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Burton Family P'ship v. Luani Plaza, Inc.

Third District Court of Appeal State of Florida
Jul 3, 2019
No. 3D18-1935 (Fla. Dist. Ct. App. Jul. 3, 2019)

Summary

holding that there was no abuse of discretion shown when the trial court's award was based upon competent evidence and expert testimony

Summary of this case from Gidwani v. Roberts

Opinion

No. 3D18-1935

07-03-2019

The Burton Family Partnership, et al., Appellants, v. Luani Plaza, Inc., etc., Appellee.

Rogers Towers, P.A., and E. Carson Lange and P. Brandon Perkins (Jacksonville), for appellants. Mitchell J. Cook, P.A., and Mitchell J. Cook, for appellee.


Not final until disposition of timely filed motion for rehearing. Lower Tribunal No. 08-320-K An appeal from the Circuit Court for Monroe County, Timothy J. Koenig, Judge. Rogers Towers, P.A., and E. Carson Lange and P. Brandon Perkins (Jacksonville), for appellants. Mitchell J. Cook, P.A., and Mitchell J. Cook, for appellee. Before EMAS, C.J., and HENDON, and MILLER, JJ. MILLER, J.

Appellants, the Burton Family Partnership and Dr. Michael Burton, challenge an amended final judgment awarding attorney's fees and prejudgment interest to appellee, Luani Plaza, Inc. For the reasons set forth below, we affirm in all respects, save for the award of prejudgment interest granted in conjunction with fees incurred litigating the amount of fees.

Dr. Burton owns two units within Luani Plaza, a commercial plaza consisting of businesses and professional offices. "Though not a condominium, the ownership [of units] constitutes 'a common interest community,' as generally described in the Restatement (Third) of Property: Servitudes—'a real-estate development or neighborhood in which individually owned lots or units are burdened by a servitude that imposes an obligation that cannot be avoided by nonuse or withdrawal.'" Luani Plaza, Inc. v. Burton, 149 So. 3d 712, 714 (Fla. 3d DCA 2014) (quoting Restatement (Third) of Prop.: Servitudes § 6.2 (2000)). The community is governed by documents, including the recorded Declaration of Covenants, Conditions, and Restrictions (the "Declaration"), and the Amendment to the By-Laws of Luani Plaza, Inc. (the "By-Laws").

Over a decade ago, Dr. Burton filed a declaratory action seeking a determination that he was within his rights to convert his two commercial units into affordable housing units. Luani Plaza filed a separate action to foreclose a lien arising out of unpaid common interest community assessments. The cases were consolidated, and in 2011, following a bench trial, the trial court entered a final judgment of foreclosure in favor of Luani Plaza, finding fee entitlement under the terms of the Declaration. Dr. Burton appealed the final judgment of foreclosure and this Court affirmed. Burton, 149 So. 3d at 716. It was further determined that the propriety of awarding attorney's fees was "not ripe for review," as no fees had yet been awarded. Id. at 713 n.1.

After the mandate issued, the trial court conducted an evidentiary hearing and entered an amended final judgment awarding attorney's fees. The court awarded fees incurred in the underlying litigation, and, relying upon an expansive fee provision set forth within the By-Laws, further awarded fees incurred in litigating the amount of fees, otherwise known as "fees on fees." See, e.g., Geary v. Butzel Long, P.C., 13 So. 3d 149, 153 (Fla. 4th DCA 2009) (characterizing fees incurred in litigating the amount of fees as "fees on fees"). The court also awarded prejudgment interest on the total merged fee amount back to 2011, the date fee entitlement under the Declaration was initially determined by court order. The instant appeal ensued.

STANDARD OF REVIEW

Entitlement to attorney's fees based on the interpretation of a statute or contract is subject to de novo review. State Farm Fla. Ins. Co. v. Silber, 72 So. 3d 286, 288 (Fla. 4th DCA 2011) (citation omitted). "The standard of review for an award of attorney's fees, whether based on contract or statute, is abuse of discretion." Universal Beverages Holdings, Inc. v. Merkin, 902 So. 2d 288, 290 (Fla. 3d DCA 2005) (citing Thomas v. Perkins, 723 So. 2d 293, 294 (Fla. 3d DCA 1998)). Finally, "[a] trial court's decision concerning a plaintiff's entitlement to prejudgment interest is reviewed de novo." Berloni S.p.A. v. Della Casa, LLC, 972 So. 2d 1007, 1011 (Fla. 4th DCA 2008) (citation omitted).

LEGAL ANALYSIS

Appellants challenge the trial court's award of fees incurred in litigating the amount of fees. Generally, "[i]t is settled that in litigating over attorney'[s] fees, a litigant may claim fees where entitlement is the issue, but may not claim attorney's fees incurred in litigating the amount of attorney's fees." N. Dade Church of God, Inc. v. JM Statewide, Inc., 851 So. 2d 194, 196 (Fla. 3d DCA 2003) (citations omitted). Nonetheless, certain contractual fee provisions are sufficiently broad to warrant an exception. See Waverly at Las Olas Condo. Ass'n, Inc. v. Waverly Las Olas, LLC, 88 So. 3d 386, 389 (Fla. 4th DCA 2012) (holding that the phrase "any litigation" was sufficiently broad to encompass "fees incurred in litigating the amount of fees").

Here, the By-Laws allow for the recovery of fees "for litigating the issue of the amount of fees to be awarded" in both the trial and appellate proceedings. The court was bound to enforce its terms. See I. Kushnir Hotels, Inc. v. Durso, 912 So. 2d 633, 636 (Fla. 4th DCA 2005) (holding that the trial court was bound to enforce prevailing party fee provision, as it constituted a contract); see also Windsor Falls Condo. Ass'n, Inc. v. Davis, 265 So. 3d 709, 711 (Fla. 1st DCA 2019) ("Although we do not reject the argument that a contract can provide for an award of attorney's fees, including fees incurred for litigating the fee amount itself, we hold that the trial court did not err in denying Appellant such an award."). Thus, we find no error in the award of fees on fees.

Appellants further challenge the amount of the fee award. As the trial court did indeed consider competent, expert testimony in conjunction with its finding of reasonableness, we conclude that appellants have failed to demonstrate any error in the amount of fees awarded. See Baker v. Varela, 416 So. 2d 1190, 1193 (Fla. 1st DCA 1982) ("No abuse of discretion has been shown in the trial court's award of attorney's fees based on the evidence as to the number of hours expended in preparation and trial, the skill and expertise demanded and exhibited by plaintiff's counsel, the nature and complexity of the litigation, the results obtained, and the several other factors touched upon at the attorney's fees hearing.").

Finally, appellants urge error in the grant of prejudgment interest for fees incurred in litigating the amount of fees. In Florida, entitlement to prejudgment interest is governed by the "loss theory," as was thoroughly explicated by the Florida Supreme Court in Argonaut Insurance Co. v. May Plumbing Co., 474 So. 2d 212, 214-15 (Fla. 1985):

[S]ince at least before the turn of the century, Florida has adopted the position that prejudgment interest is merely another element of pecuniary damages. While doing so, the Court recognized and rejected an alternative but traditional rationale—that prejudgment interest was to be awarded as a penalty for defendant's "wrongful" act of disputing a claim found to be just and owing. This view is still the rule of some jurisdictions. The distinction between liquidated and unliquidated claims is closely linked to this "penalty theory" of prejudgment interest. To punish a defendant for failure to pay a sum which was not yet certain or which he disputed would be manifest injustice. But where the amount is certain and the defendant refuses to surrender it because of defenses determined to be meritless, the defendant may properly be punished for abuse of his privilege to litigate. Under the "loss theory," however, neither the merit of the defense nor the certainty of the amount of loss affects the award of prejudgment interest. Rather, the loss itself is a wrongful deprivation by the defendant of the plaintiff's property. Plaintiff is to be made whole from the date of the loss once a finder of fact has determined the amount of damages and defendant's liability therefor.
. . .
In short, when a verdict liquidates damages on a plaintiff's out-of-pocket, pecuniary losses, plaintiff is entitled, as a matter of law, to prejudgment interest at the statutory rate from the date of that loss.
(Internal citations omitted) (footnotes omitted). Thus, the loss theory necessarily presupposes that there was a "wrongful deprivation" and that "plaintiff is to be made whole from the date of the loss once liability . . . is set by the fact finder." Boulis v. Fla. Dep't of Transp., 733 So. 2d 959, 961 (Fla. 1999).

In the context of attorney's fees, "prejudgment interest . . . is awardable only if there is an appropriate basis for awarding that interest." Id. at 962. Accordingly, contemporary, binding jurisprudence dictates that interest accrues "from the date the entitlement to attorney fees is fixed through agreement, arbitration award, or court determination." Quality Engineered Installation, Inc. v. Higley S., Inc., 670 So. 2d 929, 930-31 (Fla. 1996) (citations omitted); see also Cox v. Great Am. Ins. Co., 203 So. 3d 204, 206 (Fla. 4th DCA 2016) ("[A]ppellee was also entitled to interest on the attorney's fees award from th[e] date entitlement was determined.") (citation omitted). Alternatively, if proof is adduced that fees were "incurred and paid" by a party "prior to the entry of judgment," prejudgment interest is proper. Boulis, 733 So. 2d at 962 (emphasis in original). The rationale supporting these general principles is that by awarding prejudgment interest as of the date of entitlement or demonstration of loss, "the burden of nonpayment is fairly placed on the party whose obligation to pay attorney fees has been fixed." Higley S., Inc., 670 So. 2d at 931.

Here, prejudgment interest was only awardable once there was an appropriate basis for awarding the interest. In the original final judgment, the trial court solely relied upon the Declaration in determining entitlement to attorney's fees. Thus, the trial court did not, at that time, adjudicate entitlement to fees on fees, as the Declaration did not allow for such recovery. Following remand, the trial court rendered the amended final judgment, finding entitlement to fees incurred litigating the amount of fees was justified under the Bylaws. It is indisputable that entitlement to fees on fees was not "fixed through agreement, arbitration award, or court determination" until the amended final judgment was rendered. Id. at 931. Moreover, as there was no litigation as to the amount of attorney's fees until initial entitlement was determined by entry of the original judgment, it is evident that no fees on fees were earned, incurred, or invoiced until after entry of the final judgment. Finally, the record is devoid of evidence that appellee "incurred and paid" the fees on fees prior to the entry of the amended final judgment. Boulis, 733 So. 2d at 962 (emphasis in original).

Under these circumstances, we conclude that the event that fixed the date of loss for purposes of awarding prejudgment interest, on the fees on fees, was the entry of the amended final judgment. See Mason v. Reiter, 564 So. 2d 142, 147 (Fla. 3d DCA 1990) ("[I]t was the . . . adjudication of paternity which triggered the mother's entitlement to, and the father's liability for payment of her attorney's fees. This event fixed the date of the loss for purposes of awarding prejudgment interest . . .") (citations omitted). Consequently, the court erred in awarding prejudgment interest for fees on fees, calculated from the date of the original judgment.

CONCLUSION

As "an award of prejudgment interest is not an opportunity for the plaintiff to obtain a windfall or for the court to penalize the defendant," here, calculating prejudgment interest from a date earlier than the date entitlement was determined or appellee realized any loss or incurred any liability for the payment of fees on fees was error. Arizona Chem. Co. v. Mohawk Indus., Inc., 197 So. 3d 99, 102 (Fla. 1st DCA 2016) (citations omitted). Accordingly, we affirm the trial court's determination of entitlement and ultimate fee award, but reverse and remand for the recalculation of prejudgment interest consistent with this opinion.

Affirmed in part; reversed in part; and remanded.


Summaries of

Burton Family P'ship v. Luani Plaza, Inc.

Third District Court of Appeal State of Florida
Jul 3, 2019
No. 3D18-1935 (Fla. Dist. Ct. App. Jul. 3, 2019)

holding that there was no abuse of discretion shown when the trial court's award was based upon competent evidence and expert testimony

Summary of this case from Gidwani v. Roberts

noting that "certain contractual fee provisions are sufficiently broad to warrant an exception" to the general rule prohibiting fees for fees; affirming the order on appeal because the fees were awarded pursuant to a provision that expressly authorized the recovery of fees "for litigating the issue of the amount of fees to be awarded"

Summary of this case from Nazarova v. Nayfeld
Case details for

Burton Family P'ship v. Luani Plaza, Inc.

Case Details

Full title:The Burton Family Partnership, et al., Appellants, v. Luani Plaza, Inc.…

Court:Third District Court of Appeal State of Florida

Date published: Jul 3, 2019

Citations

No. 3D18-1935 (Fla. Dist. Ct. App. Jul. 3, 2019)

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