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JAIN v. BUCHANAN INGERSOLL ROONEY PC (2021)

District Court of Appeal of Florida, Third District.2021-12-01No. No. 3D20-1529

Summary

Holding. The court affirmed the trial court's award of attorney's fees to Morgan, holding that fees paid by the firm pursuant to an indemnification contract constitute fees "incurred on the defendant's behalf" under Florida's offer of judgment statute, regardless of whether the defendant personally paid them.

Avra Jain sued her former attorney Richard Morgan and his law firm for legal malpractice. Morgan served an offer of judgment before trial concluded in his favor. Morgan then sought to recover attorney's fees under Florida's offer of judgment statute, which permits a prevailing defendant to recover fees "incurred on the defendant's behalf." Jain argued Morgan was not entitled to fees because he personally did not pay for legal services; instead, his firm indemnified him and paid the defense costs under a contractual arrangement. The trial court awarded fees to Morgan, finding that the statute's language covers expenses incurred by others on a defendant's behalf pursuant to a contract.

On appeal, the court affirmed, holding that the attorney's fees and costs satisfied the statutory requirement of being "incurred on the defendant's behalf" because they were paid by the firm pursuant to an indemnification contract. The court reasoned that because the litigation against both Morgan and the firm arose from the same facts and legal theories—the firm's vicarious liability depended entirely on Morgan's alleged wrongdoing—the legal work performed was inseparable and benefited Morgan. The court rejected Jain's argument that apportionment was necessary, finding the defense of both defendants required identical work.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether fees paid by a third party pursuant to an indemnification contract satisfy the statutory requirement of fees "incurred on the defendant's behalf"
  • Whether attorney's fees must be apportioned between a defendant and entities liable for vicarious liability when the same legal work defends both
  • Scope of indemnification agreements in relation to offer of judgment fee recovery

Procedural posture

Jain appealed a final judgment awarding attorney's fees to Morgan following the trial court's determination that Morgan was entitled to fees under Florida's offer of judgment statute despite the firm paying his defense costs.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

INTRODUCTION

Avra Jain appeals from a final judgment awarding attorneys fees in favor of attorney Richard Morgan, based upon Morgans offer of judgment. For the reasons that follow, we affirm.

BACKGROUND

Jain filed a legal malpractice suit against her former attorney, Richard Morgan, and Morgans law firm, Buchanan Ingersoll & Rooney, PC (“the Firm”). The only claim alleged against the Firm was for respondeat superior/vicarious liability. Both Morgan and the Firm were represented by the law firm of White & Case LLP.

During the pendency of the litigation, Morgan served an offer of judgment to Jain pursuant to section 768.79, Florida Statutes (2018). The Firm did not join in the offer of judgment or serve its own offer. At the conclusion of the litigation, the trial court entered final judgment in favor of Morgan and the Firm.

Morgan moved for an award of attorneys fees on the basis of his offer of judgment. Jain contended that Morgan was not entitled to fees under section 768.79 because Morgan himself did not incur any fees, given the fact that the Firm was contractually obligated to indemnify, and did indemnify, Morgan. Jain requested, alternatively, that the court trial apportion the fees between Morgan and the Firm.

Following a hearing, the trial court determined that Morgan was entitled to his fees because section 768.79 permits recovery of fees “incurred on the defendants behalf,” and thus the analysis was unaffected by the fact that Morgan may not himself have been contractually obligated to pay his attorney for legal services. Finally, the court found that apportionment was not appropriate in this case because the fees incurred in defending both Morgan and the Firm were the same.

The trial court entered a final judgment awarding fees to Morgan, and this appeal followed.

STANDARD OF REVIEW

While the trial courts award of attorneys fees is generally reviewed for an abuse of discretion, the trial courts construction or interpretation of a statute in determining entitlement to fees is a pure question of law, which we review de novo. Burton Family Pship v. Luani Plaza, Inc., 276 So. 3d 920 (Fla. 3d DCA 2019).

ANALYSIS

The argument advanced by Jain, both below and here on appeal, is that because Morgan himself never incurred any attorneys fees, and none were incurred on his behalf, he is not entitled to recover fees under section 768.79. While we agree with Jain that Morgan himself did not incur attorneys fees, we disagree with Jains contention that attorneys fees were not incurred on his behalf.

We begin with the relevant statute. Section 768.79(1) provides, in pertinent part:

In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorneys fees incurred by her or him or on the defendants behalf pursuant to a policy of liability insurance or other contract from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than such offer, and the court shall set off such costs and attorneys fees against the award.

(Emphasis added).

It is undisputed that: Morgan made an offer of judgment to Jain; the offer was never accepted by Jain; and the judgment was one of no liability. The only question is whether, pursuant to the above provision, the costs and attorneys fees were “incurred ․ on the defendants behalf” under a policy of liability insurance or other contract.

The record establishes that, although Morgan himself may not have been obligated to pay any attorneys fees or costs, such fees and costs were incurred on his behalf by the Firm, pursuant to a contract.

For example, the retainer agreement between White & Case and Morgan provided that, although White & Case is engaged to represent both Morgan and the Firm, Morgan “will not be obligated to pay [White & Cases] fees and costs” because White & Case “executed a similar retainer agreement with the Firm, and both the Firm and Morgan executed a letter agreement indicating their understanding that [White & Case] would represent them both and that the Firm “has agreed to pay [White & Cases] fees and disbursements relating to the Joint Representation and agrees to accept full responsibility for such fees and disbursements as allocated in [White & Cases] monthly bills.” In addition, the Firms by-laws demonstrated that the Firm was obligated to indemnify Morgan and pay for attorneys fees and costs incurred by Morgan as a result of the lawsuit by Jain.

1

Thus, the fact that the Firm was contractually obligated to indemnify Morgan and to pay for the legal services provided by White & Case on behalf of Morgan means that those expenses were incurred by the Firm “on behalf of Morgan” as required under section 768.79(1). The analysis here is unaffected by the fact that White & Case also provided legal services in defending the Firm as a defendant in the lawsuit.

Jain suggests that White & Case was primarily representing the Firm, and that the defense of Morgan was merely secondary, incidental to, and subsumed by, the defense of the Firm. Indeed, Jains expert witness opined that “there was virtually no additional work required in order to represent Mr. Morgan individually.” However, and as the trial court noted, the reverse of that statement would be true as well, that “there was virtually no additional work required in order to represent the Firm vicariously.” In other words, if the Firm had not been named as a defendant, White & Case would have performed precisely the same legal work it provided with both Morgan and the Firm as named defendants. It is undisputed that the Firm was sued under a theory of respondeat superior, by which the Firms potential liability in the action was vicarious, based upon the alleged acts and conduct of Morgan, its attorney-employee. Without a finding of liability against Morgan, no liability could be imposed upon the Firm. As the final judgment indicated, “regardless of whether either Defendant was ‘primary’ or ‘secondary,’ all of the claims were exactly the same, the theories of liability were the same, the damages sought against both Defendants were the same, and the evidence was the same. There is no work in this case attributable [to the Firm] and not Morgan, or attributable to Morgan and not [the Firm].”

In Key West Seaside, LLC v. Certified Lower Keys Plumbing, Inc., 208 So. 3d 718 (Fla. 3d DCA 2015), this court considered a trial court order denying Key West Seasides (“Seaside”) motion for attorneys fees and costs under the offer of judgment statute. Seaside, the owner of a condominium project, was sued by a subcontractor and was represented by the same law firm representing several other related defendants, including the general contractor. Ultimately, judgment was entered in favor of Seaside because Seaside had paid what it owed to the general contractor. When Seaside moved for attorneys fees and costs pursuant to its offer of judgment, the trial court denied the motion, in part because the attorneys fees had been billed to and paid by the general contractor, pursuant to an indemnification agreement between Seaside and the general contractor. This court reversed, holding: “The fact that another party or a nonparty may have paid the offerors attorneys fees is of no consequence to the question of whether the offeror is entitled to fees and costs pursuant to the offer of judgment statute or rule.” Id. at 721. See also Aspen v. Bayless, 564 So. 2d 1081 (Fla. 1990) (holding that a party may recover costs when the funds used to pay the costs were furnished by a third person without any obligation of repayment); Balseca v. Callies Elec., Inc., 566 So. 2d 322 (Fla. 3d DCA 1990) (same).

CONCLUSION

Because the attorneys fees and costs were “incurred. . . on the defendants behalf,” the trial court properly found entitlement and awarded attorneys fees in favor of Morgan in light of his status as prevailing party under the offer of judgment.

Affirmed.

FOOTNOTES

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.   The relevant by-law provided:(a) The Corporation shall indemnify to the full extent not prohibited by law ․ any person made, or threatened to be made, a party to or otherwise involved in (as a witness or otherwise) an action, suit or proceeding ․ by reason of the fact that he or she is or was a director or officer or shareholder or attorney employee ․ against all expenses and liability actually incurred, including, without limitation, judgments, amounts paid or to be paid in settlement of actions and costs of defense ․(b) Expenses incurred by such a person in defending any such action, suit or proceeding ․ shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such person ․

EMAS, J.