Trustees of Cameron-Brown Inv. Group v. Tavormina

• Decision Date: 08 July 1980
• Docket Number: CAMERON-BROWN,No. 79-895,79-895
• Citation: 385 So.2d 728
• Parties: TRUSTEES OFINVESTMENT GROUP, Appellants, v. Jeanette E. TAVORMINA and Justin P. Havee, as Trustees for D. MitchellInvestments, Inc., a Florida Corporation and Harriet P. Mitchell, Appellees.
• Court: Florida District Court of Appeals

Page 728

385 So.2d 728

TRUSTEES OF CAMERON-BROWN INVESTMENT GROUP, Appellants, v. Jeanette E. TAVORMINA and Justin P. Havee, as Trustees for D. MitchellInvestments, Inc., a Florida Corporation and Harriet P. Mitchell, Appellees.

No. 79-895.

District Court of Appeal of Florida, Third District.

July 8, 1980.

Bailey & Dawes and Jesse C. Jones, Miami, for appellants.

Greenfield & DuVal and Harvie S. DuVal, Coral Gables, for appellees.

Before HENDRY and SCHWARTZ, JJ., and VANN, HAROLD R. (Ret.), Associate judge.

HENDRY, Judge.

Beginning in 1972, appellees obtained a series of construction loans from appellants and others, ultimately totalling three and one-quarter million dollars. The loans were evidenced by promissory notes, and secured by various mortgage instruments. In 1976, appellants were forced to foreclose. In that foreclosure action, the loans were found to be usurious, and appellants' award was limited by the statutory penalty to somewhat over half the amount of the principal indebtedness. The trial court found, however, that appellants were contractually entitled to attorneys' fees, and awarded same, "exclusive of the hours expended on the usury issue. . . ."

Appellants contend that the fee award should reflect the undivided whole of their attorneys' efforts; however, we agree with the trial court that appellants are not entitled to reimbursement for their attempt to enforce usurious loan provisions.

We refer to Wilson v. Conner, 106 Fla. 6, 142 So. 606 (Fla.1932), wherein the Supreme Court said, on similar facts:

The allowance of an attorney's fee should . . . have eliminated therefrom any measure of compensation for services rendered in this case in support of the attempted collection of usury on behalf of the creditor; that is, no indemnity for attorney's fees should be allowed to complainant for any legal services rendered in connection with efforts to enforce the usury, as distinguished from foreclosing the mortgage for the legally enforcible amount of the debt.

142 So. at 609; cited in Feemster v. Schurkman, 291 So.2d 622, 630 (Fla. 3d DCA 1974).

We affirm that portion of the decision excluding from appellants' fee award that amount representing effort expended on the usury issue.

The second prong of appellants' challenge to the order of the trial court presents greater difficulty.

Appellants' award below was computed with reference to the hourly fee contract entered into between the appellants and their attorneys. It is urged, however, that appellants contracted with appellees for "all costs of collection, including a reasonable attorney's fee" (as evidenced by the appearance of that language in the promissory notes issued by appellees), and that appellees are thus obligated to pay a "reasonable" fee, rather than the amount appellants actually owe. Since appellants' actual fee expense is less than $25,000, and testimony adduced at trial suggests that a "reasonable" fee might exceed $100,000, the issue is of some moment to both parties.

The trial court limited appellants' fee award to their actual expense, feeling constrained to do so by 1930's Florida Supreme Court caselaw. Appellants argue that those cases, although not explicitly overruled or disavowed, are moribund; they point to a series of more recent cases in which awards by the court were made on the basis of "reasonability", and in contravention of the terms of fee agreements between parties and their counsel. Moreover, appellants argue, allowing appellees to profit by appellants' advantageous fee arrangement violates the collateral source rule.

This last proposition may be briefly dispatched. As appellees note in response, the collateral source rule is an ingredient of the law of torts. It was developed to prevent a tortfeasor's avoidance of the civil punishment meted out for his wrongdoing. Conversely, it is basic to the law of contracts that the measure of damages is the plaintiff's injury, rather than the defendant's culpability. Although sharp distinctions blend where the breach of a contract has some personal or emotional effect on another party, the laborious formulation of a multimillion dollar loan agreement between businesspeople is hardly such an instance. We are not aware of an instance in which the collateral source rule has been applied to penalize a breaching party, and we are not disposed to so apply it.

We now turn to appellant's contention that modern caselaw demonstrates their right to "reasonable" fees irrespective of their arrangement with counsel. They argue that this more recent treatment supersedes the older cases relied on by the trial court, which are adverse to their position. We affirm, nonetheless, the decision of the court below that the earlier authority has not been eviscerated by more recent doctrine, and that it indeed controls in favor of appellees.

It is necessary to briefly review the caselaw relied upon by the circuit court.

In 1935, the Florida Supreme Court considered a "reasonable fee" provision in a two-thousand dollar note from Daisy Mallard to Charles Ewing:

This subject has been discussed by this court sufficiently to clearly establish the rule by which the trial courts of this state should be guided in such matters. The rule, to again restate it, is: "Fees allowed mortgagee for his solicitor's services in foreclosure proceedings being intended as indemnity for expenditures necessarily made or incurred to protect his interest, he can recover from mortgagor only usual and customary fees which he has paid or obligated himself to pay solicitor." (Italics supplied.) Brett v. First (National) Bank (of Marianna), 97 Fla. 284, 120 So. 554, 555 ((Fla.1929)).

Mallard v. Ewing, 121 Fla. 654, 164 So. 674, 678-79 (Fla.1935).

That reference is to the court's 1929 decision, wherein they refused to award attorney's fees payable under a deed stipulation, because the mortgagee neglected to supply evidence of his obligation to pay counsel.

In foreclosure proceedings in our state, the fee allowed the mortgagee for the services of his solicitor in the proceedings is intended as an indemnity to the mortgagee for expenditures necessarily made or incurred to protect his interest. United States Savings Bank v. Pittman, 80 Fla. 423, 86 So. 567 (, 572 (Fla.1920)).

Brett, supra, 120 So. 554.

In Blount Bros. Realty Co. v. Eilenberger, 98 Fla. 775, 124 So. 41 (Fla.1929), the holder of a delinquent note sought a "reasonable attorney's fee", as provided for in the note, without a showing of fee obligation to his attorney.

It appears by the record that suit has been brought on the note after maturity and that plaintiff sues by an attorney. There is evidence that $1,000 is a reasonable fee for the services of the attorney. But that is not enough. Non constat but that plaintiff's attorney has agreed to accept as compensation for his services a sum less than that provided for in the note, in which event no more than the amount agreed upon between the plaintiff and his attorney could be recovered from the maker of the note, as the debtor's contract to pay the fee is one of indemnity.

Blount, supra, 124 So. at 42.

The foregoing authority clearly supports the judgment of the trial court that the proper measure of appellants' award is their fee expense or indebtedness; nevertheless, appellants contend that courts will not be bound, in assessing reasonable attorneys' fees pursuant to contract, by the fee agreement between a successful party and his attorney.

Appellants are correct: When a court determines a ...