Attorney’s Fees And Multipliers In Florida

The purpose of this article is to provide a general overview of Florida law on attorney’s fees and attorney’s fees multipliers.  The breadth of this topic is such that a comprehensive review of all aspects of attorney’s fees is not possible in this article.  Multi-volume treatises have been written on this subject.  That being said, some relevant areas of the law in which attorney’s fees are available are discussed below.

Learn about what attorney's fees and attorney's fees multipliers are available under the law in Florida

When are Attorney’s Fees Available?

Simply put, attorney’s fees are not available in Florida unless expressly allowed by contract or statute.  Price v. Tyler, 890 So.2d 246, 250 (Fla. 2004) quoting Bidon v. Dept. of Professional Regulation, 596 So.2d 450, 452 (Fla. 1992) (“Attorney’s fees incurred while prosecuting or defending a claim are not recoverable in the absence of a statute or contractual agreement authorizing their recovery.”)  Notice, the holding only relates to attorney’s fees incurred while prosecuting a claim.  The focus of this article is upon attorney’s fees incurred while prosecuting a claim.  However, in some circumstances attorney’s fees incurred outside of litigation are actual compensatory damages, which are recoverable in later litigation if pled as special damages.

By way of example only, assume corporate counsel and outside counsel of a purchasing entity had spent thousands of hours on due diligence and drafting of acquisition documents only for the Chief Financial Officer of the purchaser to receive an anonymous text message three days before closing a $25 Million deal that said “[Seller] hid $1 Million do you want to see the checks?”  Imagine then a follow up text a day later that said “Ask [Mr. Brown] for check numbers [1001], [1002] and [1003].”  In this scenario the attorney’s fees and accounting fees incurred in due diligence may be the only damages incurred by the seller.

The above example is provided simply as a reminder that the general rule prohibiting recovery of attorney’s fees is not as inflexible as one may think.  Often times, a tortfeasor’s actions trigger the necessary expenditure of non-litigation related attorney’s fees.  Although this won’t be discussed in any more detail in this article, those non-litigation related attorney’s fees may be recoverable as special damages.

Contractual Attorney’s Fees: Prevailing Party

Frequently, a contract provides that the prevailing party in future litigation is entitled to attorney’s fees.  As one can imagine, the express language in the contract is important and often the subject of litigation.  Some general issues regarding contractual attorney’s fees are discussed below.

What if the Contract Only Provides Attorney’s Fees to One Side?

Sometimes a contractual attorney’s fees provision are one-way, meaning the provision only allows attorney’s fees to one side if a dispute results in litigation.  Often a one-way attorney’s fees clause is inserted at the bottom of invoices for services or materials and litigated when the purchaser fails to make payment.  One-way attorney’s fees provisions are interpreted as allowing the prevailing party, whichever party that may be, to recover their attorney’s fees.  Fla. Stat. 57.150(7) (“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….”)

What if the Result of the Litigation is a Tie or the Prevailing Party is Difficult to Determine?

For contractual attorney’s fees, an award of attorney’s fees is generally considered mandatory, meaning that the Court must determine a winner and a loser and the Court must award the prevailing party a reasonable attorney’s fee.  Determining the prevailing party can sometimes be difficult.  For example, if a plaintiff claims $100,000 in damages but only receives $47,000 in the damage award, who was the prevailing party?  The plaintiff obtained a significant award, but the defendant was successful in defending the majority of the dollars claimed.

To determine the prevailing party the Court will apply the significant issues test, which was first adopted as law in Florida by our Supreme Court in 1992.  Moritz v. Hoyt Enterprises, Inc., 604 So.2d 807, 809-810 (Fla. 1992) quoting Hensley v. Eckerhart, 461 U.S. 424 (1983) (“the [significant issues] test is whether the party ‘succeeded on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.”).  As is sometimes the case, the Florida Supreme Court addressed Moritz again just a year after the holding was issued.  Although this re-evaluation of Moritz involved a statutory construction lien, the Florida Supreme Court noted that reliance on Mortiz was appropriate.  The Court noted that a long line of pre-Moritz cases in statutory construction lien law found that a plaintiff would be entitled to an award of attorney’s fees if it obtained a net judgment.  But, after Moritz, the Court held that a reviewing court should not be bound by the inflexibility of the net judgment rule and should have discretion to determine who prevailed on the significant issues.  Prosperi v. Code, Inc., 626 So.2d 1360, 1362 (Fla. 1993) (“We hold that in considering whether to apply the net judgment rule, the trial judge must have the discretion to consider the equities and determine which party has in fact prevailed on the significant issues.”)

There is a plethora of case law reasoning that in a breach of contract action there must be a prevailing party.  Newton v. Tenney, 122 So.3d 390, 392 (Fla. 4th DCA 2013) (“Our court has broadly stated that in a breach of contract action, one party must prevail.  Although some districts recognize that cases can sometimes effectively be ties, such that the parties can both be viewed as winners or losers, we have maintained that in a breach of contract action, one party must prevail.” (citations omitted)); see also, Green Companies, Inc. v. Kendall Racquetball Investment, Ltd., 658 So.2d 1119 (Fla. 3d DCA 1995) (Attorney’s fees to plaintiff were appropriate when plaintiff was determined to be a prevailing party when jury found it prevailed on a breach of contract claim but found there were no damages.); Animal Wrappers and Doggie Wrappers, Inc. v. Courtyard Distribution Center, Inc., 73 So.3d 354 (Fla. 4th DCA 2011).  Despite the plethora of opinions holding that in a breach of contract action there must be a prevailing party, there are some cases explaining that the Court has discretion to find neither party prevailed in litigation.  KCIN, Inc. v. Canpro Investments, Ltd., 675 So.2d 222 (Fla. 2d DCA 1996) (“A rule which requires an award of prevailing party attorney’s fees in all cases may result in an unjust reward to a party whose conduct caused the failure of the contract….Therefore, we hold that an attorney’s fee award is not required each time there is litigation involving a contract providing for prevailing party fees.  To the extent that the decisions in Lucit and Green Companies require an award of prevailing party attorney’s fees in every such case, we certify conflict to the Florida Supreme Court.”).

One Florida Supreme Court case has applied the significant issues test to find that it is possible that neither party prevailed in the litigation.  Trytek v. Gale Industries, Inc., 3 So.3d 1194 (Fla. 2009) (After substantial discussion of Moritz and Prosperi, the Court held that “[c]ertainly the possibility that neither party is a prevailing party is consistent with an application of the significant issues test of Moritz and Prosperi” and remanded with instructions that the trial court could find neither party was the prevailing party.).  However, Trytek was a statutory lien case and not a breach of contract case.  Certainly, Prosperi (a lien case) found the significant issues analysis in Moritz (a breach of contract case) persuasive.  It may be possible that in the future the Florida Supreme Court addresses whether in contract cases there can be a situation in which neither party prevails.  However, at this time the majority rule is that there must be a prevailing party in a breach of contract action.

Can the Significant Issues Test be Modified by Contract?

 At least one appellate court has held it cannot.  Port-A-Weld, Inc. v. Padula & Wadsworth Construction, Inc., 984 So.2d 564 (Fla. 4th DCA 2008).  In Port-A-Weld the contract stated, in relevant part, “For purposes of this Agreement, a party shall not be considered as a ‘prevailing party’ if its recovery shall be less than 75% of its claim amount.”  In finding that Port-A-Weld was at most a 60% winner, the Court held that “failing to recognize Port-A-Weld’s entitlement to fees and costs as the prevailing party violates the mutuality principle of 57.105(7) and pre-existing public policy as articulated in P&C Thompson Bros. [v. Rowe, 433 So.2d 1388, 1389 (Fla. 5th DCA 1983)].” Id. at 570.

What if the Parties Arbitrate Instead of Litigate?

Attorney’s fees expended in litigation or dispute resolution are contrary to the American Rule and as such contractual language awarding attorney’s fees are strictly construed. Sholkoff v. Boca Raton Community Hospice, Inc., 693 So.2d 1114 1117 (Fla. 4th DCA 1997) (citing Ohio Realty Investment Corp. v. Southern Bank, 300 So.2d 679 (Fla. 1974)).  In at least one case, a contract that entitled the prevailing party in a “legal action” to attorney’s fees was interpreted to include arbitration.  B&H Construction & Supply Co., Inc. v. District Bd. of Trustees of Tallhassee Community College, 542 So.2d 382, 390 (Fla. 1st DCA 1989).  A prevailing party attorney’s fees clause in a contract should state that it applies to arbitration as well as litigation but Courts have interpreted broad terms such as “legal action” to include both litigation and arbitration.

Selected Statutes Authorizing Attorney’s Fees

Generally, when a statute allows attorney’s fees to a party a Court will apply the significant issues test or something resembling the significant issues test to determine which party is entitled to attorney’s fees.  However, not all statutes are created, or drafted, equal.  Sometimes the analysis departs from the significant issues framework.  The statutes authorizing attorney’s fees are too numerous to discuss them all so a few statutes that commonly impact businesses are discussed below.

Attorney’s Fees for Unpaid Wages

In Florida, the prevailing party in a claim for unpaid wages is entitled to their attorney’s fees.  Specifically, the statute states as follows:

Fla. Stat. 448.08: Attorney’s fees for successful litigants in actions for unpaid wages

The Court may award to the prevailing party in an action for unpaid wages costs of the action and a reasonable attorney’s fee.

The term “wages” has been broadly construed to include commissions and other benefits.  Baker v. Storfer, 51 So.3d 652 (Fla. 4th DCA 2011) (Commissions are wages); BDO Seidman, LLP v. Bee, 24 So.3d 1278 (Fla. 3d DCA 2010) (Partnership distributions and bonuses are wages); Speer v. Mason, 769 So.2d 1102 (Fla. 4th DCA 2000) (Vested profit sharing plan contributions are wages). However, attorney’s fees are not mandatory when an employee is successful in a wage claim because the statute contains the permissive word “may” and not the mandatory word “shall.”  Ruffa v. Saftpay, Inc., 163 So.3d 711 (Fla. 3d DCA 2015).  This statute is often litigated in federal court as this type of claim is often paired with a Fair Labor Standards Act claim, which is brought under federal law.  Alfonso v. Care First Medical Center, Inc., 2015 WL 10000983 (S.D. Fla. 2015) (Independent Contractor is not entitled to attorney’s fees pursuant to Fla. Stat. 448.08).

The Florida Deceptive and Unfair Trade Practices Act

The Florida Deceptive and Unfair Trade Practices Act (hereinafter “FDUTPA”) has become a favorite for plaintiff’s counsel, particularly in litigating consumer related claims.  Essentially, FDUTPA creates a cause of action when there is a business practice that is “likely to mislead” consumers or the public, Davis v. Powertel, Inc., 776 So.2d 971, 974 (Fla. 1st DCA 2000) or “is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers”. Samuels v. King Motor Co. of Boca Raton, 782 So.2d 489, 499 (Fla. 4th DCA 2001) (citations omitted).  For the purpose of this article, further discussion of what constitutes a violation of FDUTPA is not warranted.  It is important to understand that this type of claim can often be brought as a class action claim.  Furthermore, it is a favorite of plaintiff’s counsel because of the broad definition of deceptive or unfair behavior and because of the attorney’s fees provision in the statute.  The statute authorizing attorney’s fees for violation of FDUTPA states, in relevant part:

501.2105 Attorney’s fees.

(1) In any civil litigation resulting from an act or practice involving a violation of this part, except as provided in subsection

(5), the prevailing party, after judgment in the trial court and exhaustion of all appeals, if any, may receive his or her reasonable attorney’s fees and costs from the nonprevailing party.

                        …

(5) In any civil litigation initiated by the enforcing authority, the court may award to the prevailing party reasonable attorney’s fees and costs if the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the losing party or if the court finds bad faith on the part of the losing party.

The FDUTPA attorney’s fees statute is permissive and not mandatory.  It has been held that the following non-exclusive factors are to be considered when determining whether to award attorney’s fees in to a prevailing party in a FDUTPA case:

  1. The scope and history of the litigation;
  2. The ability of the opposing party to satisfy an award of fees;
  3. Whether an award of fees against the opposing party would deter others from acting in similar circumstances;
  4. The merits of the respective positions—including the degree of the opposing party’s culpability or bad faith;
  5. Whether the claim brought was not in subjective bad faith but frivolous, unreasonable, groundless;
  6. Whether the defense raised a defense mainly to frustrate or stall; and
  7. Whether the claim brought was to resolve a significant legal question under FDUTPA law.

Humane Society of Broward County, Inc. v. Florida Humane Society, 951 So.2d 966 (Fla. 4th DCA 2007).

The factors stated in Humane Society have been utilized as a basis to deny attorney’s fees to a plaintiff for successfully defending a FDUTPA action.  Colomar v. Mercy Hospital, Inc., 335 Fed. Appx. 29 (11th Cir. 2009) (Denied attorney’s fees to the hospital defendant after weighing the Humane Society factors and after giving great deference to the fact that the plaintiffs did not bring the claim in bad faith.)  In fact, the factors set forth in Humane Society seem to benefit consumer plaintiffs over corporate defendants.  Consideration of lack of bad faith and the ability to pay make it easier for a Court to exercise its discretion to not award attorney’s fees against a plaintiff.

Proposal for Settlement

Section 768.79, Florida Statutes, and Rule 1.442 of the Florida Rules of Civil Procedure contain Florida’s proposal for settlement statute.  The purpose of the statute is to sanction and allow for attorney’s fees when an offer for settlement is unreasonably denied.  The case law surrounding proposals for settlement is perplexing, complicated, and a hot bed for litigation.  Statutes regarding attorney’s fees are strictly construed because they are contrary to common law.  Sarkis v. Allstate Insurance Co., 863 So.2d 210 (Fla. 2003).  For that reason, the law on this topic is always changing and new cases are constantly invalidating proposals for settlements due to some new argument that the offer did not comply with the draconian requirements of Fla. Stat. 768.79 and Fla. R. Civ. P. 1.442.

Essentially, the statute is intended to allow a plaintiff to recover attorney’s fees if it made an offer of judgment, which was declined by defendant, and the plaintiff obtained a judgment that is at least 25 percent greater than the offer.  Conversely, the statute is intended to allow a defendant to recover attorney’s fees if it made an offer of judgment, which was declined by the plaintiff, and the plaintiff’s judgment is at least 25 percent less than the offer.  It is important to realize that even when there is no contractual or statutory right to attorney’s fees, either the plaintiff or defendant can utilize a proposal for settlement to trigger a claim for attorney’s fees.  So even contracts that never intended to allow a prevailing party to obtain attorney’s fees can result in fee switching if a proposal for settlement is offered and rejected.

Attorney’s Fees Multipliers

In a contingency case there are certain circumstances in which an attorney’s fees award can be increased through the use of a multiplier from 1.5 to 2.5. [1]  Recent cases have limited the applicability of the use of a multiplier in Florida.  However, careful navigation of current case law gives some guidance to the types of cases in which a multiplier is appropriate and in which a multiplier is not appropriate.

Quanstrom and Rowe

In tort or contract cases taken on a contingency, the factors to analyze when determining the appropriateness of a multiplier are:

(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel; (2) whether the attorney was able to mitigate the risk of nonpayment in any way; and (3) 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 Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990)

The factors enumerated in Rowe are:

(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.

Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985).

These elements form the backbone of the early analysis conducted when determining the appropriateness of a fee multiplier.  However, recent cases have limited the application of a fee multiplier in certain types of cases.

Fee Multipliers Not Appropriate for Fees Awarded by Offer of Judgment Statute

The biggest limitation in the application of fee multipliers in contingency cases is when attorney’s fees are authorized by the Offer of Judgment Statute, Florida Statutes, §768.79.  Sarkis v. Allstate Ins. Co., 863 So.2d 210 (Fla. 2003).  The rationale in Sarkis is essentially that the purpose of a fee multiplier is to encourage litigation while the purpose of the Offer of Judgment Statute is to encourage settlement.  Essentially, a fee multiplier is supposed to encourage an attorney to take a case when nobody else would.  However, the Sarkis court reasoned that the offer of Judgment statute was penal in nature and that the penal nature of the statute was supposed to encourage settlement.  Pursuant to Sarkis, without Florida Statute 768.79 or Fla. R. Civ. P. 1.442 expressly authorizing a fee multiplier there is no basis for a fee multiplier when the attorney’s fees were awarded pursuant to the Offer of Judgment Statute.

The Difficulty in Obtaining Competent Counsel

Many recent cases focus on the ability to obtain competent counsel without the possibility of a multiplier.  In Garrison, the Court held that the fact that an insured was able to retain ten (10) attorneys (the first nine of which were unable to obtain resolution and apparently unwilling to litigate the dispute) was a fact that negated the insured’s claim that it could not retain competent counsel without a fee multiplier.  Garrison Property and Cas. Ins., Co. v. Rohrbacher, 204 So.3d 154 (Fla. 5th DCA 2016); see also Florida Pennisula Ins. Co. v. Wagner, 196 So.3d 419 (Fla. 2d DCA 2016) (In reversing, “[t]here was no showing or finding that without the prospect for a multiplier to an otherwise reasonable fee award, the Wagners would have had difficulty finding competent counsel to represent them in this insurance coverage dispute.”)  However, the Florida Supreme Court recently clarified that fee multipliers can be appropriate even when the defendant is an insurer and the nature of the claim is a coverage dispute.  Joyce v. Federated National Insurance Co., 228 So.3d 1122, 1135 (Fla. 2017) (“We reaffirm our adherence to the use of contingency fee multipliers in this State and make clear that there is not a ‘rare’ and ‘exceptional’ circumstances requirement before a contingency fee multiplier can be applied.”)

When a Multiplier is Appropriate

So when is a multiplier appropriate?  Most cases taken on a contingency are done so because there is a high likelihood of success and collection, but the client simply doesn’t have the financial ability to pay legal fees.  Most contingency cases would not support a multiplier.  Likewise, the current trend is that insureds in coverage disputes with their insurers are not entitled to a multiplier.  However, at least some recent cases have affirmed a multiplier in an insurance coverage dispute.  Citizens Property Insurance Corp. v. Pulloquinga, 183 So.3d 1134 (Fla. 3d DCA 2015) (“With respect to the other factors to be considered in applying a multiplier set forth in Quanstrum, the trial court also concluded that Pulloquinga’s counsel was unable to mitigate against her non-payment of fees because Pulloquinga had no other means by which to pay her counsel and that the time involved by counsel was substantial, the results were the maximum sought and the fee arrangement was entirely contingent.  We conclude that Pulloquinga provided sufficient competent evidence to support those conclusions as well and therefore affirm the application of the 1.5 multiplier.”)

Conclusion

The gravamen of the cases reversing awards of fee multipliers reverse the award because there is evidence that a substantial number of attorneys are willing to take the case on a contingency.  This has become the most important factor in determining whether a multiplier is appropriate.  At least one court has held that a fee multiplier is appropriate when there is a large number of attorneys willing to take the case on contingency and settle for a small percentage of the amount due, the lack of willingness of attorneys to take the case to trial supports an award of a fee multiplier.  TRG Columbus Dev. Venture, Ltd. v. Sifontes, 163 So.3d 548 (Fla. 3d DCA 2015).  As such, when seeking a multiplier, the requesting party should inform the court of all the reasons why few attorneys would take this case to trial.  The reasons could range from factual problems with the case, legal problems with the case or simply potential challenges with collection.


[1] Some argue this is 1.5 to 3.0 as a 3.0 multiplier is expressly authorized in Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985).  However, the maximum multiplier seems to be limited to 2.5 in Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990).


Authors:
Charlie B. Jimerson, Esq.
D. Brad Hughes, Esq.

 

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