MIAMI BUSINESS LITIGATION: PREVAILING PARTY RECOVERY OF LEGAL FEES IN BREACH OF CONTRACT CLAIMS

Courts in Florida and most other jurisdictions award attorney’s fees to prevailing parties based on the American Rule. MV Senior Mgmt., LLC v. Redus Florida Hous., LLC, 319 So. 3d 66, 67 (Fla. 1st DCA 2020) (“Florida courts follow the ‘American rule.’”). This rule limits fee awards to instances where attorney’s “fees are expressly provided for by statute, rule, or contract.” Bane v. Bane, 775 So. 2d 938 (Fla. 2000). Therefore, a statute, rule, or contract must contain a provision allowing the prevailing party to recover attorney’s fees or he/she will be precluded from recovering such fees. Friedman v. Friedman, 144 So. 2d 866 (Fla. 3d DCA 1962) (holding that in the absence of statute or contract, a former spouse was not entitled to attorney’s fees even though the opposing party’s motion was frivolous). Peter Mavrick a Miami business litigation attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Parties suing under a contract are often entitled to recover attorney’s fees assuming they prevail because contracts frequently contain a prevailing party attorney’s fee provision. However, some contractual attorney’s fee provisions are unilateral. These provisions allow one contracting party to recover attorney’s fees, but not the other. For example, a contract may state that a landlord can recover fees from the tenant in an action brought to enforce the lease. This type of provision prevents the tenant from recovering attorney’s fees against the landlord even when the tenant prevails. Florida statutory law corrects the imbalance by transforming unilateral attorney’s fee provisions into bilateral provisions regardless of the contract language. See Fla. Stat. § 57.105 (“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.”); Mediplex Constr. of Fla., Inc. v. Schaub, 856 So. 2d 13 (Fla. 4th DCA 2003) (“[T]he purpose behind section 57.105(7) is to provide mutuality of attorney’s fees as a remedy in contract cases.”); Florida Hurricane Prot. & Awning, Inc. v. Pastina, 43 So. 3d 893 (Fla. 4th DCA 2010) (“The statute renders bilateral a unilateral contractual clause for prevailing party attorney’s fees”).

Florida’s Supreme Court used the same statutory scheme in recent years to expand attorney’s fee liability to non-contract-based claims if a relevant contract contains an attorney’s fee provision. In Ham v. Portfolio Recovery Associates, LLC, 308 So. 3d 942 (Fla. 2020), Florida’s Supreme Court determined that a prevailing party in an action for common law account stated could recover his attorney’s fees because a contract (which was not sued upon) permitted the recovery of attorney’s fees for “any action to enforce the contract.” The Supreme Court premised its decision on the plain wording of Fla. Stat. § 57.105, which states that “[i]f 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.” Id. (citing Fla. Stat. § 57.105) (emphasis in original).

The results of Ham are far reaching and may positively or negatively impact litigants depending on whether they prevail in the lawsuit, seek to recover attorney’s fees, or oppose fee recovery. Either way, litigants should be aware that the ability to recover attorney’s fees or contest the opposing side’s attorney’s fee claim is not limited to (1) a breach of contract claim or (2) the contractual language of the attorney’s fee provision. As long as a contract exists between the parties, and that contract includes a prevailing party attorney’s fee provision, attorney’s fees are an issue in dispute that must be considered when making strategic decisions in the lawsuit.

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.