Florida’s Reciprocal Attorney’s Fees Provision: How Creditors Can Be On The Hook For A Defendant’s A
Florida is one of a handful of states that allows, in certain circumstances, for the awarding of a defendant’s attorney’s fees if a court determines that they are the prevailing party in a lawsuit. Section 57.105(7), Fla. Stat. states that:
If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract.
Pursuant to this very statute, a defendant is entitled to their attorney’s fees even if their lawsuit is dismissed without prejudice. See, Nudel v. Flagstar Bank, FSB, 60 So. 3d 1163, 1164-65 (Fla. 4th DCA 2011)(holding that a defendant was entitled to her attorney’s fees after the trial court granted her motion to dismiss a mortgage foreclosure action and dismissed the foreclosure action without prejudice).
Florida case law holds that a claim for attorney’s fees does not have to be pled in a motion to dismiss as a motion to dismiss is not a pleading under Florida law. In Tunison v. Bank of America, N.A., 144 So. 3d 588 (Fla. 2d DCA 2014), the appellate court reversed a trial court’s denial of the defendant’s motion for attorney’s fees after a financial institution dismissed its foreclosure complaint without prejudice against the defendant. Id. at 589. The defendant did not raise his entitlement to attorney’s fees in his motion to dismiss. Id. at 590.
The appellate court concluded that because the defendant’s motion to dismiss was not a pleading under Florida law, the defendant was not required to make a claim for attorney’s fees in his motion to dismiss. Id. 590-591. Had the defendant filed an answer to the complaint, he would have been required to plead his entitlement to attorney’s fees because an answer is a pleading under Florida law. See, e.g., Res Panel Refrigeration Corp. v Bill Collins Refrigeration Services, Inc., 636 So. 2d 569, 570 (Fla. 3d DCA 1994)(holding that defendants who prevailed in lawsuit were not entitled to reciprocal attorneys’ fees after they failed to assert a reciprocal claim for attorneys’ fees in their answer).
Once a case is dismissed and/or a judgment is entered in a defendant’s behalf, the defendant has 30 days to make a claim for attorney’s fees pursuant to Fla. R. Civ. P. 1.525. If the Motion for Attorney’s Fees is filed more than 30 days after the dismissal or judgment, it is untimely. See, e.g., Ulico Cas. Co. v. Roger Kennedy Const., Inc., 821 So. 2d 452 (Fla. 1st DCA 2002)(holding that party which sought attorneys’ fees 47 days after judgment filed untimely claim).
Assuming that a party files a timely Motion for Attorney’s Fees, the trial court must conduct an evidentiary hearing to determine if the attorney’s fees are reasonable. In Bateman v. Service Insurance Company, 836 So. 2d 1109 (Fla. 3d DCA 2003), the appellate court held that “the trial court abused its discretion in disbursing attorney’s fees … without first conducting an evidentiary hearing.” Id. at 1110. In cases where an attorney takes on a case on a contingency basis, courts will determine a reasonable fee based on what is referred to as the lodestar method.
Under the lodestar method, a trial court will first determine the number of hours reasonably expended on the litigation. Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145, 1151 (Fla. 1985). Next, in order to arrive at a reasonable rate, trial courts look at the following factors, which are commonly referred to as the Rowe factors:
(1) The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly.
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
(3) The fee customarily charged in the locality for similar legal services.
(4) The amount involved and the results obtained.
(5) The time limitations imposed by the client or by the circumstances.
(6) The nature and length of the professional relationship with the client.
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.
(8) Whether the fee is fixed or contingent.
Finally, once a trial court determines the reasonable rate, a trial court then determines if a multiplier is necessary.
Trial courts look at the following factors to determine if a multiplier is necessary:
Whether the relevant market requires a contingency fee multiplier to obtain competent counsel;
Whether the attorney was able to mitigate the risk of nonpayment in any way; and
Whether any of the factors set forth in Rowe are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.
Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990).
Once a trial court determines that a multiplier is necessary, the question becomes how much of a multiplier should be applied. According to the Florida Supreme Court, when the trial court determines the success was more likely than not at the outset, the multiplier should be 1.5; when the likelihood of success was approximately even at the outset, the multiplier should be 2; and, when the success was unlikely at the time the case was initiated, the multiplier should be in the range of 2.5 and 3.
Miami Children’s Hosp. v. Tamayo, 529 So. 2d 667, 668 (Fla. 1988)(citing Rowe, 472 So. 2d at 1151).
In TRG Columbus Development Venture, Ltd. v. Sifontes, the the trial court heard testimony at the evidentiary hearing that there were very few attorneys willing to take on a similar lawsuit on a contingency basis, determined that a reasonable hourly rate was $400.00 per hour, for a lodestar fee of $118,960, applied a multiplier of 2 to the matter, and awarded $237,920 in attorney’s fees. 163 So. 3d 548, 550-553 (Fla. 4th DCA 2015). The appellate court affirmed the trial court’s award of $237,920.00 in attorney’s fees. Id. at 550.
Creditors must be cognizant of the risks associated with filing lawsuits in Florida.
Gill Law Firm focuses its practice on representing creditors in litigation throughout the states of Florida and Georgia. Contact us at firstname.lastname@example.org (Wayne Gill) or by phone at (561) 454-0301.
#creditors #creditorsrights #debtcollection #collections #attorneysfees #Florida #MichaelNixon #WayneGill #Litigation #receivables #judgmentenforcement #contract #loanagreement #smallbusiness #accountspayable #contingentfee #mitigation #GillLawFirm #accountsreceivable