Wells v. Halmac Dev., Inc.

• Decision Date: 13 April 2016
• Docket Number: No. 3D15–1081.,3D15–1081.
• Citation: 189 So.3d 1015
• Parties: Diane N. WELLS and Thomas O. Wells, Appellants, v. HALMAC DEVELOPMENT, INC. and Hector Castro, Appellees.
• Court: Florida District Court of Appeals

189 So.3d 1015

Diane N. WELLS and Thomas O. Wells, Appellants,

v.HALMAC DEVELOPMENT, INC. and Hector Castro, Appellees.

No. 3D15–1081.

District Court of Appeal of Florida, Third District.

April 13, 2016.

Wells & Wells and Diane Noller Wells, for appellants.

Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel and Stuart Sobel, for appellees.

Before ROTHENBERG, EMAS and FERNANDEZ, JJ.

EMAS, J.

INTRODUCTION

Diane N. Wells and Thomas O. Wells (collectively "Wells") appeal the trial court's order denying their motion for attorney's fees pursuant to section 57.105, Florida Statutes (2012). We hold that the trial court erred in its legal determination that Castro presented a "colorable claim" under Florida law and therefore, in denying Wells' motion for fees. Accordingly, we reverse and remand for the trial court to enter an order granting entitlement and for a determination of the amount of fees which should be awarded to Wells.

BACKGROUND

In 2008, Wells contracted with Halmac Development, Inc. ("Halmac") for general construction work at their home in Coral Gables. In August 2009, Wells fired Halmac. Thereafter, Halmac recorded a claim of lien against the Wells' property and brought a lawsuit to foreclose on the lien. Halmac also sought damages for breach of contract, unjust enrichment, and quantum meruit.

The parties agreed to arbitrate the dispute and at arbitration, Wells also asserted their own claims against Halmac for breach of contract and misappropriation of funds, as well as a claim against Halmac's president, Hector Castro, individually, for fraudulent lien. The parties agreed that the arbitrator would determine the issue of prevailing party.

On August 17, 2011, the arbitrator entered an award ("Initial Award") finding in favor of Wells on the contract claim, and in favor of Halmac on its counterclaim, and on Wells' claim for misappropriation of funds. Further, the arbitrator denied Wells' claims against Halmac and Castro for the filing of a fraudulent lien, noting that during the hearing, he granted Castro's motion to dismiss the claim brought against him by Wells. Lastly, after a thorough discussion of the claims and awards in the matter, the arbitrator concluded, "[w]eighing the factors delineated by the Supreme Court in Trytek [v. Gale Indus., Inc., 3 So.3d 1194 (Fla.2009),] and the equities on both sides of this case, I find that there is no prevailing party for the purposes of an award of attorney's fees."

After the Initial Award, both Halmac and Wells filed motions to modify the Initial Award for a correction of computational errors. Castro also filed a motion, requesting that the Initial Award be modified to address the question of "who is the prevailing party as between Castro and the Wells, and ... that Castro be deemed the prevailing party." Wells responded to Castro's motion arguing that Castro was attempting to have the merits re-determined, and that "[a] modification is limited to the scope of AAA R–48 or Fla. Stat. § 682.14(1)(a), and the Arbitrator has determined, in accordance with Florida law, that there is no prevailing party for the purposes of attorneys' fees and costs in this action." On September 23, 2011, the arbitrator entered a Modification of Award ("Modified Award"), which increased the award amount due to Wells. The arbitrator also addressed Castro's prevailing party request, stating "[t]he Motion for Modification filed by Respondent Castro is hereby denied." Wells filed a Motion to Confirm and Enforce the Arbitration Award against Halmac in the trial court, which was denied without prejudice. The trial court gave the parties until November 16, 2011, to file motions to vacate, modify or correct the arbitration award.

One day prior to the deadline, Castro filed a motion to intervene in the trial court case, which was subsequently granted. Additionally, Halmac and Castro jointly filed, in the trial court, a Motion to Modify and Correct Award pursuant to section 682.14, Florida Statutes ("Motion to Modify"). The Motion to Modify sought what it characterized as a "technical correction in the form of the award," claiming that the Modified Award "failed to clarify, correct or modify the award to include Castro as the prevailing party" as between Castro and Wells.

Wells then filed a Renewed Motion to Confirm and Enforce the Arbitration Award Against Plaintiff Halmac Development, Inc. and a Response to Halmac/Intervenor's Motion for Modification under section 682.14, arguing that the Modified Award must be confirmed because Halmac and Castro had no good faith basis to vacate or further modify the award under sections 682.13¹ and 682.14², Florida Statutes (2012).

On January 31, 2012, following a hearing, the trial court entered an order granting the Renewed Motion to Confirm as between Wells and Halmac. On that same date, the trial court entered an order directing "the arbitrator to determine [the] prevailing party between Wells and Castro." Subsequently, on February 14, 2012, the arbitrator issued an Order of the Arbitrator on Remand ("Remand Order") stating:

The AWARD previously in this case tracks current Florida case law on this question so that will not be revisited here. Weighing that case law, as well as that cited for the first time in this case in the briefs of the parties, I find that neither Mr. Castro nor the Wells is a prevailing party for the purpose of an award of attorneys' fees.

(Emphasis added).

Thereafter, Wells filed a motion for attorney's fees against Castro, Halmac and its attorneys, pursuant to section 57.105, Florida Statutes (2012), asserting they knew or should have known their claim that Castro was a prevailing party was not supported by the facts or the law.

On March 20, 2012, the trial court again heard the parties regarding the Motion to Modify. The trial court "deferred" ruling on the motion, instead giving Castro "90 days from Feb. 14, 2012 to move to modify, correct and/or vacate [the] arbitrator award" (emphasis added). However, instead of filing a motion to modify, correct and/or vacate the arbitral award, Castro filed, in the trial court, a Motion to be Determined the Prevailing Party ("Prevailing Party Motion"), asking the trial court to declare that Castro was the prevailing party and thereby entitled to an award of attorney's fees. Specifically, Castro argued that the trial court was required to enter an order finding him to be the prevailing party because the arbitrator "failed to determine a prevailing party" in its Remand Order. In support of this proposition, Castro cited to the case of Hollub v. Narula, 704 So.2d 689 (Fla. 3d DCA 1997), and told the court that the Hollub case involved "the exact issue" raised in the instant case.

Wells responded to Castro's motion, asserting that the arbitrator had already and properly determined there was no prevailing party, pursuant to the Florida Supreme Court's opinion in Trytek. In addition, Wells filed its second motion for section 57.105 sanctions against Castro, Halmac and its attorneys for its continued efforts to overturn the arbitrator's decision despite binding authority that there was no legal basis for Castro's counsel to pursue such efforts.

After a hearing, the trial court entered an order granting Castro's Prevailing Party Motion, stating that "Hector Castro is the prevailing party as between Defendants, Diane N. Wells and Thomas O. Wells and Hector Castro" ("October 22 order"). Castro then filed a motion for prevailing party attorney's fees.

Wells filed a petition for writ of mandamus in this court to compel the trial court to confirm the arbitration award. Wells v. Castro, 117 So.3d 1233 (Fla. 3d DCA 2013). This court granted the petition, finding that the trial court was required to confirm the arbitration award, which determined there was no prevailing party as between Wells and Castro, and that the trial court "had no legal basis" to enter the October 22 order. Id. at 1238. Thus, this Court quashed the October 22 order and directed the trial court to confirm the Initial Award as modified by the February 14, 2012 Remand Order. In addition, this court denied Castro's motion for attorney's fees and, importantly, granted Wells' motion for appellate attorney's fees pursuant to section 57.105.

The trial court, in compliance with this court's mandate, vacated the October 22 order and confirmed the arbitrator's award, as modified. Wells then filed a motion for attorney's fees against Castro and his counsel, in accordance with their first two motions for 57.105 fees, and sought fees and costs incurred from November 23, 2011³ , not including time spent on appellate matters. After an evidentiary hearing, the trial court denied Wells' motion for 57.105 fees, finding Castro "had a legitimate good faith belief that he was the prevailing party in the arbitration proceedings ... [and] that he was entitled to attorney's fees as the prevailing party under Florida Statute § 713.31."⁴ Further, the court found, Castro "brought a colorable claim to be determined the prevailing party under the authority of Hollub ... and Florida Statute § 713.31." Finally, the court found that if "attorney fees sanctions are not appropriate where a party presents a colorable claim and loses on the pleadings or on a summary judgment, attorney fees are certainly not appropriate as a sanction under Florida Statute § 57.105 where the party prevails at the trial level and ultimately loses on appeal." The court also denied Wells' later filed motion for rehearing. This appeal followed.

ANALYSIS

Generally, we review a trial court's order denying attorney's fees for an abuse of discretion. However, to the extent the trial court's determination on a motion for attorney's fees is based on an issue of law, our standard of review is de novo. Blue Infiniti, LLC v. Wilson, 170 So.3d 136 (Fla. 4th DCA 2015).

Under section 57.105(1), Florida Statutes (2012):

the court shall award a reasonable attorney's fee, including prejudgment interest, to be paid to the

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