LAW.coLAW.co

LENAHAN v. LENAHAN (2021)

District Court of Appeal of Florida, Third District.2021-08-11No. No. 3D20-1436

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

In this breach of contract action, Timothy Lenahan (“the brother”), the plaintiff below, appeals a July 24, 2020 post-judgment final order (“fee judgment”) that awarded $349,094.70 in prevailing party attorneys fees and costs to the defendant below, Shannon Lenahan (“the sister”). The trial court entered the fee judgment following a jury trial and after it had entered a February 19, 2020 final judgment that, inter alia, determined the sister was entitled to prevailing party attorneys fees pursuant to a fee provision contained in the parties’ contract underlying this litigation.

1

Because the sister failed to plead her entitlement to contractual attorneys fees in any pleading, and because we conclude that the exception to the pleading requirement for seeking attorneys fees set forth in Stockman v. Downs, 573 So. 2d 835 (Fla. 1991) does not apply here, we reverse.

2

I. RELEVANT FACTS AND PROCEDURAL HISTORY

A. The Parties’ Pleadings

This action involves a contentious dispute between siblings over the dispersal of their deceased fathers ashes and the sisters ability to visit their ailing mother. In December 2014, the parties entered into an agreement whereby the sister agreed to turn over their fathers ashes to the brothers attorney by January 15, 2015, and the brother agreed not to interfere unreasonably with the sisters visitation of their mother. The agreement contained a prevailing party attorneys fees provision.

3

When the sister did not turn over the fathers ashes by January 15, 2015, the brother, on January 16, 2015, filed the instant breach of contract action against the sister seeking to compel the sister to comply with their agreement (i.e., specific performance). The brothers complaint pleaded entitlement to prevailing party attorneys fees under the agreements fee provision.

The sister responded by filing an answer, affirmative defenses, and several permissive counterclaims. In her pleading, the sister argued, as an affirmative defense, that the brother had breached their agreement by interfering with the sisters attempts to visit their mother, thereby relieving the sister of her obligation to deliver the ashes. Another of the sisters affirmative defenses argued that the agreement was unconscionable and therefore void. It is undisputed that the sisters pleading did not affirmatively plead her entitlement to prevailing party attorneys fees under the agreement or otherwise.

B. The Sister Retains New Legal Counsel

More than two years into the litigation, the sisters initial lawyer withdrew from the case. In May 2017, the sisters current lawyer agreed to represent the sister with the purported understanding that the lawyer would not charge any fees to the sister, but, if the lawyer successfully defended the sister against the brothers breach of contract action at trial, the sister would pursue prevailing party attorneys fees under the parties’ agreement. The sisters fee agreement with her new lawyer was never reduced to writing and the sisters new lawyer did not seek to amend the sisters pleadings to affirmatively plead entitlement to fees.

C. The Trial, the Jury Verdict and the Sisters Post-trial Motions

The lower court conducted a jury trial, and, on October 29, 2019, the jury rendered a verdict in the sisters favor. Because the jury answered “Yes” to the question asking whether the brother had breached the agreement, consistent with the jury instructions, the jury did not go on to answer whether the sister had breached the agreement.

On November 6, 2019, the sister filed her “Motion for Entry of Final Judgment and to Award Attorneys Fees and Costs as the Prevailing Party” (“November 6 motion”) seeking entry of final judgment consistent with the jurys verdict. It is in this November 6 post-trial motion that the sister first filed a paper that claimed entitlement to attorneys fees under the subject agreements fee provision.

4

The sister did not set this November 6 motion for hearing; rather, nearly two and half months later, the sister filed her January 16, 2020 “Motion for Entry of Final Judgment” (“January 16 motion”). In her January 16 motion, the sister merely asked that the trial court “reserve jurisdiction to determine entitlement to attorneys fees and costs, as well as the corresponding amount due.” Attached to her January 16 motion was a proposed final judgment that did not adjudicate the issue, but simply reserved jurisdiction to determine fees. The brother did not file a response to the sisters January 16 motion and, as discussed below, did not file a response to the sisters November 6 motion until March 18, 2020.

On January 23, 2020, the sister noticed her January 16 motion for a five-minute hearing on the successor judges motion calendar. During the February 19, 2020 hearing before the successor judge, the sisters attorney argued that the sister was the prevailing party in the case but, consistent with the parties’ understanding regarding the scope of this hearing, requested that the trial court reserve jurisdiction on the issue of entitlement to fees because of the attorneys understanding that the brother intended to seek prevailing party attorneys fees. The brothers counsel agreed that the court should reserve jurisdiction on the issue of entitlement, stating that the brother intended to seek attorneys fees because the sister, at trial, had abandoned her affirmative defense that the agreement was void; ergo, the brother had “prevailed” on the affirmative defense.

Notwithstanding the parties’ agreement that the court should simply enter a final judgment in the sisters favor and reserve jurisdiction on both entitlement and amount of attorneys fees, the trial court ruled at the hearing that the sister was entitled to prevailing party attorneys fees, but also invited the brothers counsel to file his own fee motion. Consistent with its oral rulings, the trial court entered the February 19, 2020 final judgment which, in relevant part, provides: “[The sister] is the prevailing party and is entitled to recover her reasonable attorneys’ fees and costs. The court reserves jurisdiction to consider all post-judgment motions.”

5

Following the February 19th final judgment hearing, at which the trial court invited the brothers counsel to file his own fee motion, the brother filed his motion for attorneys fees and an incorporated response to the sisters November 6 motion. On May 14, 2020, the brother filed an amended fee motion and response to the sisters November 6 motion (“the brothers amended motion/response”). In the brothers amended motion/response, the brother argued that the sister was not entitled to contractual attorneys fees because she had failed to seek prevailing party attorneys fees in her pleading and that Stockman’s exception to the pleading requirement did not apply. The trial court, though, refused to revisit its earlier fee entitlement determination as to the sister and, after conducting a two-day evidentiary hearing on the amount of attorneys fees to which the sister was entitled, entered the July 24, 2020 fee judgment

6

awarding the sister a total of $349,094.70 in fees and costs.

7

The brother timely appealed the fee judgment, challenging the fee award.

8

II. STANDARD OF REVIEW

This Court reviews de novo whether a party is entitled to attorneys fees pursuant to the provisions of a contract. See Burton Family Pship v. Luani Plaza, Inc., 276 So. 3d 920, 922 (Fla. 3d DCA 2019). Similarly, application of Stockman’s exception to the pleading requirement for attorneys fees is reviewed de novo. See Save on Cleaners of Pembroke II Inc. v. Verde Pines City Ctr. Plaza LLC, 14 So. 3d 295, 297 n.4 (Fla. 4th DCA 2009).

III. ANALYSIS

The Florida Supreme Court has determined that “a claim for attorneys fees, whether based on statute or contract, must be pled.” Stockman, 573 So. 2d at 837. “Failure to do so constitutes a waiver of the claim.” Id. at 838. While the Stockman court established a bright-line requirement that entitlement to fees must be pled, the Court recognized an exception to the pleading requirement where (i) a party has sufficient notice that the party opponent claims entitlement to contractual or statutory attorneys fees (notice prong), and (ii) there is action or inaction on the part of the party that can be deemed to be either the partys acquiescence to the fee claim or the partys failure to object to the party opponents failure to plead entitlement to attorneys fees (waiver prong):

[W]e recognize an exception to the rule announced today. Where a party has notice that an opponent claims entitlement to attorneys fees, and by its conduct recognizes or acquiesces to that claim or otherwise fails to object to the failure to plead entitlement, that party waives any objection to the failure to plead a claim for attorneys fees.

Id. (emphasis added); see also Save on Cleaners of Pembroke II Inc., 14 So. 3d at 297 (“An implicit rationale for Stockman’s exception – and its concomitant requirement of objecting to an unpled claim – is that under the Rules of Civil Procedure the failure to object to a claim not pleaded may operate as a consent to amendment of the pleading to include the claim.”); Fla. R. Civ. P. 1.190(b) (“When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.”).

In this appeal, the sister concedes that she did not plead entitlement to attorneys fees in her pleading. Nonetheless, the sister argues that Stockman’s exception to the pleading requirement applies here because (i) the brother was purportedly on notice both before and during trial that, if she won at trial, the sister intended to seek prevailing party attorneys fees, and (ii) the brother waived any objection to her failure to plead a claim for attorneys fees.

A. Waiver Prong of Stockman’s Exception to the Pleading Requirement 9

Under the particular facts and circumstances of this case, we conclude that the brother did not, through any action or inaction, recognize or acquiesce to the sisters fee claim. Nor did the brother waive any objection to the sisters failure to plead a claim for contractual attorneys fees. To the contrary, the brother filed the brothers amended motion/response expressly objecting to the sisters failure to plead her fee claim.

The timing of the parties’ respective filings is important. The sister first pleaded entitlement to fees post-trial in her November 6 motion. The sister, though, did not set this November 6 motion for hearing. Instead, recognizing that the fee claim was disputed, the sister noticed her January 16 motion for hearing on the trial courts five-minute motion calendar. Unlike her November 6 motion, the sisters January 16 motion merely requested that the trial court enter final judgment in her favor and reserve jurisdiction on the issues of entitlement and amount of attorneys fees. Similarly, the proposed final judgment attached to the January 16 motion merely reserved jurisdiction over the fee issues without adjudicating entitlement to fees.

Hence, going into the five-minute motion hearing conducted on February 19, 2020, the brother had no reason to believe that the trial court – a successor judge who had not presided over the trial – would adjudicate the sisters November 6 motion, or otherwise determine fee entitlement. At this February 19 hearing on the sisters January 16 motion the brothers counsel did not acquiesce to the sisters fee claim or waive the sisters failure to plead it; he merely agreed that the court should reserve jurisdiction on attorneys fees, stating that the brother intended to file his own fee motion.

The brother later did so, filing the brothers amended motion/response in which the brother – extensively citing to Stockman’s pleading requirement – expressly and unequivocally asserted opposition to the sisters November 6 motion (and, more generally, the sisters claim for fees).

10

On this record, we cannot conclude, as the sister urges, that the brother waived his objection to the sisters failure to plead her fee claim simply because the trial court, in rendering its February 19, 2020 final judgment, adjudicated the sisters unnoticed November 6 motion. The brothers amended motion/response expressly raises the Stockman objection, and, under this cases unusual procedural posture, was sufficient to preserve the objection.

B. Distinguishing this Courts Storob Decision

The sister heavily relies on this Courts decision in Storob v. Sphere Drake Insurance, 730 So. 2d 375 (Fla. 3d DCA 1999), as support for her argument that Stockman’s exception to the pleading requirement is applicable in this case. Storob, though, is distinguishable. In Storob, an insurance carrier filed a declaratory judgment action against its insureds, seeking a coverage determination. Id. at 375. The insureds successfully defended the action and were therefore entitled to statutory attorneys fees under section 627.428 of the Florida Statutes.

11

The trial court denied the insureds’ fee claim, though, because the insureds had not pled entitlement to attorneys fees in their pleadings. Id. at 375-76. Citing Stockman, this Court reversed “because when, at the end of the non-jury trial, the trial judge asked the carriers counsel to prepare the final judgment, he agreed with the insureds’ lawyers request to include a provision that ‘the court reserves jurisdiction as to attorneys fees ․’ ” Id. at 376.

Although short on facts, we can readily infer from the opinion that the Storob court concluded the waiver prong of Stockman’s exception was met because the carriers counsel – i.e., the counsel for the party against whom fees would be awarded – agreed to include a provision in the final judgment reserving jurisdiction for fees. There was no indication in Storob that the carrier was also seeking fees against its insureds. Hence, unlike the instant case, there would be no reason for the carriers counsel in Storob to agree to include a reservation of jurisdiction for fees in the judgment other than to recognize and acquiesce to the insureds’ unpled fee claim.

Unlike the insurer in Storob, the brother pleaded his entitlement to prevailing party attorneys fees. Thus, the brother had a very good reason – entirely unrelated to any purported acquiescence to the sisters fee claim – at the February 19 hearing in which the trial court specifically invited the brother to file his own fee motion, to ask the court to reserve jurisdiction to determine his entitlement to fees. In short, unlike Storob, where the insurers counsel essentially acquiesced to the insureds’ entitlement to fees, leaving only a determination as to the amount of fees, here, the brother – who was pursuing his own, properly pleaded fee claim – merely agreed that the trial court should reserve jurisdiction on the issues of both entitlement and amount of fees. For these reasons, Storob is distinguishable and does not govern our determination in this appeal.

IV. CONCLUSION

A partys failure to plead entitlement to contractual attorneys fees results in a waiver of the partys fee claim unless the party opponent has sufficient notice of the partys fee claim, and the party opponent either acquiesces to the claim or fails to object to the partys failure to plead entitlement to fees. Stockman, 573 So. 2d at 838. Because the sister failed to plead her entitlement to contractual attorneys fees in her pleading, and because the brother did not, through any action or inaction, waive any objection to the sisters failure to plead a claim for contractual attorneys fees, we conclude that the exception to Stockman is inapplicable. The sister, therefore, waived her right to seek contractual attorneys fees in this case. Accordingly, we reverse all but the cost award in the July 24, 2020 fee judgment, and remand for the trial court to enter a new judgment consistent with this opinion.

Reversed and remanded with instructions.

FOOTNOTES

1

.   This Court affirmed the February 19, 2020 final judgment in a separate appellate proceeding, see Lenahan v. Lenahan, No. 3D20-522, 2021 WL 2944756 (Fla. 3d DCA July 14, 2021), and, in that appeal, we granted the sisters motion seeking appellate level attorneys fees. Our granting of the sisters motion for appellate level attorneys fees in that appeal, however, neither controls nor informs our independent review in this case of whether trial level attorneys fees were appropriately sought below. Florida Rule of Appellate Procedure 9.400 – rather than Stockman v. Downs, 573 So. 2d 835 (Fla. 1991) and its progeny – governs the procedures applicable for parties seeking appellate fees. See Advanced Chiropractic & Rehab. Ctr., Corp. v. United Auto. Ins. Co., 140 So. 3d 529, 535 (Fla. 2014). Further, the portion of the February 19, 2020 final judgment that merely determined the sister was entitled to fees, without affixing an amount, was not appealable and therefore was outside the scope of our jurisdiction and adjudication in 3D20-522. See Acosta v. Tower Hill Signature Ins. Co., 245 So. 3d 882, 883 (Fla. 3d DCA 2018).

2

.   Because there was no written fee agreement between the sister and her counsel, the brother also challenges the trial courts determination that the sisters counsel is entitled to a contingency fee multiplier. See R. Regulating Fla. Bar 4-1.5(f)(1),(2) (requiring all contingency fee agreements to be in writing); but see R. Regulating Fla. Bar 4-1.5(e)(1) (“The fact that a contract may not be in accord with these rules is an issue between the lawyer and client and a matter of professional ethics, but is not the proper basis for an action or defense by an opposing party when fee-shifting litigation is involved.”) Because of our disallowance of fees based on Stockman’s pleading requirement, we need not, and therefore do not, reach this issue.

3

.   The attorneys fees provision provided, in relevant part, as follows:[T]he parties agree that any expenses, including but not limited to, counsel fees, court costs, and travel, incurred by a party in the successful enforcement of any of the provisions of this Agreement, whether through litigation or other action necessary to compel compliance herewith, shall be borne by the defaulting party ․ Any such costs incurred by a party in the successful defense of any action for enforcement of any such provision shall be borne by the party seeking to enforce compliance.If a party by action, proceeding, counterclaim, defense or otherwise, seeks to set aside this Agreement, or to declare any of its terms and conditions invalid, void, or against public policy for any reason ․, said party shall reimburse the other party and be liable for any and all such partys reasonable expenses, costs and attorneys fees provided to the extent that such action, proceeding, counterclaim or defense results in a decision, judgment, decree or order dismissing or rejecting said claims[.]

4

.   The sisters November 6 motion also sought to recover court costs under section 57.041 of the Florida Statutes.

5

.   The hearing transcript from the February 19, 2020 hearing reflects that the trial court signed a proposed final judgment prepared by the sisters counsel that had not been attached to the sisters January 16 motion that was noticed for hearing. It is this February 19, 2020 final judgment that the brother separately appealed, and that we affirmed, in 3D20-522. As noted in footnote 1, supra, that portion of the February 19, 2020 final judgment determining that the sister was entitled to attorneys fees was non-final, subject to revision by the trial court, and non-appealable. Acosta, 245 So. 3d at 883.

6

.   It does not appear that the trial court ever entered an order denying that portion of the brothers amended motion/response which argued that the brother had prevailed and was entitled to fees. The brother raises no issue as to his own entitlement to fees in this appeal, and we express no opinion on the issue.

7

.   The trial court awarded $129,720 in lodestar fees, along with a 2.5 contingency fee multiplier. The fee judgment also included $6,900 in expert fees, taxable costs of $8,548.74 and prejudgment interest of $9,345.96.

8

.   The brother does not challenge the $8,548.74 cost award.

10

.   While the brothers amended motion/response specifically objected to the entitlement to fees asserted in the sisters November 6 motion, we note that, even if the brother had not filed a response to the sisters November 6 motion, such omission, standing alone, would likely not have satisfied the waiver prong of Stockman’s exception. See Taylor v. T.R. Props., Inc. of Winter Park, 603 So. 2d 1380, 1381 (Fla. 5th DCA 1992) (determining that a partys failure to file a response objecting to a demand for attorneys fees made, for the first time, in a motion for summary judgment did not constitute a Stockman waiver because “there is no requirement in the Florida Rules of Civil Procedure that would require [the party] to respond in any way to that demand prior to the hearing on the motion”).

11

.   The statute provides, in relevant part:Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insureds or beneficiarys attorney prosecuting the suit in which the recovery is had.§ 627.428(1), Fla. Stat. (2020).

SCALES, J.