Cheek v. McGowan Elec. Supply Co.

• Decision Date: 16 July 1987
• Docket Number: No. 68563,68563
• Citation: 511 So.2d 977,12 Fla. L. Weekly 407
• Parties: 12 Fla. L. Weekly 407 Alan CHEEK, Petitioner, v. McGOWAN ELECTRIC SUPPLY CO., Respondent.
• Court: Florida Supreme Court

Page 977

511 So.2d 977

12 Fla. L. Weekly 407

Alan CHEEK, Petitioner, v. McGOWAN ELECTRIC SUPPLY CO., Respondent.

No. 68563.

Supreme Court of Florida.

July 16, 1987.

M. Stephen Turner, of Culpepper, Pelham, Turner & Mannheimer, Tallahassee, for petitioner.

William C. Owen, of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tallahassee, for respondent.

PER CURIAM.

We have for review Cheek v. McGowan Electric Supply Co., 483 So.2d 1373 (Fla. 1st DCA 1985), in which the district court certified five questions as being of great public importance. We have jurisdiction, article V, section 3(b)(4), Florida Constitution, and approve the decision below.

This action arose in connection with a promissory note to McGowan Electric, as payee, which was executed by general contractor, Cheek, and electrical subcontractor, Thomas Cook. The note was given in satisfaction of a sum owing for electric supplies purchased by Cook from McGowan under a credit arrangement in which Cheek acted as a guarantor for credit purchases made by Cook to be used on Cheek's job.

The questions certified involve: 1) an award of attorney's fees to McGowan as provided for under the promissory note and 2) the denial of Cheek's motion for costs made pursuant to rule 1.442, Florida Rule of Civil Procedure. The questions certified do not deal with the respective liability of the parties under either the guarantee agreement or the promissory note. Under the unique facts of this case, which may be ascertained from the district court's opinion below, we find no error in the trial court's apportionment of liability. Therefore, we

decline further discussion of this matter in this opinion. ¹

ATTORNEY'S FEES.

First, we address the attorney's fee issue. Under the promissory note sued upon, Cheek agreed to pay "all costs, including a reasonable attorney's fee" incurred in connection with the collection of the note. In a post-judgment motion McGowan sought fees as provided for under the note. The trial court originally denied the motion because McGowan had failed to present the issue to the jury. However, upon reconsideration, relying specifically on Taggart Corp. v. Benzing, 434 So.2d 964 (Fla. 4th DCA 1983), the trial court reversed its position and awarded fees to McGowan. On appeal, the district court affirmed the award of attorney's fees, holding, contrary to several other district courts, Newcombe v. South Florida Business Negotiators, Inc., 340 So.2d 1192, 1194 (Fla. 2d DCA 1976); Machado v. Foreign Trade, Inc., 478 So.2d 405 (Fla. 3d DCA 1985); Lhamon v. Retail Development, Inc., 422 So.2d 993 (Fla. 5th DCA 1982), that attorney's fees predicated upon a provision in a contract may be awarded upon proof presented after a final judgment. The district court certified the following question:

WHERE ATTORNEY'S FEES ARE PLED IN A SUCCESSFUL SUIT FOR RECOVERY PURSUANT TO A PROMISSORY NOTE, AND THE NOTE PROVIDES THAT THE MAKER SHALL PAY "REASONABLE ATTORNEY'S FEES," MAY THE PROOF OF SUCH FEES BE PRESENTED FOR THE FIRST TIME AFTER FINAL JUDGMENT PURSUANT TO A MOTION FOR ATTORNEY'S FEES BY THE PREVAILING PARTY?

483 So.2d at 1381.

We have recently answered this question in the affirmative in Parham v. Price, 499 So.2d 830 (Fla.1986). Consistent with our decision in Parham, we reject Cheek's contention that under article I, section 22 of the Florida Constitution he has a right to a jury determination of reasonable attorney's fees as provided for under the note. In Mid-Contintent Casualty Co. v. Giuliano, 166 So.2d 443 (Fla.1964), this Court held that the right to a jury trial on the issue of attorney's fees did not exist under the common law and, therefore, there was no such right preserved under section 3 of the Declaration of Rights of the Florida Constitution, the predecessor to article I, section 22. While that case involved an award of attorney's fees authorized by statute, the holding was not predicated on the distinction between statutorily and contractually authorized attorney's fees. Therefore, we hold that proof of attorney's fees whether such fees are provided for by statute, see Finkelstein v. North Broward Hospital District, 484 So.2d 1241 (Fla.1986), or by contract may be presented for the first time after final judgment pursuant to a motion for attorney's fees, as was done in this case.

The district courts of appeal which have held that contractually authorized attorney's fees are subject to jury trial do so on the premise that the attorney's fees are recoverable as a part of the damages. We differ with that conclusion because the recovery of attorney's fees is ancillary to the claim for damages. A contractual provision authorizing the payment of attorney's fees is not part of the substantive claim because it is only intended to make the successful party whole by reimbursing him for the expense of litigation. In fact, an attorney's fee can only be recovered after the determination of the prevailing party has been made.

McGowan also seeks attorney's fees in connection with this proceeding. ² Cheek argues that fees are not authorized in connection with this proceeding because the We grant McGowan's motion for attorney's fees and remand this case to the trial court for a determination of reasonable attorney's fees incurred by McGowan in connection with the proceedings before this Court.

provision at issue does not expressly provide for appellate fees. We do not agree and find that McGowan is entitled to fees incurred in defending the judgment in its favor in this Court. Section 59.46, Florida Statutes (1985) provides that "[i]n the absence of an expressed contrary intent, any provision of a statute or of a contract ..., providing for the payment of attorney's fees to the prevailing party shall be construed to include the payment of attorney's fees to the prevailing party on appeal." (emphasis added). We find this statute applicable even though the fee provision in question was unilateral in nature providing for fees to McGowan incurred in connection with collection of the note. Attorney's fee clauses in security agreements, such as the promissory note at issue, are "to protect and indemnify [the holder of the note] against expenditures necessarily made or incurred to protect his interest." Blount Brothers Realty Co. v. Eilenberger, 98 Fla. 775, 777, 124 So. 41, 41 (1929). As recently noted by an Indiana court, "[w]here the disappointed maker of a note pursues, and loses, in appellate proceedings, legal expenses incurred by the holder of the note defending the judgment on appeal are also reasonably necessary to protect collection rights." Parrish v. Terre Haute Savings Bank, 438 N.E.2d 1, 3 (Ind.App.1982).

OFFER OF JUDGMENT

On March 19, 1980, fifteen days prior to the first trial in this case, ³ Cheek served McGowan with an offer of judgment, pursuant to Florida Rule of Civil Procedure 1.442, for $4,500 plus interest and costs. On the ordered discovery cutoff date, Monday, March 24, 1980, ten days before trial, Cheek hand-delivered an "amended offer of judgment" for $7,500 plus interest and costs. Neither offer was accepted prior to the first trial. Cheek did not renew either offer of judgment nor did he serve a new offer of judgment prior to the second trial. McGowan's ultimate recovery after the second trial was $7,223.93 plus interest. The trial court denied Cheek's demand for costs under rule 1.442, finding that the offers of judgment made prior to the first trial were "not effective" as to the second trial. On appeal, the district court disapproved the trial court's reason for denial of costs but affirmed the denial based on its conclusion that the offer of $7,500 was not timely served.

On rehearing the district court certified the following questions in connection with the offer of judgment:

1. WHETHER AN AMENDED OFFER OF JUDGMENT RELATES BACK TO THE DATE OF SERVICE OF THE ORIGINAL OFFER OF JUDGMENT FOR PURPOSES OF THE TIME REQUIREMENTS IN RULE 1.442, FLORIDA RULES OF CIVIL PROCEDURE?

2. WHETHER, WHEN THE ELEVENTH DAY BEFORE TRIAL FALLS ON A [SUNDAY], HAND DELIVERY OF AN OFFER OF JUDGMENT ON THE FOLLOWING MONDAY IS EFFECTIVE UNDER RULE 1.442, FLORIDA RULES OF CIVIL PROCEDURE?

3. WHETHER AN OFFER OF JUDGMENT HAND-SERVED ON THE [TENTH DAY] BEFORE TRIAL IS VALID WHERE THE PARTIES HAVE AGREED BY PRETRIAL ORDER THAT THE DISCOVERY CUTOFF DATE SHALL BE THE [TENTH DAY] BEFORE TRIAL?

4. [WHETHER AN OFFER OF JUDGMENT TIMELY MADE BEFORE A FIRST TRIAL WILL OPERATE TO SAVE THE OFFEROR COSTS FROM THE TIME OF THAT OFFER IF, IN A SUBSEQUENT TRIAL AFTER REVERSAL AND REMAND, THE OFFEREE OBTAINS A JUDGMENT EQUAL TO

OR LESS THAN THE SUM OFFERED?] (RESTATED).

483 So.2d at 1382.

We answer the fourth question, as restated, in the affirmative but answer the other three questions in the negative. We therefore, approve the district court's disposition of this issue on appeal.

Rule 1.442, Florida Rules of Civil Procedure, provides in pertinent part:

At any time more than ten days before the trial begins a party defending against a claim may serve an offer on the adverse party to allow judgment to be taken against him for the money or property or to the effect specified in his offer with costs then accrued. An offer of judgment shall not be filed unless accepted or until final judgment is rendered. If the adverse party serves written notice that the offer is accepted within ten days after service of it, either party may then file the offer and notice of acceptance with proof of service and thereupon the court shall enter judgment.... If the judgment finally obtained by the adverse party is not more favorable than the offer, he must pay costs incurred after the making of the offer.

(Emphasis added).

In its initial decision, the district court below concluded that the fourth question certified should be answered in the affirmative. The district court reached this conclusion by construing the phrase "judgment finally obtained" in rule 1.442 to...