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Construction Law Authority / Contracts  / The Scope of Attorneys’ Fees for Prevailing Parties Must be Defined

The Scope of Attorneys’ Fees for Prevailing Parties Must be Defined

A recent Fourth District Court of Appeal Case, Florida Hurricane Protection and Awning Company, Inc. v. Pastina, shows the importance of defining the scope of a prevailing party attorneys’ fee provision in contracts.  In Pastina, the attorneys’ fee provision in the contract allowed for the contractor to recover its attorneys’ fees when the contractor had to sue for collection of any amounts owed.  There was no mention of any situation where the owner could recover fees.  Subsequently, a dispute arose between the parties and the owner prevailed at trial and sought to recover his attorneys’ fees.  The trial court held that under Section 57.105(7), Florida Statutes, the unilateral attorneys’ fee provision in the contract became bilateral and allowed the homeowner to recover his attorney’s fees.  The Circuit Court, acting in its appellate capacity, upheld that decision.

The Fourth District Court of Appeal, en banc, held that although the statutory section may apply, that the action between the parties was beyond the scope of the attorneys’ fee provision.  That is, since the action did not arise out of the contractor’s collection efforts of unpaid sums, that the prevailing fee provision did not apply and the owner could make no claim under it.  This opinion was by a majority of the en banc panel, and elicited two separate dissents.

The opinion means that in negotiating contracts, parties need to be careful as to the scope of the prevailing party attorneys’ fee provision.  If the parties intend that in any and all potential litigation between them has the prevailing party with its right to claim its attorneys’ fees then the language should be modified to state that.  Unfortunately for the owner in the Pastina case, it appears that the contractor had a standard form that the owner signed and did not have recourse to either negotiate the terms or did not have the sophistication to negotiate those terms.  Presumably the Court would have found that the attorneys’ fee provision would have been similarly inapplicable had the contractor been the prevailing party in this case, but because the issue was not raised the Court did not deal with that issue.  However, this again points to the need to have a very specific and detailed review of any contracts, including the attorneys’ fee provision, before such contracts are executed.

Sanjay Kurian

Sanjay Kurian

skurian@bplegal.com

Sanjay Kurian is a Board Certified Construction Lawyer and is a member of the Firm’s Construction Law and Litigation group. He is AV Rated Preeminent by Martindale-Hubbell. He has also been selected again as a Super Lawyer in 2017, which is a recognition by his peers of the top 5% of lawyers in Florida.

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