Sunday, November 29, 2020

Attorney Fees Not Always Awarded

Law Matters


 

Clients are often disappointed to find out that an attorney’s fees are not part of every judgment. Most think it is only fair that because they have been wronged, one way or another, the wrongdoer should pay all of their expenses. That just doesn’t happen often. 

Florida follows the American rule. Under the American rule, attorney fees are generally not recoverable in litigation unless provided by contract or a statute. Florida’s legislature has provided for attorney’s fees in many statutes, often with the intent of leveling the playing field so that someone without money will be able to hire an attorney. The thought in those cases is that an attorney will sign on if the attorney believes the client has a good case and attorney’s fees can be recovered from the other side, even if the client will not be able to pay. 

The legislature has provided for the recovery of attorney’s fees in landlord and tenant disputes. In those cases, it is the tenant who is at a financial disadvantage and sometimes is taken advantage of by the wealthier and more experienced landlord. Florida’s Condominium Act provides for the recovery of attorney’s fees by the prevailing party in actions to enforce compliance with the Condominium Act, the declaration of condominiumthe articles of incorporation or bylaws of a condominium association. The association’s coffers are usually quite substantial as the association uses money from all owners. A unit owner has to use his or her own funds for attorney’s fees. Lawsuits for unpaid wages also include recovery of attorney’s fees. 

Florida has other statutes providing for an award of attorney’s fees, but almost all provide the award is to the prevailing party in a lawsuit or administrative action. That means the winner gets fees and the loser pays both sides. Those statutes can encourage litigation by promoting the belief that the winner will get his or her attorney’s fees paid as well as anything else awarded by the court. That also encourages many to discount the possibility of losing. The statutes do not mention that courts rarely award 100% of a party’s fees and costs even if the party wins the lawsuit. 

The statutes not only attempt to balance the playing field, but also effect some element of fairness. The winner in lawsuits under the statutes should not lose because of attorney’s fees. As applied by the courts, the statutes do not fully reach that goal. 

Attorney fee awards are generally governed by what is known as the lodestar principle. That principle provides for the attorney’s fee awards based upon the judge’s determination of a reasonable number of hours and a reasonable hourly rate for the attorney in the case. Rarely does the prevailing party get all of his or her attorney’s fees paid by the loser. Attorney’s fees hearings are contested and the opposing party argues that the claimed time was excessive, or bills for non-lawyer tasks. Those arguments usually reduce the fees awarded to the prevailing party. Recovery is further reduced by the general rule that fees are not recoverable determining the number of fees to be awarded. Even though the prevailing party has to pay his or her attorney to argue the amount of fees to be awarded, that cost is not recoverable. 

While statutes that provide for prevailing party attorney’s fees can encourage litigation, there are also attorney fee statutes designed to discourage lawsuits or to encourage early resolution. Section 57.105 Florida Statutes is a good example. Part of that statute is intended to discourage frivolous lawsuits. It provides that upon the court’s initiative or motion of any party, the court is to award a reasonable attorney’s fee to be paid equally by the losing party and the losing party’s attorney when the court finds that a claim presented to the court was not supported by material facts or would not be supported by law. If a party wishes to pursue fees under the statute, the party must first give the other side 21 days’ notice that it will seek fees as sanctions if the challenged matter is not withdrawn or corrected. 

Section 57.105 Florida Statutes also provides that if a contract contains a provision allowing attorney’s fees to a party taking action to enforce the contract, the provision is made bilateral. If either party wins, that party will be entitled to attorney’s fees from the loser. That portion of the statute is clearly intended to balance the playing field between those who prepare contracts and those that sign a contract prepared by the other side, such as credit card companies, landlords and others in a strong bargaining position. 

Section 768.79 Florida Statutes uses the potential of an attorney fee award to encourage settlement. That statute allows either party to make a formal proposal for settlement. If the offer is not accepted by the other party within 30 days, and the offering party does at least 25% better at trial, the offering party is entitled to attorney’s fees from the date the offer was made. To give everyone a chance to investigate claims in a lawsuit, court rules prohibit a proposal to a defendant earlier than 90 days from the date the defendant is served with summons and complaint, and no proposal may be made by the defendant to the plaintiff earlier than 90 days after the lawsuit is filed. The deadline for serving a proposal is 45 days before the date set for trial or the first day of the docket on which the case is set for trial, whichever is earlier, to avoid using it as an ambush. 

Even when a statute provides for recovery of attorney’s fees, recovery is generally limited to the prevailing party. In cases involving multiple issues and claims, each party may win on some. That makes it difficult for the court to determine who won on the most significant issue or issues in the case. Courts will also limit the award to fees incurred in connection with the issues wonwhich may be far less than all paid by the winner. 

Attorney fees are not the only expense of a lawsuit and court rules do not provide for recovery of all expenses. That should be a reason to carefully consider the initiation of litigation. The possibility of losing should also be considered and should be considered realistically. When someone is sued, they can sue back in what is known as a counterclaim. That can quickly turn the tables in an unexpected fashion. Difficulty in collecting a judgment should also be a factor, as even if the court awards attorney’s fees to the prevailing party, it still has to collect them from the loser. 

Statutes providing for attorney’s fees to the prevailing party may help level the playing field and can help the prevailing party avoid losing in victory. They are not a panacea and should not be the only factor considered before filing suit.  

William G. Morris is the principal of William G. Morris, P.A. William G. Morris and his firm have represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, associations and real estate. The information in this column is general in nature and not intended as legal advice. 

 


 

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