was reduced. For
232	purposes of the determination required by paragraph (b), the
233	term "judgment obtained" means the amount of the net judgment
234	entered, plus any postoffer settlement amounts by which the
235	verdict was reduced.
236	(9)(7)(a)  If a party is entitled to costs and fees
237	pursuant to the provisions of this section, the court may, in
238	its discretion, determine that an offer was not made in good
239	faith. In such case, the court may disallow an award of costs
240	and attorney's fees.
241	(b)  When determining the reasonableness of an award of
242	attorney's fees pursuant to this section, the court shall
243	consider, along with all other relevant criteria, the following
244	additional factors:
245	1.  The then apparent merit or lack of merit in the claim.
246	2.  The number and nature of offers made by the parties.
247	3.  The closeness of questions of fact and law at issue.
248	4.  Whether the person making the offer had unreasonably
249	refused to furnish information necessary to evaluate the
250	reasonableness of such offer.
251	5.  Whether the suit was in the nature of a test case
252	presenting questions of far-reaching importance affecting
253	nonparties.
254	6.  The amount of the additional delay cost and expense
255	that the person making the offer reasonably would be expected to
256	incur if the litigation should be prolonged.
257	(10)(8)  Evidence of an offer is admissible only in
258	proceedings to enforce an accepted offer or to determine the
259	imposition of sanctions under this section.
260	(11)  This section does not apply to any party not
261	represented by an attorney in an action governed by the Florida
262	Small Claims Rules.
263	(12)  This section creates substantive rights to the award
264	of attorney's fees, and any procedural provisions are directly
265	related to the definition of those rights. Any procedural
266	aspects of this provision are intended to implement the
267	substantive provisions of the law.
268	Section 4.  It is the intent of this act and the
269	Legislature to accord the utmost comity and respect to the
270	constitutional prerogatives of the judiciary of this state, and
271	nothing in this act should be construed as an effort to impinge
272	upon those prerogatives. To that end, if any court of competent
273	jurisdiction enters a final judgment concluding or declaring
274	that a provision of this act improperly encroaches upon the
275	authority of the Florida Supreme Court to determine the rules of
276	practice and procedure in the courts of this state, the
277	Legislature intends that such provision be construed as a
278	request for rule change pursuant to Section 2, Article V of the
279	State Constitution and not as a mandatory legislative directive.
280	Section 5.  This act shall take effect July 1, 2008, and
281	the amendments to section 768.79, Florida Statutes, made by this
282	act shall apply only to offers made on or after that date.

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