Fifth DCA Reverses Denial of §57.105 Motion for Sanctions
The Fifth District Court of Appeal reversed a trial court in Orange County’s Circuit Court that denied multiple motions for sanctions pursuant to Florida Statute §57.105 for claims that were not supported by the material facts or the law.
In Infiniti Employment Solutions, Inc. v. MS Liquidators of Arizona, LLC, a breach of contract case, the trial court denied three motions filed by Infiniti seeking attorney’s fees and delay damages after MS Liquidators raised affirmative defenses that were factually and legally unsupportable. All three of Infiniti’s motions were filed pursuant to Fla. Stat. §57.105, which allows a party to move for attorney’s fees and other sanctions when they can show that the party or attorney against whom the motion was filed knew or should have known that a claim or defense was not supported by material facts necessary to make the claim, or the claim was not supported by then-existing law applicable to the facts of the case. After the trial court’s denial of the Motions for Sanctions pursuant to §57.105, Infiniti appealed the denials.
In denying all three of Infiniti’s motions, the trial court applied an outdated version of §57.105. Prior to 1999, an award of sanctions under §57.105 was permissible only if the there was a complete absence of a justiciable issue of either fact or law in the entire case. The current version permits an award of fees if the party or its attorney against whom the motion is directed knew or should have known that ANY claim or defense was not supported by fact or law. The Fifth DCA found that the trial court should have separately evaluated each of the claims or defenses that were challenged by Infiniti’s motions seeking sanctions and determined at which point each claim or defense that was the subject of one of the motions became unsupported by the facts or law. The Fifth DCA reversed the trial court’s holding because it was clear and without dispute that at some point prior to trial MS Liquidators recognized that some of their claims were not supported by material facts or existing law but failed to dismiss them. As such, the Fifth DCA determined that the trial court erred in finding that MS Liquidators did not violate §57.105.
In reversing in favor of Infiniti, the appellate court remanded the case back to the trial court to consider if the owner of MS Liquidators should be personally held accountable for paying damages as well. The Fifth DCA explained that the term “party” has an expanded definition to include not only named parties but also others that participate in the litigation by exercising some manner of control over the case. Additionally, the trial court was directed by the appellate court to provide Infiniti an opportunity to prove, if possible, the amount of delay damages it sustained due to the actions of MS Liquidators.
In our own practice, particularly in county court, it is not infrequent that a well pled motion by the defendant for sanctions under §57.105 is denied despite clear evidence that indicates sanctions should be awarded. Depending on both the legal issues involved in the motion and the amount to potentially be awarded, it may be worthwhile to consider an appeal of a trial court’s denial of a §57.105 motion. This case highlights one appellate court’s willingness to enforce §57.105 and not allow trial courts to grant a “pass” to parties that otherwise should have been sanctioned already.
 41 Fla. L. Weekly D2469 (Fla. 5th DCA Nov. 4, 2016).