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 HERBERT COOPER, and MICHAEL GOLDEN, Petitioners, Fee Case No v. Fee Case No Rel. Case No LATERRA CONDOMINIUM ASSOCIATION, INC., Respondent. FINAL ORDER ON MOTIONS FOR ATTORNEY S FEES AND COSTS / On March 21, 2017, Laterra Condominium Association, Inc. (Association), the legal entity responsible for the operation of the Laterra Condominium, located in St. Johns County, Florida, moved for an award of $10, in attorney s fees. The Association s motion was designated Fee Case No Also on March 21, 2017, Petitioners moved for an award of $7, in attorney s fees and $50.00 in costs. This motion was designated Fee Case No On March 23, 2017, the Association filed a response to Petitioners motion. On March 24, 2017, the arbitrator entered an Order Permitting Response to the Association s motion. On April 7, 2017, Petitioners filed their response to the Association s motion. The fee cases are hereby consolidated for judicial economy. Relevant Procedural History These fee cases arise from arbitration case number On January 11, 2017, Petitioners filed their petition. The petition alleged that the Association had Page 1 of 8

2 committed multiple errors in noticing and conducting its annual meeting and election. On February 10, 2017, the Association filed an Answer. In its answer, the Association admitted error and acquiesced to a new election from the second notice, which was the same as its response to Petitioners pre-arbitration notice. On February 27, 2017, Petitioners filed a reply alleging that the new election should be commenced with the first notice. On March 6, 2017, the arbitrator entered a summary final order ordering the Association to re-do its election from the second notice of election. 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)). Rule 61B (7), Florida Administrative Code states, in pertinent part: The prevailing party in a proceeding brought pursuant to Section , F.S., is entitled to an award of reasonable costs and attorney s fees. 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. (Emphasis supplied). Petitioners pre-arbitration notice, dated December 5, 2016, states, in Page 2 of 8

3 pertinent part: Demand for Relief and Reasonable Opportunity to Comply The Unit Owners present two options to the Association for avoiding an election challenge through arbitration. As the Unit Owners first option for the Association, they demand that the three incumbent Board members (Steve Salser, Francisco Paco Acevedo, Bruce Dubiel) each resign immediately due to the improper election procedures occurring under their watch, allowing the two newly elected Board members to appoint replacements. The Unit Owners would also be satisfied under this pre-arbitration demand, and will forgo their election challenge, if just one of those three incumbent Board members resigned due to the improper election procedures, allowing the four remaining members to appoint a replacement. If the four remaining members cannot agree on an appointment by the end of December 2016, then the Association shall immediately conduct an election to fill the open board seat. The Unit Owners second option for the Association to avoid an election challenge is for the Association to conduct a new election by starting the entire election process anew and scheduling the new election date as soon as possible so that the first sixty-day election notice can be sent without unnecessary delay. Nothing prevents the Association from immediately complying with either of these two options under the Unit Owners demand; however, the Unit Owners will allow the Association and existing Board members until December 31, 2016 as reasonable opportunity to fully comply with this demand by selecting one of these options for avoiding an election challenge. If the first option is selected then at least one incumbent Board member must have already resigned and a new Board member appointed or the first election notice for replacing that one Board seat already mailed out by December 31, If the second option is selected then the first sixtyday notice for the new election, soliciting candidates and providing the new election date, must have already been mailed out by December 31, The Association s response, dated December 22, 2106, states in pertinent part: Accordingly, your clients have no legally cognizable right to another election with a new slate of candidates as a remedy in this case. Florida law is clear on this point. However, if you possess any Florida law to the contrary, please forward it to our attention prior to filing the petition for arbitration.... Nevertheless, the Association will hold another election with the same slate of candidates in an effort to resolve this matter. In the event your clients accept this offer, please advise immediately. (Emphasis in original). Page 3 of 8

4 Petitioners allege that even though they did not prevail on requiring the Association to redo the election from the first notice, the arbitrator ordered a new election from the second notice with a requirement of a special notice and permission for candidates to supplement their information sheet. Therefore, they should be deemed the prevailing party. Pre-arbitration notice is not a perfunctory requirement; it is designed to allow a respondent a reasonable opportunity to agree to the relief requested without a formal legal proceeding. Alvarez v. Doral Isles Cmty. Ass n, Inc., Arb. Case No , Final Order of Dismissal (Sept. 19, 2014). The Association was willing to re-do its election from the second notice of election. The Association was not given the opportunity to acquiesce to the special notice or supplements to the information sheets. Moreover, the only issue litigated between the parties was whether to re-do the election from the first or the second notice, and the Association prevailed on that issue. Therefore, the Association is entitled to recover its reasonable attorney s fees and costs. B. Attorney s Fees and Costs The next issue to be decided is the reasonableness of the attorney s fees and costs 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 Page 4 of 8

5 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. Attorney s Fees The Association seeks compensation for legal services provided by two attorneys. However, one of the attorneys, Anthony Salem, did not file a separate affidavit with his signature. Rule 61B (2), Florida Administrative Code, provides: (2) A prevailing party seeking an award of costs and attorney s fees shall file a motion seeking the award not later than 45 days after rendition of the final order, except that if an appeal by trial de novo has been timely filed in the courts, a motion seeking prevailing party costs and attorney s fees must be filed within 45 days following the conclusion of that appeal and any subsequent appeal. The motion is considered filed when it is received by the division. The motion shall: (a) State the basis for the petition and the total attorney s fees and costs that are claimed; (b) Specify the hourly rate claimed; (c) Include an affidavit by the attorney who performed the work that: 1. States the number of years in which the attorney has been practicing law, 2. Indicates each activity for which compensation is sought, and 3. States the time spent on each activity. In a case involving multiple issues which are separate and distinct from each other, the affidavit shall identify the specific issue for which each activity was performed. Therefore, the Association will not be awarded fees for the time entries for Anthony Salem. See Skip Drish v. Ivy lake Estates Ass n, Inc., Arb. Fee Case No Page 5 of 8

6 1786, Final Order on Attorney s Fees and Costs (April 13, 2009); Domaine Delray Condo. Ass n, Inc. v. Koylan, Arb. Fee Case No , Final Order on Motion to Tax Costs and Attorney s Fees (May 17, 2010); St. George Condo. Ass n, Inc., v. Henry, Arb. Fee Case , Final Order on Motion for Attorney s Fee and Costs (August 04, 2009)(Petitioner's motion and accompanying affidavit were not signed by the attorney who did the work). The Association s counsel, Kevin E. Jakab, charged an hourly rate of $ for hours of work. Mr. Jakab has been practicing law in Florida for 14 years. The undersigned finds the hourly rate of $ is reasonable. Number of Hours The Association is claiming it is entitled to be reimbursed for hours expended by Mr. Jakab. The requested time is excessive. Before discussing the specifics of the Association s request, some general principles must be recognized. First, previous arbitration cases have held that in an arbitration proceeding where the respondent prevails, only fees incurred beginning with preparation of the answer are considered incurred in the arbitration proceeding. Colonial Club Condo. Ass n, Section I, Inc., v. Grunberg, Arb. Fee Case No , Final Order on Motion for Costs and Attorney s Fees (August 31, 2011). However, in the rare case where the respondent admits error in the response to a pre-arbitration demand, but disagrees with the relief sought and prevails on that issue, the preparation of the response will be reimbursed. Second, attorney time expended addressing matters not in arbitration will not be awarded. Juno Beach Condo. Ass n, Inc. v. Abood, Arb. Fee Case No , Final Order on Motion for Attorney s Fees and Costs (July 21, 2010). Third, the motion Page 6 of 8

7 for attorney s fees is rife with entries of attorney time spent in telephone calls, s and conferences with the Association. 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' Ass n 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). Finally, the Association will not be reimbursed for the time spent after entry of the final order, except for time spent preparing the motion for attorney s fees for which 1.0 hour is reasonable. Sunrise Landing Condo. Ass n of Brevard, Inc. v. Wilson, Arb. Fee Case No , Final Order on Attorney s Fees and Costs (May 9, 2006). After consideration of the above, and the fact that the Association only filed an answer, the Association will be awarded the following number of hours: For the response to the pre-arbitration notice: For the answer (including review of the petition): For the review of the reply: For communication with client: For the motion for attorney s fees: For the response to Petitioners motion 5.0 hours Therefore, the Association will be awarded $2, in attorney s fees for 10.0 hours of work at the rate of $ per hour. The Association did not request reimbursement of any costs. Based on the foregoing, it is ORDERED: 1. Petitioners Motion for Attorney s Fees and Cost is DENIED. 2. The Association s Motion for Attorney s Fees is GRANTED, in part. Within thirty (30) days of the date of this order, Petitioners shall reimburse the Association s Page 7 of 8

8 attorney s fees in the amount of $2, DONE AND ORDERED this 13th day of April, 2017, at Tallahassee, Leon County, Florida. Terri Leigh Jones, Arbitrator Department of Business and Professional Regulation Arbitration Section 2601 Blair Stone Road Tallahassee, Florida Section Telephone: Section Facsimile: 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 mailed by U.S. mail, postage prepaid, and this 13th day of April, 2017, to: Hans C. Wahl, Esq. One Independent Drive Suite 1400 Jacksonville, FL hwahl@jimersoncobb.com Attorney for Petitioners Kevin E. Jakab, Esq San Marco Blvd. Jacksonville, FL kjakab@jakablaw.com Attorney for Respondent Terri Leigh Jones, Arbitrator Page 8 of 8