Brian Kelly a/k/a Brian K. Kelly v. BankUnited, FSB

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
BRIAN KELLY a/k/a BRIAN K. KELLY,
Appellant,
v.
BANKUNITED, FSB,
Appellee.
No. 4D14-2359
[March 18, 2015]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Cynthia Imperato, Judge; L.T. Case No. CACE09-010729
(11).
Kirk J. Girrbach of Guardian Law Group of Florida, P.A., Fort
Lauderdale, for appellant.
Gary M. Carman and Richard F. Danese of Gray Robinson, P.A., Miami,
for appellee.
ON MOTION FOR REHEARING
FORST, J.
We grant the Motion for Rehearing filed by Appellee BankUnited,
withdraw our previously issued opinion dated January 7, 2015, and
replace it with the following:
Appellant Brian Kelly appeals the order denying his amended motion
for attorneys’ fees in an underlying foreclosure action. He argues that,
upon Appellee BankUnited’s voluntary dismissal of the underlying
foreclosure action, he was the prevailing party below for purposes of
entitlement to attorneys’ fees under section 57.105(7), Florida Statutes.
However, in light of the unique circumstances in this case where neither
party substantially prevailed, we affirm the trial court’s order for reasons
discussed below.
Appellee filed a foreclosure complaint against Appellant for defaulting
on a loan. Appellant filed an answer and affirmative defenses, including a
request for the trial court to “award costs and reasonable attorney fees as
provided by 15 U.S.C. 1640(a) & (e), Fla. Statutes, Section 57.105, and the
mortgage and note, and such other relief as this Court deems just and
proper.”
Final summary judgment was entered in favor of Appellee. Appellant
appealed that judgment. During the pendency of the appeal, the subject
property was sold to a third party by a short sale agreement entered into
by Appellant and Appellee.1 Because of the short sale, Appellee moved to
cancel the foreclosure sale, vacate the final summary judgment, dismiss
the action, and return the original note and mortgage, which the trial court
granted. However, neither party petitioned this court to dismiss
Appellant’s appeal of the final summary judgment before attempting to
dismiss the action below.
Over a year after the short sale, we reversed the order of final summary
judgment and remanded the case to the trial court for rehearing on
Appellee’s motion for summary judgment. Kelly v. BankUnited, FSB, 125
So. 3d 981 (Fla. 4th DCA 2013). On remand, Appellant moved for
attorneys’ fees and costs in the trial court, arguing that he is the prevailing
party in the case and entitled to fees under the terms of the mortgage
document and section 57.105(7). Upon a magistrate’s recommendation,
the trial court continued the motion until it could rehear Appellee’s motion
for summary judgment pursuant to our mandate. In a separate order, the
trial court recognized that Appellee had voluntarily dismissed the case
because of the short sale agreement.
After a hearing on his original motion for attorneys’ fees, Appellant
amended his motion, and it again came before the court. The trial court
denied Appellant’s amended motion as to entitlement to prevailing party
attorneys’ fees, which is the subject of the instant appeal.
Generally, a trial court’s ruling on a motion for attorneys’ fees is
reviewed for abuse of discretion; “[h]owever, where entitlement depends on
the interpretation of a statute or contract the ruling is reviewed de novo.”
Mihalyi v. LaSalle Bank, N.A., 39 Fla. L. Weekly D2269, at *1 (Fla. 4th DCA
Oct. 29, 2014).
1 The agreement apparently made no mention with respect to responsibility for
the payment of either parties’ attorneys’ fees, an omission which opened the door
to the present conflict.
2
Initially, we note that Appellant’s request for fees in his answer to
Appellee’s complaint was sufficient to place Appellee on notice of
Appellant’s intent to seek attorneys’ fees in the action. See Stockman v.
Downs, 573 So. 2d 835, 837 (Fla. 1991). We also note that Appellee’s
attempt to voluntarily dismiss the case in the trial court while the final
summary judgment order was pending on appeal is a nullity and therefore
does not factor in the analysis below. See Equibank, N.A. v. Penland, 330
So. 2d 739, 739-40 (Fla. 1st DCA 1976).
On the merits of whether Appellant was the prevailing party below for
purposes of section 57.105, we first reference the general rule—“A
plaintiff’s voluntary dismissal makes a defendant the ‘prevailing party’
within the meaning of subsection 57.105(7), even if the plaintiff refiles the
case and prevails.” Mihalyi, 39 Fla. L. Weekly D2269, at *1; see also
Thornber v. City of Fort Walton Beach, 568 So. 2d 914, 919 (Fla. 1990) (“In
general, when a plaintiff voluntarily dismisses an action, the defendant is
the prevailing party. A determination on the merits is not a prerequisite
to an award of attorneys’ fees where the statute provides that they will
inure to the prevailing party.” (internal citation omitted)). Under the
general rule, the determination of the defendant being the prevailing party
is thus outside of a determination on the merits of the case. Alhambra
Homeowners Ass’n, v. Asad, 943 So. 2d 316, 319 (Fla. 4th DCA 2006).
However, our court has recognized an exception to the general rule as
stated in Padow v. Knollwood Club Ass’n, 839 So. 2d 744 (Fla. 4th DCA
2003), which the Second District applied in the context of prevailing party
fees under section 57.105 in Tubbs v. Mechanik Nuccio Hearne & Wester,
P.A., 125 So. 3d 1034, 1041-42 (Fla. 2d DCA 2013). In Padow, the plaintiff
was a condominium association that filed a complaint against a
condominium owner, Padow, for failure to pay maintenance assessments.
Padow, 839 So. 2d at 745. One year later, Padow provided the association
with a check for $2,000. Id. In ruling against the association’s motion for
summary judgment, the trial court determined that the $2,000 satisfied
Padow’s outstanding financial obligations to the association. Id.Subsequently, the association voluntarily dismissed its complaint without
prejudice and then Padow moved for attorneys’ fees as the prevailing party
in the action. Id. The trial court denied Padow’s motion, finding that,
since Padow “had paid the claim, or a very good part of it” and the
association “got most of what it sought” and thus “achieved all of the
legitimate goals of [its] suit,” it could not find that Padow was the
“prevailing party” for purposes of the award of attorneys’ fees. Id. This
court affirmed, finding that Padow could not be a “prevailing party” with
respect to the payment of attorneys’ fees, “because he paid the substantial
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part of the association’s claim for delinquent assessments prior to the
voluntary dismissal.” Id. at 746.
Tubbs summarized the holding in Padow, saying,
Padow teaches that courts must look to the substance of
litigation outcomes—not just procedural maneuvers—in
determining the issue of which party has prevailed in an
action. “‘[I]t is [the] results, not [the] procedure, which govern
the determination’ of which party prevailed for purposes of
awarding attorney's fees[.]” Bessard v. Bessard, 40 So. 3d
775, 778 (Fla. 3d DCA 2010) (second and third alterations in
original) (quoting Smith v. Adler, 596 So. 2d 696, 697 (Fla. 4th
DCA 1992)).
Tubbs, 125 So. 3d at 1041. This is the lesson we take from Padow and
apply in the instant case.
Here, upon voluntary dismissal after execution of the short sale
agreement, Appellant lost his home and received none of the proceeds of
the sale of the property, yet the amount Appellee received from the short
sale constituted less than 25% of the amount claimed prior to the
voluntary dismissal.2 As such, similar to the court in Tubbs, we find that
“the conclusion that neither of the parties achieved their litigation
objectives in [this foreclosure] case is inescapable.” Id. at 1042.
We distinguish this situation from Padow because, as recognized by
this court in Alhambra, in Padow the defendant “caved” to the demands of
the plaintiff; here, the parties “caved,” in part, to the demands of each
other to reach a compromise, with neither substantially prevailing in the
action. Alhambra Homeowners Ass’n, 943 So. 2d at 320. However, this
nuance still necessitates the application of some exception to the general
rule as stated in Thornber when determining whether the party requesting
fees has prevailed, because to strictly apply the general rule in the instant
circumstances would elevate form over substance and lead to a result
contrary to the purpose of section 57.105. See Thornber, 568 So. 2d at
919; Padow, 839 So. 2d at 746.
Where the purpose of section 57.105 is to deter misuse of the judicial
system and discourage needless litigation, to declare Appellant the
2The judgment amount obtained by Appellee on the reversed summary judgment
was $220,325.86. The subsequent short sale was for $53,000.00, representing
a 75.94% reduction to the benefit of Appellant.
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prevailing party and entitled to attorneys’ fees under these facts would be
contrary to that goal. See Tubbs, 125 So. 3d at 1042; Bay Fin. Sav. Bank,
F.S.B. v. Hook, 648 So. 2d 305, 307 (Fla. 2d DCA 1995). We do not want
to penalize plaintiffs “with a substantial assessment of attorney’s fees for
recognizing the obvious and dismissing their claims that had become moot
for reasons unrelated to the merits of the litigation between the parties.”
Tubbs, 125 So. 3d at 1042.
Therefore, in a situation where both Appellant and Appellee
compromised in effectively agreeing to a settlement to end their litigation,
we will not hold Appellee responsible for payment of Appellant’s attorneys’
fees, as Appellee’s dismissal of the pending complaint following the
settlement was the obvious and appropriate course of action. Where a
plaintiff’s voluntary dismissal results in neither party substantially
prevailing in the litigation outcome, neither party is the prevailing party
for purposes of attorneys’ fees. In such a case, as here, neither the general
rule, nor the exception in Padow, applies.
We note that this holding does not require trial courts “to look behind
a voluntary dismissal to decide whether the dismissal represents ‘an end
or finality to the litigation on the merits[,]’” which has been an approach
rejected by our court. See Alhambra Homeowners Ass’n, 943 So. 2d at
321. The finding that neither party has substantially prevailed by virtue
of the voluntary dismissal is regardless of the merits of each party’s claim
or defense in the underlying action.
We affirm the order denying Appellant’s motion for attorneys’ fees as
the prevailing party upon Appellee’s voluntary dismissal.
Affirmed.
LEVINE and KLINGENSMITH, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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