Securities Fraud Lawyers Blog
Long before Florida became a state in 1845, Florida’s territorial government sought to protect Floridians. As early as 1828, Florida enacted a requirement that non-residents file a ‘bond with approved security in the sum of one hundred dollars, conditioned for the payment of all Cost and charges which may be adjudged against him in said suit. (“Cost Bond”). Florida’s Cost Bond requirement remains basically the same as the original 1828 version with only one major change and several minor revisions primarily related to section numbering.
Cost Bond legislation is not unique to Florida. More than half of the United States has similar legislation. Some states make the Cost Bond an affirmative duty of the non-resident plaintiff while other states require that a defendant demand that the plaintiff file a non resident cost bond and/or file a motion to compel a nonresident plaintiff to file a Cost Bond.
The reasons for enacting the Cost Bond statute are seemingly lost to history. However, it is easy to conclude that the reasons include Florida’s concern that its residents may be harmed if costs assessed against a non-resident plaintiff remain unpaid and the non-resident plaintiff avoids Florida courts’ jurisdiction; this is supported by case law. Another reason that the statute may have been adopted was to help limit frivolous suits by non-resident plaintiffs against Florida residents. Limiting frivolous lawsuits may well have been a significant reason because, particularly in the early years of the statute, $100 was a large sum of money and thus the Cost Bond was a high threshold for non-resident plaintiffs to gain access to Florida courts.
Why should a modern Florida lawyer be familiar with the Cost Bond statute? I submit that there are three main reasons. One is that you may be able to use the Cost Bond statute to further your client’s interests. Next, Florida’s Cost Bond statute makes Florida lawyers representing non-resident plaintiffs potentially liable for costs assessed against their client but which are not paid. Finally, the question of whether the Cost Bond requirement should be increased is of interest because raising it may make the Cost Bond statute more useful as a tool to protect your Florida resident client’s interests. Thus, a significant increase in the Cost Bond could help limit frivolous or harassing suits by non-resident plaintiffs. But first a little history…
The History of a Cost Bond/Security Requirement in Florida
The Acts that the Legislative Council of the Territory of Florida passed at their 6th session in 1827 included An act to revise and amend the judiciary system of this Territory of which section 16 states:
Sec. 16. Be it further enacted That whenever plaintiff or complainant, who is a non-resident, shall commence a suit in any of the courts of this territory, it shall be the duty of himself or his agent or attorney previous to suing out the original process, to file with the clerk of the court in which said suit is to be brought, bond with approved security in the sum of one hundred dollars, conditioned for the payment of all costs and charges which may be adjudged against him in said suit; and upon a failure to file such bond and security as aforesaid, the attorney bringing or prosecuting said suit, shall be liable for said costs and charges; and if adjudged against said plaintiff, an execution may issue against said attorney for the same.
Acts of the Legislative Council of the Territory of Florida: Passed at Their Sixth Session 1827, An act to revise and amend the judiciary system of this Territory, Sec. 16., p. 116.
When first enacted, the Cost Bond requirement allowed a defendant to file a motion to dismiss a non-resident plaintiff’s lawsuit if the non-resident plaintiff failed to file ‘such bond and security as aforesaid’. The Cost Bond in 1828 did not specifically allow non-resident plaintiff any opportunity to cure their failure to post the requisite Cost Bond before a Motion to Dismiss would be entered against a non-resident plaintiff.
By 1892, Florida’s Cost Bond statute had been amended in a substantive way to make it easier for the attorney representing a non-resident plaintiff to avoid a motion to dismiss. With the 1892 revision, defense counsel or defendant could file a motion to dismiss, ‘upon a failure [by nonresident Plaintiff] to file such bond and security within thirty days after such commencement, or such removal, the defendant may after thirty days’ notice to the plaintiff or his attorney (during which the plaintiff may file such bond).” Today, a Florida-resident defendant must give non-resident plaintiff twenty days’ notice of intent to file a motion to dismiss for failure to post a Cost Bond which gives the nonresident plaintiff time to cure.
The Cost Bond has been revised several times to change the section
number. The Cost Bond section number was first changed in 1829, then again in 1906, 1920, 1927, 1941, and 1967. In 1995 revisions were made to remove gender specific references and today the Costs Bond is found at Florida Statutes §57.011 and reads as it did in 1828. The major change is the addition of the opportunity for the nonresident plaintiff to cure their failure to file a Cost Bond with the clerk of court.
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