42
Fla. L. Weekly D848aop of Form
Fla. L. Weekly D848aop of Form
Attorney’s
fees — Prevailing party — Trial court did not err in awarding attorney’s fees
for litigating the amount of fees and costs pursuant to fee-shifting provision
in consulting agreement between parties — Trial court properly found that
prevailing party was entitled to recover as costs the fees paid to fact
witnesses for their assistance with case and discovery preparation — There is
no merit to claim that conduct of paying fact witnesses anything more than $5
per day constituted illegal conduct that negated prevailing party’s right to
recover attorney’s fees and costs — Because trial court failed to itemize cost
award, and because it could be construed to include disallowed costs, award is
reversed and remanded for trial court to determine which costs were taxable and
which costs were nontaxable — Trial court did not err in awarding costs
related to attorneys’ overhead expenses that were related to action pursuant to
agreement between parties — Prejudgment interest — Trial court erred in
awarding prejudgment interest on attorney’s fee award from date the fees were
incurred rather than the date when the fees were awarded
fees — Prevailing party — Trial court did not err in awarding attorney’s fees
for litigating the amount of fees and costs pursuant to fee-shifting provision
in consulting agreement between parties — Trial court properly found that
prevailing party was entitled to recover as costs the fees paid to fact
witnesses for their assistance with case and discovery preparation — There is
no merit to claim that conduct of paying fact witnesses anything more than $5
per day constituted illegal conduct that negated prevailing party’s right to
recover attorney’s fees and costs — Because trial court failed to itemize cost
award, and because it could be construed to include disallowed costs, award is
reversed and remanded for trial court to determine which costs were taxable and
which costs were nontaxable — Trial court did not err in awarding costs
related to attorneys’ overhead expenses that were related to action pursuant to
agreement between parties — Prejudgment interest — Trial court erred in
awarding prejudgment interest on attorney’s fee award from date the fees were
incurred rather than the date when the fees were awarded
TRIAL PRACTICES, INC., Appellant, v.
HAHN LOESER & PARKS, LLP, as substitute party for Jack J. Antaramian,
Appellee. 2nd District. Case Nos. 2D13-6051, 2D14-86. (Consolidated) Opinion
filed April 12, 2017. Appeals from the Circuit Court for Hillsborough County;
Herbert J. Baumann, Jr., Judge. Counsel: G. Donovan Conwell, Jr. of Conwell
Business Law, P.A., Tampa, for Appellant. Edmond E. Koester of Coleman,
Yovanovich & Koester, P.A., Naples, for Appellee.
HAHN LOESER & PARKS, LLP, as substitute party for Jack J. Antaramian,
Appellee. 2nd District. Case Nos. 2D13-6051, 2D14-86. (Consolidated) Opinion
filed April 12, 2017. Appeals from the Circuit Court for Hillsborough County;
Herbert J. Baumann, Jr., Judge. Counsel: G. Donovan Conwell, Jr. of Conwell
Business Law, P.A., Tampa, for Appellant. Edmond E. Koester of Coleman,
Yovanovich & Koester, P.A., Naples, for Appellee.
(MORRIS, Judge.) Trial Practices,
Inc. (TPI), appeals a final judgment awarding attorneys’ fees, costs, and
prejudgment interest to Hahn Loeser & Parks, LLP (Hahn), as substituted for
Jack J. Antaramian, who is deceased. The underlying litigation began when TPI
brought suit against Antaramian to recover fees it alleged it was owed for
various trial support services that TPI provided to Antaramian in his suit
against a third party. Antaramian successfully defended against TPI’s suit, and
as a result, he sought prevailing party attorneys’ fees and costs in the trial
court.1 Ultimately, the trial court awarded
him prevailing party attorneys’ fees, costs, and prejudgment interest.
Inc. (TPI), appeals a final judgment awarding attorneys’ fees, costs, and
prejudgment interest to Hahn Loeser & Parks, LLP (Hahn), as substituted for
Jack J. Antaramian, who is deceased. The underlying litigation began when TPI
brought suit against Antaramian to recover fees it alleged it was owed for
various trial support services that TPI provided to Antaramian in his suit
against a third party. Antaramian successfully defended against TPI’s suit, and
as a result, he sought prevailing party attorneys’ fees and costs in the trial
court.1 Ultimately, the trial court awarded
him prevailing party attorneys’ fees, costs, and prejudgment interest.
On appeal, TPI argues that the trial
court erred by awarding attorneys’ fees and costs for litigating the amount of
attorneys’ fees. As will be discussed herein, we disagree with that argument
and we therefore affirm that portion of the award. TPI also argues that Hahn is
not entitled to prevailing party attorneys’ fees because Antaramian improperly
paid expert witness fees to fact witnesses. And TPI challenges the inclusion of
overhead expenses within the cost award. While we find no error in the trial
court’s ultimate conclusion regarding the propriety of payments to the fact
witnesses or in the trial court’s award of costs for overhead expenses to
Antaramian’s attorneys, we conclude that the trial court’s failure to itemize
an award of $317,873.64 within the overall cost award requires reversal. We
also agree with TPI that the trial court erred in awarding prejudgment interest
running from the time the attorneys’ fees and costs were incurred rather than
from the time when they were awarded. Additionally, it is unclear whether the
prejudgment interest award was based, in part, on disallowed office overhead
expenses. Consequently, we must reverse the trial court’s prejudgment interest
award. We affirm all other issues without further comment.
court erred by awarding attorneys’ fees and costs for litigating the amount of
attorneys’ fees. As will be discussed herein, we disagree with that argument
and we therefore affirm that portion of the award. TPI also argues that Hahn is
not entitled to prevailing party attorneys’ fees because Antaramian improperly
paid expert witness fees to fact witnesses. And TPI challenges the inclusion of
overhead expenses within the cost award. While we find no error in the trial
court’s ultimate conclusion regarding the propriety of payments to the fact
witnesses or in the trial court’s award of costs for overhead expenses to
Antaramian’s attorneys, we conclude that the trial court’s failure to itemize
an award of $317,873.64 within the overall cost award requires reversal. We
also agree with TPI that the trial court erred in awarding prejudgment interest
running from the time the attorneys’ fees and costs were incurred rather than
from the time when they were awarded. Additionally, it is unclear whether the
prejudgment interest award was based, in part, on disallowed office overhead
expenses. Consequently, we must reverse the trial court’s prejudgment interest
award. We affirm all other issues without further comment.
BACKGROUND
In August 2005, TPI entered into its
contract with Antaramian to perform litigation support services in Antaramian’s
lawsuit against a third party (the “Consulting Agreement”). TPI was required to
assist Antaramian and his counsel in preparing for trial and in presenting the
case during trial. The Consulting Agreement required Antaramian to compensate
TPI five percent of any gross recovery that Antaramian obtained as a result of
a verdict in his favor or settlement. Ultimately, Antaramian and the third
party settled the lawsuit with each party agreeing to drop their claims against
the other party. Thereafter, Antaramian refused to pay TPI the five percent fee
pursuant to the Consulting Agreement under the theory that Antaramian did not
obtain a gross recovery and, therefore, did not owe anything to TPI.
contract with Antaramian to perform litigation support services in Antaramian’s
lawsuit against a third party (the “Consulting Agreement”). TPI was required to
assist Antaramian and his counsel in preparing for trial and in presenting the
case during trial. The Consulting Agreement required Antaramian to compensate
TPI five percent of any gross recovery that Antaramian obtained as a result of
a verdict in his favor or settlement. Ultimately, Antaramian and the third
party settled the lawsuit with each party agreeing to drop their claims against
the other party. Thereafter, Antaramian refused to pay TPI the five percent fee
pursuant to the Consulting Agreement under the theory that Antaramian did not
obtain a gross recovery and, therefore, did not owe anything to TPI.
In June 2006, TPI sued Antaramian
for breach of the Consulting Agreement. The issue to be decided was whether
Antaramian obtained a gross recovery through his settlement with the third
party thereby obligating him to pay TPI its fee. The jury returned a verdict in
favor of Antaramian. TPI appealed, but this court affirmed the final judgment.
for breach of the Consulting Agreement. The issue to be decided was whether
Antaramian obtained a gross recovery through his settlement with the third
party thereby obligating him to pay TPI its fee. The jury returned a verdict in
favor of Antaramian. TPI appealed, but this court affirmed the final judgment.
Antaramian then sought prevailing
party attorneys’ fees and costs pursuant in part to a provision in the Consulting
Agreement. The provision provided in relevant part that the
party attorneys’ fees and costs pursuant in part to a provision in the Consulting
Agreement. The provision provided in relevant part that the
prevailing
party in any action arising from or relating to this agreement will be entitled
to recover all expenses of any nature incurred in any way in connection with
the matter, whether incurred before litigation, during litigation, in an
appeal, . . . or in connection with enforcement of a judgment, including, but
not limited to, attorneys’ and experts’ fees.
party in any action arising from or relating to this agreement will be entitled
to recover all expenses of any nature incurred in any way in connection with
the matter, whether incurred before litigation, during litigation, in an
appeal, . . . or in connection with enforcement of a judgment, including, but
not limited to, attorneys’ and experts’ fees.
Antaramian sought $2,551,796.26,
exclusive of prejudgment interest. After a hearing, the trial court granted
Antaramian’s motion, though in a reduced amount of $2,004,432.58. The trial
court also awarded prejudgment interest in the amount of $462,709.81 “from the
date the attorneys’ fees and costs were incurred.” Thus the total award was
$2,467,142.39.
exclusive of prejudgment interest. After a hearing, the trial court granted
Antaramian’s motion, though in a reduced amount of $2,004,432.58. The trial
court also awarded prejudgment interest in the amount of $462,709.81 “from the
date the attorneys’ fees and costs were incurred.” Thus the total award was
$2,467,142.39.
In making the award, the trial court
found that the majority of Antaramian’s witnesses were fact witnesses and that
Antaramian had improperly paid them as if they were expert witnesses, which was
prohibited by section 92.142(1), Florida Statutes (2013). The trial court also
found that the prevailing party provision in the Consulting Agreement did not
entitle Antaramian to recover the full amount paid to the fact witnesses
because TPI could not have foreseen that Antaramian would have paid the
witnesses at a rate higher than what they were entitled to be compensated.
However, the court noted that the fact witnesses also “assisted in both case
and discovery preparation” thereby rendering them consulting experts.
Consequently, the trial court permitted Antaramian to recover “certain fees
charged.” Those fees were apparently part of a $317,873.64 cost award.
found that the majority of Antaramian’s witnesses were fact witnesses and that
Antaramian had improperly paid them as if they were expert witnesses, which was
prohibited by section 92.142(1), Florida Statutes (2013). The trial court also
found that the prevailing party provision in the Consulting Agreement did not
entitle Antaramian to recover the full amount paid to the fact witnesses
because TPI could not have foreseen that Antaramian would have paid the
witnesses at a rate higher than what they were entitled to be compensated.
However, the court noted that the fact witnesses also “assisted in both case
and discovery preparation” thereby rendering them consulting experts.
Consequently, the trial court permitted Antaramian to recover “certain fees
charged.” Those fees were apparently part of a $317,873.64 cost award.
Additionally, the trial court found
that Antaramian could recover attorneys’ fees and costs for his attorneys’
litigation of the issues of entitlement to and the amount of attorneys’ fees
and costs. The trial court explained that the attorneys’ fees and costs
provision in the Consulting Agreement was broad enough to encompass such an
award.
that Antaramian could recover attorneys’ fees and costs for his attorneys’
litigation of the issues of entitlement to and the amount of attorneys’ fees
and costs. The trial court explained that the attorneys’ fees and costs
provision in the Consulting Agreement was broad enough to encompass such an
award.
The trial court also found that
Antaramian was entitled to recover his costs incurred in connection with the
action, but the court noted that the Consulting Agreement did not extend so far
as to require payment for “an ‘overhead allocation’ of [Antaramian’s] staff and
rent paid on [his] behalf.” While the trial court awarded separate cost awards
for various attorneys who represented Antaramian, TPI contends that the
$317,873.64 cost award erroneously includes or at least fails to indicate
whether it includes $255,000 of Antaramian’s office overhead expenses which the
trial court expressly disallowed.
Antaramian was entitled to recover his costs incurred in connection with the
action, but the court noted that the Consulting Agreement did not extend so far
as to require payment for “an ‘overhead allocation’ of [Antaramian’s] staff and
rent paid on [his] behalf.” While the trial court awarded separate cost awards
for various attorneys who represented Antaramian, TPI contends that the
$317,873.64 cost award erroneously includes or at least fails to indicate
whether it includes $255,000 of Antaramian’s office overhead expenses which the
trial court expressly disallowed.
ANALYSIS
I. Award of Attorneys’ Fees and Costs for Litigating the
Amount of Attorneys’ Fees and Costs
Amount of Attorneys’ Fees and Costs
TPI challenges the award of $40,346
which was the portion of the final judgment attributed to Antaramian’s
attorneys’ litigation of the issue of the amount of attorneys’ fees and costs.
TPI contends that Antaramian was not entitled to recover attorneys’ fees and
costs for litigating the amount of fees to be recovered,2 even though a fee-shifting provision
in the parties’ contract provides that such fees and costs may be recovered.
which was the portion of the final judgment attributed to Antaramian’s
attorneys’ litigation of the issue of the amount of attorneys’ fees and costs.
TPI contends that Antaramian was not entitled to recover attorneys’ fees and
costs for litigating the amount of fees to be recovered,2 even though a fee-shifting provision
in the parties’ contract provides that such fees and costs may be recovered.
Both the Florida Supreme Court and
this court have recognized that when parties are seeking attorneys’ fees
pursuant to a statute, the parties are not necessarily entitled to recover
attorneys’ fees for litigating the amount of fees. See, e.g., State
Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830, 833 (Fla. 1993); Wight
v. Wight, 880 So. 2d 692, 694 (Fla. 2d DCA 2004). However, in this case,
the attorneys’ fees and costs were not awarded pursuant to a statute but were
instead awarded pursuant to the fee-shifting provision in the Consulting
Agreement. And we agree with the trial court that the provision was broad
enough to encompass the award of fees and costs for litigating the amount of
attorneys’ fees. Parties may “freely contract on the issue of attorney[s’]
fees,” Precision Tune Auto Care, Inc. v. Radcliffe, 815 So. 2d 708, 710
(Fla. 4th DCA 2002), and we will not rewrite a contract in order to relieve TPI
of the result of its obligation under the Consulting Agreement, see Beach
Resort Hotel Corp. v. Wieder, 79 So. 2d 659, 663 (Fla. 1955).
this court have recognized that when parties are seeking attorneys’ fees
pursuant to a statute, the parties are not necessarily entitled to recover
attorneys’ fees for litigating the amount of fees. See, e.g., State
Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830, 833 (Fla. 1993); Wight
v. Wight, 880 So. 2d 692, 694 (Fla. 2d DCA 2004). However, in this case,
the attorneys’ fees and costs were not awarded pursuant to a statute but were
instead awarded pursuant to the fee-shifting provision in the Consulting
Agreement. And we agree with the trial court that the provision was broad
enough to encompass the award of fees and costs for litigating the amount of
attorneys’ fees. Parties may “freely contract on the issue of attorney[s’]
fees,” Precision Tune Auto Care, Inc. v. Radcliffe, 815 So. 2d 708, 710
(Fla. 4th DCA 2002), and we will not rewrite a contract in order to relieve TPI
of the result of its obligation under the Consulting Agreement, see Beach
Resort Hotel Corp. v. Wieder, 79 So. 2d 659, 663 (Fla. 1955).
We are not persuaded by the cases
cited by TPI: Oquendo v. Citizens Property Insurance Corp., 998 So. 2d
636, 638 (Fla. 3d DCA 2008), Paladyne Corp. v. Weindruch, 867 So. 2d
630, 634 (Fla. 5th DCA 2004), and Mangel v. Bob Dance Dodge, Inc., 739
So. 2d 720, 723-24 (Fla. 5th DCA 1999). In those cases, the parties seeking the
awards of fees relied on retainer agreements with their attorneys as the basis
for their recovery of fees from the opposing parties. But here, Antaramian did
not rely on a retainer agreement with his counsel as the basis for recovery of
attorneys’ fees and costs. Rather, he relied on the Consulting Agreement, which
was an agreement between himself and TPI. As already discussed herein, the
Consulting Agreement includes a very broad fee-shifting provision which permits
an award of fees that were incurred by the prevailing party in any matter that
is connected with the Consulting Agreement.
cited by TPI: Oquendo v. Citizens Property Insurance Corp., 998 So. 2d
636, 638 (Fla. 3d DCA 2008), Paladyne Corp. v. Weindruch, 867 So. 2d
630, 634 (Fla. 5th DCA 2004), and Mangel v. Bob Dance Dodge, Inc., 739
So. 2d 720, 723-24 (Fla. 5th DCA 1999). In those cases, the parties seeking the
awards of fees relied on retainer agreements with their attorneys as the basis
for their recovery of fees from the opposing parties. But here, Antaramian did
not rely on a retainer agreement with his counsel as the basis for recovery of
attorneys’ fees and costs. Rather, he relied on the Consulting Agreement, which
was an agreement between himself and TPI. As already discussed herein, the
Consulting Agreement includes a very broad fee-shifting provision which permits
an award of fees that were incurred by the prevailing party in any matter that
is connected with the Consulting Agreement.
We find Waverly Las Olas
Condominium Ass’n v. Waverly Las Olas, LLC, 88 So. 3d 386 (Fla. 4th DCA
2012), to be instructive to our case. In Waverly, a tenant sued a
condominium association in a dispute over parking spaces, and the association
filed a third-party complaint against the developer. Id. at 387. After
the third-party complaint was dismissed, the developer sought prevailing party
attorneys’ fees against the association pursuant in part to an agreement
between the developer and the individual unit owners. Id. As part of the
fee request, the developer sought to recover fees that were expended on
litigating the amount of fees. Id. at 388. Because the trial court
concluded that the association’s claims were all inextricably intertwined with
one set of core facts, the trial court awarded all fees incurred to the
developer, including fees for time spent on litigating the amount. Id.
Condominium Ass’n v. Waverly Las Olas, LLC, 88 So. 3d 386 (Fla. 4th DCA
2012), to be instructive to our case. In Waverly, a tenant sued a
condominium association in a dispute over parking spaces, and the association
filed a third-party complaint against the developer. Id. at 387. After
the third-party complaint was dismissed, the developer sought prevailing party
attorneys’ fees against the association pursuant in part to an agreement
between the developer and the individual unit owners. Id. As part of the
fee request, the developer sought to recover fees that were expended on
litigating the amount of fees. Id. at 388. Because the trial court
concluded that the association’s claims were all inextricably intertwined with
one set of core facts, the trial court awarded all fees incurred to the
developer, including fees for time spent on litigating the amount. Id.
On appeal, the Fourth District
upheld the fee award. The Fourth District explained that “[t]he various
third-party complaints focused on a common core set of facts” and that although
it might have been possible to apportion the fees between the breach of
contract claims and the other claims, “the broad language in the fee provision
contemplates its application to more than breach of contract claims.” Id.
Specifically, the fee provision at issue in Waverly “provided for an
award of fees for ‘any litigation between the parties under this
Agreement.’ ” Id. The Fourth District also upheld the trial court’s
decision to award fees for litigating the amount of attorneys’ fees. The court
concluded that the contractual provision was “broad enough to encompass fees
incurred in litigating the amount of fees.” Id. at 389 (footnote
omitted). In doing so, the court distinguished Palma on the basis that
it involved a request for fees pursuant to a statute. Id.
upheld the fee award. The Fourth District explained that “[t]he various
third-party complaints focused on a common core set of facts” and that although
it might have been possible to apportion the fees between the breach of
contract claims and the other claims, “the broad language in the fee provision
contemplates its application to more than breach of contract claims.” Id.
Specifically, the fee provision at issue in Waverly “provided for an
award of fees for ‘any litigation between the parties under this
Agreement.’ ” Id. The Fourth District also upheld the trial court’s
decision to award fees for litigating the amount of attorneys’ fees. The court
concluded that the contractual provision was “broad enough to encompass fees
incurred in litigating the amount of fees.” Id. at 389 (footnote
omitted). In doing so, the court distinguished Palma on the basis that
it involved a request for fees pursuant to a statute. Id.
Similarly here, the fee-shifting
provision was drafted in such a way that it broadly encompassed all claims that
were connected in any way to the Consulting Agreement. Further, the
fee-shifting provision permitted recovery of “all expenses of any nature
incurred in any way” including attorneys’ fees. Consequently, as the Fourth
District did in Waverly, we conclude that the language in the
fee-shifting provision was “broad enough to encompass fees incurred in
litigating the amount of fees.” Id. We hold that the trial court did not
err in including an award of attorneys’ fees and costs for time spent on
litigating the amount of fees.
provision was drafted in such a way that it broadly encompassed all claims that
were connected in any way to the Consulting Agreement. Further, the
fee-shifting provision permitted recovery of “all expenses of any nature
incurred in any way” including attorneys’ fees. Consequently, as the Fourth
District did in Waverly, we conclude that the language in the
fee-shifting provision was “broad enough to encompass fees incurred in
litigating the amount of fees.” Id. We hold that the trial court did not
err in including an award of attorneys’ fees and costs for time spent on
litigating the amount of fees.
II. The Cost Award’s Inclusion of Recoverable Payments to
Fact Witnesses for Trial Testimony and Possible Inclusion of Antaramian’s
Office Overhead Expenses
Fact Witnesses for Trial Testimony and Possible Inclusion of Antaramian’s
Office Overhead Expenses
TPI argues that payment to the fact
witnesses of more than $5 per day violates section 92.142(1) and constitutes
sanctionable conduct. Thus TPI contends that the trial court should have
rejected Antaramian’s total request for prevailing party attorneys’ fees and
costs based on this alleged misconduct. TPI also asserts that payment of
prevailing party attorneys’ fees and costs under these circumstances was not
reasonably contemplated by the parties at the time they entered into the
Consulting Agreement. TPI further contends that the trial court’s award of
costs improperly included Antaramian’s office overhead expenses.
witnesses of more than $5 per day violates section 92.142(1) and constitutes
sanctionable conduct. Thus TPI contends that the trial court should have
rejected Antaramian’s total request for prevailing party attorneys’ fees and
costs based on this alleged misconduct. TPI also asserts that payment of
prevailing party attorneys’ fees and costs under these circumstances was not
reasonably contemplated by the parties at the time they entered into the
Consulting Agreement. TPI further contends that the trial court’s award of
costs improperly included Antaramian’s office overhead expenses.
Below, the trial court agreed that
attorneys who testify at trial as fact witnesses are not entitled to the same
hourly fee as an expert witness and, instead, that they are entitled only to $5
per day, the amount of witness compensation provided for in section 92.142. The
trial court also agreed that the fee-shifting provision in the Consulting
Agreement did not entitle Antaramian to recover the full amount paid to the
attorney witnesses because TPI could not have foreseen that the witnesses would
have been paid at a rate higher than that to which they were entitled. However,
the trial court did permit recovery of “certain fees charged” by the witnesses
to the extent that they “also assisted in both case and discovery preparation.”
attorneys who testify at trial as fact witnesses are not entitled to the same
hourly fee as an expert witness and, instead, that they are entitled only to $5
per day, the amount of witness compensation provided for in section 92.142. The
trial court also agreed that the fee-shifting provision in the Consulting
Agreement did not entitle Antaramian to recover the full amount paid to the
attorney witnesses because TPI could not have foreseen that the witnesses would
have been paid at a rate higher than that to which they were entitled. However,
the trial court did permit recovery of “certain fees charged” by the witnesses
to the extent that they “also assisted in both case and discovery preparation.”
At the time of trial, rule 4-3.4(b)
of the Rules Regulating the Florida Bar provided that a lawyer could pay the
following expenses of witnesses: “reasonable expenses incurred by the witness
in attending or testifying at proceedings; a reasonable, noncontingent fee for
professional services of an expert witness; and reasonable compensation to
reimburse a witness for the loss of compensation incurred by reason of
preparing for, attending, or testifying at proceedings.” Subsequently, in 2014,
the rule was amended to omit the reference to payment for loss of compensation.
The relevant portion of the rule now provides that a lawyer may pay “reasonable
compensation to a witness for time spent preparing for, attending, or
testifying at proceedings.” R. Regulating Fla. Bar 4-3.4(b); In re
Amendments to the Rules Regulating the Fla. Bar, 140 So. 3d 541, 566-67
(Fla. 2014).3 While the amended rule does not
govern this case, we emphasize that neither version of the rule makes it
unethical or illegal for a party to pay fact witnesses reasonable compensation
for their preparation for, attendance at, or testimony at trial.
of the Rules Regulating the Florida Bar provided that a lawyer could pay the
following expenses of witnesses: “reasonable expenses incurred by the witness
in attending or testifying at proceedings; a reasonable, noncontingent fee for
professional services of an expert witness; and reasonable compensation to
reimburse a witness for the loss of compensation incurred by reason of
preparing for, attending, or testifying at proceedings.” Subsequently, in 2014,
the rule was amended to omit the reference to payment for loss of compensation.
The relevant portion of the rule now provides that a lawyer may pay “reasonable
compensation to a witness for time spent preparing for, attending, or
testifying at proceedings.” R. Regulating Fla. Bar 4-3.4(b); In re
Amendments to the Rules Regulating the Fla. Bar, 140 So. 3d 541, 566-67
(Fla. 2014).3 While the amended rule does not
govern this case, we emphasize that neither version of the rule makes it
unethical or illegal for a party to pay fact witnesses reasonable compensation
for their preparation for, attendance at, or testimony at trial.
In this case, Antaramian requested
$715,467.61 for legal expenses, litigation support, lodging, fuel, and airfare
as listed in the spreadsheet attached to the affidavit of Robert Frazitta,
Antaramian’s controller. Of this amount, $255,000 appears to be litigation
support expenses as incurred by Antaramian Development Corporation of Naples
(ADCN) which TPI argues were Antaramian’s office overhead expenses that were
nontaxable. This leaves an amount of $460,467.61 in fees, expenses, and costs
that were charged to Antaramian by other entities for legal services,
litigation support, and related charges (such as lodging, fuel, and airfare).
However, after considering this amount as well as the assistance provided by
the fact witnesses in case and discovery preparation, the trial court found —
consistent with rule 4-3.4(b) — that Antaramian could not recover all of the
requested costs for the payments to the witnesses. Thus the trial court awarded
Antaramian costs to recover his payments to the fact witnesses but did so in a
reduced amount. The trial court awarded $317,873.64 “with . . . respect [to]
fees, costs[,] and expenses for which Antaramian is indebted or has paid as
testified to by Robert Frazitta and as introduced at the evidentiary hearing.”
$715,467.61 for legal expenses, litigation support, lodging, fuel, and airfare
as listed in the spreadsheet attached to the affidavit of Robert Frazitta,
Antaramian’s controller. Of this amount, $255,000 appears to be litigation
support expenses as incurred by Antaramian Development Corporation of Naples
(ADCN) which TPI argues were Antaramian’s office overhead expenses that were
nontaxable. This leaves an amount of $460,467.61 in fees, expenses, and costs
that were charged to Antaramian by other entities for legal services,
litigation support, and related charges (such as lodging, fuel, and airfare).
However, after considering this amount as well as the assistance provided by
the fact witnesses in case and discovery preparation, the trial court found —
consistent with rule 4-3.4(b) — that Antaramian could not recover all of the
requested costs for the payments to the witnesses. Thus the trial court awarded
Antaramian costs to recover his payments to the fact witnesses but did so in a
reduced amount. The trial court awarded $317,873.64 “with . . . respect [to]
fees, costs[,] and expenses for which Antaramian is indebted or has paid as
testified to by Robert Frazitta and as introduced at the evidentiary hearing.”
We agree with the trial court’s
analysis of section 92.142 as well as the trial court’s conclusion that
Antaramian was entitled to recover (as costs) the fees paid to witnesses for
their assistance with case and discovery preparation. In doing so, we reject
TPI’s argument that Antaramian’s conduct of paying the attorney fact witnesses
anything more than $5 per day constituted illegal conduct that negated his
right to recover prevailing party attorneys’ fees and costs. And to the extent
that TPI argues that it could not have reasonably foreseen that Antaramian
would pay the attorney fact witnesses anything more than $5 per day, we
likewise reject that assertion based on the fact that rule 4-3.4(b) permits the
payment of reasonable compensation to witnesses for preparing for, attending,
and testifying at proceedings.
analysis of section 92.142 as well as the trial court’s conclusion that
Antaramian was entitled to recover (as costs) the fees paid to witnesses for
their assistance with case and discovery preparation. In doing so, we reject
TPI’s argument that Antaramian’s conduct of paying the attorney fact witnesses
anything more than $5 per day constituted illegal conduct that negated his
right to recover prevailing party attorneys’ fees and costs. And to the extent
that TPI argues that it could not have reasonably foreseen that Antaramian
would pay the attorney fact witnesses anything more than $5 per day, we
likewise reject that assertion based on the fact that rule 4-3.4(b) permits the
payment of reasonable compensation to witnesses for preparing for, attending,
and testifying at proceedings.
However, TPI has raised another
argument related to the costs that were awarded to Antaramian which requires us
to reverse the $317,873.64 cost award. From the record before us, we cannot
conclude that the award is supported by competent, substantial evidence. This
is because the trial court failed to itemize the award, and we cannot determine
which costs the trial court deemed taxable and which it deemed nontaxable.
Although the trial court made the finding that Antaramian was not entitled to
recover costs for “ ‘overhead allocation’ of the normal staff and rent paid” on
his behalf, the trial court’s order also awarded costs to Antaramian as set
forth in his hearing exhibits 1 and 13. A comparison of the two exhibits
reveals that Antaramian’s prejudgment interest calculation spreadsheet
contained figures matching figures on the attachment to Frazitta’s affidavit
and that attachment included Antaramian’s office overhead expenses. Thus
Antaramian’s prejudgment interest calculation appears to be based on an amount
which includes the disallowed office overhead expenses. And if the trial court
awarded prejudgment interest that was calculated based on amounts that included
Antaramian’s office overhead expenses, that fact necessarily implies that those
office overhead expenses are part of the cost award itself. Although
Antaramian’s prejudgment interest calculation spreadsheet indicates that there
was an adjustment made discounting Frazitta’s costs, that fact does not save
the $317,873.64 cost award. Absent an itemization, the award on its face could
be interpreted to include costs for the disallowed office overhead expenses.4 Similarly, we are unable to discern
what portion of the award was for the payment to fact witnesses for their trial
testimony.
argument related to the costs that were awarded to Antaramian which requires us
to reverse the $317,873.64 cost award. From the record before us, we cannot
conclude that the award is supported by competent, substantial evidence. This
is because the trial court failed to itemize the award, and we cannot determine
which costs the trial court deemed taxable and which it deemed nontaxable.
Although the trial court made the finding that Antaramian was not entitled to
recover costs for “ ‘overhead allocation’ of the normal staff and rent paid” on
his behalf, the trial court’s order also awarded costs to Antaramian as set
forth in his hearing exhibits 1 and 13. A comparison of the two exhibits
reveals that Antaramian’s prejudgment interest calculation spreadsheet
contained figures matching figures on the attachment to Frazitta’s affidavit
and that attachment included Antaramian’s office overhead expenses. Thus
Antaramian’s prejudgment interest calculation appears to be based on an amount
which includes the disallowed office overhead expenses. And if the trial court
awarded prejudgment interest that was calculated based on amounts that included
Antaramian’s office overhead expenses, that fact necessarily implies that those
office overhead expenses are part of the cost award itself. Although
Antaramian’s prejudgment interest calculation spreadsheet indicates that there
was an adjustment made discounting Frazitta’s costs, that fact does not save
the $317,873.64 cost award. Absent an itemization, the award on its face could
be interpreted to include costs for the disallowed office overhead expenses.4 Similarly, we are unable to discern
what portion of the award was for the payment to fact witnesses for their trial
testimony.
Where a trial court reviews a motion
to tax costs, it “should consider each item of cost and determine whether it
should be allowed in whole or in part or disallowed.” Northbrook Life Ins.
Co. v. Clark, 590 So. 2d 528, 528 (Fla. 2d DCA 1991). And a trial court’s
failure to itemize costs, especially where a motion to tax costs is denied in
part, can result in a reversal. See id. (“Because [the appellant]
failed to itemize these costs, there was no way to determine whether they were
all taxable.”); Winn-Dixie Stores, Inc. v. Reddick, 954 So. 2d 723, 730
(Fla. 1st DCA 2007) (holding that the trial court erred by failing to itemize
which costs it chose to allow or disallow, thereby precluding intelligent
appellate review of the awarded costs); Kirkland v. Thurmond, 519 So. 2d
717, 718 (Fla. 1st DCA 1988) (explaining that “unless the trial court grants or
denies [a] motion to tax costs in its entirety,” the trial court “should
itemize those [costs] allowed and those disallowed[ ]and the amounts approved
for each item” in order to facilitate appellate review). Thus, because the
trial court failed to itemize the $317,873.64 cost award and because it could
be construed to include disallowed costs, we must reverse this award and remand
for the trial court to determine which costs were taxable and which costs were
nontaxable.
to tax costs, it “should consider each item of cost and determine whether it
should be allowed in whole or in part or disallowed.” Northbrook Life Ins.
Co. v. Clark, 590 So. 2d 528, 528 (Fla. 2d DCA 1991). And a trial court’s
failure to itemize costs, especially where a motion to tax costs is denied in
part, can result in a reversal. See id. (“Because [the appellant]
failed to itemize these costs, there was no way to determine whether they were
all taxable.”); Winn-Dixie Stores, Inc. v. Reddick, 954 So. 2d 723, 730
(Fla. 1st DCA 2007) (holding that the trial court erred by failing to itemize
which costs it chose to allow or disallow, thereby precluding intelligent
appellate review of the awarded costs); Kirkland v. Thurmond, 519 So. 2d
717, 718 (Fla. 1st DCA 1988) (explaining that “unless the trial court grants or
denies [a] motion to tax costs in its entirety,” the trial court “should
itemize those [costs] allowed and those disallowed[ ]and the amounts approved
for each item” in order to facilitate appellate review). Thus, because the
trial court failed to itemize the $317,873.64 cost award and because it could
be construed to include disallowed costs, we must reverse this award and remand
for the trial court to determine which costs were taxable and which costs were
nontaxable.
III. Challenge to Inclusion of Costs to Counsel for Overhead
TPI also challenges the various cost
awards to Antaramian’s attorneys in the total amount of $89,415.48 to the
extent that the awards include overhead expenses such as postage, Westlaw
research, office supplies, an iPad, travel expenses, telephone calls, courier
service, and photocopies. TPI cites cases that stand for the proposition that
such overhead expenses are nontaxable unless there is evidence that they are
reasonably necessary to prosecute or defend the case. See Lewis v.
Thunderbird Manor, Inc., 60 So. 3d 1182, 1182 (Fla. 2d DCA 2011); Bolton
v. Bolton, 412 So. 2d 72, 73 (Fla. 2d DCA 1982); Landmark Winter Park,
LLC v. Colman, 24 So. 3d 787, 789 (Fla. 5th DCA 2009). However, courts have
acknowledged that a party may recover overhead expenses as part of a cost award
where a contract between the parties permits such an award. See In re
Amendments to Unif. Guidelines for Taxation of Costs, 915 So. 2d 612, 614
(Fla. 2005) (recognizing that “guidelines are advisory only” and “are not
intended to . . . limit the amount of costs recoverable under a contract or
statute”); Panama City-Bay Cty. Airport & Indus. Dist. v. Kellogg Brown
& Root Servs., Inc., 136 So. 3d 788, 788 n.1 (Fla. 1st DCA 2014) (“The
parties’ contract broadly allows for the prevailing party to recover on ‘any
and all claims[,] actions, damages, losses and costs’ and ‘all costs, expenses,
and attorney’s fees,’ without specifying limits, such as those provided under
the Statewide Uniform Guidelines of Taxation of Costs in Civil Cases.”). And
here, we construe the fee-shifting provision in the Consulting Agreement to be
broad enough to include such expenses. Our treatment of these overhead expenses
— versus Antaramian’s personal office overhead expenses — is different
because the fee-shifting provision here permits the recovery of “all expenses
of any nature incurred in any way in connection with the matter,” and the
attorneys’ overhead expenses as described fall within that definition. But the
reason why we (and presumably the trial court) concluded that Antaramian’s
personal office overhead expenses were not recoverable is because the expenses
related to his staff and rent are expenses that exist independently of the
action. We find no error in the distinct treatment of the types of overhead
expenses, and we conclude that the trial court did not err in awarding costs
related to Antaramian’s attorneys’ overhead expenses that were related to this
action.
awards to Antaramian’s attorneys in the total amount of $89,415.48 to the
extent that the awards include overhead expenses such as postage, Westlaw
research, office supplies, an iPad, travel expenses, telephone calls, courier
service, and photocopies. TPI cites cases that stand for the proposition that
such overhead expenses are nontaxable unless there is evidence that they are
reasonably necessary to prosecute or defend the case. See Lewis v.
Thunderbird Manor, Inc., 60 So. 3d 1182, 1182 (Fla. 2d DCA 2011); Bolton
v. Bolton, 412 So. 2d 72, 73 (Fla. 2d DCA 1982); Landmark Winter Park,
LLC v. Colman, 24 So. 3d 787, 789 (Fla. 5th DCA 2009). However, courts have
acknowledged that a party may recover overhead expenses as part of a cost award
where a contract between the parties permits such an award. See In re
Amendments to Unif. Guidelines for Taxation of Costs, 915 So. 2d 612, 614
(Fla. 2005) (recognizing that “guidelines are advisory only” and “are not
intended to . . . limit the amount of costs recoverable under a contract or
statute”); Panama City-Bay Cty. Airport & Indus. Dist. v. Kellogg Brown
& Root Servs., Inc., 136 So. 3d 788, 788 n.1 (Fla. 1st DCA 2014) (“The
parties’ contract broadly allows for the prevailing party to recover on ‘any
and all claims[,] actions, damages, losses and costs’ and ‘all costs, expenses,
and attorney’s fees,’ without specifying limits, such as those provided under
the Statewide Uniform Guidelines of Taxation of Costs in Civil Cases.”). And
here, we construe the fee-shifting provision in the Consulting Agreement to be
broad enough to include such expenses. Our treatment of these overhead expenses
— versus Antaramian’s personal office overhead expenses — is different
because the fee-shifting provision here permits the recovery of “all expenses
of any nature incurred in any way in connection with the matter,” and the
attorneys’ overhead expenses as described fall within that definition. But the
reason why we (and presumably the trial court) concluded that Antaramian’s
personal office overhead expenses were not recoverable is because the expenses
related to his staff and rent are expenses that exist independently of the
action. We find no error in the distinct treatment of the types of overhead
expenses, and we conclude that the trial court did not err in awarding costs
related to Antaramian’s attorneys’ overhead expenses that were related to this
action.
IV. Prejudgment Interest Award
In awarding prejudgment interest on
the award of attorneys’ fees and costs, the trial court found that the
attorneys’ fees and costs were an element of damages. The trial court therefore
found that the interest accrued from the date that the fees and costs were
incurred. However, fees awarded pursuant to a prevailing party fee provision in
a contract are not damages because the party requesting them is not entitled to
the fees until he becomes the prevailing party, and therefore, interest does
not accrue prior to the date that entitlement to attorneys’ fees is fixed by
agreement, an arbitration award, or by a court determination. See Butler
v. Yusem, 3 So. 3d 1185, 1186 (Fla. 2009); Quality Engineered
Installation, Inc. v. Higley S., Inc., 670 So. 2d 929, 930-31 (Fla. 1996).
We reject Hahn’s argument that entitlement to fees was fixed on the date that
the Consulting Agreement was signed in this case. While the fee-shifting
provision is broad and establishes a right to prevailing party attorneys’ fees,
that right was not vested on the date that the Consulting Agreement was signed.
Rather, that right was established on the date that the trial court determined
that Antaramian was the prevailing party. Consequently, the trial court erred
by awarding prejudgment interest running from the date that the fees were
incurred rather than from the date that Antaramian was deemed to be the
prevailing party.
the award of attorneys’ fees and costs, the trial court found that the
attorneys’ fees and costs were an element of damages. The trial court therefore
found that the interest accrued from the date that the fees and costs were
incurred. However, fees awarded pursuant to a prevailing party fee provision in
a contract are not damages because the party requesting them is not entitled to
the fees until he becomes the prevailing party, and therefore, interest does
not accrue prior to the date that entitlement to attorneys’ fees is fixed by
agreement, an arbitration award, or by a court determination. See Butler
v. Yusem, 3 So. 3d 1185, 1186 (Fla. 2009); Quality Engineered
Installation, Inc. v. Higley S., Inc., 670 So. 2d 929, 930-31 (Fla. 1996).
We reject Hahn’s argument that entitlement to fees was fixed on the date that
the Consulting Agreement was signed in this case. While the fee-shifting
provision is broad and establishes a right to prevailing party attorneys’ fees,
that right was not vested on the date that the Consulting Agreement was signed.
Rather, that right was established on the date that the trial court determined
that Antaramian was the prevailing party. Consequently, the trial court erred
by awarding prejudgment interest running from the date that the fees were
incurred rather than from the date that Antaramian was deemed to be the
prevailing party.
There is an additional reason for
reversal relating to the prejudgment interest award. In rendering its order,
the trial court expressly relied on Antaramian’s prejudgment interest
calculation spreadsheet. In fact, the trial court’s prejudgment interest award
amount of $462,709.81 is the exact amount of interest listed on Antaramian’s
prejudgment interest calculation spreadsheet. But as we discussed in relation
to the award of costs, the prejudgment interest calculation spreadsheet appears
to include the disallowed office overhead expenses as the basis for the
prejudgment interest calculation, and it is unclear whether the trial court’s
$317,873.64 cost award included all or a portion of Antaramian’s disallowed
office overhead expenses. If the cost award included such disallowed expenses,
then the award of prejudgment interest was incorrectly calculated. Accordingly,
we reverse the trial court’s award of prejudgment interest, and we remand for a
recalculation of the award running from the date that the attorneys’ fees and
costs were awarded rather than from when they were incurred. Additionally, if
the trial court’s prejudgment interest calculation included interest on
disallowed office overhead expenses, it should omit that portion of the award
on remand.
reversal relating to the prejudgment interest award. In rendering its order,
the trial court expressly relied on Antaramian’s prejudgment interest
calculation spreadsheet. In fact, the trial court’s prejudgment interest award
amount of $462,709.81 is the exact amount of interest listed on Antaramian’s
prejudgment interest calculation spreadsheet. But as we discussed in relation
to the award of costs, the prejudgment interest calculation spreadsheet appears
to include the disallowed office overhead expenses as the basis for the
prejudgment interest calculation, and it is unclear whether the trial court’s
$317,873.64 cost award included all or a portion of Antaramian’s disallowed
office overhead expenses. If the cost award included such disallowed expenses,
then the award of prejudgment interest was incorrectly calculated. Accordingly,
we reverse the trial court’s award of prejudgment interest, and we remand for a
recalculation of the award running from the date that the attorneys’ fees and
costs were awarded rather than from when they were incurred. Additionally, if
the trial court’s prejudgment interest calculation included interest on
disallowed office overhead expenses, it should omit that portion of the award
on remand.
CONCLUSION
The trial court correctly determined
that Antaramian was entitled to recover his attorneys’ fees and costs for time
spent litigating the amount of attorneys’ fees. Similarly, the trial court was
correct in its finding that Antaramian’s fact witnesses were entitled to
receive compensation for their assistance with case and discovery preparation. However,
because the trial court failed to itemize the cost award of $317,873.64,
thereby precluding effective appellate review, we must reverse that portion of
the cost award and remand for further proceedings. We likewise reverse the
prejudgment interest award because the trial court erred in its method of
calculation and because it is unclear if the interest award is based, in part,
on disallowed office overhead expenses. In all other respects, we affirm.
that Antaramian was entitled to recover his attorneys’ fees and costs for time
spent litigating the amount of attorneys’ fees. Similarly, the trial court was
correct in its finding that Antaramian’s fact witnesses were entitled to
receive compensation for their assistance with case and discovery preparation. However,
because the trial court failed to itemize the cost award of $317,873.64,
thereby precluding effective appellate review, we must reverse that portion of
the cost award and remand for further proceedings. We likewise reverse the
prejudgment interest award because the trial court erred in its method of
calculation and because it is unclear if the interest award is based, in part,
on disallowed office overhead expenses. In all other respects, we affirm.
Affirmed in part, reversed in part,
and remanded for further proceedings. (WALLACE and SLEET, JJ., Concur.)
and remanded for further proceedings. (WALLACE and SLEET, JJ., Concur.)
__________________
1Antaramian
also successfully defended on appeal and was awarded appellate attorneys’ fees
by this court due to his status as the prevailing party. See Trial
Practices, Inc. v. Antaramian, 97 So. 3d 228 (Fla. 2d DCA 2012) (table
decision).
also successfully defended on appeal and was awarded appellate attorneys’ fees
by this court due to his status as the prevailing party. See Trial
Practices, Inc. v. Antaramian, 97 So. 3d 228 (Fla. 2d DCA 2012) (table
decision).
2TPI
presents no argument on the propriety of awarding attorneys’ fees and costs for
litigating entitlement to attorneys’ fees. Since there is no dispute on this
issue, we do not address it.
presents no argument on the propriety of awarding attorneys’ fees and costs for
litigating entitlement to attorneys’ fees. Since there is no dispute on this
issue, we do not address it.
3Notably,
while eliminating the portion of the provision that permitted payment for the
loss of compensation, the court left intact the portion of the rule permitting
payment of reasonable compensation for the witness’s time spent preparing for,
attending, or testifying at the proceedings. Such payments have long been
permitted as long as the payment is not conditioned on the content of the
testimony. See ABA Comm’n on Ethics & Prof’l Responsibility, Formal
Op. 96-402 (1996) (titled Propriety of Payments to Occurrence Witnesses).
while eliminating the portion of the provision that permitted payment for the
loss of compensation, the court left intact the portion of the rule permitting
payment of reasonable compensation for the witness’s time spent preparing for,
attending, or testifying at the proceedings. Such payments have long been
permitted as long as the payment is not conditioned on the content of the
testimony. See ABA Comm’n on Ethics & Prof’l Responsibility, Formal
Op. 96-402 (1996) (titled Propriety of Payments to Occurrence Witnesses).
4We
acknowledge that the award could also be interpreted to exclude the office
overhead expenses, but it is precisely because the award could be construed in
two different ways that renders the award problematic.
acknowledge that the award could also be interpreted to exclude the office
overhead expenses, but it is precisely because the award could be construed in
two different ways that renders the award problematic.
* * *