By: Richard E. Guttentag, Esq., Stearns, Roberts & Guttentag, L.L.C.
“In any action brought to enforce a lien . . . the prevailing party is entitled to recover a reasonable fee for the services of her or his attorney for trial and appeal or for arbitration . . . .” Florida Statute, Section 713.29. Although Florida Statute, Section 713.29 clearly calls for prevailing party attorney’s fees, there has been much litigation over the terms “prevailing party” and which party is the prevailing party in actions to enforce a claim of lien.
Although a factor in determining the prevailing party, the fact that a contractor may obtain a net judgment on its action to enforce its lien is not determinative of whether the contractor is the prevailing party for purposes of entitlement to attorneys’ fees under the Construction Lien Law. Since about 1993, the party prevailing on the significant issues in the litigation is the party that should be considered the prevailing party for attorney’s fees. This is known as the “significant issues test”. A measure of the test is the result obtained at the close of the case. There is no requirement that the court determine that one party is the prevailing party. The recent case of GMPF Framing, LLC v. Villages at Lake Lily Associates, LLC, 2012 WL 5364649 (Fla. 5th DCA 2012) illustrates the application of the significant issues test.
In GMPF Framing, LLC v. Villages at Lake Lily Associates, LLC, GMPF Framing, LLC (“Contractor”) recorded a Claim of Lien against the property owned by the Villages at Lake Lily Associates, LL C (“Owner”). The trial court discharged the lien, but additional claims for the imposition of an equitable lien and unjust enrichment remained pending. The Owner filed a Motion for Entry of a Final Judgment of Attorneys’ Fees and Costs pursuant to Florida Statute, Section 713.29. The trial court determined that the Owner was entitled to recover attorneys’ fees and costs as the prevailing party under Section 713.29, and entered a judgment for attorneys’ fees and costs against the Contractor in the amount of sad fees and costs, despite the actions for equitable lien and unjust enrichment still pending. The Contractor appealed the judgment.
Construction cases often involve multiple theories of recovery and involve multiple factual determinations. In the GMPF Framing, LLC case, despite the lien action being dismissed, the Contractor still had pending claims for quantum meruit and equitable lien against the Owner that should have been considered in the court’s determination of the prevailing party because the claims arose out of the same transaction as the lien. Accordingly, since significant counts remained in the lawsuit, the appellate court concluded that it was impossible to determine the prevailing party until the pending counts were resolved. The Court reasoned that it was not the intent of the legislature to award attorneys’ fees to a defendant in an action to enforce a construction lien merely because the owner successfully defends a lien action, yet the owner is found liable for damages in the same case for labor and/or materials furnished for the Owner’s benefit. Therefore, the appellate court reversed the trial court’s order awarding attorneys’ fees to the Owner on the grounds that such ruling was premature because significant issues (i.e. the quantum meruit and equitable lien actions) remained pending in the lawsuit, and held that the determination of prevailing party attorneys’ fees should be made at the conclusion of the case.
This case demonstrates that even if an owner defeats a contractor’s lien claim, the owner may not be entitled to attorneys’ fees if the contractor prevails against the owner on other significant issues or claims in the lawsuit. The prevailing party in a lien action is the party that has prevailed on the “significant issues” in the case.
About the Author: Richard E. Guttentag is a partner with Stearns, Roberts & Guttentag, L.L.C., and is Board Certified in Construction Law by the Florida Bar. Mr. Guttentag exclusively in construction law including construction lien claims and defense, payment and performance bond claims and defense, bid protests, construction contract preparation and negotiation, and construction and design defect claims and defense. He can be reached for consultation at [email protected].