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How Do I Get My Attorney’s Fees in Litigation After a Settlement is Reached?
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How Do I Get My Attorney’s Fees in Litigation After a Settlement is Reached?

November 16, 2021 Community Association Industry Legal Blog

Reading Time: 5 minutes


When lawsuits are filed, sometimes the prevailing party is entitled to attorney’s fees.  As a general rule in Florida, those attorney’s fees may only be awarded if a statute or contract allows for them. See State Farm Fire & Cas. CO. v. Palma, 629 So.2d 830, 832 (Fla. 1993).

For example, in lawsuits involving a homeowners’ association and one of its members, Florida Statute § 720.305 provides that attorney’s fees are awarded to the “prevailing party.” However, determining the “prevailing party” is not always clear, particularly when a pre-trial settlement is reached. A recent decision in Isola Bella Homeowners Ass’n, Inc. v. Clement addresses this issue and provides guidance on determining the “prevailing party” for purposes of awarding attorney’s fees after a settlement agreement is reached.

The guidance in Isola Bella Homeowners Ass’n, Inc.is not limited to lawsuits between a homeowners’ association and its members.  It can also be applied to settlement agreements where the “prevailing party” for purposes of attorney’s fees is still at issue.

You Avoided Court, But Who Pays Attorney's Fees When There's No Declared Winner?

Determining the Prevailing Party for Purposes of Attorney’s Fees

When determining the “prevailing party” for purposes of entitlement to attorney’s fees, Florida courts analyze the claims and determine the significant issues in the litigation. The party prevailing on these significant issues, for purposes of attorney’s fees, is the “prevailing party.” Mortiz v. Hoyt Enters., Inc., 604 So.2d 807, 810 (Fla. 1992). When a settlement agreement is reached, this determination is not always clear cut, as the defendant is often assumed by the court to be the “prevailing party” when a plaintiff voluntary dismisses an action. See Alhambra Homeowners Ass’n v. Asad, 943 So.2d 316, 318 (Fla. 2d DCA 2013).

When a settlement is reached, Florida courts “look to the substance of litigation outcomes – not just procedural maneuvers – in determining the issue of which party has prevailed in an action.” Tubbs v. Mechanik Nuccio Hearne & Wester, P.A., 125 So.3d 1034, 1041 (Fla. 2d DCA 2013) (quoting Padow v. Knollwood Club Ass’n, 839 So.2d 744 (Fla. 4th DCA 2003). The challenge of Florida courts in making a prevailing party determination demonstrates the need to ensure settlement agreements are drafted clearly.  Those agreements should specify the party entitled to attorney’s fees or make a clear statement as to the “prevailing party,” or that neither party is a “prevailing party” and, as such, neither party is entitled to attorney’s fees.

Isola Bella Homeowners Ass’n, Inc., v. Clement

In Isola Bella Homeowners Ass’n, Inc., the Clements (“Homeowners”) installed a fence on their property, which was approved by the Association’s Architectural Review Committee, with an acknowledgement from the Homeowners that the fence would not encroach upon any easement. However, portions of that fence encroached on an easement, and the Homeowners refused to remove or relocate it, giving rise to the lawsuit. Isola Bella Homeowners Ass’n. at *1.

Prior to trial, the parties reached a “partial settlement” in which the Homeowners agreed to remove the offending portions of the fence, while leaving the issue of entitlement to attorney’s fees undecided. Id. The parties then filed a joint stipulation for dismissal and asked the court to adopt the settlement agreement, dismiss the action and retain jurisdiction to enforce the agreement to determine the Association’s entitlement to attorney’s fees. Id. The trial court found that although the Association obtained the relief it requested in the lawsuit, it did not “prevail” because the Homeowners did not admit any wrongdoing in the settlement agreement. Id.

On appeal, the trial court’s decision was reversed, and the Association was awarded “prevailing party” attorney’s fees. In reaching this conclusion, the appellate court noted that the Association did not compromise in the effort to settle the dispute. Instead, the court found that through the settlement agreement, “the Association uncompromisingly obtained the only relief sought on the only issue raised in the litigation…. This was sufficient for the Association to be considered the prevailing party.” Id at *2 (emphasis added).

In sum, where a settlement agreement is reached, and a party obtains the relief sought in the initial complaint, Florida courts are likely to find that party is entitled to “prevailing party” attorney’s fees. Of course, if the settlement agreement precludes an award of attorney’s fees to either party, the holding in Isola Bella. Homeowners Ass’n, Inc. will not affect the terms of the parties’ settlement agreement.

Conclusion

Isola Bella Homeowners Ass’n, Inc. demonstrates the importance and need for well-drafted settlement agreements, especially in cases where there are multiple issues addressed by the settlement agreement. It is imperative to the recovery of “prevailing party” attorney’s fees that a settlement agreement clearly addresses the issue of attorney’s fees. This is especially true for actions brought under § 720.305 Fla. Stat., where settlements between an association and a member are often reached and entitlement to attorney’s fees is commonly disputed.


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