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

Transcription

1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION-HOA ELECTION DISPUTE CINDI FOSTER, Petitioner, Fee Case No v. Rel. Case No SANDALWOOD HOMEOWNERS ASSOCIATION, INC., Respondent. / FINAL ORDER ON RESPONDENT S MOTION FOR ATTORNEY S FEES On March 2, 2016, Respondent, Sandalwood Homeowners Association, Inc. (the Association), filed a motion for attorney s fees and costs as prevailing party in the underlying arbitration under case number On March 30, 2016, Petitioner, Cindi Foster, filed a response opposing the motion for fees and costs. The Association is requesting $16, for 55.6 hours of time expended by counsel at the rates of $ per hour for the managing partner of the law firm and $ per hour for two associate attorneys. No costs are sought. The parties are located in Palm Beach County, Florida. This fee case arose from a petition for arbitration filed by Petitioner on October 26, 2015, which had as its central issue the manner in which the Association conducted an election held in September of The petition contained roughly 40 allegations of actions taken by the Association that Petitioner claimed constituted errors and/or misconduct.

2 Petitioner was ordered to show cause why the petition should not be dismissed in an Order entered on November 2, 2015, because it appeared that Petitioner might not have provided the Association with pre-arbitration notice. Petitioner filed a response on November 13, An Order Requiring Answer was entered and the Association filed an answer to the petition on December 22, Petitioner made additional filings in the case which included an unsolicited response to the Association s answer on January 11, 2016, an objection to the Association s motion for an extension of time to answer the petition, a Motion to Compel Production of Respondent s Fee Agreement with Counsel on December 29, 2015, and a request to reschedule a case management conference. At Petitioner s request, the case management conference was rescheduled and held on January 15, Until February 1, 2016, Petitioner had appeared pro se in this matter. On February 1, 2016, Petitioner, through counsel, filed a notice of appearance and voluntary dismissal of the petition. On February 10, 2016, a Final Order of Dismissal was entered. Conclusions of Law A. Prevailing Party 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, 809 (Fla. 1992) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Page 2 of 10

3 However, when a case becomes moot or there is a voluntary dismissal, there is no decision on the merits and the determination of 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. The Laurels at Margate Condominium Association, Inc. v. Slonecky, Arb. Case No F, Final Order on Motion for Attorney's Fees (July 28, 1994). In the instant case, the petition was dismissed two weeks after a case management conference at which the parties factual allegations and interpretations of the Association s governing documents were discussed. According to Petitioner s counsel, Petitioner met with counsel for the first time on the date of the case management conference. Apparently only after the case management conference was held did Petitioner engage legal counsel. The general rule is that when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party within the meaning of statutory or contractual provisions awarding attorney s fees to the prevailing party in litigation. Johnson v Sarasota Outrigger Condominium, Inc., Arb. Fee Case No , Final Order on Motion for Attorney s Fees (October 23, 2012), citing Alhambra Homeowners Ass n. v. Asad, 943 So. 2d 316, 308 (Fla. 4 th DCA 2006). Courts have permitted fees when the plaintiff has taken a voluntary dismissal at various stages of the proceeding. See, e.g., Stuart Plaza, Ltd. v. Atl. Coast Dev. Corp. of Martin County, 493 So. 2d 1136 (Fla. 4 th DCA, 1986)(on the day of trial); Landry v. Countrywide Home Loans, Inc., 731 So. 2d 137 (Fla. 1 st DCA, 1999)(after defendant filed a motion for summary judgment, plaintiff filed a notice of voluntary dismissal); Dolphin Towers Condo. Ass n, Inc. v. Del Bene, 388 So. 2d 1268 (Fla. 2d DCA, 1980)(after some evidence had been introduced in a Page 3 of 10

4 non-jury trial); and Barrett v. Lakebridge Condo. Ass n, Inc., Arb. Fee Case No , Final Order on Motion for Attorney s Fees and Costs (July 30, 2008)(a voluntary dismissal taken just when the case was ready for a final order on the merits). In the instant case, Petitioner, acting in a pro se capacity, made copious allegations of alleged misconduct by the Association, which necessitated the Association taking action to defend itself. Petitioner dismissed the petition after obtaining the advice of legal counsel, but only after the Association had already expended time and resources in responding to Petitioner s allegations. According to Petitioner s counsel, the Association has been involved since 2014 in a pending court case involving different homeowners, but some of the same legal issues that were raised by Petitioner in this arbitration case. 1 Petitioner claims that the voluntary dismissal of the petition had nothing whatsoever to do with the merits of the case, but rather, was done because Petitioner s counsel advised her that it would be best to let the Circuit Court litigation proceed to [a] determination and depending on the outcome of that litigation, the administration of the association would change. Had Petitioner informed the arbitrator of the pending court case earlier in the proceedings, in the interest of judicial economy and to avoid potentially inconsistent rulings, a determination on whether to go forward with the arbitration case could have been made before the Association had incurred significant legal expenses in defending against Petitioner s allegations. Counsel for the Association, in the interest of candor, could have informed the informed the arbitrator of the pending case but did not. Petitioner chose to proceed without the benefit of counsel and without informing the arbitrator of 1 Fifteenth Judicial Circuit, Case Number CA XXXXMB, according to Petitioner. Page 4 of 10

5 the pending court action. Under the circumstances of this case, the Association is the prevailing party. B. Attorney s Fees and Costs The next issue is to determine the reasonableness of the attorney s fees and costs requested 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 the 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 the attorney s fees, the criteria set forth in R. Regulating Fla. Bar 4-1.5, [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 Fla. Admin. Code R. 61B (7). 1. Hourly Rate The Association has provided an affidavit of its attorneys, as required by Rule 61B , Florida Administrative Code. The Association seeks compensation for the legal services of Michael J. Gelfand, Esquire, at the rate of $ per hour. Mr. Gelfand has been licensed to practice law in the State of Florida since October of Page 5 of 10

6 1982, approximately 34 years at the time his services were rendered in the underlying arbitration case. Additionally, Attorney Gelfand has been Board Certified by the Florida Bar in real estate law since 1994, serves as Chair of The Florida Bar s Real Property, Probate and Trust Law Section ( RPPTLS ), has served the RPPTLS in other capacities and is a lecturer for The Florida Bar Real Estate Board Certification in the area of homeowners associations. After considering the above factors, the undersigned finds the rate of $ per hour to be a reasonable rate for an attorney with Mr. Gelfand's experience, and falls within the range of fees charged in the locality for similar legal services. See, e.g. One Island Place Condo. Ass n, Inc. v. Attia, Arb. Fee Case No , Final Order on Fees and Costs (July 29, 2008)($ per hour reasonable for an attorney with 25 years of experience). The Association seeks compensation for the legal services of Tamela K. Eady, Esquire, at the rate of $ per hour. Attorney Eady has been licensed to practice law in the State of Florida since October of 1987, approximately 29 years at the time her services were rendered in the underlying arbitration case. Additionally, Attorney Eady has been Board Certified by the Florida Bar in real estate law since After considering the above factors, the undersigned finds the rate of $ per hour to be a reasonable rate for an attorney with Ms. Eady's experience, and falls within the range of fees charged in the locality for similar legal services. The Association also seeks reimbursement for the legal services of Tanique G. Lee, Esquire, at the rate of $ per hour. Attorney Lee has been licensed to practice law in the State of Florida since October of 1997, approximately 19 years at the time her services were rendered in the underlying arbitration case. After considering Page 6 of 10

7 the above factors, the undersigned finds the rate of $ per hour to be a reasonable rate for an attorney with Ms. Lee's experience, which falls within the range of fees charged in the locality for similar legal services. See, e.g., Latitude on the River Condo. Ass n, Inc. v. Lorenzo, Arb. Fee Case No , Final Order on Motion for Attorney s Fees (July 28, 2014)($ per hour reasonable for an attorney with 16 years of experience); One Island Place Condo. Ass n, Inc. v. Attia, Arb. Fee Case No , Final Order on Fees and Costs (July 29, 2008)($300 per hour reasonable for an attorney with 25 years of experience). 2. Number of Hours The Association seeks reimbursement for hours of legal services provided by Attorney Gelfand, 1.50 hours of legal services provided by Attorney Eady, and hours of legal services provided by Attorney Lee. While at first blush the number of hours appears high, the documents filed by Petitioner indicate that Sandalwood is a rather large multi-phase community with a rather complex history that includes an action to preserve its covenants and restrictions under the Marketable Record Title Act in 2007 and a possible administrative dissolution of the Association. The petition and its attachments contained allegations not only about the 2015 election, but also about events occurring at a 2009 election that Petitioner claimed had relevance to the 2015 election, and about the types of proxies used at both the 2009 and 2015 elections. Attachments to the petition totaled over 360 pages, and included video recordings of a meeting that was apparently held by the Association on September 3, 2015, and a 2009 election and meeting. In order to respond to the Page 7 of 10

8 petition, counsel for the Association would, by necessity, have had to review a great deal of material and, presumably, meet with representatives of the Association. Under these circumstances, it is difficult to determine what a reasonable number of hours to respond to the petition would be. However, counsel for the Association filed a Notice of Appearance and a Motion for Extension of Time to File Answer on December 14, The Association seeks reimbursement for hours of legal services prior to filing the notice of appearance and motion. Of these, 5.2 hours were expended by Attorney Gelfand and 12.7 hours were expended by Attorney Lee. Fees have generally not been awarded in the arbitration program for activities undertaken prior to the drafting and filing of the petition, in cases where the petitioner has prevailed, or prior to the drafting of the answer, where the prevailing party was the named respondent. See, e.g., Carbone v. Seawatch at Jupiter Island Condo. Ass n, Inc., Arb. Fee Case No , Final Order on Request for Attorney s Fees (November 30, 1999); Seascape Club Condo. Ass n. Inc. v. Frankel, Arb. Case No , Final Order (April 20, 1999). For this reason, 5.2 hours of Attorney Gelfand s time and 12.7 hours of Attorney Lee s time will be deducted. According to the timesheets submitted by the Association, 8.50 hours was expended by Attorney Lee after the filing of Petitioner s Notice of Appearance and Dismissal, which states in its certificate of service that it was provided by to counsel for the Association. Prior arbitration case law generally limits reimbursement after the final order to 1.0 hour for the preparation of the motion and affidavits for attorney s fees and costs. Jade Residences at Brickell Bay Condo. Ass n, Inc. v. Espejo, Arb. Fee Case No , Final Order on Motion for Attorney s Fees and Costs Page 8 of 10

9 (March 12, 2010). Therefore, 7.5 hours will be deducted and Association will be awarded 1.0 hour for time spent preparing the motion for fees and costs. Of the remaining time requested, the Association will be awarded $1, for 5.70 hours of Mr. Gelfand's legal services at $ per hour, $ for 1.50 hours of Ms. Eady s legal services at $ per hour, and $6, for 23.0 hours of Ms. Lee's legal services at $ per hour, for a total of $8, Based on the foregoing, it is ORDERED: Within thirty (30) days of the date of this Order, Petitioner shall reimburse the Association for its attorney s fees in the amount of $8, No costs were requested and none are awarded. Florida. DONE AND ORDERED this 7 th day of July, 2016, at Tallahassee, Leon County, Leslie O. Anderson-Adams, Arbitrator Department of Business and Professional Regulation Arbitration Section 2601 Blair Stone Road Building B, 4 th Floor 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 appears on the following page.) Page 9 of 10

10 Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail to the following person on this 7 th day of July, 2016: Richard W. Glenn, Esq. THE LAW OFFICE OF RICHARD W. GLENN th Ave. N Jupiter, FL Attorney for Petitioner Tanique G. Lee, Esq. GELFAND & ARPE, P.A Palm Beach Lakes Blvd., Ste West Palm Beach, FL Attorney for Respondent Leslie O. Anderson-Adams, Arbitrator Page 10 of 10