Florida Litigation Update: Does the Court Have the Authority to Sanction a Party After Voluntary Dismissal is Filed

Feb 11, 2013   

Generally, the filing of a voluntary dismissal (with or without prejudice) divests the trial court of jurisdiction.  However, what happens where a party brings a frivolous action, but on the eve of trial, voluntarily dismisses the case?  The Florida Supreme Court recently addressed the answer in Pino v. The Bank of New York, Case No. SC11-697, 38 Fla. L. Weekly S78a (Fla. February 7, 2013), available here.

Pino involved a mortgage foreclosure action.   The defendant, Pino, discovered that the mortgagee Bank submitted fraudulent, back-dated documents to support its foreclosure claim.  Pino served, but did not file, a motion for sanctions against the Bank pursuant to Fla. Stat. §57.105 for bringing the frivolous action.  Pursuant to this statute, the Bank had a 21 day “safe harbor” window to withdraw the offending pleading.  If the Bank did not withdraw the Motion during this time, Pino could thereafter file his Motion for Sanctions.

The Bank served a voluntary dismissal without prejudice within the 21 day safe-harbor period. A dismissal without prejudice means that the same lawsuit may be re-filed at a later date, provided (amongst other things) the statute of limitations did not expire.  Thereafter, the Bank re-filed a new action for foreclosure, and this time supported its pleading with genuine and truthful documentation.  Pino creatively sought to re-open the original lawsuit based on the Banks original fraud, and asked the trial court to strike the voluntary dismissal without prejudice, and sanction the Bank for its prior fraud on the court by issuing a dismissal of the original lawsuit with prejudice, as opposed to without prejudice.  In addition, Pino demanded that the Bank and its lawyers be sanctioned pursuant to §57.105.

The Florida Supreme Court held that the trial court has no power or authority to strike a notice of voluntary dismissal “where the alleged fraud does not lead the plaintiff to obtain affirmative relief to the detriment of the defendant.”  However, the trial court is not left impotent.  The Court noted, for example, that the trial court may refer a lawyer to the Florida Bar, where appropriate.  However, a hit to the offending partys pocketbook appears to be ostensibly outside the Courts reach.

Unless a properly served §57.105 Motion had been served.

Specifically, the Court expressly held that a voluntary dismissal does not divest a trial court of the authority to sanction a party pursuant to §57.105 if the dismissal occurred outside the 21 day safe harbor window.  As held by Pino:

If the plaintiff does not file a notice of voluntary dismissal or withdraw the offending pleading within twenty-one days of a defendant’s request for sanctions under section 57.105, the defendant may file the sanctions motion with the trial court, whereupon the trial court will have continuing jurisdiction to resolve the pending motion and to award attorney’s fees under that provision if appropriate, regardless of the plaintiff’s subsequent dismissal.

Id.

Unfortunately for Mr. Pino, the Banks voluntary dismissal occurred within the 21 day safe harbor window, and thus the court was powerless to sanction the offensive conduct.  Moreover, because the “fraud on the court” took place in the first action before the voluntary dismissal, the court lacked any authority to sanction the Bank based on its inherent authority. Recognizing the injustice, the Court noted that it understood “the concerns of those who discuss the multiple abuses that can occur from fraudulent pleadings being filed with the trial courts in this state. While rule 1.420(a)(1) has well served the litigants and courts of this state, we request the Civil Procedure Rules Committee review this concern and make a recommendation to this Court regarding whether (a) explicit sanction authority should be provided to a trial court pursuant to rule 1.110(b), even after a case is voluntarily dismissed, (b) rule 1.420(a)(1) should be amended to expressly allow the trial court to retain jurisdiction to rule on any pending sanction motions  that seek monetary sanctions for abuses committed by either party during the litigation process, or to allow the trial court explicit authority to include attorney’s fees in any award to a party when the dismissed action is reinstated, or (c) to adopt a rule similar to Federal Rule 11 to provide explicit authority for the trial court to impose sanctions.”  Thus while Mr. Pino was left with no avenue to redress the damages caused to him by the Banks fraudulent litigation, at least he can take comfort knowing that his case laid the roadmap to ensnaring future miscreant litigants.