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

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION 4100 CONDOMINIUM CORP., Petitioner, v. Fees Case No Rel. Case No OLIVER ESPAILLAT, Respondents. / FINAL ORDER ON ATTORNEY S FEES AND COSTS A Final Order of Dismissal was entered in the underlying case, Arb. Case No , on July 12, The final order was based on the Notice of Voluntary Dismissal Without Prejudice filed by the petitioner on July 7, The final order entered in the underlying case recognized the Notice of Voluntary Dismissal Without Prejudice filed by the petitioner, dismissed the case without prejudice and closed the case file. The petitioner filed a motion for award of attorney s fees on August 8, 2005, and an affidavit of the property manager on August 15, An order was entered giving the respondent an opportunity to respond to the motion for attorney s fees, but the respondent failed to do so. However, in response to the petition for arbitration, the respondent stated that he had never been notified about the violation concerning his roof prior to me selling the property; that the notices of the violation were apparently mailed to the unit s address rather than his home address, even though the management company always sent the mail concerning the maintenance fees to the home address; and that he objected to the 1

2 association recovering any attorney s fees since the association had not provided notice of the violation and since the problem with the roof was solved as soon as we found out. 1 The petitioner s motion for attorney s fees does not request any specific amount for fees and costs. However, an attached affidavit states that attorney s cost s expended in this case were $ Reimbursable costs were not separated from routine office costs such as postage. An attached Affidavit as to Attorney s Time states that the total amount owed for fees is $2, Attached to the affidavit is a sheet entitled User Information and Billing Rate listing the attorneys whose time is billed, the amounts charged for each attorney, and the length of time each has been a member of the bar. Also attached is the pre-bill worksheet showing the time spent on various and numerous tasks. The total amount of the costs and fees billed to the association is $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 this case, the final order entered in the underlying case recognized the Notice of Voluntary Dismissal Without Prejudice filed by the petitioner, dismissed the case without prejudice and closed the case file. Normally, when a case is voluntarily dismissed without prejudice, attorney s fees cannot be awarded to the petitioner because the petitioner has dismissed its own case without prejudice, meaning that the 1 The response to the petition for arbitration was not filed by the respondent; it was a letter sent to petitioner that was subsequently filed by petitioner as respondent s answer on the same date the Notice of Voluntary Dismissal Without Prejudice was filed. 2

3 case has not been resolved and the petitioner can file another petition for arbitration alleging the same facts and the same violations. Thus, there is no prevailing party in the underlying arbitration case. Normally, when there has been a voluntary dismissal without prejudice, the only issue regarding attorney s fees would be whether the respondent is entitled to have his attorney s fees reimbursed by the petitioner. However, in this case, the petitioner indicated in its notice of voluntary dismissal that it was actually dismissing the case because the respondent had corrected the violation alleged in the petition. The notice stated that the violation had been cured by July 1, Thus, the Notice of Dismissal Without Prejudice was, in actuality, more akin to a suggestion of mootness than a true voluntary dismissal without prejudice, regardless of the title of the notice. Further, in the notice, the petitioner reserved the right to seek an award of attorney s fees and costs as the prevailing party, which again suggests that it was not petitioner s intention to file a notice of dismissal without prejudice but merely to have the arbitrator dismiss the petition because it was moot. When there is a decision on the merits, the party prevailing on the significant issues in the litigation is the party that should be considered the prevailing party for attorney s fees Moritz v. Hoyt Enterprises, Inc., 604 So. 2d 807 (Fla. 1992). 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 this case, a final order dismissing the case without prejudice was entered based on the notice of voluntary dismissal filed by the petitioner. The petitioner stated that it was dismissing the case because it was moot and reserved the right to request 3

4 attorney s fees. In 51 Island Way Condominium Association, Inc. v. Williams, 458 So. 2d 364 (Fla. 2d DCA 1984), the court held that attorney s fees could be awarded even when a case is dismissed as moot. That a party can be a prevailing party even though a petition has been dismissed as moot, has been codified in the administrative rules. Rule 61B (7), Florida Administrative Code, provides as follows: 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. The rule has been interpreted to mean that when the respondent provides the relief requested, it will be found that the action was taken as a result of the arbitration proceeding and the petitioner will be considered the prevailing party, unless there is evidence that the action was taken for some reason unrelated to the arbitration proceeding. See, e.g., Inverness III Condo. Ass n, Inc. v. Flournoy, Arb. Case No , Final Order on Motion for Attorney s Fees and Costs (May 31, 2005)(where petition seeking to require the respondent to remove the mold from her unit was filed after the respondent had already undertaken certain remediation efforts to get rid of the mold for health reasons, the petition for arbitration cannot be found to be the motivating factor for the respondent s efforts, and the petitioner could not be found to be the prevailing party). When the respondent provides the relief requested in the petition after the petition has been served on him and the petition is dismissed as moot, the rule creates a rebuttable presumption that the petitioner is the prevailing party. A party may be found to be a prevailing party if the legal action is the catalyst motivating the opposing party to provide the relief sought, so long as the opposing party s actions were required 4

5 by law. See, e.g. Landmark Club Condominium Ass n, Inc. v. Albornoz-Greenberg, Arb. Case No F, Final Order on Petitioner s Motion for Attorney s Fees (September 22, 1993)(citing to 51 Island Way Condominium Association, Inc. v. Williams, supra., and Hoffmeister v. Coler, 544 So. 2d 1067 ( Fla. 4th DCA 1989) as authority). In this case, the respondent voluntarily repaired his roof, the relief requested, after being served with the petition for arbitration. Despite the failure of the petitioner to establish that respondent had been served with all the documents required to be served on him, the affidavit of service established that respondent was served with the petition for arbitration on April 26, However, when the violation was corrected is not clear. Petitioner s Motion for Determination as to Attorney Fees and Costs alleges that the petitioner is the prevailing party and entitled to an award of attorney s fees because the subject violation has been cured since the filing of the subject petition and as such [petitioner] is entitled to its attorney s fees and costs. (e.s.) Of course, the determination of whether the petition for arbitration was the motivating factor in obtaining the relief sought is not whether the petition was filed prior to the violation being cured, but whether the petition had been served prior to the violation being cured. Thus, the allegations in the motion for attorney s fees do not support a determination that the petitioner was the prevailing party. The petitioner also filed an affidavit of the association manager. However, the affidavit only asserted that 2 The affidavit of service, filed May 20, 2005, states only that a copy of this Alias Summons and Amended Mandatory Non-Binding Petition for Arbitration with Exhibit A & B were served by substitute service on respondent on April 26, The Order Requiring Answer, the rules, the information sheet, and the answer form were apparently never served on the respondent, since the petitioner never filed an amended affidavit or affidavit establishing service of those documents as directed by the arbitrator. 5

6 [s]ubsequent to the filing of the lawsuit, and as a result of the actions taken by the law firm hired by the association, the violation complained of was eventually cured. The affidavit provided no factual information concerning when the violation was cured. However, the Notice of Voluntary Dismissal Without Prejudice, which was attached as an exhibit to the motion for attorney s fees, alleged that on May 23, 2005, the violation had not been cured, but that it had been cured by July 1, The respondent did not dispute this allegation. Further, the timeframe also fits with the response to the petition, dated June 20, 2005, in which the respondent states that the problem with the roof has been solved. Therefore, it is determined that the violation was cured after service of the petition for arbitration and that the petition was the motivating factor causing the respondent to repair his roof. Therefore, the petitioner is the prevailing party and is entitled to recover its attorney s fees. The only issue remaining to be decided by the arbitrator is the reasonableness of the attorney s fees claimed by the petitioner. In Florida Patient s Compensation Fund v. Rowe, 472 So. 2d 1145, 1150 (Fla. 1985), the Supreme Court articulate[d] specific guidelines to be followed in setting attorney s fees and adopted the federal lodestar approach as a suitable foundation for an objective structure for setting reasonable fee awards. The lodestar figure is determined 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. Id. at The petitioner seeks compensation for the services of a number of attorneys and legal assistants, which seems unbelievable in a case where the only activities were the filing of the petition for arbitration and amended petition and service of the amended 6

7 petition. The respondent s answer was not even due since the petitioner had not yet filed an affidavit or anything else establishing the date the respondent received the Order Requiring Answer and answer form. Indeed, it is not clear at all that the respondent ever received the Order Requiring Answer. Therefore, there shouldn t have been the need for any flurry of attorney activity related to the arbitration case. The only attorney who appeared in this case on behalf of petitioner was Natalie Bruzzese, Esquire, who, according to the User Information and Billing Rate sheet, had been a member of the Florida Bar for 10 months. The billing information provides three different billing amounts for Natalie Bruzzese alone: 5.5 hours at $ an hour; 2.6 hours at a blended rate of $130 an hour; and 3.00 hours at a FLAT rate. Fees are also requested for Ferren Korr, Esquire, Biana Brito, Esquire, Mark Heinish, Esquire, Rachel Marino, legal assistant, and Miriam Brown, legal assistant. Eight pages of billing information has been attached to the attorney s affidavit. No effort was made by the counsel for the petitioner to sort through those pages and include in the request for attorney s fees only the entries necessary for the successful prosecution of this arbitration action. Several of the listings are almost two months before the petition for arbitration was filed and refer to matters such as, Provided client with updated information regarding status of delinquent account. One entry refers to reviewing document for Terrabella Townhomes to see if there was a connection with the 4100 documents and then ing the property manager enclosing amendments for Terra Bella Townhome association. These billings reflect just some of the entries on the first page of the billing sheets that were not directly connected with this arbitration case, if connected at all. Further, these types of entries are throughout the 7

8 billing sheets. A respondent is only responsible for paying the fees reasonably incurred in the arbitration proceeding. The arbitrator cannot award fees incurred by the association in other matters that may (or may not) involve the respondent. From the billing sheets, and from the respondent s response to the petition, it is apparent that the respondent was involved in the sale of his home. Although the repair of the roof may have figured in the sale of the home, the association is not entitled to be reimbursed for attorney s fees in this arbitration case relating to work done in connection with the sale of the home. 3 Nevertheless, the time expended by counsel for the association involving the sale of the home has been included in the billing sheets submitted. For example, on May 24, 2005, Ms. Bruzzese spent time reviewing a facsimile from management regarding intent to sell form to be signed by seller, and drafted correspondence to title company regarding conditions of association s possible approval of sale. These are not activities connected with this arbitration case and should not have been included as time expended on this case. In Florida Patient s Fund, supra, the Florida Supreme Court placed the burden on the party seeking the attorney s fees and costs to establish entitlement to the fees and costs requested. The court noted that [i]nadequate documentation may result in a reduction of the number of hours claimed, as will a claim for hours that the court finds to be excessive or unnecessary. Id at Further, the court noted that a reasonable hourly rate must be determined by the court and that [t]he party who seeks the fees carries the burden of establishing the prevailing market rate, i.e., the rate charged in 3 Of course the respondent may be liable to the association for such fees if required in the condominium documents or elsewhere. The association cannot recover them in this proceeding, however. 8

9 that community by lawyers of reasonably comparable skill experience and reputation. Id at The petitioner has failed to establish that the market rate for an attorney with Ms. Bruzzese s experience, an attorney who had been a member of the Florida Bar for only 10 months, should be compensated at a rate of $ an hour. In other arbitration cases taking place at approximately the same time as this one, the arbitrators found that $ per hour rather than $ an hour was a reasonable fee for Ms. Bruzzese. See e.g. Plantation Forest Condominium Association, Inc.,v. Garay, Case No , Final Order on Motion For Attorney s Fees and Costs (September 15, 2005). Therefore, attorney s fees will be awarded at a rate of $ per hour as appropriate. The attorney s billing sheets reflect a total of hours for all services, including those that were not necessary or related to this case. As indicated above, the eight-page billing statement contains numerous instance of billing for time that was not reasonably or necessarily expended on the arbitration case. Since the petitioner failed to separate the items reflecting time necessarily and reasonably expended on this arbitration case and since the motion for attorney s fees and costs does not request any specific amount of fees as reimbursement for time expended on the arbitration action, the arbitrator will allow the following as reasonable time expended: One hour for pre-arbitration notice; 3 hours for activities relating to service of the petition and determining whether the respondent had repaired his roof; 1 hour for preparation of the notice of correspondence from the respondent and the voluntary dismissal; and 1 hour for the preparation of the motion for attorney s fees and costs, to which will be added the flat fee of $ for the preparation of the petition for arbitration, as stated on the billing sheets. Thus, the petitioner will be 9

10 awarded attorney s fees based on a total of 6 hours at $ per hour, or $990.00, plus the $200 flat fee for preparation of the petition for arbitration 4 for a total of $1, in attorney s fees. The petitioner is also entitled to certain reimbursable costs. Postage, FedEx expenses, and copying are not reimbursable. However, the respondent will be awarded costs for the filing fee of $50.00; $40.00 each for two of the service of process fees (only two affidavits regarding service of process were filed in this case); and $16.00 for an online investigative location services, for a total of $ Based on the foregoing, it is ORDERED: The respondent shall, within 30 days, pay to the petitioner the total amount of $1,246.00, which represents reimbursement for $1, in attorney s fees and $ in costs. DONE AND ORDERED this 26th day of January, 2006, at Tallahassee, Leon County, Florida. Diane A. Grubbs, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida The time expended for preparing an amended petition is considered as included in the flat fee. If the petition had initially included the necessary factual allegations and exhibits an amended petition would not have been necessary. 10

11 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 persons on this 26th day of January, 2006: Natalie A. Bruzzese, Esquire Rachel E. Frydman, Esquire KATZMAN & KORR, P.A NW 49 th Street, #202 Ft. Lauderdale, Florida Oliver Espaillat 1161 NW 141 st Avenue Pembroke Pines, Florida Oliver Espaillat 211 Northeast 8 th Avenue, Apt. #405 Hallendale Beach, Florida Oliver Espaillat 6628 Southwest 41 st Street #C Davie, Florida Respondent Diane A. Grubbs, Arbitrator Right to Appeal As provided by section , F.S., a party who is adversely affected by this final order may, within 30 days of the entry and mailing of this final order, file a complaint for a trial de novo in a court of competent jurisdiction in the circuit in which the condominium is located. This order does not constitute final agency action and is not appealable to the district courts of appeal. 11