Florida’s Fourth DCA Reverses “Prevailing Party” and Section 57.105 Attorneys’ Fee Awards
In Blue Infiniti, LLC v. Wilson (Fla. 4th DCA, July 8, 2015), Florida’s Fourth District Court of Appeal reversed awards of prevailing party attorneys’ fees andattorneys’ fees pursuant to Section 57.105, Florida Statutes.
The plaintiff sued on a promissory note, to foreclose a mortgage, and for civil Racketeer Influenced and Corrupt Organizations (RICO). Three weeks later, the defendants sent a letter to the plaintiff claiming the foreclosure count was premature because the note had not yet matured, and enclosing a check to satisfy the “amount due and owing together with interest.” Despite this payment, litigation proceeded. The defendants filed a motion for sanctions pursuant to Section 57.105 as to the RICO claim. Thereafter, the plaintiff filed a notice of voluntary dismissal with prejudice of all counts. In response, the defendants filed a motion for prevailing party attorneys’ fees.
A hearing was held on both of the fee motions. The trial court granted the prevailing party fee motion, relying upon general case law which holds that a defendant is the prevailing party when a plaintiff voluntarily dismisses a case. The trial court also granted the Section 57.105 motion upon finding that the civil RICO count was “frivolous.”
On appeal, the Fourth District reversed the “prevailing party” award by applying Padow v. Knollwood Club Ass’n, 839 So. 2d 744 (Fla. 4th DCA 2003), which set forth a “recognized exception” to the general rule that a defendant is the prevailing party when a plaintiff voluntarily dismisses a case. In Padow, a homeowners association filed suit against a homeowner for failure to pay maintenance fees. After the suit was filed, the homeowner remitted payment, the association thereafter voluntarily dismissed the case, and the homeowner then filed a motion for attorneys’ fees as the “prevailing party.” Affirming the denial of fees to the homeowner, the Fourth District held:
[A] defendant is not automatically the prevailing party for the purpose of an attorney’s fee statute when a plaintiff takes a voluntary dismissal. Here, [the homeowner] cannot be a ‘prevailing party’ within the meaning of section 718.303(1) because he paid the substantial part of the association’s claim for delinquent assessments prior to the voluntary dismissal.
The Padow court further explained its reasoning:
[T]o find that [the homeowner] was the prevailing party under these circumstances would require a plaintiff to fight every case to judgment, even though it ‘achieved all of the legitimate goals of [its] suit,’ which was not the goal of the legislature in passing the statute [allowing attorneys’ fees].
In Blue Infiniti, the Fourth District thus held:
The exception to the general rule discussed in Padow applies to this case. Two of the three counts that [plaintiff] filed against [defendants] were for the amount that the [defendants] owed on the note, with one of the counts seeking foreclosure. Although the check that the [defendants] sent to [plaintiff], in an attempt to satisfy the debt, was for $1,575.00 less than the amount that [plaintiff] requested in its complaint [the difference being attributable to late fees], [plaintiff] clearly recovered the majority of what it sought by filing suit. Having received most of what it sought, [plaintiff] dismissed all three counts, bringing litigation to an end. The trial court improperly awarded prevailing attorneys’ fees in this case.
Thus, even though the defendants payment was $1,575.00 less than that initially demanded, the voluntary dismissal did not render them the “prevailing parties” for attorneys’ fee purposes because the plaintiff still recovered “the majority” of what it sought by commencing litigation.
The Fourth District also reversed the attorneys’ fee award pursuant to Section 57.105 because the defendants’ attorney was not permitted to testify at an evidentiary hearing and because the trial court did not make detailed and specific findings of bad faith. The case was remanded for the trial court to afford plaintiff and its attorney a full hearing on the Section 57.105 fee motion.
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