MIAMI BUSINESS LITIGATION: PREVAILING IN LAWSUIT AND RECOVERING ATTORNEYS’ FEES

Parties to a lawsuit are generally responsible for paying their own attorney’s fees regardless of the lawsuit’s outcome. This is known as the “American Rule.” However, exceptions to the American Rule exist when the lawsuit arises from a breach of contract that contains an attorney’s fee provision or the violation of a statute that contains an attorney’s fees-shifting provision. MV Senior Management, LLC v. Redus Florida Housing, LLC, 319 So. 3d 66 (Fla. 1st DCA 2020). These contracts and statutes require the non-prevailing party in the litigation to pay the reasonable attorney’s fees of the prevailing party. But determining who prevailed in complex lawsuits with multiple parties, claims, crossclaims, and counterclaims can be difficult. The Miami business litigation attorneys of the Mavrick Law Firm represent 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.

The leading case in Florida for determining who is the prevailing party in a breach of contract action is Moritz v. Hoyt Enterprises, Inc., 604 So. 2d 807 (Fla. 1992). In Moritz, the Supreme Court of Florida held that the prevailing party in litigation is the party that prevails on the “significant issues” in the case. The purchasers of a home paid an initial down payment to a vendor to purchase the home. The purchasers then attempted to repudiate the contract and subsequently sued for breach of contract to recover their down payment. The vendor counterclaimed for breach of contract. The trial court found that the purchasers breached the contract and the vendor did not. However, the trial court also ordered the vendor to return the difference between the purchaser’s down payment and the vendor’s damages to the purchaser. The Florida Supreme Court found that the significant issue in the litigation was the breach of contract issue. Therefore, because the vendor prevailed on that issue, the vendor was the prevailing party and entitled to attorney’s fees even though the purchasers were entitled to a larger judgment award.

Moritz indicates that, at times, it may be difficult to determine who is the prevailing party based on the “significant issue” test. The Supreme Court of Florida further addressed the matter in Prosperi v. Code, Inc., 626 So. 2d 1360 (Fla. 1993), where it stated that a net judgment is a “significant factor” but does not necessarily control the determination of who is the prevailing party. Interestingly, in cases involving the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), the Florida Fourth District Court of Appeal continues to focus on whether a party obtained a net judgment. FDUTPA claims are commonly included in lawsuits because FDUTPA has broad application and a fee-shifting provision. See Fla. Stat. § 501.2105 (2024). For example, in Banner v. Law Office of David J. Stern, P.A., 198 So. 3d 1133 (Fla. 4th DCA 2016), the Fourth District Court of Appeal held that “where a claim involves multiple claims directed at the same conduct,” to recover attorney’s fees, a party must “(1) recover judgment on the [FDUTPA claim], and (2) recover a net judgment for the entire case.” Employment litigation also has fee shifting provisions, sometimes evenly shifting fees to the winning party and in other statutes, the fee shifting is explicitly deferential to the litigating employee if he or she wins the case.

Determining who is the prevailing party for purposes of attorney’s fees can be a difficult issue to determine even with the Supreme Court of Florida’s jurisprudence. Issues such as which party prevailed on the “significant issues” and which party recovered a net judgment are relevant to the analysis and often require careful consideration of the attending circumstances. Parties should be aware of the complexities of this issue when pursuing their attorney’s fees in litigation.

The Miami business litigation lawyers of the Mavrick Law Firm also represent 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.