Florida Supreme Court Authorizes Defense Attorneys Fees Under FDUTPA

In a case certified by the federal appeals court, the Florida Supreme Court held that a prevailing defendant in a Florida Deceptive and Unfair Trade Practice Act (FDUTPA) lawsuit is entitled to attorney’s fees for the period prior to dismissal of the FDUTPA count.  (Fla. Stat. § 501.2105)(prevailing party in a FDUTPA action may recover reasonable costs and attorneys’ fees).  The Court also held that Fla. Stat. § 768.79, the offer of judgment statute, is not applicable in cases where the plaintiff seeks equitable relief and damages, and the defendant responds with a general offer and requests a release from all claims.  Under § 768.79, in Florida state court civil litigation cases, if a plaintiff rejects a defendant’s timely offer for judgment, the defendant is entitled to recover reasonable costs and attorneys’ fees.  Diamond Aircraft Industries, Inc. v. Horowitch, 38 FLW S17, Case No. SC11-1371 (Fla. January 10, 2013) (available here).

Dr. Horowitch, a resident of Arizona, entered into a contract with Florida-based Diamond Aircraft Industries, Inc. (“Diamond”) to purchase a small jet for $850,000.  Diamond never delivered the jet and demanded Horowitch pay at least $1,380,000.  Horowitch sued Diamond in Florida state court for specific performance of the contract.  The case was removed to federal court and Horowitch raised four claims: (1) specific performance; (2) breach; (3) breach of fair dealing and good faith; and (4) deceptive trade practices under FDUTPA.  Horowitch requested attorneys’ fees if he prevailed.  See Fla. Stat. § 501.2105.  Pursuant to Fla. Stat. § 768.79, Diamond offered Horowitch an offer of judgment of $40,000 if Horowitch released Diamond from all claims of liability.  Horowitch did not accept the offer and both parties moved for summary judgment.  The federal trial court granted summary judgment in favor of Diamond on specific performance, breach of contract, and breach of implied covenants of good faith and fair dealing.  The court denied summary judgment under FDUTPA, but applied the Arizona Consumer Fraud Act (ACFA).  At trial, the court found in favor of Diamond.

Diamond moved for attorneys’ fees under FDUTPA and Fla. Stat. § 768.79.  The trial court denied Diamond’s motion, holding that (1) § 768.79 did not apply because Horowitch asserted an equitable claim for non-monetary relief (specific performance) and, in the alternative, a claim for monetary damages; and (2) FDUTPA did not apply.  Diamond appealed to the 11th Circuit (the federal appeals court), who then certified questions to the Florida Supreme Court.

First, the Florida Supreme Court held that the prevailing party attorneys’ fee provision under FDUTPA entitled Diamond to its defensive attorneys’ fees because “Horowitch invoked FDUTPA.”  Horowitch, Slip Op. P. 6.  “Horowitch exposed himself to both the benefits and the possible consequences of that act’s provisions” and “simply because FDUTPA is ultimately held to have no application and does not provide a plaintiff with a basis for recovery after the provisions of the act have been invoked does not negate a defendant’s status as a prevailing party in an action filed by a plaintiff under that act.”  Horowitch, Slip Op. Pp 11-12 (emphasis in original).

Second, the Court held that Diamond is entitled to attorneys’ fees under FDUTPA, but only for the period of litigation until the trial court dismissed the FDUTPA claim.

As for Florida’s offer of judgment statute, Fla. Stat. § 768.79, applied to the case, the “Florida Legislature enacted section 768.79 to deter individuals from rejecting purportedly reasonable settlement offers through the imposition of the sanctions of costs and attorney’s fees.”  Horowitch, Slip Op. P. 20. Fla. Stat. § 768.79 is inapplicable in cases that seek equitable relief as an alternative to monetary relief and that there is no exception for instances where the claim for equitable relief is meritless.  Florida case law dictates that when the plaintiff seeks only monetary relief, the statute applies, but when the plaintiff seeks only nonmonetary/equitable relief, it does not apply.  The statute limits its applicability to civil actions “for damages.”

Finally, the Florida Supreme Court held that Fla. Stat. § 768.79 does not apply because Diamond’s offer of judgment to Horowitch failed to satisfy Florida Rule of Civil Procedure 1.442(c)(2) (requires a proposal for settlement to include the names of the parties; the claims to be resolved; a statement of relevant conditions; a statement of the total amount of the proposal; a statement with particularity to all nonmonetary terms to the proposal, statement with particularity any offer for punitive damages; statement as to whether the offer includes attorneys’ fees and whether the fees are part of the legal claim; and include a certificate of service).

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