MIAMI BUSINESS LITIGATION: CONTRACTUAL ATTORNEY’S FEES PROVISIONS DO NOT ALWAYS ALLOW RECOVERY

Earlier this week we explored the American Rule and its prohibitions against recovering attorney’s fees unless a contractual provision or statute permits the prevailing party to recover those attorney’s fees. We also explored two difficulties that can arise when a party seeks to recover his or her attorney’s fees under a statute. The first difficulty occurs when a statute permits the recovery of attorney’s fees but does not require them because the court has large discretion to determine whether it should award attorney’s fees to the prevailing party. The second difficult arises when the statute contains a heightened burden requiring the prevailing party to show bad faith or other similar conduct as a prerequisite to recovering attorney’s fees. In this article, we explore some of the potential difficulties recovering prevailing party attorney’s fees under a contractual provision. 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.

Parties to a contract may include a unilateral attorney’s fee provision. This provision entitles one of the contracting parties to recover attorney’s fees in the event he or she prevails but does not entitle the other contracting party to recover attorney’s fees even if he or she is the prevailing party in the lawsuit. Florida’s legislature implemented a law to rectify this problem by turning unilateral attorney’s fees provisions into bilateral attorney’s fees provisions so long as the contract was entered after October 1, 2018. 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.”). The purpose of the statute “is to provide mutuality of attorney’s fee remedy in contract cases.” Walls v. Quick & Reilly, Inc., 824 So.2d 1016 (Fla. 5th DCA 2002).

A contract can be drafted narrowly to exclude the recovery of attorney’s fees. An attorney’s fees provision itself can be drafted in a manner that excludes the recovery of attorney’s fees to certain stages of the lawsuit or certain types of claims. See Pardo v. Goldberg, 92 So. 3d 295 (Fla. 3d DCA 2012) (“We conclude that the attorney’s fee provision of the promissory note between Kapital and Goldberg does not include language broad enough to justify the imposition of appellate attorney’s fees against the guarantors.”). In addition, the contract can be drafted in a manner that excludes attorney’s fees in certain situations despite the existence of an otherwise all encompassing prevailing party attorney’s fee provision. In 331 Partners, LLC v. 331 Freeport Partners, LLC, 2025 WL 753381 (N.D. Fla. Mar. 10, 2025), the contract contained an attorneys’ fee provision that allowed the prevailing party to recover its attorney’s fees without limitation. However, the contract also contained a provision stating that if the seller fails, neglects, or refuses to perform the buyer “may seek to recover such damages or seek specific performance.” When the seller did not perform, the buyer sued for declaratory relief and prevailed. The court, however, rejected the buyer’s request for attorney’s fees because it determined the contract only permitted attorney’s fees in actions for damages and specific performance. Declaratory relief did not satisfy either category for fees. Therefore, contract based attorney’s fee provisions have their own pitfalls much like statutory attorney’s fee provisions.

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.