Court: District Court of Appeal of Florida; August 16, 2000; Florida; State Appellate Court
The court affirmed the order assessing attorney's fees against Miri Mayost Visoly and Aviad Visoly for filing a frivolous appeal in their litigation against Security Pacific Credit Corporation. The appeal attempted to re-litigate matters already concluded by prior judgments and was contradicted by established evidence and case law. The court highlighted concerns over both trial and appellate counsel's actions, which blurred the lines of professional ethics and resulted in Security Pacific incurring over $750,000 in legal fees due to prolonged litigation initiated by the Visolys. This included numerous motions and appeals, which delayed foreclosure and incurred unnecessary costs. Despite previous sanctions, the Visolys continued their litigation strategy, prompting the court to emphasize its intolerance for frivolous appeals that waste judicial resources. The background revealed that Aviad Visoly had previously filed a suit claiming the validity of a mortgage held by Security Pacific was null, but the suit was dismissed after he admitted not owning stock in Westburry Shoppes Corporation, whose mortgage was validly executed. Following a settlement, Aviad agreed to a judgment against Westburry. The court's ruling serves as a warning against the misuse of legal processes.
In May 1991, Ivan Benjamin, representing the Visolys, filed a counterclaim against Security Pacific seeking cancellation of a mortgage. The Visolys submitted individual affidavits asserting that each owned 50% of the corporation's stock, claimed that Bodek, who signed the mortgage, was not the company's president, and alleged he forged stock certificates. These claims contradicted previous judicial findings regarding the legitimacy of the mortgage and the Visolys' earlier positions in attempts to cancel it and in their settlement agreement.
Over the next 4½ years, the Visolys employed various delay tactics, including filing motions to recuse trial judges, petitions for prohibition, and changing legal representation multiple times. They accused Security Pacific's lawyers of misconduct and requested extensions to secure new counsel, citing case complexity. Their newly appointed lawyer, Itzhak Bachar, eventually withdrew due to non-payment.
In December 1995, a final judgment of foreclosure was issued. Security Pacific's assignee sought to recover funds collected during the litigation, facing continued opposition from the Visolys through various legal maneuvers. In January 1997, the trial court ordered the disbursement of remaining receivership funds, prompting Security Pacific to file for attorney's fees against multiple parties, including the Visolys, which was granted in November 1997. However, the court denied fees for attorney Friedlander. Security Pacific appealed, and the appellate court reversed the decision, stating that Friedlander's involvement was after the claims had been deemed meritless.
The Visolys then hired another lawyer who moved to set aside the attorney's fees order, arguing improper service since the notice had been sent to their post office box while they were in Israel. The court agreed, setting aside the fees due to service issues and reclassifying the motion for attorney's fees as a third-party claim.
Security Pacific re-served the Visolys under the Non-Resident Businessman's Statute, mailing process copies to the Secretary of State and the Visolys' known addresses in Haifa, Israel, and Hallandale, Florida. The Visolys responded by hiring a new attorney who filed a motion to dismiss the third-party complaint and to quash service of process. This motion was denied by the trial court, and the Visolys' subsequent appeal was affirmed. Over three months, three hearings were held regarding the motion for attorney's fees, during which the Visolys attempted to sue Security Pacific's lawyers and filed a motion to disqualify the trial judge for alleged prejudice.
At a November hearing, the Visolys' counsel, Litwin, argued that the hearing should not proceed due to lack of notice and his recent entry into the case. The trial court dismissed these claims, warning Litwin about potential repercussions for delaying tactics. The hearing continued, leading to the trial judge assessing attorney's fees against the Visolys amounting to $347,321.75.
Aviad Visoly and Miri Mayost submitted affidavits claiming to be shareholders of Westburry at the time the mortgage was void, a position deemed insincere by the court, which noted that prior testimony had established the mortgage's validity. Over eight years, the Visolys engaged in extensive litigation, including multiple motions to recuse and appeals, which the court characterized as frivolous and intended to delay foreclosure.
In their sixth appeal, the Visolys contended that the attorney's fees assessment violated their due process rights because they were not named parties and argued the trial court lacked jurisdiction over them individually. However, Florida law defines a "party" broadly, encompassing anyone who participates in litigation, regardless of being named in pleadings. This includes individuals who employ counsel or contribute to litigation expenses, as established in case law.
In Florida Ass'n of Nurse Anesthetists v. Dep't of Prof. Reg., the court established that an association participating in administrative proceedings is considered a "party." Similarly, Kaiser Aerospace clarified that a participant in a confirmed reorganization plan with a direct interest is also deemed a "party." The Visolys were determined to be "parties" in their litigation due to their extensive involvement, including filing multiple documents and incurring litigation costs. The trial court appropriately assessed attorney's fees against them, as Florida law mandates fee awards to the prevailing party in the absence of justiciable issues. Under Section 57.105 of the Florida Statutes, both the losing party and their counsel are liable for fees unless the counsel acted in good faith. The court found the Visolys used Westburry to delay mortgage foreclosure with actions deemed "sham and frivolous," justifying the fee assessment. Regarding appellate attorney's fees, Florida law allows for such fees when an appeal is deemed frivolous, characterized as lacking any justiciable question and devoid of merit. Established guidelines for determining frivolous appeals include a complete lack of legal merit, overwhelming evidence contradicting the case, actions taken to delay litigation, or false factual assertions.
An appeal was deemed frivolous in Brahmbhatt v. Allstate Indem. Co. due to established case law contradicting the appellant's arguments regarding uninsured motorist coverage after the insured was murdered while assisting a stranded motorist. Similarly, in Procacci Commercial Realty, Inc. v. Dep't of Health and Rehabilitative Services, the appeal was found frivolous as trial facts contradicted the appellant's claims about the successful bidder's parking spaces. An appeal lacking factual basis or sound legal argument is considered without merit. A "frivolous" appeal raises arguments that a reasonable lawyer would recognize as unfounded in fact or law. The Visolys' positions in their appeal were deemed meritless, contributing to unnecessary litigation costs, as they engaged extensively in the litigation process over nine years without support from the record or relevant legal authority. Consequently, Security Pacific's motion for appellate attorney's fees was granted as a sanction for the frivolous appeal. The imposition of attorney's fees aims to deter baseless claims and unnecessary litigation costs. The responsibility for such fees can fall on the litigant, attorney, or both, depending on the circumstances. If an attorney acted on a client's misleading representations in good faith, the client may bear sole financial responsibility for sanctions. However, if a reasonable attorney would recognize the lack of a valid issue, the attorney must also be accountable. The ethical standards of legal practice necessitate that attorneys act in a manner consistent with justice, balancing their duty to represent clients with their professional obligations.
In P.T.S. Trading Corp. v. Habie, the court awarded attorney fees for abuse of process, emphasizing the duty of counsel to ensure that appeals are pursued in good faith and are not frivolous, as outlined in the Rules Regulating the Florida Bar. Lawyers are prohibited from initiating or defending proceedings without a non-frivolous basis and must expedite litigation in their clients' interests. If an attorney is approached to pursue a meritless appeal, they are obligated to inform the client about potential sanctions and the unethical nature of such actions. Attorneys must withdraw from representation rather than engage in frivolous appeals. The court underscored the importance of holding attorneys accountable for unprofessionalism, stating that sanctions in the form of attorney's fees would deter frivolous appeals and compensate the nonappealing party for defending against baseless claims.
The court found that Avi Litwin, the appellate counsel for the Visolys, significantly contributed to the unnecessary litigation costs due to the lack of merit in the appeal, supported by the case's history and established case law contradicting the Visolys' claims. Both the Visolys and their counsel were deemed jointly liable for the appellate attorney's fees. The court affirmed the previous order, granted Security Pacific's motion for attorney's fees, and remanded the case to the trial court for determination of the appropriate amount.
On September 11, 1996, Bachar filed a motion to withdraw as attorney for clients Aviad and Miri, with subsequent orders allowing Bruce Friedlander to withdraw as attorney for Westburry. In November 1996, Sheldon Zipkin entered an appearance for Westburry. The motion claimed that Aviad and Miri filed false affidavits through the insolvent Westburry Shoppes Corporation, obstructing summary judgments and causing prolonged receivership. The trial court deemed that allowing the Visolys to avoid attorney's fees would be improper, as there was a clear lack of legitimate legal arguments in their claims. The court, referencing Section 57.105, found the Visolys liable for the plaintiff's attorney fees, noting their awareness of the falsity of their allegations. Their actions were characterized as bad faith, with previous pleadings struck as sham in an earlier case.
Attorney Ronald Lowy engaged Avi Litwin to contest the attorney's fees order, but during a November 1998 hearing, Litwin misleadingly claimed he was new to the case. The court had previously directed that future pleadings be sent to the Visolys' Hallandale address, which was confirmed as valid for service. The Visolys filed an appeal through Litwin, seeking to avoid service and stay the denial of their motion to dismiss, both of which were denied by the trial court and later by the appellate court. Litwin's prior involvement in the case while with Lowy was noted, indicating his claim of recently entering the case was misleading. The trial court clarified that only a motion is needed for a hearing on attorney's fees, and Litwin had appeared at the hearing, indicating he received notice.
A court hearing addressed the issue of notice to Mr. Litwin, who represented a party in a motion for attorneys' fees. The court questioned Litwin's claim of being unaware of the proceedings, suggesting that his presence implied knowledge of the motion. The court expressed frustration over Litwin's slow responses, indicating that the hearing could extend indefinitely at that pace. A statutory provision, Section 57.105 of the Florida Statutes (1999), outlines conditions under which reasonable attorney's fees may be awarded to the prevailing party, specifically when the losing party or their attorney knew or should have known that their claims lacked factual support or legal basis. However, attorneys are not liable if they acted in good faith based on their client’s representations. Additional provisions allow for fee awards if claims are found to cause unreasonable delay, and Rule 9.410 permits fees as sanctions against violations of appellate procedure rules or frivolous filings. Courts recognize a spectrum of claims from strong to weak, complicating the categorization of cases as frivolous or non-frivolous, which has implications for sanctions against attorneys and clients.
Courts in different jurisdictions apply varying standards regarding "frivolous" litigation, as highlighted in Byron C. Keeling's critical review of Federal Rule 11 and state sanctions provisions. In the case of Procacci Commercial Realty, Inc., the appellant was assessed attorney's fees for filing a meritless lawsuit based on a baseless allegation against the successful bidder. The appeals court upheld the lower court's decision, deeming both the lawsuit and the appeal frivolous, noting that the appellant primarily sought to reargue previously presented facts. Additionally, concerns about potential ethical violations prompted the court to direct the Clerk to notify the Florida Bar. The litigation was marred by false affidavits and aggressive legal tactics, including attempts to sue opposing counsel and motions to recuse the trial judge, turning the proceedings into a disruptive spectacle. The court expressed disapproval of the judiciary being used as a mere venue for disputes, emphasizing that it undermines the integrity of the justice system. Furthermore, counsel was reminded of the importance of avoiding dilatory practices that tarnish the administration of justice, as outlined in Rule 4-3.2 of the Rules Regulating the Florida Bar.
