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Who Is (And Who Isn’t) a ‘Prevailing Party’ for Purposes of Awards of Attorneys’ Fees in Florida Commercial Litigation

Whenever you decide to go to court after a contractual partner has breached your commercial contract, there is some risk that the other side could, at some point, seek an award of attorneys’ fees. In addition to fighting for your contractual rights under the agreement generally, your skilled South Florida commercial litigation attorney can also help when it comes to this issue of attorneys’ fees. If the party whom you’ve sued is wrongfully seeking attorneys’ fees, it may be incumbent on you to persuade the court that the other party doesn’t qualify for such an award.

First, it is important to note that, in any Florida civil litigation, a party generally must be a “prevailing party” under this state’s law in order to potentially qualify for an award of attorneys’ fees. That is exceptionally important because, of course, commercial litigation actions can be complex and who is or is not a “prevailing party” under Florida law may not necessarily be clear. This can happen for many possible reasons. Maybe you litigated to a verdict and your judgment was a mixed bag of favorable and unfavorable rulings. Alternately, perhaps you and your legal counsel decided it was in your best business interests to dismiss the lawsuit.

That latter scenario is what happened to one entity in Collier County in its case. The entity, an operator of a residential community near Naples, had signed a contract for the provision of cable services as well as treated wastewater for irrigation.

The operator sued for breach of contract. During discovery, certain agreements were produced that cleared up the matters in dispute in the case. One of them indicated that the operator was entirely correct in its arguments about the rate to be charged for treated wastewater and when that rate could change.

With all disputed matters resolved, the operator voluntarily dismissed its lawsuit. The defendants seized upon this action and pressed for an award of attorneys’ fees. Citing to a 2016 case from the appeals court in Miami, the defendants argued that, when a plaintiff voluntarily dismisses its lawsuit, the defendants are the prevailing parties, meaning that they are potentially eligible for an award of attorneys’ fees.

The operator argued that it, not the defendants, was the prevailing party. The documents provided during discovery proved that the operator was entitled to exactly what it sought when it filed suit, and the defendants “were forced to execute a separate and distinct agreement clarifying its obligations” and that they were exactly as the operator stated in its complaint.

Voluntary dismissal doesn’t automatically trigger an attorneys’ fees award

The appeals court ruled for the operator. The defendants were right that, generally, when a plaintiff voluntarily dismisses its case, the defense is the prevailing side. However, there is an exception when the two sides settle a lawsuit and the dismissal of the complaint “was the obvious and appropriate course of action.” When that happens, neither side is a prevailing party for purposes of awards of attorneys’ fees. In cases where the plaintiff voluntarily dismisses, the court are free to “look behind” that dismissal and analyze the facts of the case “to determine whether a party is a ‘substantially’ prevailing party.”

In this case, the facts indicated that the defendants were not the substantially prevailing party in terms of what each side had originally sought and what the final outcome was. As a result, the operator was not obligated to pay any of the defendants’ attorneys’ fees.

There are many different in which a commercial dispute potentially can harm your business. Be sure you have the maximum protection possible by retaining the skilled South Florida commercial litigation attorneys at Stok Kon + Braverman. Our attorneys have handled a full spectrum of commercial contract cases and are here to help you with yours.

Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.