"Fees for Fees": A Familiar Trend May Come to an End

Lawyers and clients alike may soon have reason to rejoice––or sulk, depending on which side you fall—at the prospect of recovering the fees to litigate the quantum of attorneys' fees. Attorney’s fees are a hot topic in litigation, with prevailing parties looking for ways to recover all they spent while prosecuting or defending a lawsuit. A recent decision from the Second District may continue opening the door for additional attorney’s fees claims for litigating the amount of fees, commonly referred to as “fees for fees”.

In Florida, attorney's fees incurred in preparing for and participating in the hearing to determine the amount of attorney’s fees from a lawsuit are unrecoverable. State Farm Fire & Casualty Ins. Co. v. Palma 629 So. 2d 830 (Fla. 1993). Since Palma, other courts in Florida have expanded that ruling to disallow recovering “fees for fees” under statutory authority, including section 57.105.

That trend may end by a recent decision by the Second District Court of Appeal in Trial Practices, Inc. v. Hahn Loeser & Parks, LLP. 2017 WL 1363916, Case Nos. 2D13-6051, 2D14-86. As the prevailing party of the lawsuit, Hahn Loeser & Parks, LLP moved for, and was awarded, its reasonable attorney fees, including those incurred to determine the amount of the fees. Trial Practices Inc. appealed the award. The Second District upheld the award on the basis of the language of the fee-shifting provision in the underlying contract. Id.

The fee provision permitted the prevailing party “in any action arising from or relating to this agreement” to recover its attorney’s fees “incurred in any way in connection with the matter.” The court found the provision broadly encompassed “all claims” connected in any way with the contract, and considered litigating the amount of attorney’s fees a “claim” contemplated by the con- tract provision, and “fees for fees” was permissible. The Second District's opinion follows and adopts a recent decision from the Fourth District Court of Appeals, Waverly at Las Olas Condo. Assoc., Inc. v. Waverly Las Olas, LLC, 88 So. 3d 386, 389 (Fla. 4th DCA 2012).

In Waverly, the Fourth District held a contract provision authorizing recovery of attorney’s fees for “any litigation” includes those incurred in litigating the amount of attorney’s fees.

Trial Practices demonstrates a continued departure from the previously-held idea that an attorney or client cannot recover “fees for fees.” What does this mean for litigations of the future? It must necessarily begin with the contracts between the parties that inevitably form the basis of the lawsuits. Where boilerplate language would state the prevailing party is entitled to its attorney’s fees, drafters might opt for stricter language to shield their clients from an increased risk in the event they lose a lawsuit.

The ruling from the Second District is a double-edged sword: on one side, prevailing parties with broad language in the contract may be able to recover additional fees, but on the other, they risk owing those fees. It is an important consideration given lawsuits can easily reach the hundreds of millions of dollars in fees depending on complexity and duration of the case, and the fees incurred in determining the amount of attorney’s fees can be tens of thousands more. Regardless of position, parties to contracts, and the attorneys drafting those con- tracts, must be increasingly mindful of the risk of drafting broad attorney’s fees provisions with this shifting trend.