Court Opinion

ID: 6347927
Source: CourtListenerOpinion
Date Created: 2022-06-08 15:03:01.04197+00
Date Added: 2024-06-11T15:49:23.916759
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

                       PHILIP MORRIS USA INC.,
                              Appellant,

                                     v.

              BARBARA COHEN, as personal representative
                    of the Estate of Rita Shifrin,
                              Appellee.

                               No. 4D21-467

                              [June 8, 2022]

   Appeal and cross-appeal from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Carlos A. Rodriguez, Judge; L.T. Case
No. 062008CA000521AXXXCE.

   Geoffrey J. Michael of Arnold & Porter Kaye Scholer LLP, Washington,
DC, Kenneth J. Reilly and Hassia T. Diolombi of Shook, Hardy & Bacon
L.L.P., Miami, and Jennifer M. Voss of Shook, Hardy & Bacon L.L.P.,
Tampa, for appellant.

   Jeffrey V. Mansell and Bard D. Rockenbach of Burlington and
Rockenbach, P.A., West Palm Beach, and Scott P. Schlesinger, Jonathan
R. Gdanski, and Brittany C. Barron of Schlesinger Law Offices, P.A., Fort
Lauderdale, for appellee.

LEVINE, J.

   Philip Morris appeals an award of $559,690 in attorneys’ fees imposed
as a sanction based on section 57.105(1) and Moakley v. Smallwood, 826
So. 2d 221 (Fla. 2002), after finding that several statements made by Philip
Morris’s counsel during opening statements were in bad faith. We find
that the trial court erred by awarding attorneys’ fees for the entire trial
because “the amount of the award of attorneys’ fees must be directly
related to the attorneys’ fees and costs that the opposing party has
incurred as a result of the specific bad faith conduct of the attorney.”
Moakley, 826 So. 2d at 227. Since the trial court made “express finding[s]
of bad faith conduct” by Philip Morris’s counsel only as to the opening
statement, and did not make the same “bad faith” determinations about
other conduct during the trial, we find that the trial court failed to follow
the requirements of Moakley by demonstrating how the specific bad faith
conduct in the beginning of the trial was directly related to all the plaintiff’s
attorneys’ fees for the entire trial. Thus, as a result, we reverse the
sanctions awarded by the trial court. 1 We also find the cross-appeal moot
based on our reversal in the direct appeal.

   The plaintiff, as personal representative of the decedent’s estate, sought
compensatory and punitive damages against Philip Morris for wrongful
death. Philip Morris stipulated that the decedent was addicted to
cigarettes, but disputed whether the decedent’s addiction was a legal
cause of her COPD, whether the COPD manifested prior to the November
21, 1996, deadline for filing Engle 2 progeny cases, and whether the
decedent’s COPD caused her death. Philip Morris also stipulated to trying
phase 1 liability and phase 2 punitive damages together.

   The trial court highlighted the following statements made by Philip
Morris’s counsel in opening in its order finding “bad faith.” During opening
statements, Philip Morris contrasted a 1993 radiology report containing
the decedent’s COPD diagnosis, which the plaintiff referenced in her
opening, with a 1995 medical record from a different doctor that did not
mention COPD. Philip Morris then told the jury that the plaintiff would
not call the doctor who authored the 1993 report. Specifically, Philip
Morris stated: “That was written by Dr. Fabian. Will they be bringing you
that testimony about that one paragraph? No.” The plaintiff objected,
arguing that Philip Morris knew that Dr. Fabian was deceased. The trial
court asked the plaintiff if she wanted a mistrial, and the plaintiff said no.
The trial court sustained the objection and gave a curative instruction that
the doctor had passed away and that both sides have equal access to
subpoena witnesses.

    Several times during opening, Philip Morris also characterized the
plaintiff’s case by referring to the plaintiff’s “position” and “theory” of the
case. For instance, Philip Morris stated: “One theory is that [the decedent]
was defrauded and started smoking back in the ’40s. . . . Another theory
is that she would have quit smoking in time to avoid getting COPD if she
had not relied on something Philip Morris said in a 1994 advertisement.”
(emphasis added). Philip Morris also suggested that “the plaintiff’s
position” is that “her primary care doctor[] just forgot” to include the
plaintiff’s COPD diagnosis in a 1995 medical record. (emphasis added).
Another time, Philip Morris stated: “Can’t or won’t quit, that’s the position

1 As a result of the reversal of the sanctions, we need not address the other issues
raised by Philip Morris in its brief.
2 Engle v. Liggett Grp., Inc., 945 So. 2d 1246 (Fla. 2006).

                                         2
that the plaintiff took in 2010.” (emphasis added). The trial court
sustained the plaintiff’s objections. At least twice, the trial court advised
Philip Morris during sidebar to frame its opening statements in terms of
what the evidence would show and not to talk about the plaintiff’s position
or frame the plaintiff’s case.

   Next, Philip Morris misrepresented that the plaintiff was seeking
$81,000 in total compensatory damages, when in fact this figure came
from the plaintiff’s interrogatory answer for only loss of support and
services.    Philip Morris stated, “And the interesting thing about
compensatory damages in this claim is the plaintiff hasn’t told us what
she thinks all of her damages are.” The trial court sustained the plaintiff’s
objection. Philip Morris continued, “When we ask the plaintiff what are
the damages, we were told, ‘Undetermined at this time.’” The trial court
again sustained the plaintiff’s objection. Philip Morris then stated, “18
months later. That’s what we were told her compensatory damages are.”
At the time, Philip Morris was showing a slide with the amount of $81,000.

   The plaintiff then asked the trial court for an order to show cause
against counsel for violating the trial court’s order and also requested a
“provisional mistrial.” The trial court stated, “There’s no provisional
mistrial.” After stating that it was “speechless,” the trial court sustained
the objection, struck the comments about damages, and instructed Philip
Morris to rephrase its statements.

   Philip Morris moved on to discussing punitive damages, stating that
“they are over and above whatever is awarded for compensatory damage,
which is what we just talked about.” The plaintiff objected, complaining
that Philip Morris again pointed to the $81,000 figure, misleading the jury.
The plaintiff moved to show cause why Philip Morris should not be in direct
contempt. The plaintiff stated that she “can’t get a fair trial,” but also
stated that she did not want a mistrial. The trial court recognized that
Philip Morris was “directly violating my orders,” but declined to hold
counsel in contempt. The trial court gave a curative instruction, striking
the reference to the $81,000 being the plaintiff’s compensatory claim.

   Philip Morris next mentioned other lawsuits involving e-cigarettes.
Philip Morris stated, “Philip Morris can’t be punished for any harm that
JUUL caused other people.” Philip Morris continued, “And the evidence
will be that people who are harmed by JUUL can and have brought their

                                     3
own lawsuits against JUUL—” 3 The plaintiff objected, asked the trial court
to reserve ruling on a motion for mistrial, and again asked for a motion to
show cause. The trial court sustained the objection and gave a curative,
advising the jury that other pending lawsuits should not affect its decision.
The trial court reserved ruling on “additional sanctions.” After a brief
recess, the trial court then stated there would be entitlement to section
57.105 sanctions due to Philip Morris’s conduct during its opening
statement.

   During deliberations, the jury sent a note that it could not get past
question 1, which asked the jury to determine whether the decedent’s
addiction to cigarettes containing nicotine was a legal cause of her COPD
which was manifested prior to November 21, 1996. The trial court gave
the jury an Allen charge. After the jury again indicated it could not come
to a consensus, the trial court then granted a directed verdict on question
1.

   The next day, the jury sent another note indicating it was unable to
agree on questions 2 and 3. Question 2 asked the jury “whether [the
decedent] reasonably relied to her detriment on a statement, concealment,
or omission by Philip Morris USA, Inc. not otherwise known or available
concerning the health effects and/or addictive nature of cigarettes and, if
so, whether such reliance was a legal cause of her COPD and death.”
Question 3 asked “whether [the decedent] reasonably relied to her
detriment on an act or statement made in furtherance of defendant’s
agreement to conceal or omit material information not otherwise known
concerning the health effects and/or addictive nature of cigarettes, and, if
so, whether such reliance was a legal cause of her COPD and death.” After
confirming the jury was unable to reach a verdict, the trial court declared
a mistrial and dismissed the jury.

   On March 9, 2020, the trial court entered a sanction order against
Philip Morris, finding that Philip Morris’s actions “during opening are in
Bad Faith.” (emphasis added). The trial court further found that “the
conduct was willful and deliberate” given the repeated violations of
numerous rulings and instructions. The order recounted Philip Morris’s
improper statements during opening: telling the jury that the plaintiff was
not calling Dr. Fabian as a witness; continuing to characterize the
plaintiff’s case contrary to the court’s instructions; informing the jury
about other pending lawsuits for e-cigarettes; and mischaracterizing an

3In Philip Morris USA, Inc. v. Rintoul, No. 4D20-1963, 2022 WL 1482413 (Fla. 4th
DCA May 11, 2022), evidence regarding JUUL was found to be inadmissible
against Philip Morris.

                                       4
interrogatory answer to make it appear as if the plaintiff was claiming
$81,000 in total economic damages.

    Although the trial court confined its finding of bad faith conduct
entirely to the opening statement, the trial court also noted other instances
of improper conduct during the trial, without finding those other acts to
be in “bad faith.” The trial court found that Philip Morris violated two
pretrial rulings during cross-examination of a witness, misrepresented the
record, improperly attacked counsel, and disrespected and attacked the
court. The court imposed sanctions on Philip Morris under section
57.105(1) in lieu of contempt, reserving jurisdiction to determine the
amount or type of sanctions.

   During a March 10 sanction hearing, the plaintiff requested only an
award of attorneys’ fees for the entire trial. The plaintiff did not request
fees for a portion of the trial, or specifically the time before or during the
opening statement. During a subsequent evidentiary hearing on October
19 and 20, the plaintiff again argued she was entitled to attorneys’ fees for
the entire trial. The plaintiff’s expert also testified that the trial court
should award fees for the entirety of hours the plaintiff’s counsel expended
at trial. After the evidentiary hearing, the trial court entered a final
sanction order, awarding the plaintiff attorneys’ fees in the amount of
$599,690 for the entire trial based on section 57.105(1) and Moakley. In
determining this amount, the trial court refused to include fees for one of
the plaintiff’s attorneys whom the trial court found made improper closing
arguments.

   Philip Morris appeals. The plaintiff cross-appeals, challenging the trial
court’s reduction of the fee award based on improper closing arguments
by her attorney.

   “The standard of review of an order granting sanctions for attorney
misconduct is abuse of discretion.” Rivero v. Meister, 46 So. 3d 1161, 1163
(Fla. 4th DCA 2010). “However, to the extent a trial court’s order on
attorney’s fees is based on its interpretation of the law, we have de novo
review.” Ferere v. Shure, 65 So. 3d 1141, 1144 (Fla. 4th DCA 2011).

   The attorneys’ fees sanction in this case cannot be upheld under either
section 57.105(1) or Moakley, the two grounds identified by the trial court
as the basis for the fee award. Initially, the trial court’s reliance on section
57.105(1) would be inapplicable. Section 57.105 provides:

      (1) Upon the court’s initiative or motion of any party, the court
      shall award a reasonable attorney’s fee, including

                                       5
      prejudgment interest, to be paid to the prevailing party in
      equal amounts by the losing party and the losing party's
      attorney on any claim or defense at any time during a civil
      proceeding or action in which the court finds that the losing
      party or the losing party’s attorney knew or should have
      known that a claim or defense when initially presented to the
      court or at any time before trial:

      (a) Was not supported by the material facts necessary to
      establish the claim or defense; or

      (b) Would not be supported by the application of then-existing
      law to those material facts.

         ....

      (4) 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.

    “The central purpose of section 57.105 is. . . to deter meritless filings.”
Davis v. Bailynson, 268 So. 3d 762, 769 (Fla. 4th DCA 2019) (citation
omitted). The instant case did not involve a meritless filing, but rather bad
faith statements by Philip Morris in opening. Additionally, fees cannot be
awarded under section 57.105(1) without complying with the twenty-one-
day notice provision set forth in section 57.105(4). Here, there was no
motion for sanctions under section 57.105(4) and no way for Philip Morris
to “withdraw[] or appropriately correct[]” statements made in opening. See
§ 57.105(4), Fla. Stat.; Ferere, 65 So. 3d at 1144 (reversing section
57.105(1) attorney’s fees where plaintiff’s counsel alleged the “doctoring of
records” during jury selection and there was no way for counsel to
withdraw or appropriately correct that allegation).

   The sanction also cannot be upheld under Moakley. Philip Morris
argues that its alleged misconduct did not cause the plaintiff to lose the
entirety of her trial fees. Philip Morris argues that the issues constituting
the bad faith conduct earlier in the trial did not relate to the issues on
which the jury subsequently hung. Additionally, Philip Morris points out
that the opening statement occurred three weeks prior to the jury not
reaching a verdict, and there was a ten-day hiatus in deliberations due to
juror illness, which further extended the temporal relationship between
the bad faith conduct, as determined by the trial court, and the resulting

                                      6
mistrial due to the jury’s inability to reach a verdict.

    The plaintiff states that the trial court is in the best position to
determine the impact of improper arguments. USAA Cas. Ins. Co. v.
Howell, 901 So. 2d 876, 879 (Fla. 4th DCA 2005). Although the trial court
is indeed in the best position to observe the impact of arguments, that
position does not relieve the trial court from pointing out specifically how
the bad faith conduct is directly related to the sanctions, especially in this
case where the trial court sanctioned Philip Morris for attorneys’ fees for
the entire trial.

    An award of fees as a sanction “must be directly related to the attorneys’
fees and costs that the opposing party has incurred as a result of the
specific bad faith conduct of the attorney.” Moakley, 826 So. 2d at 227
(emphasis added). In Moakley, the Florida Supreme Court concluded “that
the trial court’s exercise of the inherent authority to assess attorneys’ fees
against an attorney must be based upon an express finding of bad faith
conduct and must be supported by detailed factual findings describing the
specific acts of bad faith conduct that resulted in the unnecessary
incurrence of attorneys’ fees.” Id. The court went on further to require
that the finding of bad faith conduct “must be predicated on a high degree
of specificity in the factual findings.” Id.

    The sanction imposed in the present case cannot be upheld under
Moakley because the trial court’s only findings of bad faith conduct related
to what occurred in opening statement. The trial court did not make
findings of bad faith as to other various incidents interspersed later in the
trial. However, even if the trial court had made such findings—which it
did not—that still would not satisfy Moakley’s requirement. Moakley
requires an express finding of bad faith, which is “directly related” to the
award of attorneys’ fees. Id. The trial court did not demonstrate how the
attorneys’ fees for the entire trial were “directly related” to the bad faith
conduct in the opening statement, or for that matter, the various other
items highlighted by the trial court. Thus, the trial court’s findings fail to
satisfy both key components of Moakley relating to the attorneys’ fees for
the entire trial. See Cousins v. Duprey, 325 So. 3d 61, 75 (Fla. 4th DCA
2021) (reversing where the sanctions award was not “directly related to the
alleged sanctionable conduct”); Bennett v. Berges, 50 So. 3d 1154, 1160
(Fla. 4th DCA 2010) (reversing where “the trial court awarded fees that
were not directly related to the specific bad faith conduct of appellants”);
Finol v. Finol, 912 So. 2d 627, 629 (Fla. 4th DCA 2005) (granting petition
for certiorari where “[t]he record and the order also fail to show how the
fees awarded directly relate to the fees incurred as a result of the alleged
bad faith conduct”); Heiny v. Heiny, 113 So. 3d 897, 903 (Fla. 2d DCA

                                      7
2013) (reversing where “the entirety of the wife’s legal fees could not have
been the direct result of the husband’s misconduct”).

    Further, none of the arguments that the trial court found to be made
in bad faith directly related to the questions the jury hung on. As to
question 1, the trial court directed a verdict. Thus, the jury effectively
hung on only questions 2 and 3, which related to concealment and
reliance. However, the bad faith arguments in opening had nothing to do
with concealment and reliance. Rather, the bad faith arguments in
opening related to the plaintiff not calling her doctor witness,
characterizing the plaintiff’s case, other pending lawsuits for e-cigarettes,
and misrepresenting that the plaintiff sought $81,000 in total economic
damages. Even the additional conduct the trial court found to be
improper—without the required express finding of bad faith conduct—did
not relate to questions 2 and 3. Additionally, the trial court issued curative
instructions following the objectionable opening statements. It is well-
established that a jury is presumed to follow a trial court’s instructions.
R.J. Reynolds Tobacco Co. v. Thomas, 264 So. 3d 199, 202 (Fla. 4th DCA
2019). The record simply does not support a finding that Philip Morris’s
opening statements tainted the entire trial and caused the jury to hang on
questions 2 and 3.

    As Philip Morris points out, it is impossible to know why the jury hung.
It is possible the jury could not reach a verdict simply because of a conflict
in the evidence. Alternatively, the plaintiff’s own closing arguments could
have played a role in the jury’s inability to reach a verdict inasmuch as the
trial court found that the plaintiff’s attorney had made improper closing
arguments. See Miller v. City of Los Angeles, 661 F.3d 1024, 1026 (9th
Cir. 2011) (reversing award of attorney’s fees for entire trial as a sanction
where record did not support a finding that closing argument caused jury
to hang).

    Moakley sanctions are to be awarded for specific instances of bad faith
conduct which are directly related to the amount of fees incurred. For
instance, in Patsy v. Patsy, 666 So. 2d 1045, 1046 (Fla. 4th DCA 1996),
this court affirmed an award of $1,870 in attorney’s fees for filing a sham
motion with no factual basis solely to delay the proceedings. In Bennett,
this court found a $12,500 fee award “excessive based upon the extent of
the sanctionable conduct.” 50 So. 3d at 1160. Instead, “[t]he fee award
should have been limited to the narrow circumstance of the appellants’
failure to come forward with proof of their allegation of theft at the January
2009 hearing.” Id. See also Moakley, 826 So. 2d at 223 (recognizing the
trial court’s inherent authority to award $1,125 in attorneys’ fees as
compensation for the time the opposing party expended in responding to

                                      8
a subpoena, but reversing based on the absence of an express finding of
bad faith).

   Of course, we are not saying that attorneys’ fees can never be awarded
as a sanction for the entire trial. In Chambers v. NASCO, Inc., 501 U.S.
32, 51 (1991), the Supreme Court affirmed a $1 million award of attorney’s
fees for the cost of litigation where the defendant’s “entire course of
conduct throughout the lawsuit evidenced bad faith and an attempt to
perpetrate a fraud on the court . . . .” However, unlike in Chambers, this
is not a case where Philip Morris’s “entire course of conduct throughout
the lawsuit evidenced bad faith and an attempt to perpetrate a fraud on
the court.” Id. Rather, the trial court made specific findings of bad faith
that were limited to Philip Morris’s comments in opening statements. See
Tenev v. Thurston, 198 So. 3d 798, 802 (Fla. 2d DCA 2016) (reversing an
award of attorneys’ fees for the entire trial where the “only detailed factual
finding of bad faith on the part of [the defendant]—the dishonest
statements to the court—did not warrant a mistrial”).

    Further, when the trial court asked the plaintiff whether she wanted to
request a mistrial during opening statements, the plaintiff declined and
maintained that she did not want a mistrial. When the plaintiff proceeded
with the trial and rejected the offers of mistrial from the trial court, the
plaintiff then proceeded at her own peril by not availing herself of a
mistrial. Consequently, had the plaintiff accepted the offer of a mistrial,
then she would have at least mitigated some of the attorneys’ fees incurred
by her at trial. Instead, as a result of the plaintiff’s strategic decision, the
amount of attorneys’ fees incurred by the plaintiff dramatically increased.
See United States v. Carter, 45 Fed. Appx. 339, 347-48 (6th Cir. 2002)
(finding waiver where defendant made a strategic decision and refused
court’s offer to declare a mistrial). A plaintiff who elects to proceed with
the trial, declines a mistrial, and then does not get the result she wants,
may not complain about not receiving attorneys’ fees as a sanction for the
entirety of the trial.

    This case would have been different if, for example, immediately
following the objectionable opening statements, the plaintiff had moved for
a mistrial, and the trial court had granted the motion. In such a scenario,
an award of attorneys’ fees would have been directly related to the bad
faith misconduct. See Lasar v. Ford Motor Co., 399 F.3d 1101, 1113 (9th
Cir. 2005) (affirming award of $63,397.50 in attorney’s fees as a sanction
where trial court granted a mistrial after defendant’s opening statements
violated two limine rulings).

   It is important to note that the trial court only ruled specifically on the

                                       9
plaintiff’s request for an award of attorneys’ fees for the entire trial, made
at the March 10, 2020 sanction hearing as well as at the evidentiary
hearing held on October 19 and 20, 2020. Additionally, the plaintiff’s
expert witness testified that the trial court should award attorneys’ fees for
the entirety of hours the plaintiff’s counsel expended at trial. Significantly,
the plaintiff never requested or sought a lesser portion of attorneys’ fees.
Instead, she sought fees only for the entire trial. Even on appeal, the
plaintiff does not advocate for partial attorneys’ fees.

    “The prohibition against proverbial multiple ‘bites at the apple’ for trials
remains firmly rooted as the leading, guiding principle to govern the scope
of remand and should serve as the default direction when these kinds of
decisions are being made.” Morales v. Fifth Third Bank, 275 So. 3d 197,
201 (Fla. 4th DCA 2019) (citation omitted). “The party failing to establish
its attorney’s fees claim is not entitled to a second opportunity to make the
requisite showing.” Warner v. Warner, 692 So. 2d 266, 268 (Fla. 5th DCA
1997). By only requesting fees for the entire trial, the plaintiff has not
sought fees that were “directly related” to the trial court’s finding of bad
faith, such as the attorneys’ fees incurred prior to and during the opening
statement. Therefore, we cannot now award attorneys’ fees for that part
of the trial where the trial court found bad faith conduct.

   We also note that the facts of cases like the present one, in principle,
were a concern of then Chief Justice Wells at the time of the issuance of
Moakley. Chief Justice Wells listed a host of potential issues in his
concurrence in result only, including the following: “The majority likewise
does not set any limits on the monetary sanctions which the trial court
can impose.” 826 So. 2d at 228. He further stated that “[f]rankly, I am
concerned about arbitrary or intimidating applications of undefined and
unlimited ‘bad faith’ sanctions.” Id. at 229. Chief Justice Wells’s concerns
appear to be prophetic. This case demonstrates an example of where
“undefined and unlimited” sanctions are being issued. Without clear
definitions and findings of specific bad faith conduct “directly related” to
the award of attorneys’ fees as a sanction, the sanction has become
“arbitrary” and “intimidating.” Id.

   Finally, we note that there were other remedies available to the plaintiff
and the trial court. The plaintiff could have accepted the multiple offers
by the trial court to grant a mistrial. Although we appreciate there may
be strategic reasons to demur, that is still a decision that the plaintiff
makes and lives with. Further, a trial court could refer to the Florida Bar
any examples of specific bad faith conduct. See generally R. Regulating
Fla. Bar Ch. 4; see also Fla. Code of Jud. Conduct, Canon 3D. There are
potential contempt powers that may be applicable in certain limited cases.

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See § 38.22, Fla. Stat. (recognizing a court’s statutory power to punish
contempt); Ex parte Earman, 95 So. 755, 760 (Fla. 1923) (recognizing a
court’s inherent power to punish contempt). Of course, there remains the
inherent authority of the trial court to award attorneys’ fees under
Moakley. However, that remains viable only when utilized under the
specific requirements of that case. Since the trial court did not follow the
clear dictates of Moakley, we reverse.

   In summary, we find the sanction did not follow the requirements of
Moakley because the award of attorneys’ fees for the entire trial was not
directly related to the findings of bad faith conduct that occurred during
opening statement. As such, we reverse. Because we reverse the
sanctions award, the cross-appeal challenging the reduction in recoverable
attorneys’ fees is moot and therefore dismissed.

   Reversed; cross-appeal dismissed as moot.

FORST and KLINGENSMITH, JJ., concur.

                           *         *         *

   Not final until disposition of timely filed motion for rehearing.

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