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Article: FL State Courts Limit Parties’ Abilities to Recover Attorney Fees

November 2, 2021 | Posted in : Article / Book

A recent article by Kenneth Duvall and Stephanie Koutsodendris, “Florida State Courts Limit Parties’ Abilities to Recover Attorneys’ Fees,” reports on attorney fee recovery in state courts in Florida.  This article was posted with permission.  The article reads:

In a pair of recent decisions, Florida state courts reined in multiple statutes that allow for the recovery of attorneys’ fees. In one decision, the Florida Supreme Court adopted a relatively narrow reading of Florida’s “reciprocal” fee-shifting statute, which automatically amends contracts with one-way prevailing party fee provisions to make them reciprocal. In another decision, a judge in Miami-Dade County’s Complex Business Litigation Section narrowly applied Florida’s settlement proposal statute, which sanctions parties that unreasonably reject offers of judgment.

Limiting Florida’s Reciprocal Fee-Shifting Statute

Unlike most other states, Florida has a statute (section 57.105) that rewrites unilateral fee-shifting contract provisions into bilateral provisions. But in a recent case, Levy v. Levy1, the Florida Supreme Court unanimously adopted a fairly strict reading of the statute. The contract at issue explicitly allowed a plaintiff to recover its fees if it successfully enforced the contract, but said nothing about allowing a prevailing defendant to recover its fees if it successfully defeated a claim made pursuant to the contract.

The lower court had held that the statute allowed a prevailing defendant to recover its attorneys’ fees under such a contract but the Supreme Court disagreed, concluding that the statute only applies when the contract “confer[s] the right to fees on one identifiable contracting party to the exclusion of the other party.”2  In other words, if a contract states that Party A can recover its attorney’s fees as a prevailing party, then the statute will automatically allow Party B to recover its fees as a prevailing party, too. However, in the contract at issue, either party theoretically could have been the plaintiff seeking to enforce the contract. Therefore, the statute did not apply to confer fee-award rights on whichever party happened to be the defendant.

Practice pointer: When drafting or interpreting a fee-shifting provision, realize that conferring the right to recover fees to only one party by name will automatically confer that same right on the other party. However, conferring the right to recover fees only to the party enforcing—or, alternatively, only to the party resisting enforcement of—the contract will not trigger reciprocity.

Limiting Florida’s Offer of Judgment Sanctions Statute

Another Florida statute (section 768.79) automatically entitles a party to attorneys’ fees if its settlement offer is “unreasonably” rejected. If a plaintiff declines a defendant’s offer of judgment, but ultimately obtains a judgment worth only 75% or less of the amount offered, then the defendant is entitled to a fee award as a sanction. Likewise, if a defendant declines a plaintiff’s offer of judgment, but the plaintiff obtains a judgment worth 125% or more of the amount offered, then the plaintiff is entitled to a fee award as a sanction.

In Tein v. Miccosukee Tribe, the defendant offered each plaintiff a mere $2,500 to settle all claims and later obtained a complete dismissal of the case. Accordingly, the defendant was entitled to an award of fees under the statute because the plaintiffs recovered less than 75% of the offers—indeed, they recovered nothing at all. The defendant then applied for an award of $900,000 in fees as a sanction under the statute.

Judge Michael Hanzman acknowledged that the defendant was entitled to an award of “something,” but refused to award the defendant anything close to the amount requested. The court pointed out that there are many factors that it must consider in determining the amount of the award, including the merit of the claims, the closeness of the issues, and “all other relevant criteria.”4  In the end, Judge Hanzman found that, but for the technical argument that ultimately carried the day for the defendant (sovereign immunity), the defendants would have lost as a result of their “outrageous” and “despicable” actions. Consequently, the judge awarded the defendant only $10,000 against each plaintiff—a far cry from the $900,000 sought.

Practice pointer: Plaintiffs and defendants who “should” accept an offer of judgment under the statute—based simply on the 25% calculation—but fail to do so will have to pay “something” in the form of an attorneys’ fee sanction. However, if the court takes a dim view of the party that made the offer of judgment, then that “something” could end up being nominal.