Court Opinion

ID: 2833059
Source: CourtListenerOpinion
Date Created: 2015-09-02 15:05:59.983972+00
Date Added: 2024-06-11T11:31:48.580325
License: Public Domain

Third District Court of Appeal
                                 State of Florida

                          Opinion filed September 2, 2015.
           Not final until disposition of timely filed motion for rehearing.

                                 No. 3D13-2589
                           Lower Tribunal No. 07-1195 K

                            Key West Seaside, LLC,
                                      Appellant,

                                          vs.

                   Certified Lower Keys Plumbing, Inc.,
                                      Appellee.

      An Appeal from the Circuit Court for Monroe County, David J. Audlin, Judge.

      Vincent F. Vaccarella and Craig R. Lewis, for appellant.

      Garcia & Smith, P.A., and Peter Rysman, for appellee.

Before SHEPHERD, LAGOA, and LOGUE, JJ.

      LAGOA, J.

      Key West Seaside, LLC, (“Seaside”) appeals from an order denying its

motion for attorney’s fees and costs pursuant to the offer of judgment statute, section

768.79, Florida Statutes (2010), and Florida Rule of Civil Procedure 1.442. Because
a final judgment of no liability was entered in favor of Seaside, and because the trial

court made no finding that Seaside’s offer of judgment was not made in good faith,

we reverse and remand with instructions to determine reasonable attorney’s fees.

I.     FACTUAL AND PROCEDURAL HISTORY

      Certified Lower Keys Plumbing, Inc., (“Certified”) was the subcontractor on

a condominium project owned by Seaside. Certified sued the following five

defendants: (1) Seaside; (2) Current Builders of Fla., Inc., the general contractor; (3)

Travelers Casualty and Surety Company of America, Inc., the surety; (4) CB

Development; and (5) Michael Taylor, the president of Current Builders of Fla., Inc.

One law firm represented all the defendants.

      During the course of the litigation, each of the five defendants served an offer

of judgment on Certified, none of which were accepted. Following trial, the trial

court entered judgment against the general contractor. A judgment of no liability,

however, was entered against Seaside. Specifically, the trial court ruled that

“[j]udgment is hereby rendered in favor of Defendant KEY WEST SEASIDE, LLC

on the basis that the lien was transferred to the bond of Defendant TRAVELERS

CASUALTY AND SURETY COMPANY OF AMERICA and that Defendant KEY

WEST SEASIDE, LLC, made payment in full to Defendant CURRENT BUILDERS

OF FLA. INC.”

      Seaside subsequently moved for attorney’s fees and costs under the offer of

judgment statute and rule. The trial court denied the motion, basing its ruling in part
                                           2
on the testimony of Seaside’s attorney, Vincent Vaccarella, that the attorney’s fees

“were billed to and paid by or on behalf of Current Builders of Fla., Inc.,” (“Current

Builders”) pursuant to an indemnification agreement between Seaside and Current

Builders. The trial court also based its denial of fees on “the fact that Attorney

Vaccarella, while advocating for Defendants Current Builders of Fla., Inc., CB

Development, Inc., and Travelers Casualty and Surety Company of America, Inc.,

made arguments adverse to Key West Seaside, LLC.” The trial court made no

findings that Seaside made the offer of judgment in bad faith. This timely appeal

followed.

II.   ANALYSIS

      The sole issue before this Court is whether the trial court erred in denying

Seaside’s motion for fees and costs pursuant to section 768.79, Florida Statutes, and

Florida Rule of Civil Procedure 1.442. Florida’s offer of judgment statute, section

768.79, provides in pertinent part that:

             (1) In any civil action for damages filed in the courts of
             this state, if a defendant files an offer of judgment which
             is not accepted by the plaintiff within 30 days, the
             defendant shall be entitled to recover reasonable costs and
             attorney’s fees incurred by her or him . . . from the date of
             filing of the offer if the judgment is one of no liability or
             the judgment obtained by the plaintiff is at least 25 percent
             less than such offer, and the court shall set off such costs
             and attorney’s fees against the award. Where such costs
             and attorney’s fees total more than the judgment, the court
             shall enter judgment for the defendant against the plaintiff
             for the amount of the costs and fees, less the amount of the
             plaintiff’s award.
                                           3
             ....

             (7)(a) If a party is entitled to costs and fees pursuant to the
             provisions of this section, the court may, in its discretion,
             determine that an offer was not made in good faith. In
             such case, the court may disallow an award of costs and
             attorney's fees.

§ 768.79(1), (7)(a), Fla. Stat. (2010).1 Florida Rule of Civil Procedure 1.442(h)(1)

further provides that “[i]f a party is entitled to costs and fees pursuant to applicable

Florida law, the court may, in its discretion, determine that a proposal was not made

in good faith.      In such a case, the court may disallow an award of costs and

attorneys’ fees.”

      Under both the statute and rule, therefore, entitlement to fees and costs to a

qualifying offeror is mandatory, if the statutory prerequisites have been met.

Schmidt v. Fortner, 629 So. 2d 1036, 1040 (Fla. 4th DCA 1993). Indeed,

             once an offer has been filed by a defendant and a judgment
             is one of no liability by the defendant, the defendant has
             the right to an award of attorney's fees. The sole basis on
             which a court can disallow an entitlement to an award of
             fees is if it determines that a qualifying offer was not made
             in good faith.

Mesa v. Ocean Enters., Inc., 803 So. 2d 908, 909-10 (Fla. 4th DCA 2002) (holding

that it was error for the trial court to deny a prevailing defendant attorney’s fees

1
  This Court reviews de novo a trial court’s ruling on a motion to award attorney’s
fees and costs pursuant to the offer of judgment statute and rule. Wolfe v. Culpepper
Constructors, Inc., 104 So. 3d 1132, 1134 (Fla 2d DCA 2012); Health First, Inc. v.
Cataldo, 92 So. 3d 859, 869 (Fla 5th DCA 2012); Jacksonville Golfair, Inc. v.
Grover, 988 So. 2d 1225, 1226 (Fla. 1st DCA 2008).

                                           4
under the offer of judgment statute without making a finding that the offer was made

in bad faith); see also Downs v. Coastal Sys. Int’l, Inc., 972 So. 2d 258, 261 (Fla. 3d

DCA 2008) (“[A]bsent a finding that a party’s offer of judgment was not made in

good faith, the trial court cannot disallow an entitlement to an award of fees.”); Vines

v. Mathis, 867 So. 2d 548, 550 (Fla. 1st DCA 2004); Mateo v. Rubiales, 717 So. 2d
133, 135 (Fla. 4th DCA 1998) (holding that trial court’s failure to make a finding of

bad faith under section 768.79(7)(a) where prerequisites of the statute have been

fulfilled demands reversal of order denying entitlement to fees).

      Here, the trial court denied Seaside’s entitlement to attorney’s fees without

finding that Seaside’s proposal was not made in good faith. Instead, its ruling was

based on the fact that a co-defendant was legally responsible for Seaside’s attorney’s

fees, and on its finding that in representing this co-defendant, the law firm seeking

fees made arguments contrary to Seaside’s position. The fact that another party or

a nonparty may have paid the offeror’s attorney’s fees is of no consequence to the

question of whether the offeror is entitled to fees and costs pursuant to the offer of

judgment statute or rule.

      Moreover, a review of the record indicates that there could have been no basis

for the trial court to find that Seaside made its offer in bad faith. At the time the

offer of judgment was made, the magistrate had ruled that Seaside’s lien was

transferred to the Travelers bond, and the trial court upheld that ruling twice—

including in the Final Judgment. It is well established, as a matter of law, that a
                                           5
determination that Seaside’s transfer of the lien to the Travelers bond precluded

liability against Seaside. See § 713.24(1), Fla. Stat. (2013); Allied Gen. Contractors

v. Superior Asphalt Co., 397 So. 2d 727, 728 (Fla. 5th DCA 1981); Riviera Beach

P’ship Ltd. v. S.I. Goldman Mech. Contractor, 345 So. 2d 783, 784 (Fla. 4th DCA

1977); Deltona Corp. v. Indian Palms, Inc., 323 So. 2d 282, 283 (Fla. 2d DCA 1975)

(holding that an owner is not a proper party to a subcontractor’s suit for payment

after its lien was transferred to bond); W. Plumbing & Heating Co. v. Hurley, 168
So. 2d 328, 329-30 (Fla. 1st DCA 1964); see also Dep’t of Highway Safety & Motor

Vehicles v. Weinstein, 747 So. 2d 1019, 1020 (Fla. 3d DCA 1999) (holding that

good faith exists as a matter of law where at the time an offer was made the offeror

had a reasonable basis to conclude that its exposure was nominal); Wagner v.

Brandeberry, 761 So. 2d 443, 445-46 (Fla. 2d DCA 2000) (same). Furthermore, as

our sister court explained in Vines, 867 So. 2d at 550, the “entry of the no liability

judgment in favor of [the defendant] mandated an award of attorneys’ fees and costs

absent a finding that [the] offer of judgment was not made in good faith.”

      Because the trial court did not find that Seaside’s offer of judgment was made

in bad faith and Seaside’s offer of judgment met the statutory requirement for

entitlement to fees, we find that the trial court erred in denying fees and costs.

Accordingly, we reverse the trial court’s order and remand with instructions for the

trial court to determine reasonable attorney’s fees.

      SHEPHERD, J., concurs.
                                           6
Key West Seaside, LLC, v. Certified Lower Keys Plumbing, Inc.
Case No. 3D13-2589

Logue, J. (dissenting)

      For me, the dispositive legal point in this case is Seaside’s failure to provide a

copy of the transcript of the evidentiary hearing which formed the basis for the trial

court’s detailed and well-reasoned order. The order under review specifically states

it is based on testimony taken at a hearing on August 22, 2013. Without reviewing

the evidence presented and any findings the trial court made orally at the hearing, we

are not in a position to opine that the trial court abused its discretion in denying

Seaside attorney’s fees for its nominal offer of judgment.

      The most basic, black letter principle of appellate law is that the trial court’s

decision arrives before this court cloaked with a “presumption of correctness and the

burden is on the appellant to demonstrate error.” Applegate v. Barnett Bank of

Tallahassee, 377 So. 2d 1150, 1152 (Fla. 1979). This principle is particularly

applicable here because the trial court’s order can only be reversed based upon a

determination that the trial court abused its discretion. § 768.79 (7)(a), Fla. Stat.

(2013); see also State Farm Fla. Ins. Co. v. Laughlin-Alfonso, 118 So. 3d 314, 315

(Fla. 3d DCA 2013) (“The abuse of discretion standard of review governs this

Court’s review of a trial court’s determination that a proposal for settlement was not

made in good faith.”). Without a copy of the evidentiary hearing transcript, it is

simply impossible for an appellate court to conclude that the trial court abused its

                                           7
discretion in this case.

      As the Florida Supreme Court explained,

      In appellate proceedings the decision of a trial court has the
      presumption of correctness and the burden is on the appellant to
      demonstrate error. . . . When there are issues of fact the appellant
      necessarily asks the reviewing court to draw conclusions about the
      evidence. Without a record of the trial proceedings, the appellate court
      cannot properly resolve the underlying factual issues so as to conclude
      that the trial court's judgment is not supported by the evidence or by an
      alternative theory. Without knowing the factual context, neither can an
      appellate court reasonably conclude that the trial judge so misconceived
      the law as to require reversal. The trial court should have been affirmed
      because the record brought forward by the appellant is inadequate to
      demonstrate reversible error.

Applegate, 377 So. 2d at 1152 (emphasis added).

      Judge Padovano has noted, “the absence of a transcript is likely to present a

serious problem if the order is one that turns on an issue of fact or the proper

exercise of judicial discretion. In either of these events, it may be impossible to

evaluate the order without reference to a full record of the testimony and other

evidence.” Philip J. Padovano, Florida Appellate Practice § 18:3, at 342 (2012 ed.).

We have both events here. We are asked to review an order that implicates both

issues of fact and a trial court’s discretion. If any type of order requires a transcript

in order to conduct a meaningful review, it is precisely this type of order which turns

on issues of fact and the proper exercise of judicial discretion.

      For this reason, in a virtually identical case, the Fourth District affirmed the

denial of a motion for attorney’s fees based upon an offer of judgment because

“[t]here is no transcript of the hearing where the court denied the motion, and we
                                          8
cannot determine whether the trial court’s ruling was an abuse of its discretion.”

Bank One, Corp. v. Bornschein, 987 So. 2d 172, 172 (Fla. 4th DCA 2008). Seaside

has the temerity to argue that the record on appeal indicates that there could have

been no basis for the trial court to find that Seaside made its offer in bad faith.

Seaside’s argument should be summarily rejected for the simple reason that the

record is incomplete because Seaside failed to provide the transcript. In fact, lawyers

who have taken similar liberties with the record when making arguments on appeal

have been sanctioned. See, e.g., Thornber v. City of Fort Walton Beach, 534 So. 2d
754, 755 (Fla. 1st DCA 1988).

      Because Seaside failed to provide a copy of the evidentiary hearing transcript,

we also cannot hold that the trial court failed to make a required finding of lack of

good faith. For my part, although the order under review did not use any “magic

words,” I find that the trial court’s order is replete with specific findings that point

directly to Seaside’s lack of good faith in making the nominal offer, and therefore

the order constitutes a sufficient finding of lack of good faith. But even if one did not

accept the written order as sufficient, it remains possible, indeed highly probable,

that the trial court made such findings on the record at the hearing. Because the trial

court’s order is cloaked with a presumption of correctness, it was Seaside’s burden

to prove that no such findings were verbally made at the hearing. Applegate, 377 So.
2d at 1152; Bornschein, 987 So. 2d 172. Seaside failed to meet that burden. Id.

      I also believe the majority errs by accepting Seaside’s argument that the

                                           9
nominal offer was in good faith as a matter of law because the trial court and this

court on appeal found that the general contractor had, in fact, been paid (and

therefore the lien against Seaside’s property for the unpaid work transferred to the

general contractor’s bond). Seaside’s argument in this regard ignores the fact that

Seaside and its attorney have adamantly maintained in every forum that the general

contractor had not been paid. In the first appeal, Seaside, represented by the lawyer

now seeking fees, argued “the trial court’s holding should be reversed since [the

General Contractor] in fact never received payment as required by the subcontract.”

Brief for Appellants at 49, Current Builders of Fla., Inc. v. Certified Lower Keys

Plumbing, 105 So. 3d 582 (Fla. 3d DCA 2012) (No. 3D11-2570) (emphasis added).

Even after we upheld the trial court’s ruling to the contrary in Current Builders,

Seaside and its lawyer have the gall to maintain in the initial brief in this appeal that

“neither Certified nor the general contractor received final payment.” Yet Seaside

and its lawyer simultaneously argue that the trial court and this court’s rejection of

Seaside’s own argument proves that Seaside was justified in making a nominal offer

of judgment.

      I find Seaside’s argument on this point—to say the least—unpersuasive. If the

reasonable foundation for Seaside’s nominal offer was the fact that the general

contractor had been paid, why would Seaside consistently maintain (and still

maintain) the general contractor had not been paid? Seaside’s argument makes no

sense. It is the legal equivalent of dividing by zero.

                                           10
      This type of double-talk, like Seaside’s nominal offer of judgment at issue,

forms a consistent pattern of lack of good faith that the trial judge summarized as the

“peculiar alignment of the Defendants.” There is no gainsaying the alignment was

peculiar. As the trial court found in denying the attorney’s fees at issue, Seaside’s

own attorney consistently “made arguments adverse to Key West Seaside, LLC.”

Seaside did not present a defense at trial. Seaside appealed a judgment that

exonerated it.1 Seaside argued that the general contractor had not been paid, even

though this argument was contrary to the facts and undermined its own defense.

Time and again, to its own detriment, Seaside consistently aligned itself with the

losing general contractor that the trial court expressly held attempted to defraud the

subcontractor.2 Seaside acted in this manner because its lawyer was the general

contractor’s lawyer, hired by the general contractor and paid by the general

contractor.

1 Seaside joined the appeal in Current Builders, which found the General Contractor
liable, even though the judgment found Seaside was not liable. Seaside was named
as an appellant in the body of the notice of appeal and in the body of the initial brief.
Notice of Appeal, Current Builders of Fla., Inc. v. Certified Lower Keys Plumbing,
105 So. 3d 582 (Fla. 3d DCA 2012) (No. 3D11-2570) (“Defendants Current Builders
of Florida, Inc., Travelers Causality Surety Company of American, Key West
Seaside, LLC [the Developer], CB Development, Inc. and Michael Taylor, through
undersigned counsel, appeal to the Florida Third District Court of Appeal . . . .”);
Brief for Appellants at 2, id. (“Current, Seaside [the Developer], Travelers, Taylor,
and CB Development are defendants below and the appellants in this case.”).
2 After a two day non-jury trial, the trial court held that the general contractor’s
transfer of all of its assets to the related corporation “constituted a fraudulent
transfer, in an attempt to evade the lawful claim of [the Subcontractor], in violation
of Florida law.”
                                         11
      The trial court was right that this alignment was “peculiar.” Seaside was

acting as nothing more than a stalking horse or stooge for the general contractor and

the general contractor’s lawyer (whose fees for representing Seaside we are being

asked to award in this case). Under these circumstances, the trial court properly

found that Seaside’s nominal offer of judgment was not based on any reasonable

foundation, but was made merely a “Catch 22” intended to lay the predicate for a

future award of attorney’s fees. Based even on the grossly inadequate record before

us, Seaside’s offer was a textbook example of one lacking good faith. See Eagleman

v. Eagleman, 673 So. 2d 946, 948 (Fla. 4th DCA 1996).

      I respectfully dissent.

                                         12