Opinion ID: 1823145
Heading Depth: 1
Heading Rank: 3

Heading: Attorney's Fees Under Section 320.27(10)

Text: Petitioners Hubbel and Herbert argue that the loss covered by a motor vehicle dealer's bond includes attorney's fees because section 320.27(10) requires the bond to cover any loss or damage of a dealer's customer and because the attorney's fee provision under FDUTPA is incorporated into chapter 320. They assert that public policy dictates such a finding because both chapter 320 and FDUTPA were designed to protect consumers and to make them whole. Alternatively, petitioners, for the first time, argue that attorney's fees should be awarded under section 627.428, Florida Statutes (1997), because this Court recently concluded in Nichols v. Preferred National Insurance Co., 704 So.2d 1371 (Fla.1997), that attorney's fees are proper against surety companies under that provision. That claim was not made in the trial court or before the district court of appeal. The statements of claims in these cases specifically alleged fraud and intentional misrepresentation and deceptive and unfair trade practices against the motor vehicle dealers under FDUTPA. Section 501.2105, Florida Statutes (1997), a part of FDUTPA, provides for attorney's fees for the prevailing party in such an action. However, the statute in issue in this proceeding is section 320.27(10) and the bond provisions directed by the state agency to implement that statute. It requires motor vehicle dealers to obtain surety bonds or an irrevocable letter of credit in the amount of $25,000 prior to obtaining a license. Under that provision, [s]uch bonds and letters of credit shall be to the department and in favor of any person ... who shall suffer any loss as a result of any violation of the conditions hereinabove contained. The hereinabove contained language refers to the following condition language: Surety bonds and irrevocable letters of credit shall be in a form to be approved by the department and shall be conditioned that the motor vehicle dealer shall comply with the conditions of any written contract made by such dealer in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of chapter 319 and [chapter 320] in the conduct of the business for which the dealer is licensed. [1] The issue is whether attorney's fees are to be considered any loss under section 320.27(10). The court in Marshall addressed a similar issue as it applied to an earlier version of a related statute, section 320.77, which is the statute governing surety bonds for mobile home dealers. In Marshall, the court concluded that section 320.77 included attorney's fees provided for under FDUTPA because the reference in section 320.77 to any loss applied to any violation of any provision of [section 320.77] or of any other law of this state having to do with dealing in mobile homes. The Marshall court concluded that a violation of FDUTPA was obviously a violation of a law of this state and accordingly included attorney's fees under the term any loss. The court also noted that [t]he obvious purpose of the Little FTC Act is to make consumers whole for losses caused by fraudulent consumer practices. Similarly, the purpose of the bonding and licensing requirements in chapter 320 is protection of consumers who deal with mobile home dealers. These aims are not served if attorney's fees are not included in the protection. 360 So.2d at 1148. We find the Marshall court's partial reliance on the any other law language found in section 320.77(10), Florida Statutes (1975), misplaced. That language pertained only to the suspension or revocation of a mobile home dealer's license, and not the provision for a surety bond found in section 320.77(11). That same any other law language is similarly confined in the licensing provision of the statutory scheme we consider today. [2] Further, like the statutory bond provision at issue in Marshall, the statute in this case states that any loss applies to the conditions of any written contract made by the dealer during a sale and to any violations of chapters 319 and 320. [3] It does not extend to violations of any law of the state. Generally, the law is clear that attorney's fees are not considered to be a loss or damages, and to be recoverable must be expressly provided for by statute, rule, or contract. The written contract in this case, the surety bond, does not contain a provision for attorney's fees. Nor does the complaint assert any violations of chapters 319 and 320. [4] Most important, there is no provision for attorney's fees in section 320.27(10). While chapter 320 does contain provisions for attorney's fees elsewhere, see, e.g. §§ 320.697, 320.8245, 320.838, Fla. Stat. (1997), it does not contain such a provision in section 320.27(10). We conclude that under the plain language of the statute, attorney's fees are not included under the statutory scheme set forth in section 320.27(10); accordingly, we disapprove Marshall. Next, we find the asserted public policy concerns are not justifiable and would effectively destroy the statutory scheme which establishes a modest fund for consumers to obtain a refund of their monies. As illustrated by the facts in this case, to accept the view of the petitioners would mean the primary beneficiary of the fund would be the attorneys, not the consuming public. The legislative scheme was intended to establish a very modest fund of $25,000 from which consumers could recover damages when car dealers went out of business and defaulted in their obligations. The Hubbel case is an illustration of the type of claim that was intended to be protected. Once the default was entered and the validity of the claim established, which easily could have been done in a small claims proceeding, the judgment was immediately paid by the surety. If we accepted the arguments of the claimants in this case, logic and commonsense necessarily lead to the conclusion that the asserted judicial construction would result in the attorney's fee provisions substantially depleting the fund. The applicable statute, section 320.27(10), by its clear terms, states the aggregate liability of the surety in any one year shall in no event exceed the sum of the bond, or in the case of a letter of credit, the aggregate liability or the issuing bank shall not exceed the sum of the credit. If the obligation was as open-ended as asserted by the claimants, few sureties and no banks would provide the bond or letter of credit to make this statutory scheme work. We reject petitioner's claim in this Court based upon Nichols v. Preferred National Insurance Co., 704 So.2d 1371 (Fla.1997). That case interpreted the provisions of section 627.428. The petitioners in the instant case failed to claim attorney's fees under that section both at trial and on appeal. Accordingly, for the reasons expressed, we approve the result reached by the district court in these cases. It is so ordered. HARDING, C.J., and SHAW, WELLS and PARIENTE, JJ., concur. LEWIS, J., concurs in part and dissents in part with an opinion, in which ANSTEAD, J., concurs. LEWIS, J., concurring in part and dissenting in part. I concur with the majority's determination that neither Kathryn Hubbel (Hubbel) nor C.B. and Annie Herbert (the Herberts) may recover attorney's fees from Aetna Casualty and Surety Company (Aetna) under section 627.428(1), Florida Statutes (1999), [5] only because the allegations in the complaints were specifically limited to a different statute and the claims were not presented in general terms or under section 627.428 in any of the proceedings below. Based on the specific facts of the present cases, however, I respectfully dissent from the majority's determination that costs and attorney's fees included in the judgments in favor of Hubbel and the Herberts as elements of recoverable loss under the law applicable to these facts do not constitute any loss as those words are utilized in section 320.27(10), Florida Statutes (1999). [6] In my view, the majority's determination on this issue has been tainted, and unfortunately misdirected, by a distaste for the amount of attorney's fees awarded to Hubbel and the Herberts at the trial level, despite the fact that the validity of such amounts has not been challenged in this Court and has never been an issue before this Court for consideration. [7] In a similar manner and contrary to the majority's analysis, the face amount of the surety bond does not in any way address the definition of the phrase any loss for which bonds or letters of credit are required to respond. Contrary to the majority's determination, I conclude that the plain meaning of section 320.27(10)which is also supported by public policy-requires that when a motor vehicle dealer fails to comply with the conditions of a written contract (such as a refusal to refund a deposit as occurred in one of these cases) and the conduct is so egregious that it is an unfair and deceptive trade practice under chapter 501, Florida Statutes (1999), for which Florida law describes the elements of loss recoverable to include costs and attorney's fees, the elements of loss as described by statute are or should be covered by the surety bond provided pursuant to section 320.27(10)(a). The plain meaning of the statute requires such bonds to respond to any loss as those elements are established by Florida law. To understand the basis for this conclusion, a brief review of the facts is necessary.