Court Opinion

ID: 4291559
Source: CourtListenerOpinion
Date Created: 2018-07-05 15:07:57.792005+00
Date Added: 2024-06-11T14:38:08.056679
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

        RICHARD B.WEBBER, II, as the Chapter 7 Trustee for
     FREDERICK J. KEITEL, III, and FJK IV PROPERTIES, INC.,
            a Florida corporation, Jointly and Severally,
                             Appellant,

                                     v.

                       THOMAS B. D'AGOSTINO,
                             Appellee.

                              No. 4D17-3007

                              [July 5, 2018]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach   County;    Meenu      Sasser,     Judge;    L.T.    Case     No.
502013CA004692XXXXMB.

  Kevin P. Robinson of Zimmerman Kiser Sutcliffe, Orlando, for
appellant.

   Eric C. Christu and Jonathan P. Hart of Shutts & Bowen LLP, West
Palm Beach, for appellee.

MAY, J.

    A dispute over an attorney’s fees and cost judgment brings this case to
our court once again. The trustee appeals the final judgment after years
of litigation in a foreclosure action. He raises two primary arguments: (1)
none of the three bases upon which the trial court awarded fees supports
the judgment; and (2) the amount awarded is not supported by the record.
The lender responds that the extensive litigation that ensued, challenging
the underlying judgment even after payment of the debt, warranted the fee
and cost award. We agree with the lender and affirm.

   About ten years ago, the lender loaned the borrower $1.4 million. The
note was secured by a pledge of the borrower’s stock in FJK IV Properties,
Inc. (“stock”). When the borrower failed to repay the loan, the lender filed
a two-count complaint seeking to foreclose. Subsequently, the borrower
transferred the stock to an out-of-state friend.
   On December 2, 2014, the trial court entered a final judgment of
foreclosure in favor of the lender for $3,062,832.12. The borrower
appealed.

   On June 29, 2015, the borrower filed a suggestion of bankruptcy, which
was dismissed a month later. On July 17, 2015, the trial court reversed
the out-of-state stock transfer, finding it “was made to delay, hinder
and/or defraud.” On September 3, 2015, the borrower moved for relief
from judgment under Florida Rule of Civil Procedure 1.540.

   On October 21, 2015, the court ordered the lender’s attorney-in-fact to
deliver the stock to the Palm Beach County Sheriff to sell at auction. On
December 7, 2015, the borrower assigned and transferred the stock to the
lender’s attorney-in-fact. The next day, the borrower filed a second
suggestion of bankruptcy. On February 5, 2016, the borrower paid the
lender in full.

   We then affirmed the underlying foreclosure judgment. See Keitel v.
D’Agostino, 212 So. 3d 372 (Fla. 4th DCA 2016). We also unconditionally
granted appellate attorney’s fees to the lender. Following our opinion and
order, the lender moved for attorney’s fees and costs in the trial court,
asserting three grounds for recovery: (1) the note; (2) section 57.115,
Florida Statutes; and (3) section 56.29, Florida Statutes.

    On August 4, 2017, the trial court heard the lender’s motion for
attorney’s fees and costs. The trustee argued the lender was not entitled
to fees “[b]ecause the judgment ha[d] been paid.” The trial court disagreed
and awarded fees and costs for work done in both the state and
bankruptcy courts on all three bases.

   From that judgment, the trustee now appeals. He continues to argue
that the lender was not entitled to fees under any of the three bases
because the judgment had been paid.

   We review fee and cost awards under a mixed standard of review. See
Klinow v. Island Court at Boca W. Prop. Owners’ Ass’n, Inc., 64 So. 3d 177,
180 (Fla. 4th DCA 2011). “[F]actual findings must be supported by
competent, substantial evidence, while legal findings are reviewed de
novo.” Id. We review the trial court’s determination as to the amount of
attorney’s fees and costs for abuse of discretion. Centex-Rooney Constr.
Co., Inc. v. Martin Cty., 725 So. 2d 1255, 1258 (Fla. 4th DCA 1999).

  The trustee first argues the trial court improperly determined the lender
was entitled to attorney’s fees and costs under the note because the note

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merged into the final judgment. Alternatively, the trustee contends that,
even if the note provided a basis for the post-judgment award, the plain
language of the note does not allow for the award. The lender responds
that the trustee never raised the merger doctrine in the trial court, thereby
waiving the argument, or any error was invited. See Oliver v. Oliver, 133
So. 3d 536, 564 n.2 (Fla. 5th DCA 2014) (“An argument not raised at trial
is waived for purposes of appellate review.”) Here, however, the trustee
raised the merger doctrine twice through his expert witness. We therefore
find the issue preserved.

   On the merits, we disagree with the trustee that the merger doctrine
prevents the note from providing a basis for the attorney’s fee award. That
doctrine provides “that when a valid and final judgment is rendered in
favor of a plaintiff, the original debt or cause of action upon which an
adjudication is predicated merges into the final judgment, and,
consequently, the cause’s independent existence terminates.” Weston
Orlando Park, Inc. v. Fairwinds Credit Union, 86 So. 3d 1186, 1187 (Fla.
5th DCA 2012).

   However, we have previously held that a contract providing for a
prevailing-party’s entitlement to “all reasonable attorney’s fees and costs”
was “broad enough to encompass fees for execution on the judgment.”
Fed. Auto Ins., Inc. v. Bus. Acquisitions Brokerage, Inc., 839 So. 2d 767,
767 (Fla. 4th DCA 2003) (“If the losing party persists in requiring the
expenditure of attorney’s time even after the court has entered judgment
on the arbitration award, there is no apparent reason to us why the broad
scope of this fee provision should not be invoked here as well.”).

    Here, the note provided that “[e]ach person liable hereon . . . agrees to
pay all costs, including a reasonable attorney’s fee, whether suit be
brought or not, if, after maturity of this note or default thereunder, counsel
shall be employed to collect this note.” This language is also broad enough
to encompass the extended litigation pursued by the borrower and trustee
after payment of the judgment. Thus, the merger doctrine does not prevent
the note from serving as a basis for the fee award.

   Next, focusing on the words “collect this note,” the trustee contends
that the note provides for fees “only when a party is engaged in collection
actions—which could either include the acts necessary to obtain a
judgment or . . . the acts necessary to collect a judgment.” We disagree.
The lender’s subsequent action to defend the final judgment in motions in
state court, on appeal, and in bankruptcy court was in fact to “collect” on
the note.

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    As for the statutory provisions providing a basis for the judgment for
attorney’s fees and costs, the trustee attacks the trial court’s reliance on
section 57.115 because the borrower satisfied the note by payment on
February 5, 2016. And, because the statute is limited to an award of
attorney’s fees and costs incurred “in connection with execution on a
judgment,” it was inapplicable here. 1 The lender responds that even
though the borrower satisfied the note, he continued to litigate the merits
of the underlying judgment and incurred fees in collecting the note and
the judgment. We agree with the lender.

   Section 57.115(1) provides: “The court may award against a judgment
debtor reasonable costs and attorney’s fees incurred thereafter by a
judgment creditor in connection with execution on a judgment.” The
continued litigation over the final judgment in state courts and in the
bankruptcy court were in connection with execution on the judgment.
Even the trustee’s expert testified that the borrower continued with legal
proceedings after payment was made, and that time was compensable.
This section supports the trial court’s award.

   The trustee then argues that the trial court erred because it did not
consider whether the borrower attempted to avoid or evade paying the
judgment. See § 57.115(2)(a), Fla. Stat. (“In determining the amount of
costs, including attorney’s fees, if any, to be awarded under this section,
the court shall consider [w]hether the judgment debtor had attempted to
avoid or evade the payment of judgment.”).

   This argument lacks merit. First, whether the borrower attempted to
avoid or evade paying the judgment is a consideration for the court as to
the amount of fees and costs—not entitlement. See id. Second, the court
did consider this factor. In its order, the trial court expressly found “that
[the lender] was required to engage in extensive litigation due to [the
borrower’s] deliberate efforts to delay and hinder [the lender’s] collection.”
To the extent the trustee argues that it paid the outstanding debt, payment
only occurred because the bankruptcy court mandated it.

1 The trustee also argues the trial court improperly determined the lender was
entitled to attorney’s fees and costs under section 56.29, Florida Statutes. The
lender does not respond to this argument. While we find merit in the trustee’s
argument on this issue, it simply means the trustee “wins this battle, but loses
the war.” Because the two other bases for the award support the trial court’s
judgment, we affirm the judgment despite this error.

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    And last, the trustee argues the trial court failed to properly analyze
and identify the basis for awarding attorney’s fees and costs in state court
for time spent litigating in federal bankruptcy court. The lender responds
that expert testimony explained why and how the bankruptcy litigation
related to the state proceedings and why those fees were recoverable. Once
again, we agree with the lender.

   “Although the fee applicant has the burden of establishing its
entitlement to an award of attorneys’ fees, the opponent of the fee has the
burden of pointing out with specificity which hours should be deducted.”
Centex-Rooney, 725 So. 2d at 1259 (internal citation omitted). The trial
court specifically determined that fees and costs incurred in the
bankruptcy litigation were recoverable because the borrower continued to
challenge the final judgment even after having paid it. The trial court also
noted that the trustee’s expert conceded the point.

   The trustee was required to specifically identify fees and costs that
should have been excluded. See id. He failed to do so. And, the trial
court’s findings are supported by competent, substantial evidence. We
therefore affirm the award of attorney’s fees and costs based upon the note
and section 57.115(1), Florida Statutes.

   Affirmed.

DAMOORGIAN, J., and FAHNESTOCK, FABIENNE, Associate Judge.

                           *         *         *

   Not final until disposition of timely filed motion for rehearing.

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