Recovery of attorney’s fees

Posted: March 27, 2017 By: De Novo Review Category: Foreclosure actions

By: Marty

Does a mortgagor, as a prevailing party in a foreclosure action, have to serve a 21-day safe harbor notice under section 57.105(4), Florida Statutes, when seeking attorney’s fees pursuant to section 57.105(7)?

No. Section 57.105(7) provides that “if a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract.” For all mortgages executed after October 1, 1988, section 57.105(7) “provides the other party to the mortgage – i.e. the mortgagor – a substantive right to the recovery of its fees in any action where, by virtue of the fee provision in the mortgage, the mortgagee would be entitled to fees.” See Florida Community Bank, N.A. v. Red Road Residential, LLC, 2016 WL 3176813 (Fla. 3d DCA June 8, 2016) (emphasis added).

In other words, notwithstanding that the contractual fee provision is one-sided, entitling only one of the contract’s parties to prevailing party fees, by operation of law section 57.105(7) bestows on the other party to the contract the same entitlement to prevailing party fees.” Id. (emphasis added). See also Holiday Square Owners Assoc., Inc. v. Tsetnenis, 820 So. 2d 450 (Fla. 5th DCA 2002)(emphasis added)(stating that section 57.105(7) “makes a unilateral contract clause for prevailing party attorney’s fees bilateral in effect” and that the “award is mandatory, once the lower court determined a party has prevailed.”); Ajax Paving Indus., Inc. v. Hardaway Co., 824 So. 2d 1026 (Fla. 2d DCA 2002)(emphasis added)(“Section 57.105(5) [predecessor to 57.105(7)], however, mandates that contractual fee provisions must impose reciprocal obligations and benefits on all parties to a given contract.”).

The policy behind the legislature’s enactment of the reciprocity mandate of section 57.105(7) was to “provide mutuality of attorney’s fees as a remedy in contract cases” as the “statute [was] designed to even the playing field….” Florida Hurricane Protection & Awning, Inc. v. Pastina, 43 So. 3d 893 (Fla. 4th DCA 2010)(stating “[t]he statute renders ‘bilateral a unilateral contractual clause for prevailing party attorney’s fees.’”); see also Vivot v. Bank of America, N.A., 115 So. 3d 428 (Fla. 2d DCA 2013)(finding that the mortgagor, as a prevailing party to a foreclosure action, was entitled to claim attorney’s fees under the note and mortgage pursuant to section 57.105(7) as long as he gave notice of his claim for fees in his answer and he timely filed his motion for attorney’s fees); Mihaly v. LaSalle Bank, N.A., 162 So. 3d 113, 115, n.1 (Fla. 4th DCA 2014)(finding that although the defendant did not refer to section 57.105(7) in her answer and affirmative defenses, she put the bank on notice that she was seeking fees pursuant to the contract and thus by implication, the bank was on notice that section 57.105(7) applied). Compare with HFC Collection Center, Inc. v. Alexander, 190 So. 3d 1114 (Fla. 5th DCA 2016)(emphasis added)(“The primary purpose of the safe harbor letter is to provide the party in receipt of the letter with the opportunity to withdraw or abandon a frivolous claim before sanctions are sought.”)

Florida case law requires in mandatory terms that a party to a unilateral attorney’s fee provision be awarded attorney’s fees under section 57.105(7) as long as (1) they are the prevailing party and (2) they affirmatively sought attorney’s fees in their pleading. The pleading, however, must specify that the demand for attorney’s fees is pursuant to the contract, or in the case of a foreclosure, the mortgage. A general request for attorney’s fees is not likely sufficient to satisfy the notice requirement. As long as the non-moving party is on notice of the claim for fees under the mortgage by way of the moving party’s pleadings, there is no requirement that the moving party send a separate 21-day safe harbor notice.

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