McKelvey v. Kismet, Inc.

• Citation: 430 So.2d 919
• Decision Date: 19 April 1983
• Docket Number: No. 82-499,82-499
• Parties: Andrew J. McKELVEY and Irwin Bard, Appellants, v. KISMET, INC., Appellee.
• Court: Court of Appeal of Florida (US)

Page 919

430 So.2d 919

Andrew J. McKELVEY and Irwin Bard, Appellants, v. KISMET, INC., Appellee.

No. 82-499.

District Court of Appeal of Florida Third District.

April 19, 1983.

Philip M. Gerson, Miami, for appellants.

Young, Stern & Tannenbaum and Glen Rafkin, North Miami Beach, for appellee.

Before HENDRY, BASKIN and FERGUSON, JJ.

HENDRY, Judge.

This appeal challenges a cost judgment entered against appellants in their suit for repossession of collateral given as security for a loan, and unlawful detainer. The primary issue on appeal is whether the trial court was correct in assessing attorney's fees and costs against the appellants where one count of their complaint was voluntarily dismissed and the other was involuntarily dismissed with prejudice, but before a pending counterclaim was adjudicated. Concluding that the trial court assessed costs at the proper procedural juncture of the case, we affirm.

Appellants, sellers of a restaurant known as "Menage", filed suit seeking foreclosure of a security interest against the buyer of the restaurant, appellee Kismet, when Kismet defaulted on its payments to a secured creditor. The complaint was thereafter amended to add a second count alleging a claim for unlawful detainer. Kismet answered, counterclaimed, ¹ and moved to dismiss the complaint and the amendment. The motion to dismiss was denied as to Count I, foreclosure, but was granted with prejudice as to Count II, unlawful detainer, for failure to state a cause of action. ² Two appeals, one interlocutory and one final, and a writ of mandamus were taken from the order dismissing Count II. All appeals were dismissed by this court and an award of attorney's fees pursuant to section 57.105, Florida Statutes, was granted to Kismet. While maintaining the appeals from the dismissal of Count II, appellants voluntarily dismissed Count I of the complaint with leave of the trial court. After attempts to appeal the dismissal of Count II proved unsuccessful, appellants moved to amend their pleadings and the appellee moved for attorney's fees and costs pursuant to a provision entitling the prevailing party to legal fees and costs in the event of litigation on the contract of sale. Appellants' motion to amend was denied, and the trial court granted appellee's motion for fees and costs, entering an order awarding the appellee $12,280.50. Appellee's counterclaim has at all times remained pending.

Appellants raise three issues on appeal, alleging that the trial court erred in: (1) awarding Kismet attorney's fees before it had prevailed in the trial court as evidenced by the remaining counterclaim; (2) awarding Kismet costs when the litigation had not terminated and the appellants had attempted to file an amended complaint to reinstate the claim they had voluntarily dismissed; and (3) denying appellants' motion to file an amended complaint.

Addressing the first two issues as one, we disagree with appellants' contentions and find that the trial court properly ruled that the litigation had terminated and that Kismet was the prevailing party.

Exercise of the right to voluntary dismissal terminates an action without prejudice, meaning that the action may be refiled at any time within the applicable statute of limitations. Fla.R.Civ.P. 1.420(a). Rule 1.420(a)(2) acknowledges that it is possible to voluntarily dismiss the main claim of an action and leave for independent adjudication a pending counterclaim. However, costs in a dismissed action are to be assessed and a judgment entered for the costs in that action. Florida Rule of Civil Procedure 1.420(d) provides, inter alia:

(d) Costs. Costs in any action dismissed under this rule shall be assessed and judgment for costs entered in that action.

See Gordon v. Warren Heating & Air Conditioning, Inc., 340 So.2d 1234 (Fla. 4th DCA 1976) (trial judge cannot defer assessment of costs in the original action pending the outcome of a subsequent lawsuit on the same cause of action). Thus, Rule 1.420(d) provides that costs are to be assessed immediately after a dismissal is entered and that any subsequent lawsuit on the same claim must be stayed until all of the costs awarded in the initial lawsuit are fully paid. If by contract or statute attorney's fees are made a part of the costs between the parties, these fees must also be assessed and a judgment entered in that action. Paley v. Cocoa Masonry, Inc., 354 So.2d 945 (Fla.2d DCA), cert. denied, 359 So.2d 1212 (Fla.1978); Bankers Multiple Line Insurance Co. v. Blanton, 352 So.2d 81 (Fla. 4th DCA 1977).

As Rule 1.420(d) provides that costs must be assessed as soon as a dismissal is entered ("Costs ... shall be assessed"), and yet paragraph (a)(2) provides for a pending counterclaim to remain for adjudication when the main action is dismissed, we must assume no contradiction inheres in the rules and that costs (including, in an appropriate case, attorney's fees) are to be assessed subsequent to dismissal even though a counterclaim remains for disposition. Therefore, assuming that Kismet was the "prevailing party" in the cause, the trial court correctly assessed and entered judgment for costs following the dismissal.

We conclude that Kismet was the prevailing party in the contract dispute since it won in the main action: Count II was involuntarily dismissed with prejudice for failure to state a cause of action and all appellate attempts to reverse the decision were unsuccessful, and Count I was voluntarily dismissed, and the term "prevailing party" is applicable to a defendant against whom a voluntary dismissal is taken. ³ Moreover, pendency of the counterclaim does not alter this result, for even if appellants were to succeed on appellee's counterclaim, at most they will clearly win only a battle while still losing the war. See Kirou v. Oceanside Plaza Condominium Association, Inc., 425 So.2d 650 (Fla. 3d DCA 1983). Accordingly, we find that Kismet was the "prevailing party" in this litigation for the purpose of recovery of attorney's fees and costs under the contract between the parties, and that costs and fees were properly assessed and judgment entered thereon following dismissal of appellants' action under Rule 1.420, Florida Rules of Civil Procedure.

Appellants' final contention, that the trial court erred in denying their motion to file an amended complaint, is clearly without merit. A voluntary dismissal of a lawsuit terminates the action. Although a dismissal which is voluntary is without prejudice to the bringing of a new action, it precludes revival of the original action. Randle-Eastern Ambulance Service, Inc. v. Vasta, 360 So.2d 68 (Fla.1978); Lauda v. H.F. Mason Equipment Corp., 407 So.2d 392, 394 n. 6 (Fla. 3d DCA 1981). Thus, since appellants' entire complaint had been dismissed, nothing remained to amend.

Affirmed.

FERGUSON, Judge (dissenting).

The question presented is whether the defendant is a prevailing party, as that term is used in a contract, for the purpose of awarding attorney's fees, where the plaintiffs take a pretrial dismissal of their complaint voluntarily and without prejudice.

As far as appears from the record, issues were joined in October, 1980. Shortly thereafter, a series of appellate reviews began with the case having gone not far beyond the pleading stage. This court taxed costs against appellants, pursuant to Section 57.105, Florida Statutes (1979), on a finding that the appeals relating to the involuntary dismissal of count II with prejudice were without merit. The efforts of counsel for appellee, as evident from an affidavit in support of the attorney fee claim filed in the circuit court action, are related for the most part to the above-mentioned appeals and the motion to dismiss.

In supporting the assessment of attorney's fees, the majority first looks to Florida Rule of Civil Procedure 1.420(d), dealing with costs. But attorney's fees are not authorized by that rule. MacBain v. Bowling, 374 So.2d 75 (Fla. 3d DCA 1979). Appellee relies solely upon the contract as the basis for its entitlement to attorney's fees. The contract provides:

In the event of any litigation related to this Agreement, the prevailing party shall be entitled to a reimbursement of reasonable attorneys' fees and costs. (e.s.)

Although there is no shortage of cases which identify a prevailing party for the purpose of fees, there is a stunning lack of consistency. Three schools of thought seem to have developed.

One view, and the one apparently embraced by the majority, is that where a contract or statute provides that a prevailing party in a litigation is to be paid attorney's fees, those fees are to be treated the same as costs. ⁴ In that case the fees are to be assessed in any instance where an assessment of costs would be appropriate, as in the case of a voluntary dismissal pursuant to Florida Rule of Civil Procedure 1.420(d), without an independent determination as to whether a party has "prevailed" in the litigation, as that term is commonly understood. ⁵ The earliest cases in Florida which seem to have adopted the rule treating fees the same as costs are from the Fourth District. In Gordon v. Warren Heating & Air Conditioning, Inc., 340 So.2d 1234 (Fla. 4th DCA 1976), the plaintiff brought an action to foreclose a mechanic's lien. ⁶ Eventually, that action was dismissed and followed immediately with the institution of a new lawsuit based on the same mechanic's lien. The Fourth District held that where a lien claim is voluntarily dismissed, the party against whom it was brought is the "prevailing party", entitled to attorney's fees and costs. The court, relying on Florida Rule of Civil Procedure 1.420(d), noted that the rule "has the obvious salutary effect of discouraging repeated lawsuits on the same claim by exacting payment of costs before the party whose claim was dismissed is allowed to proceed with a new edition of the identical cause of action." (e.s.). Gordon, 340 So.2d at 1235-36. Lion Oil...