STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION VILLA CAPRI CONDOMINIUM ASSOCIATION, INC., Petitioner, v. Fee Case No Rel. Case No AVI RUSHINEK and SARA RUSHINEK, Respondents. / FINAL ORDER ON ATTORNEY S FEES AND COSTS This fee case arose from a petition filed by Villa Capri Condominium Association, Inc., (the Association) on February 21, 2012, alleging that Respondents, who own two units in the condominium, were violating the Association s governing documents by running a business out of their units, by failing to provide a key to their units to the Association and by keeping inventory which constituted a fire hazard for which the Association could be cited and fined. Respondents have been living in these units for 30 years. As relief, the Association requested an order compelling Respondents to give the Association keys to their units, to cease running a business from their units and to allow a fire inspection and remediate any code violations found within the units. The Association is requesting reimbursement for legal fees in the amount of $6, for the services of attorney Carlos F. Martin. Although there is a request for costs in the motion, no affidavit of costs was filed with the motion. The Association is located in Miami-Dade County, Florida.

2 Relevant Procedural History 1. The petition for arbitration was filed on February 21, 2012, and Respondents were personally served on March 30, The answer was filed on April 24, 2012 and the reply on May 7, Two case management conferences were held the first on May 18, 2012, where, based upon representations of counsel that no business was being operated from the units, the Association dropped this allegation. 3. The second case management conference was held on June 14, 2012, which resulted in an order requiring the Association to verify an dated June 7, 2012, from the Coral Gables Fire Marshal to the effect that Respondents units no longer posed a fire hazard. 4. On May 1, 2012, Respondents provided the Association with keys to their units. 5. After the Association verified the fire marshal s , a final order of dismissal was entered on June 28, The keys to the units, the Association s decision to abandon the charge of running a business from the units and the fire inspection leading to the June 7, , all occurred three to four months after the petition was served on Respondents. 7. On August 10, 2012, the Association filed its motion to recover attorney s fees and costs as prevailing party. On September 4, 2012, Respondents filed a response opposing the motion. Conclusions of Law Prevailing Party 2

3 Pursuant to Section (4)(k), Florida Statutes, the prevailing party in an arbitration proceeding shall be awarded the costs of the arbitration and reasonable attorney s fees in an amount determined by the arbitrator. A party is a prevailing party if it succeeds on a significant issue in the arbitration and achieves some of the benefit sought in bringing the action. See Moritz v. Hoyt Enterprises, Inc., 604 So. 2d 807 (Fla. 1992). In cases dismissed because the issues became moot, or where a petitioner takes a voluntary dismissal or a settlement occurs, there is no ruling on the merits. Settlement of a case renders it moot. Savoy Owners Association, Inc. v. Candan, Arb. Case No , Final Order on Motions for Attorney s Fees and Costs (April 21, 2010) (citing Santa Rosa County v. Admin. Comm'n, Div. of Admin. Hearings, 661 So. 2d 1190, 1193 (Fla. 1995)); Jones v. Champion, 675 So. 2d 244 (2d DCA 1996); Seslow v. Seslow, 625 So. 2d 1248 (Fla. 4th DCA 1993). When there is no ruling on the merits of a case, then, whether there is a prevailing party must be determined by the particular facts of the case and the timing of the act that caused the action to be dismissed. Id. Rule 61B (7), Florida Administrative Code, states: A prevailing party is a party that obtained a benefit from the proceeding and includes a party where the opposing party has voluntarily provided the relief requested in the petition, in which case it is deemed that the relief was provided in response to the filing of the petition. Where a respondent has provided the relief sought by the petitioner prior to the filing of the petition and service on the respondent of the order requiring answer and copy of the petition, the petitioner under these circumstances is not deemed to be a prevailing party and is not entitled to an award of reasonable costs and attorney's fees. This creates a rebuttable presumption that the Association is the prevailing party 3

4 if Respondents provided the relief requested by the Association after service of the petition. Bay Point Waterfront Condominium Association, Inc. v Quesada, Fee Case No , Final Order on Motion for Attorney s Fees and Costs (June 2009). Keys Respondents oppose naming the Association as prevailing on any of the allegations raised in the petition. With regard to the failure to provide duplicate keys to the units to the Association, Respondents suggest that neither party should be considered to have prevailed. The Association, prior to the filing of the petition, had allegedly entered one of Respondents units illegally when they were in the unit, by drilling the lock and it was only after the Association agreed to provide prior written or oral notice of their intent to enter (except for emergencies), did Respondents give the keys to the Association. Respondents suggest this should be classified as a toss-up with no prevailing party. Under the applicable laws however, Respondents never had the right to deny the Association access to the units by withholding the keys. Section (5), Florida Statutes, states in full: Right of access to units.--the association has the irrevocable right of access to each unit during reasonable hours, when necessary for the maintenance, repair, or replacement of any common elements or of any portion of a unit to be maintained by the association pursuant to the declaration or as necessary to prevent damage to the common elements or to a unit or units. Respondents initial refusal to give over keys and having done so, only on May 1, 2012, two and a half months after the petition was served on them, immediately activated the presumption that they were motivated to do so by the service of the petitions. Portsview 4

5 at the Waterways Condominium Association, Inc., v Lichtenstein, Fee Case No , Final Order on Motion for Attorney s Fees and Costs (July 24, 2009)(access to the unit was not provided until after the respondent received the petition). Moreover, section (5), Florida Statutes, does not give a unit owner the authorization to negotiate with an association under what conditions entry to the unit will occur. The statute has provided all the acceptable restraints to access by the Association. Respondents argument is not a persuasive rebuttal to the presumption. Accordingly, the Association is the prevailing party on the issue of Respondents responsibility to ensure access to the units by providing duplicate keys to the Association. Business The Association withdrew the allegation that Respondents were conducting a business from their units so no decision on the merits was made. The issue of prevailing party will not be addressed. Units Created a Fire Hazard Respondents also oppose finding the Association to be prevailing party with regard to the charge that the clutter in their units created a fire hazard for which the Association could be found in violation and fined. Again, they claim that they provided proof that the claim was false. Respondents proof is an from the fire marshal dated June 7, 2012, which contains the statement, There are currently no fire code violations present within their units. It was four months after the service of the petition on Respondents that they acquiesced in allowing an inspection by the fire marshal. The Respondents 5

6 produced from the fire marshal does not rebut the presumption that they were motivated to allow the inspection by their receipt of the petition for arbitration. Accordingly, the Association is the prevailing party on the fire hazard allegation. Fees The next issue to be decided is the reasonableness of the attorney s fees claimed by the Association. In Florida Patient s Compensation Fund v. Rowe, 472 So. 2d 1145, 1150 (Fla. 1985), the Supreme Court adopted the federal lodestar approach as the foundation for setting reasonable fee awards. This approach requires the trial court to determine a lodestar figure by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate for the services of the prevailing party s attorney. Fashion Tile & Marble v. Alpha One Construction, 532 So. 2d 1306 (Fla. 2d DCA 1988). In undertaking this analysis, the reasonableness of the hourly rate and the number of hours reasonably expended must be separately considered. See Rowe, 472 So. 2d at In determining the reasonableness of attorney s fees, the criteria set forth in Rule 4-1.5, Rules Regulating the Florida Bar, Rules of Professional Conduct [then Disciplinary Rule 2-106(b) of the Florida Bar Code of Professional Responsibility] should be applied. Id. at The factors for determining a reasonable attorney s fee set forth in Rule are basically the same as the factors set forth in Rule 61B , Florida Administrative Code. The Association seeks compensation for legal services provided by Carlos Martin, whose affidavit shows he was admitted to the practice of law in the State of Florida in The rate being sought for his efforts is $ per hour for 2.4 hours 6

7 and $ an hour for 22.3 hours. After considering the previously outlined factors, the undersigned finds that the rate of $ or $ an hour for an attorney who has been practicing 8 years is excessive and a more reasonable rate for an attorney with like years of experience practicing law in the same location in Florida is $ per hour. See Murano at Portofino Condominium Association, Inc. v. Samuel, Fee Case No , Final Order on Attorney s Fees and Costs (December 22, 2011). Time Entries The Association is seeking 24.7 hours for attorney services rendered. However, since the Association only prevailed on 2/3 of the issues raised in the petition, it will only be awarded 2/3 of the reasonable fees earned by Mr. Martin from the drafting of the petition until after the first case management conference on May 18, 2012, where the Association dropped the allegation relating to the unlawful business. Thereafter, the Association will be awarded 100% of said appropriate fees from the first conference through the date of issuance of this order. Mr. Martin s timesheet shows 2.8 hours for time expended before the drafting and filing of the petition. It has always been held that, with the exception of preparing the pre-arbitration demand letter required by Section (4), Florida Statutes, for which one hour is typically awarded, attorney s fees incurred prior to the drafting of the petition for arbitration are not fees incurred in the arbitration proceeding and are therefore not awarded. Desy v. River Key Condominium Association, Inc., Arb. Case No F, Final Order on Motion for Attorney s Fees and Costs (May 20, 1993) (fees incurred prior to the drafting and filing of the petition are not recoverable in the arbitration proceeding). However, Mr. Martin prepared the petition for arbitration and 7

8 the Association will be awarded 2.5 hours in fees for this effort. The timesheet does not indicate that Mr. Martin prepared the pre-arbitration notice. The Association will be awarded 1.0 hour for pre-conference preparation and 0.7 hours for attending each conference (May 18, 2012 and June 14, 2012 conferences) for a total of 3.4 hours. The parties arranged for the Coral Gables Fire Marshal to inspect both units to determine if at that time, they were in violation of the fire code. According to the timesheet this consumed 1.8 hours which is reasonable and will be awarded. The Association is requesting to be reimbursed for approximately 8.6 hours spent on telephone calls and exchanges with counsel and the preparation of synopses by counsel for the Association s purposes. The Association will only be awarded fees for reasonable contacts with counsel and not for duplicate contacts. McClendon v. Beach Place of Treasure Island Condominium Association, Inc. Arb. Case No , Final Order on Attorney s Fees and Costs (January 13, 2012)(duplicative contacts, s and conferences with the Association s board members will not be compensated). Legal work that is necessitated by the client's own behavior should more properly be paid by the client than by the opposing party. Barratta v. Valley Oak Homeowners' Association at the Vineyards, Inc., 928 So. 2d 495, 499 (Fla. 2nd DCA 2006); See also Guthrie v. Guthrie, 357 So. 2d 247, 248 (Fla. 4th DCA 1978) (Work done that is not reasonably necessary but performed to indulge the eccentricities of the client should more properly be charged to the client rather than the opposing party); Fennessy v. Coastal Estates, Inc., Arb. Case No , Final Order on Motion for Attorney's 8

9 Fees and Costs (October 14, 2010). The Association has already been awarded fees for all contacts with counsel in preparation for the inspection by the fire marshal and the 8.6 hours would be an additional award. This would be excessive and unreasonable. Accordingly, the Association will only be awarded 2.0 hours of the 8.6 requested. Mr. Martin s timesheet includes 8.3 hours of entries for: reviewing the order requiring service (1.4); preparing the notice of personal service (0.5); reviewing Respondent s answer (0.7); reviewing documents provided by the Association s manager (0.7); reviewing the from the manager confirming that Respondents had given him keys to the units (0.2); drafting affidavits of employees who might be called as witnesses (3.2); review of the notice of the first case management conference (0.5); and reviewing the rules and regulations of the Association (1.1). The Association will be awarded 0.2 hours each for: reviewing the order requiring service; reviewing the from the manager regarding the keys; and reviewing the notice of the first case management conference; for a total of 0.6 hours. As requested, the Association will be awarded 0.7 hours for reviewing Respondents answer; and 0.7 hours reviewing documents provided by the Association; and 1.1 for reviewing the Association s governing documents for a total of 13.3 hours. The Association will not be awarded for hours drafting three affidavits for proposed witnesses; this activity was premature. Once it becomes apparent that a hearing is necessary, the time between notice and the actual hearing is more than sufficient to draft affidavits for needed fact finding. The Association is seeking fees for 1.9 hours of intraoffice meetings between 9

10 counsel and Mr. Michael Gongora in preparation for the second case management conference. Mr. Gongora is not identified. The Association has already been awarded 1.0 hour for preparation for each of the two conferences and this additional time will not be awarded. The Association will be awarded fees for the expenditure of 13.3 hours by Mr. Martin, 2.9 hours of which occurred after the May 18, 2012 case management conference. The 2.9 hours will be awarded 100% at the rate of $200.00, per hour for a total of $ The remaining spent time, 10.4 hours at $ per hour totals $2,080.00, of which the Association will only be awarded 2/3 percent, for a reduced amount of $1, Therefore, based on the foregoing, it is ORDERED: 1. The Association s motion to be named prevailing party in this case is GRANTED in part. The Association prevailed on their allegation that Respondents, in violation of the governing documents failed to grant access to their units by withholding duplicate keys from the Association and in their having created a fire hazard with regard to the allegation that Respondents were operating a business from their units in violation of the Association s governing documents. 2. The Association s request to be awarded reasonable attorney s fees is GRANTED IN PART. The award for services performed by Mr. Martin before May 18, 2012, will be reduced by 1/3 for a final amount of $1,386.66, and the time thereafter, 2.9 hours, will be paid at

11 percent at the rate of $200 per hour, for $ This accounts for the Association having prevailed on only 2/3 of the issues raised in the petition. 3. The Association s motion to be awarded costs is GRANTED. Since no affidavit of costs was attached to the motion the Association will be only be awarded $50.00 for reimbursement of the mandatory filing fee charged by the Division. Respondents shall, within 30 days, pay to the Association the total amount of $2,016.66, which represents the award of attorney s fees in the amount of $1, and $50.00 in costs for the filing fee. Florida. DONE AND ORDERED this 3 rd day of October, 2012, at Tallahassee, Leon County, Leah A. Simms, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida Telephone: (850) Facsimile: (850) Trial de novo This decision shall be binding on the parties unless a complaint for trial de novo is filed in accordance with section , Florida Statutes. CERTIFICATE OF SERVICE I HEREBY CERTIFY, that a true and correct copy of the foregoing Final Order was 11

12 mailed to the following persons on 3 rd day of October, 2012: Carlos Martin, Esq. Becker & Poliakoff 121 Alhambra Plaza, 10 th Floor Coral Gables, FL Attorney for Petitioners Richard Wood, Esq. Fowler White Burnett, P.A Brickell Avenue, 14 th Floor Miami, FL Attorney for Respondents Leah A. Simms, Arbitrator 12