The District Court of Appeal of Florida, Fourth District, recently held that in order to recover fees for prevailing on a Florida Deceptive and Unfair Trade Practices Act (FDUTPA) claim, a party must prevail not only on the FDUTPA claim but also on all pleaded legal theories such that it obtains a judgment in its favor on the entire case.
A copy of the opinion is available at: Link to Opinion
A borrower filed a lawsuit against a lender's counsel, alleging that the lender's counsel's conduct violated FDUTPA and the Florida Consumer Collection Practices Act (FCCPA). The trial court entered a judgment in favor of the borrower on the FCCPA claim but granted summary judgment in favor of the lender's counsel on the FDUTPA claim.
The trial court's judgment was affirmed on appeal, and both parties moved for appellate attorney's fees. The borrower was initially awarded appellate attorney's fees under the FCCPA, and the lender's counsel was initially awarded appellate attorney's fees under FDUTPA.
The borrower moved for rehearing on the award of appellate attorney's fees to the lender's counsel for prevailing on the FDUTPA claim.
As you may recall, § 501.2105, Florida Statutes, governs fee entitlement under FDUTPA. Section 501.2105(1) provides, in relevant part, that "the prevailing party [in FDUTPA litigation], after judgment in the trial court and exhaustion of all appeals, if any, may receive his or her reasonable attorney's fees and costs from the nonprevailing party." See § 501.2105(1), Fla. Stats.
The Appellate Court began its analysis by noting that the Florida Supreme Court has instructed that "to recover attorney's fees in a FDUTPA action, a party must prevail in the litigation; meaning that the party must receive a favorable judgment from a trial court with regard to the legal action, including the exhaustion of all appeals." See Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d 362, 368 (Fla. 2013) (citing Heindel v. Southside Chrysler-Plymouth, Inc., 476 So. 2d 266, 270 (Fla. 1st DCA 1985)).
The Court carefully examined the Heindel approach to awarding FDUTPA attorney's fees, which reads the statute's reference to a "judgment" in "civil litigation" to refer to the entire case containing a FDUTPA claim, such that the "prevailing party" must obtain a favorable judgment in the entire case, not just on the FDUTPA claim, in order to recover FDUPTA attorney's fees.
Going further, the Appellate Court analyzed Hendry Tractor Co. v. Fernandez, 432 So. 2d 1315 (Fla. 1983), which the First District Court of Appeal had relied upon in reaching its Heindel decision.
In Hendry Tractor, the plaintiffs had brought alternative counts for negligence and breach of warranty/strict liability. The jury found the defendants liable for negligence, but not for breach of warranty/strict liability, and awarded damages on the negligence claim. The trial court had awarded costs to the plaintiffs on the negligence claim but also awarded costs to the defendants under § 57.041, Fla. Stats., for prevailing on the breach of warranty/strict liability claims.
At the time of the Hendry Tractor decision, Section 57.041(1) provided that "the party recovering judgment shall recover all his or her legal costs and charges which shall be included in the judgment." See § 57.041(1), Fla. Stats. (1979).
There, the Florida Supreme Court reversed the award of costs to the Hendry Tractor defendants, holding that the "net judgment was, without doubt, rendered in favor of the plaintiffs," and that plaintiffs were "clearly the parties recovering judgment and should be awarded costs." See Hendry Tractor, 432 So. 2d at 1316.
Similarly, in rejecting the lender's counsel's argument that it was entitled to prevailing party FUDTPA attorney's fees like the defendant in Diamond Aircraft, the Appellate Court noted that unlike in the instant case, the Diamond Aircraft defendant had ultimately prevailed on all claims, not just the FUDTPA claim, such that the Diamond Aircraft plaintiff had recovered nothing.
After completing its review of the relevant case law, the Appellate Court explicitly approved the net judgment rule articulated in Heindel and Hendry Tractor, holding that where a case involves multiple counts directed at the same conduct, "a party must (1) recover judgment on the chapter 501, part II claim, and (2) recover a net judgment in the entire case" in order to recover its attorney's fees under FDUTPA. See Heindel, 476 So. 2d at 270.
Applying the net judgment rule to the case at hand, the Appellate Court determined that the lender's counsel was not entitled to recover their appellate attorney's fees under FDUTPA, as the lender's counsel had not recovered a net judgment on the entire case, since a judgment had been entered against them under the FCCPA.
Accordingly, the Appellate Court withdrew its previous order granting appellate attorney's fees to the lender's counsel for prevailing on the FUDTPA claim, and entered a new opinion denying appellate attorney's fees to the lender's counsel.
Ralph T. Wutscher
Maurice Wutscher LLP
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