41 Fla. L. Weekly D1036aTop of Form
Attorney’s
fees — Proposal for settlement — Error to award attorney’s fees pursuant to
proposals for settlement where proposals, although they included attorney’s
fees, did not include a statement that attorney’s fees are part of the legal
claim — Award of fees to prevailing party in action alleging misleading
advertising — Award of fees under section 817.41(6), Florida Statutes, which
provides for award of fees to prevailing party in misleading advertising
action, should be limited to the misleading advertising claim unless trial
court determines that other claims were intertwined with misleading advertising
claim
fees — Proposal for settlement — Error to award attorney’s fees pursuant to
proposals for settlement where proposals, although they included attorney’s
fees, did not include a statement that attorney’s fees are part of the legal
claim — Award of fees to prevailing party in action alleging misleading
advertising — Award of fees under section 817.41(6), Florida Statutes, which
provides for award of fees to prevailing party in misleading advertising
action, should be limited to the misleading advertising claim unless trial
court determines that other claims were intertwined with misleading advertising
claim
DEER VALLEY REALTY, INC., Appellant, v. SB HOTEL ASSOCIATES
LLC, a Delaware limited liability company, et al., Appellee. 4th District. Case
Nos. 4D14-2051 and 4D15-830. April 27, 2016. Consolidated appeals from the
Circuit Court for the Seventeenth Judicial Circuit, Broward County; Jeffrey E.
Streitfeld, Judge; L.T. Case No. 12-10560CACE(07). Counsel: Raoul G. Cantero,
David P. Draigh and Jesse L. Green of White & Case LLP, Miami, and Joseph
E. Altschul of Joseph E. Altschul, LLC, Pembroke Pines, for appellant. Bruce S.
Rogow and Tara A. Campion of Bruce S. Rogow, P.A., Fort Lauderdale, and Herman
J. Russomanno, Robert J. Borrello and Herman J. Russomanno, III of Russomanno
& Borrello, P.A., Miami, for appellee.
LLC, a Delaware limited liability company, et al., Appellee. 4th District. Case
Nos. 4D14-2051 and 4D15-830. April 27, 2016. Consolidated appeals from the
Circuit Court for the Seventeenth Judicial Circuit, Broward County; Jeffrey E.
Streitfeld, Judge; L.T. Case No. 12-10560CACE(07). Counsel: Raoul G. Cantero,
David P. Draigh and Jesse L. Green of White & Case LLP, Miami, and Joseph
E. Altschul of Joseph E. Altschul, LLC, Pembroke Pines, for appellant. Bruce S.
Rogow and Tara A. Campion of Bruce S. Rogow, P.A., Fort Lauderdale, and Herman
J. Russomanno, Robert J. Borrello and Herman J. Russomanno, III of Russomanno
& Borrello, P.A., Miami, for appellee.
(MAY, J.) A failed real estate investment resulted in an
action to recoup monetary losses. The plaintiff now appeals a judgment for the
defendants and a consequent award of attorney’s fees and costs. Concerning the
underlying trial, the plaintiff argues the trial court erred in: (1) admitting
“market crash” evidence and excluding the plaintiff’s rebuttal evidence; (2)
excluding evidence challenging the credibility of a defense witness; (3)
entering a directed verdict for Trump Florida Management, LLC; and (4) denying
the plaintiff’s motion to amend the complaint to assert a punitive damages
claim.1 The plaintiff also appeals the award
of attorney’s fees and costs based on separate proposals for settlement and
section 817.41(6), Florida Statutes (2014). We affirm the final judgment and
the cost judgment without further comment. We reverse the final judgment for
attorney’s fees.
action to recoup monetary losses. The plaintiff now appeals a judgment for the
defendants and a consequent award of attorney’s fees and costs. Concerning the
underlying trial, the plaintiff argues the trial court erred in: (1) admitting
“market crash” evidence and excluding the plaintiff’s rebuttal evidence; (2)
excluding evidence challenging the credibility of a defense witness; (3)
entering a directed verdict for Trump Florida Management, LLC; and (4) denying
the plaintiff’s motion to amend the complaint to assert a punitive damages
claim.1 The plaintiff also appeals the award
of attorney’s fees and costs based on separate proposals for settlement and
section 817.41(6), Florida Statutes (2014). We affirm the final judgment and
the cost judgment without further comment. We reverse the final judgment for
attorney’s fees.
The plaintiff’s complaint was based on the “Offering
Documents” that explained Donald Trump’s role in the hotel project, which
included a license to use his name and brand and provided for Trump Florida
Management to act as the initial hotel manager. The Property Report stated in
capital letters that “the condominium shall initially be known as the Trump
International Hotel . . . pursuant to a license agreement with Donald J. Trump.
If that license agreement is terminated, rights to the Trump name and
servicemarks must cease. This may have a negative impact on the value of your
unit.”
Documents” that explained Donald Trump’s role in the hotel project, which
included a license to use his name and brand and provided for Trump Florida
Management to act as the initial hotel manager. The Property Report stated in
capital letters that “the condominium shall initially be known as the Trump
International Hotel . . . pursuant to a license agreement with Donald J. Trump.
If that license agreement is terminated, rights to the Trump name and
servicemarks must cease. This may have a negative impact on the value of your
unit.”
The Purchase Agreement and other documents had similar
disclosures. The Purchase Agreement contained the following statement: “Buyer
has not relied upon . . . any representations as to: . . . (f) any particular
hotel affiliation or maintaining any existing hotel affiliation.”
disclosures. The Purchase Agreement contained the following statement: “Buyer
has not relied upon . . . any representations as to: . . . (f) any particular
hotel affiliation or maintaining any existing hotel affiliation.”
SB Hotel Associates LLC (“SB Hotel”) obtained a temporary
certificate of occupancy in October 2008. A general manager and nine other
hotel executives, selected by Donald Trump, were hired for the hotel opening.
When buyers entered into reservation and purchase agreements in 2005, the real
estate market was at a historic high. By the time the certificate of occupancy
was issued and closings were scheduled in May 2009, the market had collapsed.
certificate of occupancy in October 2008. A general manager and nine other
hotel executives, selected by Donald Trump, were hired for the hotel opening.
When buyers entered into reservation and purchase agreements in 2005, the real
estate market was at a historic high. By the time the certificate of occupancy
was issued and closings were scheduled in May 2009, the market had collapsed.
On May 5, 2009, in an effort to ensure compliance with the
“Trump Standard,” Trump Marks Fort Lauderdale LLC (“Trump Marks”), the licensor
under the license agreement, issued a default notice to SB Hotel, identifying
particular issues that Donald Trump believed SB Hotel needed to address. Trump
Marks did not terminate either the license agreement or hotel management
agreement, and did not attempt to remove the Trump name from the project.
“Trump Standard,” Trump Marks Fort Lauderdale LLC (“Trump Marks”), the licensor
under the license agreement, issued a default notice to SB Hotel, identifying
particular issues that Donald Trump believed SB Hotel needed to address. Trump
Marks did not terminate either the license agreement or hotel management
agreement, and did not attempt to remove the Trump name from the project.
On May 13, 2009, SB Hotel sent a letter to each buyer, which
scheduled a walk through inspection and closing date of May 28, 2009. The
letter advised buyers of the existence of the Trump Marks default notice. It
also advised that “[g]iven the uncharted economic climate that we are adapting
to, and the impact that the economy has had on both the real estate and
hospitality industries, we do not believe that the hotel operation will open if
purchasers have closed on fewer [than] fifty percent (50%) of the units.” It
informed buyers that they would not be permitted to occupy their units until
the hotel opened.
scheduled a walk through inspection and closing date of May 28, 2009. The
letter advised buyers of the existence of the Trump Marks default notice. It
also advised that “[g]iven the uncharted economic climate that we are adapting
to, and the impact that the economy has had on both the real estate and
hospitality industries, we do not believe that the hotel operation will open if
purchasers have closed on fewer [than] fifty percent (50%) of the units.” It
informed buyers that they would not be permitted to occupy their units until
the hotel opened.
Of the 170 buyers, only one showed up to close. Not long
after, the lender failed and was seized by the FDIC. The project went into
foreclosure, and SB Hotel’s interest was wiped out.
after, the lender failed and was seized by the FDIC. The project went into
foreclosure, and SB Hotel’s interest was wiped out.
The plaintiff filed a third amended complaint, alleging
counts for violation of the federal Interstate Land Sales Full Disclosure Act
(“ILSA”), fraud, negligent misrepresentation, fraudulent concealment, and
misleading advertising in violation of section 817.41, Florida Statutes. It
alleged detrimental reliance upon Donald Trump’s statements in his promotional
materials and that it would not have purchased a unit absent Donald Trump’s
presence as the developer.
counts for violation of the federal Interstate Land Sales Full Disclosure Act
(“ILSA”), fraud, negligent misrepresentation, fraudulent concealment, and
misleading advertising in violation of section 817.41, Florida Statutes. It
alleged detrimental reliance upon Donald Trump’s statements in his promotional
materials and that it would not have purchased a unit absent Donald Trump’s
presence as the developer.
The jury returned a verdict for the defendants on all
counts. The defendants moved for attorney’s fees and costs pursuant to section
768.79, Florida Statutes; rule 1.442 of the Florida Rules of Civil Procedure;
section 817.41(6), Florida Statutes; and ILSA. The trial court “granted [the
motions] as to entitlement pursuant to and from the date of their August 16,
2013 separate Proposals for Settlement” and “as to entitlement from December
13, 2013 pursuant to Fla. Stat. § 817.41(6).”2
counts. The defendants moved for attorney’s fees and costs pursuant to section
768.79, Florida Statutes; rule 1.442 of the Florida Rules of Civil Procedure;
section 817.41(6), Florida Statutes; and ILSA. The trial court “granted [the
motions] as to entitlement pursuant to and from the date of their August 16,
2013 separate Proposals for Settlement” and “as to entitlement from December
13, 2013 pursuant to Fla. Stat. § 817.41(6).”2
On appeal, the plaintiff argues the proposals for settlement
do not comply with rule 1.442 and section 768.79, Florida Statutes, because
they fail to state whether attorney’s fees are part of the claim for relief, do
not specify what portion of the proposals would settle a punitive damages
claim, and penalized the plaintiff for failing to anticipate the defendants
would amend their pleadings to include an attorney’s fees claim.
do not comply with rule 1.442 and section 768.79, Florida Statutes, because
they fail to state whether attorney’s fees are part of the claim for relief, do
not specify what portion of the proposals would settle a punitive damages
claim, and penalized the plaintiff for failing to anticipate the defendants
would amend their pleadings to include an attorney’s fees claim.
The defendants respond that the proposals comply with both
the rule and statute. Statements concerning attorney’s fees and punitive
damages are included in the proposal and no punitive damages claim was pending
at the time the proposals were made. Amending the pleadings to add statutory
claims for prospective attorney’s fees did not impact the proposals.
the rule and statute. Statements concerning attorney’s fees and punitive
damages are included in the proposal and no punitive damages claim was pending
at the time the proposals were made. Amending the pleadings to add statutory
claims for prospective attorney’s fees did not impact the proposals.
We have de novo review of orders awarding “attorney’s fees
and costs pursuant to section 768.79 and rule 1.442.” Pratt v. Weiss,
161 So. 3d 1268, 1271 (Fla. 2015).
and costs pursuant to section 768.79 and rule 1.442.” Pratt v. Weiss,
161 So. 3d 1268, 1271 (Fla. 2015).
Section 768.79 and rule 1.442 control attorney’s fees awards
based on a proposal for settlement. “Both section 768.79 and rule 1.442 are in
derogation of the common law . . . which requires that we strictly construe
both [of them].” Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d
362, 376 (Fla. 2013). “A proposal shall . . . state whether the proposal
includes attorneys’ fees and whether attorneys’ fees are part of the
legal claim.” Fla. R. Civ. P. 1.442(c)(2)(F) (emphasis added).
based on a proposal for settlement. “Both section 768.79 and rule 1.442 are in
derogation of the common law . . . which requires that we strictly construe
both [of them].” Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d
362, 376 (Fla. 2013). “A proposal shall . . . state whether the proposal
includes attorneys’ fees and whether attorneys’ fees are part of the
legal claim.” Fla. R. Civ. P. 1.442(c)(2)(F) (emphasis added).
Horowitch is instructive. In answering a
certified question from the Eleventh Circuit Court of Appeals, our supreme
court stated:
certified question from the Eleventh Circuit Court of Appeals, our supreme
court stated:
[E]ven
if section 768.79 applied in this case, Diamond Aircraft would not be entitled
to attorney’s fees under that section because Diamond Aircraft’s offer of
settlement did not strictly comply with rule 1.442, as it did not state that
the proposal included attorney’s fees and attorney’s fees are part of the
legal claim.
if section 768.79 applied in this case, Diamond Aircraft would not be entitled
to attorney’s fees under that section because Diamond Aircraft’s offer of
settlement did not strictly comply with rule 1.442, as it did not state that
the proposal included attorney’s fees and attorney’s fees are part of the
legal claim.
Horowitch, 107 So. 3d at 377 (emphasis
added).
added).
Here, paragraph five of the proposals stated:
The
claims to be resolved by acceptance of this proposal for settlement are all
claims against Defendant that were raised in this action or could have been
raised in this action by Plaintiff, and any claims against Plaintiff, that were
raised in this action or could have been raised in this action by Defendant.
claims to be resolved by acceptance of this proposal for settlement are all
claims against Defendant that were raised in this action or could have been
raised in this action by Plaintiff, and any claims against Plaintiff, that were
raised in this action or could have been raised in this action by Defendant.
Paragraph seven stated: “This proposal for settlement is
inclusive of all attorney’s fees and costs incurred by Plaintiff or Defendant.”
inclusive of all attorney’s fees and costs incurred by Plaintiff or Defendant.”
While the proposals included attorney’s fees, they neglected
to include a statement that “attorney’s fees [were] part of the legal
claim.” The proposals satisfied only half of rule 1.442(c)(2)(F)’s
requirements. Horowitch, 107 So. 3d at 376-78. They were therefore
invalid and unenforceable. The trial court erred in awarding attorney’s fees
pursuant to them. Because we hold the proposals invalid and unenforceable due
to their noncompliance with the rule concerning attorney’s fees, we do not
address the plaintiff’s additional arguments of the proposals’ invalidity based
on their handling of punitive damages and reference to section 817.41(6).
to include a statement that “attorney’s fees [were] part of the legal
claim.” The proposals satisfied only half of rule 1.442(c)(2)(F)’s
requirements. Horowitch, 107 So. 3d at 376-78. They were therefore
invalid and unenforceable. The trial court erred in awarding attorney’s fees
pursuant to them. Because we hold the proposals invalid and unenforceable due
to their noncompliance with the rule concerning attorney’s fees, we do not
address the plaintiff’s additional arguments of the proposals’ invalidity based
on their handling of punitive damages and reference to section 817.41(6).
Next, the plaintiff argues the trial court erred in finding
the defendants are entitled to all of their attorney’s fees under section
817.41(6) because that section is limited to fees incurred in a misleading
advertising claim and fees related to the other claims should be excluded.
Alternatively, the plaintiff argues that because the court found the defendants
are entitled to fees under section 817.41(6) from December 13, 2013, this Court
should reverse any fee award granted under the proposals for settlement before
then.
the defendants are entitled to all of their attorney’s fees under section
817.41(6) because that section is limited to fees incurred in a misleading
advertising claim and fees related to the other claims should be excluded.
Alternatively, the plaintiff argues that because the court found the defendants
are entitled to fees under section 817.41(6) from December 13, 2013, this Court
should reverse any fee award granted under the proposals for settlement before
then.
“[E]ntitlement to recover fees and costs [is] generally . .
. limited to those fees and costs directly and exclusively related to each
claim . . . on which recovery is allowed . . . .” Black Diamond Props., Inc.
v. Haines, 36 So. 3d 819, 822 (Fla. 5th DCA 2010). However, the defendants
argue the attorney’s fees under the section 817.41(6) claim are inextricably
intertwined with the other claims because they were based on the same facts and
alleged wrongs.
. limited to those fees and costs directly and exclusively related to each
claim . . . on which recovery is allowed . . . .” Black Diamond Props., Inc.
v. Haines, 36 So. 3d 819, 822 (Fla. 5th DCA 2010). However, the defendants
argue the attorney’s fees under the section 817.41(6) claim are inextricably
intertwined with the other claims because they were based on the same facts and
alleged wrongs.
“[W]here the claims involve a common core of facts and are
based on related legal theories, a full fee may be awarded unless it can be
shown that the attorneys spent a separate and distinct amount of time on counts
as to which no attorney’s fees were sought.” Anglia Jacs & Co. v. Dubin,
830 So. 2d 169, 172 (Fla. 4th DCA 2002) (internal quotation marks omitted)
(quoting Caplan v. 1616 E. Sunrise Motors, Inc., 522 So. 2d 920, 922
(Fla. 3d DCA 1988)).
based on related legal theories, a full fee may be awarded unless it can be
shown that the attorneys spent a separate and distinct amount of time on counts
as to which no attorney’s fees were sought.” Anglia Jacs & Co. v. Dubin,
830 So. 2d 169, 172 (Fla. 4th DCA 2002) (internal quotation marks omitted)
(quoting Caplan v. 1616 E. Sunrise Motors, Inc., 522 So. 2d 920, 922
(Fla. 3d DCA 1988)).
“The party seeking fees has the burden to allocate them to
the issues for which fees are awardable or to show that the issues were so
intertwined that allocation is not feasible.” Waverly at Las Olas Condo.
Ass’n v. Waverly Las Olas, LLC, 88 So. 3d 386, 388 (Fla. 4th DCA 2012)
(internal quotation marks omitted) (quoting Chodorow v. Moore, 947 So.
2d 577, 579 (Fla. 4th DCA 2007)).
the issues for which fees are awardable or to show that the issues were so
intertwined that allocation is not feasible.” Waverly at Las Olas Condo.
Ass’n v. Waverly Las Olas, LLC, 88 So. 3d 386, 388 (Fla. 4th DCA 2012)
(internal quotation marks omitted) (quoting Chodorow v. Moore, 947 So.
2d 577, 579 (Fla. 4th DCA 2007)).
Because the trial court did not determine whether the claims
were intertwined, we remand the case for that determination and for calculation
of the amount of attorney’s fees based on that determination. We also direct
the court to limit the fees from December 13, 2013, pursuant to its own order
of December 17, 2014.
were intertwined, we remand the case for that determination and for calculation
of the amount of attorney’s fees based on that determination. We also direct
the court to limit the fees from December 13, 2013, pursuant to its own order
of December 17, 2014.
In conclusion, the proposals for settlement failed to
strictly comply with rule 1.442(c)(2)(F) because they failed to state whether
the attorney’s fees were part of the legal claim. They therefore cannot form a
basis for the attorney’s fees award. While the trial court did not err in
awarding fees under section 817.41(6), those fees are limited to the misleading
advertising claim unless the court determines the claims were intertwined and
to date from December 13, 2013. We affirm the cost judgment.
strictly comply with rule 1.442(c)(2)(F) because they failed to state whether
the attorney’s fees were part of the legal claim. They therefore cannot form a
basis for the attorney’s fees award. While the trial court did not err in
awarding fees under section 817.41(6), those fees are limited to the misleading
advertising claim unless the court determines the claims were intertwined and
to date from December 13, 2013. We affirm the cost judgment.
Reversed and Remanded. (FORST, J., and SCHER,
ROSEMARIE, Associate Judge, concur.)
ROSEMARIE, Associate Judge, concur.)
__________________
1These same issues were raised in an
appeal brought by an unrelated plaintiff against the same defendants. The cases
were tried together, and orally argued together, but remain independent. See
Taglieri v. SB Hotel Assocs. LLC, No. 4D14-1983 (Fla. 4th DCA Apr. 14,
2016).
appeal brought by an unrelated plaintiff against the same defendants. The cases
were tried together, and orally argued together, but remain independent. See
Taglieri v. SB Hotel Assocs. LLC, No. 4D14-1983 (Fla. 4th DCA Apr. 14,
2016).
2December 13, 2013, was the date the
defendants moved to amend their answer by interlineation to include their claim
for attorney’s fees; the motion was granted.
defendants moved to amend their answer by interlineation to include their claim
for attorney’s fees; the motion was granted.
* * *