Prevailing-Party: Revisiting the Right to Attorney's Fees Under the Contract in Florida

A little reported decision with big impact has just come down from the Florida Supreme Court. In Levy v. Levy, No. SC20-1195 (Oct. 7, 2021), the Florida Supreme Court ruled in a marital case that Florida Statute section 57.105(7) was not applicable in a prevailing party attorney’s fee provision. In other words, just because there is a prevailing party attorney’s fee provision in a contract does not mean that the other party that becomes the prevailing party automatically get their attorney’s fees.

In Levy, the former husband filed a motion to compel the former wife to comply with a settlement agreement they had previously entered into. That agreement had a prevailing party attorney’s fee provision. Both sides sought attorney’s fees based on the clause and section 57.105(7), a statute which was thought by operation of law, converts unilateral fee provisions into reciprocal provisions. The trial court ruled against the former husband but the wife was not granted her attorney’s fees as “entitlement to attorney’s fees and costs is only contemplated against the party who is found to be in violation of th[e] Agreement.’” Id. at 3 (citation omitted). The appellate court affirmed on all issues except as to the rejection of the former wife’s request for attorney’s fees.

On appeal to the Florida Supreme Court, Justice J Grosshans, citing a conflict between Levy and another case, Sacket v. Sacket, 115 So. 3d 1069 (Fla. 4th DCA 2013), found that by the plain reading of section 57.105(7), it “only applies to a provision that confers on a party the right to attorney’s fees while not affording a comparable right to the other party.” Levy at 6-7. The court found that the provision in question did not confer a right to fees on one identifiable contracting party to the exclusion of the other party but instead “entitles either party to an award of attorney’s fees upon demonstrating that the other party violated the [contract].” Id. at 7. Thus, both parties had a right to attorney’s fees under the clause and thus, as there was no violation of the contract proven, no attorney’s fees were due to be awarded.

As reported in the Daily Business Review, this ruling is causing some lawyers to worry that the decision will spark a rise in frivolous litigation. This view appears correct as many now need to immediately amend their contracts to adjust to this decision. This ruling requires more contract wordsmithing in what should be a pretty straightforward prevailing party clause. You must now write that the prevailing party is either the offensive or defensive party, as failing to do so, a defensive party, like Ms. Levy, does not get her fees if she wins.

This decision is a siren call for contract redrafts, especially those with prevailing attorney’s fees provisions. If you are interested in receiving a copy of this decision or wish to discuss it further, please feel free to reach out to me at blog@miamimaritimelaw.co, lawofficesofmov@gmail.com or at 305.377.3700.

New Summary Judgment Standard in Florida--More Like the Feds

As has been expected as a result of the Florida Supreme Court’s opinion in December 2020 advising its intent to change the summary judgment rule 1.510, the Court has now amended that rule as of May 1, 2021 in IN RE: AMENDMENTS TO FLORIDA RULE OF CIVIL PROCEDURE 1.510, 46 Fla. L. Weekly S95 (Fla. April 29, 2021). The highlights include the following:

• The Florida Supreme Court actually replaced the text of Rule 1.510 with Federal Rule of Civil Procedure 56 with a few “tweaks.”

• 1.510(a) now says that the rule will be construed “in accordance with the federal standard” meaning we need to cite to federal cases for a while.

• Rule 1.510 makes the summary judgment standard like the directed verdict standard: Both focus on “whether evidence presents a sufficient disagreement to require submission to a jury.” Both standards make the burden for showing a genuine issue of fact to be equal with the burden of proof at trial.

• To obtain summary judgment, it is not necessary for the non-movant to “disprove” the other side’s case (if the non-moving party has to prove “x” to win at trial, then the party moving for summary judgment can either (a) produce evidence to show that “x” is not so, or (b) that the non-movant lacks the evidence to prove “x”.

• The test for whether a genuine issue of fact exists asks the trial judge to decide whether “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”

• The trial judge must articulate the reasons on the record for granting or denying a motion for summary judgment (the Federal rule actually makes it permissive, while 1.510(a) makes it mandatory).

• Summary judgment hearings must be set forty (40) days before the hearing (not 20 like the old rule), and responses must be issued within twenty (20) days, not five days, or two days like the old days…

My Team and I Obtain a Defense Verdict in Jones Act Case

I, my husband and the rest of our Miami team successfully defended a yacht owner against a former employee’s Jones Act negligence claim in a 7-day Zoom trial in the U.S. District Court for the Southern District of Florida. The case arose after the yacht’s chief stewardess was allegedly injured after hitting a wake while aboard the yacht’s tender during a purported sea trial of the tender. The plaintiff alleged she was in the course and scope of her employment with the yacht at the time of her accident aboard the tender and sought over $2 million in damages.

I first won the case on summary judgment, as the district court found the crewmember failed to present a genuine issue of fact as to whether she was acting within the course and scope of her employment when she was injured. The crewmember appealed that decision to the Eleventh Circuit Court of Appeals, which remanded the case back to the trial court, stating that in evaluating whether the crewmember was within the course and scope of her job with the yacht, the trial court needed to evaluate the case under the guidance provided in Fowler v. Seaboard Coastline R.R. Co., 638 F.2d 17, 20 (5th Cir. Unit B Feb. 1981). The Eleventh Circuit found that Fowler stands for the proposition that acts that are incidental to an employee’s work can fall within the course of her employment, even is the employee is not performing her customary job duties. Fowler, 638 F.2d at 20 (discussing the meaning of “within the scope of employment” to determine liability under the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. § 51). However, a reading of Fowler makes clear that Jones Act protections do not cover personal activity engaged in by the employee for a private purpose and having no causal relationship to her employment. Id. at 18-19.  

The Eleventh Circuit also relied on Beech v. Hercules Drilling Co., L.L.C., 691 F.3d 566, 572 (5th Cir. 2012), which states that “to hold an employer vicariously liable under the Jones Act for one employee’s injury caused by the negligence of a co-employee, a plaintiff must show that the injured employee and the employee who caused the harm were both acting in the course of their employment at the time of the accident”. Again, the court focused on the course and scope of employment as it pertained to the captain and his piloting of the alleged tender during the purported sea trial at the time the plaintiff was injured.

After carefully reviewing all the evidence in the case after it was remanded for trial, the trial court found that the plaintiff had not met her burden to show that she was acting within the course and scope of her employment on the day of her accident. The court concluded that she was engaged in a family outing with the captain who was her then boyfriend, her daughter and a married couple that were personal friends of the couple. The court determined that the activity was not advancing a business interest of the yacht owner and it was not foreseeable to the yacht owner that the activity was to be engaged in by either the plaintiff or the captain. The court noted that the Jones Act does not apply to private acts by a crewmember and emphasized that the Jones Act is not a strict liability scheme.

If you are interested in receiving a copy of the Eleventh Circuit decision or wish to contact me to discuss the case further, please feel free to send me an email at blog@miamimaritimelaw.co or you can call 305.377.3700.

"A Contract is a Contract"--Why Settlement Negotiation Documents Need to be Thought Through

Back in 1997, R.J. Reynolds Tobacco (“Reynolds”) joined a handful of competitors in signing an historic $11.3 billion settlement agreement with the state of Florida to relieve itself from liability and health costs stemming from smoking-related illnesses in exchange for reduced advertising and 25 years worth of settlement payments to the state. However, Reynolds tried to renege on that agreement, arguing that wasn’t its problem anymore, as its parent company sold the cigarette brands in question—Salem, Winston, Kool and Maverick—to ITG Brands in 2015.

Since then, neither Reynolds or ITG has paid the government under the settlement agreement. ITG paid $7 billion for the brands but wasn’t part of the historic settlement, which took place years earlier. ITG did agree to use “reasonable best efforts” to negotiate with the government to join it, but those talks were reportedly futile.

To quote the appellate court, the Fourth District Court of Appeals, “ a contract is a contract, and…Reynolds continues to be liable under the contract it signed with the state of Florida,” the opinion said. The court simply was not swayed by Reynolds’ arguments, finding that its purchase agreement with ITG ”did not in any way vitiate the responsibilities and obligations of Reynolds under the first contract.” The appellate panel said it was compelled to affirm the settlement as it was clear, unambiguous, included no provisions for brand transfers and required all parties to approve amendments in writing.

Quoting former U.S. Supreme Court Justice Oliver Wendell Holmes, the opinion said the “duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it—and nothing else.” The opinion went further and stated that “one contract did not alter the obligations of the other contract” as the purchase agreement was separate and involved different parties, and pointed to case law that says, “a corporation that acquires the assets of another business entity does not as a matter of law assume the liabilities of the prior business.” It did not help Reynolds that it had tried these same arguments in Texas and Minnesota, where the courts there snubbed the same argument.

The Fourth DCA also knocked down claims from Philip Morris USA, another party to the settlement, that ITG should be liable for the payments, finding that did not comport with the plain language in its purchase agreement with Reynolds.

Florida’s Fourth District Court of Appeal declined to rehear the case last week and said it would not certify the case to the state Supreme Court. This latest ruling means Reynolds must hold up its end of a historic $11.3 billion settlement struck with the state in 1997. The state has reported that the ruling will result in a one-time $92 million payment and roughly $30 million per year for the state.

This decision should not be a surprise. Because the contract between ITG and Reynolds was not a purchase of Reynolds’ liabilities, it is surprising that Reynolds thought it could walk away from a settlement reached with the state and that somehow, that left ITG holding the proverbial “bag.” However this case is a stark reminder that if a company reaches settlements such as this, it must consider them in any subsequent reorganization, sale or material change to the company.

If you are interested in receiving a copy of the initial decision or wish to reach out to me, you may do so by calling me at 305.377.3700 or by email at blog@miamimaritimelaw.co.