Title: The Bionetics Corporation v. Frank W. Kenniasty, Etc., Et Al.

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
 
____________ 
 
No. SC09-1243 
____________ 
 
THE BIONETICS CORPORATION, 
Petitioner, 
 
vs. 
 
FRANK W. KENNIASTY, etc., et al., 
Respondents. 
 
[February 10, 2011] 
 
LABARGA, J. 
 
In the case before us, The Bionetics Corporation (“Bionetics”) seeks review 
of the decision of the Fifth District Court of Appeal in Kenniasty v. Bionetics 
Corp., 10 So. 3d 1183 (Fla. 5th DCA 2009), on the ground that it expressly and 
directly conflicts with the decision of the First District Court of Appeal in Walker 
v. Cash Register Auto Insurance of Leon County, Inc., 946 So. 2d 66 (Fla. 1st 
DCA 2006).  We have jurisdiction.  See art. V, § 3(b)(3), Fla. Const. 
 
This case concerns the applicability of the safe harbor provision contained in 
section 57.105, Florida Statutes (2002).  Generally speaking, section 57.105 
provides the basis for sanctions against parties and counsel who assert frivolous 
 
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claims or defenses or pursue litigation for the purpose of unreasonable delay.  See 
§ 57.105, Fla. Stat. (2002).  This statute was amended to include a safe harbor 
provision under subsection (4), which took effect on July 1, 2002, while the 
present case was ongoing at the trial level.  See ch. 2002-77, §§ 1-2, at 908-09, 
Laws of Florida.  Section 57.105(4) provides:   
A motion by a party seeking sanctions under this section must be 
served but may not be filed with or presented to the court unless, 
within 21 days after service of the motion, the challenged paper, 
claim, defense, contention, allegation, or denial is not withdrawn or 
appropriately corrected. 
§ 57.105(4), Fla. Stat. (2002).   
The conflict issue presented for our determination is whether the safe harbor 
provision of section 57.105(4), Florida Statutes, applies where a party‟s frivolous 
claims were originally filed before the provision became effective, but the initial 
motion seeking attorney‟s fees was filed in court after the provision became 
effective without the motion first having been served on the opposing party 
twenty-one days before filing.  As explained in greater detail below, the Fifth 
District in Kenniasty held that the safe harbor provision contained in section 
57.105(4) applies in a case where the party seeking sanctions filed its motion for 
attorney‟s fees after the safe harbor provision took effect despite the fact that the 
lawsuit commenced prior to the effective date of section 57.105(4).  Kenniasty, 10 
So. 3d at 1186.  In contrast, the First District in Walker held that the safe harbor 
 
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provision cannot apply to a case where the complaint was filed and the alleged 
legal harm occurred prior to the effective date of the safe harbor provision.  
Walker, 946 So. 2d at 71-72.  We conclude that the safe harbor provision does not 
apply to a case where claims found to be frivolous by a trial court were originally 
filed before the safe harbor provision took effect.  We therefore quash the decision 
of the Fifth District in Kenniasty to the extent that it is inconsistent with this 
opinion, and approve the decision of the First District in Walker to the extent that it 
is consistent with our analysis and holding. 
FACTS AND PROCEDURAL BACKGROUND 
 
Frank Kenniasty (“Kenniasty”) was former counsel to Judith Deitz and 
William Moore d/b/a Techniarts Engineering (“Deitz and Moore”).  Kenniasty and 
Deitz and Moore appealed to the Fifth District the trial court‟s entry of final 
judgment in which Bionetics was awarded $39,025.778 in attorney‟s fees and costs 
against each pursuant to section 57.105, Florida Statutes.  Kenniasty, 10 So. 3d at 
1184.  The Fifth District reversed, concluding that Bionetics failed to comply with 
the safe harbor provision.  Id. at 1186.  The district court described the facts 
underlying its decision in Kenniasty as follows: 
This case arose as a result of Deitz and Moore having prevailed 
in earlier litigation.  In that case, Bionetics had filed a complaint 
against Deitz and Moore in 1999, alleging an ownership interest in 
motion picture film-processing [“MOPIX”] equipment that Deitz and 
Moore had purchased from the Defense Reutilization and 
Management Office.  In its complaint, Bionetics also sought 
 
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sequestration of the MOPIX equipment.  The court granted an order of 
sequestration, and the MOPIX equipment was sequestered in a 
temperature and humidity-controlled environment at Deitz‟s & 
Moore‟s facility.  There, the MOPIX equipment remained 
substantially assembled. 
Deitz and Moore sought relief from the sequestration, offering 
to post a bond “in lieu of sequestration of the MOPIX [e]quipment so 
that [they] could continue their business opportunities.”  Bionetics 
rejected the offer, and the trial court denied the motion.  Later, Deitz 
and Moore filed a motion to amend the order of sequestration because 
the lease had expired on their facility.  The trial court ordered the 
Sheriff to move the MOPIX equipment to Bionetics‟ facility for 
storage. 
The case went to trial and Deitz and Moore prevailed as the 
legal owners of the MOPIX equipment, and the trial court vacated the 
order of sequestration.  When Deitz and Moore entered Bionetics‟ 
facility, they found it in a seriously degraded condition in a non-
secure area with “a leaking roof, no air conditioning units, . . . lack of 
ventilation, and extreme filth and dust.”  The equipment was 
disassembled and scattered on the facility‟s floor. 
In 2001, Deitz and Moore, with Kenniasty as counsel, filed a 
four count complaint against Bionetics, alleging malicious prosecution 
in count one, negligent sequestration in count two, misappropriation 
of trade secrets in count three, and tortious interference with business 
relations in count four.  Bionetics filed a motion to dismiss all counts. 
The trial court denied the motion as to count one, deferred in ruling as 
to count two, and granted the motion as to counts three and four with 
leave to amend. 
Deitz and Moore filed an amended four count complaint on 
February 13, 2002, alleging malicious prosecution in count one, 
negligent sequestration in count two, misappropriation of trade secrets 
in count three, and tortious interference with business relations in 
count four.  Bionetics once again filed a motion to dismiss all counts. 
The trial court granted the motion with prejudice as to count two, and 
with leave to amend as to counts one, three and four. 
On April 10, 2002, Deitz and Moore filed a second amended 
complaint, which consisted of six counts: malicious prosecution in 
count one, misappropriation of trade secrets in count two, tortious 
interference with business relations in count three, invasion of privacy 
in count four, trespass to property in count five, and violation of the 
 
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Procurement Integrity Act (41 U.S.C. § 423) in count six.  Again, 
Bionetics filed a motion to dismiss all counts.  The trial court granted 
the motion with leave to amend counts one through five, and with 
prejudice as to count six. 
Deitz and Moore filed a third amended complaint on  
September 17, 2002, alleging malicious prosecution in count one, 
misappropriation of trade secrets in count two, and tortious 
interference with business relations in count three.  Bionetics once 
more filed a motion to dismiss all counts.  The trial court denied the 
motion as to count one but granted the motion as to counts two and 
three with leave to amend. 
On November 12, 2002, Deitz and Moore filed a fourth 
amended complaint, alleging malicious prosecution in count one, 
misappropriation of trade secrets in count two, and defamation in 
count three.  Bionetics filed a motion to dismiss counts two and three. 
The trial court denied the motion as to count two, but granted the 
motion as to count three with leave to amend. 
On March 28, 2003, Bionetics filed a motion for award of 
attorney‟s fees pursuant to section 57.105, Florida Statutes (2002).  
The trial court deferred consideration and ruling on the award of 
attorney‟s fees until the conclusion of the trial.  The case was tried 
without a jury and, at the close of Deitz‟s & Moore‟s case, Bionetics 
moved for involuntary dismissal, which the trial court granted.  On 
July 21, 2004, Bionetics filed a second motion for an award of 
attorney‟s fees pursuant to Section 57.105, Florida Statutes. 
Id. at 1184-85.  The trial court found that Bionetics was entitled to attorney‟s fees 
pursuant to section 57.105 for the following three claims: (1) tortious interference 
with contract;1 (2) invasion of privacy; and (3) violation of the Procurement 
Integrity Act under 41 U.S.C. § 423.  A successor judge found that Bionetics was 
entitled to $72,000 in attorney‟s fees and $6,051.56 in costs.  Accordingly, the 
                                         
 
1.  The court order on entitlement to attorney‟s fees refers to this claim as 
tortious interference with contract.  However, Deitz and Moore actually pled a 
claim for tortious interference with business relations. 
 
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lower court entered a final judgment awarding Bionetics $39,025.78 in attorney‟s 
fees and costs against Kenniasty, individually, and $39,025.78 against Deitz, 
individually, Moore individually, and d/b/a Techniarts Engineering.  Kenniasty and  
Deitz and Moore appealed the trial court‟s entry of final judgment awarding 
Bionetics attorney‟s fees and costs to the Fifth District. 
 
On appeal, the Fifth District held that the trial court erred in awarding 
Bionetics attorney‟s fees and costs pursuant to section 57.105 because Bionetics 
failed to comply with the safe harbor provision of that statute.  Id. at 1185-86.  The 
district court disagreed with Bionetics‟ contention that “the safe harbor provision 
of section 57.105(4) represented a substantive rather than procedural statutory 
change and therefore could not be applied in this lawsuit.”  Id. at 1186.  The 
district court held in relevant part that “the safe harbor provision applies in 
situations like this case where the lawsuit was filed before [the effective date of] 
July 1, 2002, but the motion for attorney‟s fees was not filed until after this date.”  
Id.  Consequently, the district court concluded that the trial court erred in awarding 
Bionetics attorney‟s fees.  Id. 2  Bionetics subsequently sought review in this Court, 
                                         
 
2.  The decision in Kenniasty expressly held that Bionetics failed to give 
timely notice under section 57.105(4) as to the counts for invasion of privacy and 
violation of the federal Procurement Integrity Act.  Kenniasty, 10 So. 3d at 1186.  
After considering whether the safe harbor provision applied to the case, the court 
proceeded to address the parties‟ various contentions with regard to the claim for 
tortious interference with business relations.  Although the district court did not 
expressly hold that Bionetics failed to comply with the safe harbor provision as it 
 
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alleging express and direct conflict with the First District‟s decision in Walker v. 
Cash Register Auto Insurance of Leon County, Inc., 946 So. 2d 66 (Fla. 1st DCA 
2006).   
In Walker, appellant Gabriel Walker filed a complaint against Cash Register 
Auto Insurance before the safe harbor provision became effective, seeking 
damages for racial prejudice on the authority of 42 U.S.C. § 1981 after his two-
year-old son was denied access to the company‟s restroom facility.  Id. at 67.  
After the jury returned a verdict in favor of Cash Register, the company sought to 
recover attorney‟s fees and costs pursuant to section 57.105(1), which the trial 
court awarded.  Id. at 68.  On appeal, Walker contended that an award of attorney‟s 
fees under section 57.105 was improper because Cash Register failed to comply 
with the safe harbor provision contained in subsection (4) of the statute.  Id. at 69.  
The First District noted that the safe harbor provision took effect on July 1, 2002, 
and observed:  “The instant complaint was filed on June 11, 2002.  The act of 
denying Walker and his son use of the restroom was alleged to have occurred on 
December 31, 2001.  Thus, any application of subsection (4) to the instant case 
would be retroactive.”  Id. at 71.  The First District held that because the safe 
                                                                                                                                   
relates to the claim for tortious interference with business relations, we read the 
decision to hold that Bionetics failed to comply with the provision on all three 
claims.  We note that apart from the applicability of the safe harbor provision to 
the claims in this case, we do not disturb the district court‟s other holdings with 
regard to the claim for tortious interference with business relations. 
 
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harbor provision was substantive in nature, the provision did not have retroactive 
application and thus could not be applied to Walker.  Id. at 71-72. 
ANALYSIS 
 
Bionetics contends that the safe harbor provision contained in section 
57.105(4) does not apply in the present case because the claims were originally 
filed prior to the effective date of the safe harbor provision.  The question of 
whether a statute applies retroactively or prospectively is a pure question of law; 
thus, our standard of review is de novo.  See D‟Angelo v. Fitzmaurice, 863 So. 2d 
311, 314 (Fla. 2003) (stating that the standard of review for pure questions of law 
is de novo).  We begin our analysis by examining the substantive or procedural 
nature of the safe harbor provision. 
Nature of Safe Harbor Provision 
Section 57.105 previously authorized an award of attorney‟s fees when there 
was a complete absence of a justiciable issue of either law or fact raised by the 
losing party.  See, e.g., Mullins v. Kennelly, 847 So. 2d 1151, 1153-54 (Fla. 5th 
DCA 2003) (citing § 57.105, Fla. Stat. (1997)).  The statute was amended in 1999 
as part of the 1999 Tort Reform Act “to reduce frivolous litigation and thereby to 
decrease the cost imposed on the civil justice system by broadening the remedies 
that were previously available,” Yakavonis v. Dolphin Petroleum, Inc., 934 So. 2d 
615, 619 (Fla. 4th DCA 2006) (quoting Wendy‟s of Ne. Fla., Inc. v. Vandergriff, 
 
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865 So. 2d 520, 523 (Fla. 1st DCA 2003)), and to allow an award of attorney‟s fees 
when a claim or defense, rather than the entire action, is frivolous.  See Albritton v. 
Ferrera, 913 So. 2d 5, 8 (Fla. 1st DCA 2005) (citing Mullins, 847 So. 2d at 1154); 
see also ch. 99-225, § 4, at 1406-07, Laws of Fla.  The statute was again amended 
to include a safe harbor provision, which took effect on July 1, 2002, while the 
present case was pending in trial court.  See ch. 2002-77, §§ 1-2, at 908-09, Laws 
of Florida. 3   
 
One relevant inquiry when analyzing a change in statutory law is whether 
the amendment constitutes a substantive change or a procedural or remedial change 
in the law.  See Smiley v. State, 966 So. 2d 330, 334 (Fla. 2007).  This Court 
generally adheres to the following guidelines to determine whether a statute is 
procedural or substantive in nature: 
Substantive law has been defined as that part of the law which 
creates, defines, and regulates rights, or that part of the law which 
courts are established to administer.  It includes those rules and 
principles which fix and declare the primary rights of individuals with 
respect towards their persons and property.  On the other hand, 
practice and procedure “encompass the course, form, manner, means, 
method, mode, order, process or steps by which a party enforces 
substantive rights or obtains redress for their invasion.  „Practice and 
procedure‟ may be described as the machinery of the judicial process 
as opposed to the product thereof.”  It is the method of conducting 
litigation involving rights and corresponding defenses. 
                                         
 
3.  The statute was amended most recently effective July 1, 2010, to include 
exceptions to monetary sanctions.  See ch. 2010-129, §§ 1-2, at 994-95, Laws of 
Fla. 
 
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Massey v. David, 979 So. 2d 931, 936-37 (Fla. 2008) (emphasis omitted) (quoting 
Haven Fed. Sav. & Loan Ass‟n v. Kirian, 579 So. 2d 730, 732 (Fla. 1991)). 
 
We have previously held that a statutory right to attorney‟s fees constitutes a 
substantive right.  See Menendez v. Progressive Express Ins. Co., 35 So. 3d 873, 
878 (Fla. 2010) (citing Moser v. Barron Chase Sec., Inc., 783 So. 2d 231, 236 (Fla. 
2001)).  Further, district courts have concluded that statutory provisions which 
impose limitations on the right to recover attorney‟s fees are substantive in nature.  
See, id. at 879 (citing Stolzer v. Magic Tilt Trailer, Inc., 878 So. 2d 437, 438 (Fla. 
1st DCA 2004) (holding that a statutory amendment allowing an employer or 
carrier thirty rather than fourteen days to provide workers‟ compensation benefits 
before being responsible for attorney‟s fees was a substantive change in the 
statute)).   
 
With regard to the specific nature of the safe harbor provision contained in 
section 57.105(4), the First District in Walker, the conflict case, explained:  
Subsection (4) does more than require the giving of notice.  It creates 
an opportunity to avoid the sanction of attorney‟s fees by creating a 
safe period for withdrawal or amendment of meritless allegations and 
claims.  The withdrawal or amendment of a claim, allegation or 
defense could substantively alter a case. 
Walker, 946 So. 2d at 71.  We agree.  Accordingly, we hold that the safe harbor 
provision contained in section 57.105(4) is substantive in nature.  Having 
 
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determined that the safe harbor provision is substantive, we turn now to consider 
the prospective or retroactive application of section 57.104(4). 
Prospective or Retroactive Application of Section 57.105(4) 
 
Substantive statutes are presumed to apply prospectively absent clear 
legislative intent to the contrary.  See Metro. Dade County v. Chase Fed. Hous. 
Corp., 737 So. 2d 494, 499 (Fla. 1999) (“The general rule is that in the absence of 
clear legislative intent to the contrary, a law affecting substantive rights, liabilities 
and duties is presumed to apply prospectively.”) (citing Hassen v. State Farm Mut. 
Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996); Arrow Air, Inc. v. Walsh, 645 So. 
2d 422, 425 (Fla. 1994)).  When determining whether a statute should be 
retroactively applied, the statute at issue is subjected to the following inquiries: 
The first inquiry is one of statutory construction:  whether there is 
clear evidence of legislative intent to apply the statute [retroactively].  
If the legislation clearly expresses an intent that it apply retroactively, 
then the second inquiry is whether retroactive application is 
constitutionally permissible. 
Id. at 499 (citations omitted).  Further, to determine legislative intent as to 
retroactivity, this Court looks both to the purpose behind the enactment of the 
statute and the terms of the statute.  Id. at 500.   
 
As the First District recognized in Walker, the purpose of the safe harbor 
provision is “to give a pleader a last clear chance to withdraw a frivolous claim or 
defense . . . or to reconsider a tactic taken primarily for the purpose of 
 
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unreasonable delay.”  Walker, 946 So. 2d at 70 (citing Maxwell Bldg. Corp. v. 
Euro Concepts, LLC, 874 So. 2d 709, 711 (Fla. 4th DCA 2004)).  With regard to 
the language of the safe harbor provision, there is no evidence of a legislative 
intent to rebut the presumption against retroactivity.  Both the statute and its 
enacting legislation are silent on the forward or backward reach of the safe harbor 
provision.  Tellingly, the enacting legislation simply provides that “[t]his act shall 
take effect July 1, 2002.”  Ch. 2002-77, § 2, at 909, Laws of Fla.  Due to the lack 
of evidence of legislative intent to apply the statute retroactively, we conclude that 
the safe harbor provision applies prospectively.  Consequently, we need not 
consider the second interrelated inquiry as to whether retroactive application is 
constitutionally permissible.  See Mem‟l Hosp.-W. Volusia, Inc. v. News-Journal 
Corp., 784 So. 2d 438, 441 (Fla. 2001) (citing Singletary v. State, 322 So. 2d 551, 
552 (Fla. 1975)).   
 
Although we conclude that the safe harbor provision applies prospectively, 
this conclusion does not completely resolve the issue before us.  We thus proceed 
to consider whether the safe harbor provision applies to cases such as Kenniasty 
where the frivolous claims were originally filed before the provision became 
effective, but the motion seeking attorney‟s fees pursuant to section 57.105 was 
filed after the provision took effect.  
 
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The Fifth District in Kenniasty held that “[a]lthough Deitz and Moore filed 
suit prior to the effective date of section 57.105(4), this safe harbor provision 
applied because Bionetics filed its motion for attorney‟s fees on March 28, 2003, 
well after its July 1, 2002, effective date.”  Kenniasty, 10 So. 3d at 1186.  In 
contrast, the First District in Walker held that the safe harbor provision did not 
apply retroactively to a case where the complaint was filed and the legal harm 
occurred before the effective date of the safe harbor provision.  Walker, 946 So. 2d 
at 71-72.  Thus, whereas the Fifth District in Kenniasty focused on the date the 
motion for attorney‟s fees was filed to determine the applicability of the safe 
harbor provision, the First District in Walker focused on the time the legal harm 
occurred and the date the underlying suit was filed to determine the prospective 
application of the safe harbor provision. 
We conclude that Walker espouses the correct view.  In this case, the claims 
for tortious interference with business relations, invasion of privacy, and violation 
of the federal Procurement Integrity Act were originally filed before the safe 
harbor provision became effective.  Because the safe harbor provision is 
substantive and does not apply retroactively, we hold that the safe harbor provision 
cannot apply in this case.  Therefore, the Fifth District erred in concluding that the 
safe harbor provision applied because Bionetics‟ motion for attorney‟s fees was 
filed after the safe harbor provision took effect.  Having resolved the conflict 
 
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presented before this Court, we decline to address the remaining issues raised by 
both parties in this case. 
CONCLUSION 
 
Based on the foregoing, we quash the decision of the Fifth District in 
Kenniasty v. Bionetics Corp., 10 So. 3d 1183 (Fla. 5th DCA 2009), to the extent 
that it is inconsistent with our decision, and we approve the decision of the First 
District in Walker v. Cash Register Auto Insurance of Leon County, Inc., 946 So. 
2d 66 (Fla. 1st DCA 2006), to the extent it is consistent with our analysis and 
holding.  Upon remand of this proceeding, the Fifth District may consider and 
decide issues that were raised but not reached by the district court or this Court. 
 
It is so ordered.   
CANADY, C.J., and PARIENTE, LEWIS, QUINCE, POLSTON, and PERRY, JJ., 
concur. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED. 
 
 
Application for Review of the Decision of the District Court of Appeal - Direct 
Conflict of Decisions 
 
 
Fifth District - Case No. 5D07-3625 and 5D07-3646 
 
 
(Brevard County) 
 
Joe Teague Caruso of Caruso, Swerbilow and Camerota, P.A., Merritt Island, 
Florida, 
 
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for Petitioner 
 
Frank W. Kenniasty, pro se, Melbourne, Florida; Judith Deitz, and William Moore, 
pro se, Silver Springs, Florida, 
 
 
for Respondents