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Florida Court: Exception to Attorney Fee Rule Misapplied

November 15, 2019 | Posted in : Expenses / Costs, Fee Agreement / Fee Proposal, Fee Award, Fee Dispute, Fee Entitlement, Fee Issues on Appeal, Fee Jurisprudence, Fee Shifting, Fee Statute, Fees for Fees, Prevailing Party Issues

A recent Law 360 story by Nathan Hale, “Exception to Attys’ Rule Misapplied, Fla. Court Says,” reports that a Florida state appeals court ruled that a lower court erred when it applied an exception to a general rule against awarding attorneys' fees incurred litigating the amount of a fees award and made such an award to a homeowner who prevailed in a mortgage foreclosure suit.

Florida's Fifth District said in its opinion that language in three attorneys' fees provisions in the note and mortgage at issue in the case between Bayview Loan Servicing LLC and homeowner Jason Cross lacked the kind of “broad and undefined language” that two other state appeals courts found warranted exceptions to the general rule against “fees for fees” awards.  But the appeals panel sided with Cross on his cross-appeal and found that the trial court erred in finding he was not entitled to collect prejudgment interest for the period when Bayview was contesting the amount of attorneys' fees to be awarded.

The panel ordered that the Orange County Circuit Judge Kevin B. Weiss should award Cross prejudgment interest for the period from Dec. 27, 2016 — when he orally pronounced that Cross entitled to attorneys' fees — through the entry of a new final judgment in the case.  “We find untenable the suggestion that a party against whom attorney’s fees are assessed may avoid the opposing party’s entitlement to the award from being fixed by merely continuing to dispute entitlement,” the Fifth District said.

Bayview's and Cross' appeals arose from a final judgment that awarded Cross contractual attorneys' fees after the Fifth District affirmed the involuntary dismissal of Bayview's mortgage foreclosure action against Cross, according to the opinion.  The Fifth District said in its opinion that it was affirming without discussion several other issues raised by the parties on appeal.  On the “fees for fees” issue, the appeals court said that as a general rule, attorneys' fees incurred while litigating the amount of an attorneys' fees award in a case are not recoverable, but exceptions have been found in two rulings by its sister district courts.

In 2012's Waverly at Las Olas Condo Association v. Waverly Las Olas LLC, the Fourth District found that a provision authorizing the award of prevailing party fees “[i]n the event of any litigation between the parties under [the agreement],” was broad enough “to encompass fees incurred in litigating the amount of fees,” according to the opinion.

The Second District reached a similar conclusion in 2017 in the case Trial Practices Inc. v. Hahn Loeser & Parks LLP, where a contractual fees provision said: “prevailing party in any action arising from or relating to this agreement will be entitled to recover all expenses of any nature incurred in any way in connection with the matter ... including, but not limited to, attorneys’ and experts’ fees.”  The Second District found the language permitting recovery of “all expenses of any nature incurred in any way” was “broad enough to encompass fees incurred in litigating the amount of the fees,” according to the opinion.

In contrast, the contractual language in the mortgage and note in this case contained more limited authorization for recovery of attorneys' fees, including those incurred “in enforcing th[e] note” and “to the extent not prohibited by applicable law,” and in connection with acceleration or foreclosure of the note and appeal and bankruptcy proceedings, according to the opinion.

A representative for Cross praised the Fifth District's consideration of the case, if not all its findings.  “We believe the court carefully considered the matter and correctly ruled on many of the issues raised on appeal and cross-appeal.  We, however, respectfully disagree with the court’s decision to limit our client’s right to recover certain fees and costs,” said attorney Michelle Branch of Ghantous & Branch PLLC, which represented Cross.