FORT LAUDERDALE BUSINESS LITIGATION: PREVAILING PARTY ATTORNEY’S FEES ARE NOT GUARANTEED

Recovering attorney’s fees is governed by the American Rule. This rule generally prohibits a party from recovering his or her attorney’s fees unless the fees are expressly permitted pursuant to a contract, statue, or rule. Q.H. v. Sunshine State Health Plan, Inc., 305 So. 3d 543 (Fla. 4th DCA 2020) (“Under the American rule, a court may only award attorney’s fees when such fees are expressly provided for by statute, rule, or contract.”). Therefore, the victor of a lawsuit must demonstrate a contract, statue, or rule entitles that victor to attorney’s fees. Reiterer v. Monteil, 98 So. 3d 586 (Fla. 2d DCA 2012) (refusing to award attorney’s fees because no contract provision, statue, or rule permitted the prevailing party to revolver his attorney’s fees). Absent this showing, the lawsuit’s victor must bear his or her own fees.  The Fort Lauderdale 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.

Many, but not all, statutes contain prevailing party attorney’s fees provisions. One example is Florida’s restrictive covenant statute. Fla. Stat. § 542.335. (“In the absence of a contractual provision authorizing an award of attorney’s fees and costs to the prevailing party, a court may award attorney’s fees and costs to the prevailing party in any action seeking enforcement of, or challenging the enforceability of, a restrictive covenant.”) Another example is Florida’s Uniform Trade Secret Act. Fla. Stat. § 688.005 (“If a claim of misappropriation is made in bad faith… the court may award reasonable attorney’s fees to the prevailing party.”).

Inclusion of the phrase “attorney’s fees” inside a statute does not guarantee the prevailing party an ability to recover attorney’s fees. The restrictive covenant example above illustrates this point because an award of prevailing party fees is discretionary with the court. Fla. Stat. § 542.335. The court has the option to award or deny an application for attorney’s fees for a myriad of reasons. In Tesla Elec., Armature & Mach., Inc. v. JLM Advanced Tech. Services, Inc., 128 So. 3d 865 (Fla. 1st DCA 2013), the trial court denied a motion for attorney’s fees without specifying the reason. Although the ruling was reversed because the trial court did not articulate its rationale, the case still exemplifies the broad discretion a trial court could possess when deciding whether to award attorney’s fees to the prevailing party

It is even harder to recover attorney’s fees under the trade secret statue discussed above. The prevailing party can only recover his or her attorney’s fees when the loser acted in bad faith. Fla. Stat. § 688.005. Courts have broad discretion when determining whether the losing party acted in bad faith. In Real-Time Labs., Inc. v. Predator Sys., Inc., 757 So. 2d 634 (Fla. 4th DCA 2000), the trial court determined that the plaintiff could not recover its prevailing party attorney’s fees even through the defendants misappropriated the plaintiff’s trade secrets. The court determined that the defendant did not act in bad faith because he “did not set out from the start to violate” the statute. By contrast, in Mangren Research & Dev. Corp. v. Nat’l Chem. Co., Inc., 87 F.3d 937 (7th Cir. 1996), the court determined the bad faith standard for awarding prevailing party attorneys was met because the defendant discussed the fact that he might be sued for trade secret misappropriation and believed he could avoid liability by changing one ingredient to create a new product.

The Fort Lauderdale 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.