Isaias v. H.T. Hackney Co.

Third District Court of Appeal
State of Florida
Opinion filed March 25, 2015.
Not final until disposition of timely filed motion for rehearing.
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No. 3D13-2593
Lower Tribunal No. 03-20260
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Roberto Isaias, et al.,
Appellants,
vs.
The H.T. Hackney Co.,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Jerald Bagley,
Judge.
Krinzman, Huss & Lubetsky and Lynette Ebeoglu McGuinness, for
appellants.
Bilzin Sumberg Baena Price & Axelrod and David Gersten and Michael
Kreitzer and Justin Brenner, for appellee.
Before WELLS, SALTER and LOGUE, JJ.
SALTER, J.
Roberto Isaias and two corporate co-defendants appeal final orders awarding
Isaias one-third of his attorney’s fees incurred in defense of the case below and
denying any recovery of attorney’s fees to the corporate co-defendants. We
reverse and remand with directions to award to all three appellants the entirety of
the fees and costs found reasonable by the trial court.1
Facts and Procedural Background
The appellee, The H.T. Hackney Co. (“Hackney”), is a wholesale grocery
distributor which provided products to the Farm Stores chain of convenience
stores. Isaias, and certain corporations and partnerships controlled by Isaias,
owned substantial interests in several Farm Stores businesses. Among these
entities were appellants REW Dairy Investments, Inc. (“REW Dairy”), and Toni
Gas Food Stores, Inc. (“Toni Gas”).
In November 1999, Isaias and the entities he controlled sold all of their
interests in the businesses to F.S. Convenience Stores, Inc. By 2002, Autumn
Partnership, LLP (“Autumn”), had acquired and was operating the Farm Stores
business. In 2002, Autumn sued Hackney in the circuit court in Miami for an
alleged breach of one of the distribution agreements.
1 The trial court concluded that the total fees and costs claimed for all three co-
defendant/appellants were $123,917.48 in attorney’s fees, and $9,186.80 in costs,
and that these amounts were reasonable. However, for reasons explained in the
body of this opinion, the trial court only awarded one-third of the fees, $41,305.82,
plus all of the costs, and only awarded that lesser amount to Isaias.
2
In 2003, Hackney filed its own suit against Isaias, REW Dairy, Toni Gas,
and the other persons and entities which had operated the Farm Stores locations
until the November 1999 sale. In its second amended complaint, Hackney alleged
that the Farm Stores owners (including the partners, shareholders, and directors of
the ownership entities) had not paid Hackney’s invoices issued from September
1998 through some time in 2001.
In 2006, Isaias sought and obtained a summary judgment that he would not
be liable for any debt incurred by his Farm Stores entities to Hackney after the
November 1999 sale of the chain. Discovery in the case, and in particular sworn
interrogatory answers served by Hackney in March 2007, confirmed that all of
Hackney’s invoices issued to the Isaias-related Farm Stores entities under the
distribution agreements before the sale of the chain in November 1999 “have been
paid.”
Isaias, REW Dairy, and Toni Gas then moved for a final summary judgment
based on the concession that the invoices for debts incurred following the sale of
the Farm Stores chain had been paid, but the trial court denied the motion.2
Immediately after that ruling, Isaias, REW Dairy, and Toni Gas each filed separate
proposals for settlement for $500.00.
2 This account of the proceedings below omits the defaults initially obtained by
Hackney against REW Dairy and Toni Gas, as these were set aside upon those
defendants’ motions well in advance of the proceedings relevant to this appeal.
3
The case never made it to trial or a renewed motion for final summary
judgment; in 2010, Hackney’s pleadings were stricken and its claims were
dismissed with prejudice for spoliation of documentary evidence.3 Thereafter, the
trial court heard the motions of Isaias, REW Dairy, and Toni Gas for attorney’s
fees and costs based on the proposals for settlement, section 768.79(1), Florida
Statutes (2007), and Florida Rule of Civil Procedure 1.442.
The trial court first determined that the offers made by REW Dairy and Toni
Gas were not made in good faith, such that no attorney’s fees or costs should be
awarded to either. The trial court awarded attorney’s fees and costs to Isaias, but
concluded that the claimed fees could not be apportioned among the three
appellants. The trial court divided the attorney’s fees claimed by the three
appellants by three and awarded that amount—plus the costs and expert witness
fees—to Isaias. This appeal followed.
Analysis
This appeal presents two issues. The first is whether the trial court correctly
determined that the $500.00 settlement offers by REW Dairy and Toni Gas were
not made in good faith, warranting disallowance of attorney’s fees and costs under
Rule 1.442(h)(1). Hackney bore the burden of demonstrating that the offers were
not in good faith. Segundo v. Reid, 20 So. 3d 933 (Fla. 3d DCA 2009). The
3 This Court affirmed that final judgment of dismissal with prejudice, per curiam.
H.T. Hackney Co. v. Autumn P’ship, LLP, 138 So. 3d 454 (Fla. 3d DCA 2014).
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determination of whether a “nominal” offer4 is in good faith requires the trial court
to consider whether the offeror had a reasonable basis to conclude, at the time of
making the offer, that its exposure was nominal. State Farm Fla. Ins. Co. v.
Laughlin-Alfonso, 118 So. 3d 314 (Fla. 3d DCA 2013).
The record in the present case is that all three appellants had an objectively
reasonable basis to make a nominal offer. Hackney had conceded, not only to
Isaias, but also to REW Dairy and Toni Gas, that all invoices before the transfer of
interests in the Farm Stores entities had been paid. Hackney had not, and has not,
articulated any legally cognizable theory upon which the prior owners of interests
in the Farm Stores entities could be liable to Hackney for post-sale invoices and
deliveries. The second amended complaint, in particular, does not articulate such a
theory.
We also cannot accept Hackney’s argument that, while Isaias’s proposal for
settlement may have been in good faith because of the partial summary judgment
he had obtained, REW Dairy and Toni Gas had not obtained such a ruling and
were therefore regarded to have more than nominal exposure. As already noted,
discovery provided an objectively reasonable basis for those two corporate
defendants to make a nominal offer. The fact that a motion for summary judgment
4 The fact that a proposal for settlement may be “nominal” does not automatically
disqualify it from characterization as a good faith offer. State Farm Ins., Co. v.
Reyes, 137 So. 3d 1122 (Fla. 3d DCA 2014); Downs v. Coastal Sys. Int’l, Inc., 972
So. 2d 258 (Fla. 3d DCA 2008).
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had been denied without elaboration does not control the assessment of the
proposals for settlement. We therefore conclude that Hackney failed to
demonstrate that the settlement proposals by REW Dairy and Toni Gas were not
made in good faith, and we reverse that determination in the orders below.
The second issue before us is whether the form and content of the invoices
submitted by the three appellants in support of their attorney’s fees claims required
an apportionment, such that the fee award to Isaias was required to be reduced by
two-thirds of the total fees incurred and found reasonable by the trial court. We
address this issue for the sake of completeness—recognizing that our
determination on the issue of good faith in the settlement proposals by the
corporate appellants makes it unnecessary to do so—in order to permit complete
review if Hackney seeks any further review of this decision.
For the period from the date the settlement proposals were made until the
date the judgments of no liability were entered against Hackney, the invoice
entries, testimony, and other parts of the record do not provide any basis for the
denial of the entire amount of attorney’s fees Isaias claimed and proved. The trial
court’s decision to reduce the fees by two-thirds is apparently based on a
conclusion that “Isaias failed to prove with specificity how much time he spent on
his portion of the case as opposed to the time spent on the other two defendants.”
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Our review of the record does not support a defendant-by-defendant
differentiation of the defense fees into “portions.” Isaias, REW Dairy, and Toni
Gas all pled and proved that the pertinent Hackney invoices were paid. That
theory of defense was shared by all three appellants, and the same legal services
benefited all three. The case relied upon by Hackney, Dr. Gail Van Diepen, P.A.
v. Brown, 55 So. 3d 612 (Fla. 5th DCA 2011), involved a failure to apportion the
plaintiffs’ attorney’s time entries between the seven counts of a complaint that
resulted in an adverse jury verdict and the single count upon which the
plaintiff/movant obtained a jury verdict for damages.
In contrast, all three appellants in the present case employed a single law
firm to represent them based on the same theory of defense. Thus, even if we were
to affirm the trial court’s conclusion that only Isaias’s settlement proposal was
made in good faith, we would nonetheless reverse and remand the award to Isaias
for one-third of the fees incurred, with directions to enter judgment to him for the
entire amount of attorney’s fees incurred, $123,917.48, together with costs (as
allowed in the judgment under review), plus prejudgment interest as provided by
law.
Having determined that the settlement proposals by all three appellants were
made in good faith, we reverse and remand for the entry of a final judgment
against Hackney awarding all three appellants, jointly and severally, the total sum
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of $123,917.48, together with those costs allowed by the trial court, plus
prejudgment interest as provided by law. The total recovery by any one or more of
the three appellants against Hackney shall not exceed that total.
Reversed and remanded, with directions.
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