Frank J. Tryteck, Et Al. v. Gale Industries, Inc., Etc.
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Supreme Court of Florida
____________
No. SC07-1641
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FRANK J. TRYTEK, et al.,
Petitioners,
vs.
GALE INDUSTRIES, INC., etc.,
Respondent.
[December 11, 2008]
PARIENTE, J.
In Gale Industries, Inc. v. Trytek, 960 So. 2d 805 (Fla. 5th DCA 2007), the
Fifth District Court of Appeal ruled on statutory attorneys‟ fees in construction lien
actions and certified a question of great public importance. We therefore have
jurisdiction. See art. V, § 3(b)(4), Fla. Const. We rephrase the certified question
as follows:
Where a lienor obtains a judgment against a property owner in an
action to enforce a construction lien brought pursuant to section
713.29, Florida Statutes (2005), are trial courts required to apply the
“significant issues” test articulated in Prosperi v. Code, Inc., 626 So.
2d 1360 (Fla. 1993), in determining which party, if any, is the
“prevailing party” for the purpose of awarding attorneys‟ fees?
We answer the rephrased certified question in the affirmative and hold that
trial courts are required to apply the “significant issues” test of Prosperi to evaluate
entitlement to prevailing party attorneys‟ fees under section 713.29, even when the
lienor obtains a judgment on the lien.1 We conclude that this Court has
consistently approached the award of attorneys‟ fees in lien actions as being
“tempered by equitable principles.” Prosperi, 626 So. 2d at 1363. In that regard,
when applying Prosperi to the facts of a case, there is no mandatory requirement
that the trial court determine that one party is the “prevailing party.” We therefore
quash the Fifth District‟s decision that held that the trial court is required to award
the lienor “prevailing party” attorneys‟ fees if the lienor recovers a judgment in any
amount on the lien claim that exceeds any setoff or damages claimed by the
homeowner on his or her counterclaim.
FACTS AND PROCEDURAL HISTORY
1. The question that was certified by the Fifth District states:
When a lienor obtains a judgment against a
property owner in an action to enforce a construction lien
brought pursuant to section 713.29, Florida Statutes
(2005), does the trial court have the discretion to apply
the “significant issues” test articulated in Prosperi v.
Code, Inc., 626 So. 2d 1360 (Fla. 1993), instead of the
net judgment rule in determining which party is the
“prevailing party” for the purpose of awarding attorney‟s
fees?
Gale Indus., 960 So. 2d at 809.
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In this case, the petitioners, Frank J. Trytek and his wife, Cathy L. Trytek,
(hereinafter referred to as either “Trytek” or “homeowner”), were building a new
residence. As part of the project, they contracted with Gale Industries, an
insulation contractor, to install insulation throughout the structure (hereinafter
referred to as either “Gale,” “contractor,” or “lienor”). It is undisputed that
“[w]hile installing the insulation, Gale‟s employees inadvertently caused some
staples to be driven through some previously installed electrical wires. The parties
agreed that Try-Cor Electric Company, a corporation owned by Frank Trytek that
was involved in electrical contracting, would make the necessary repairs.” Gale
Indus., 960 So. 2d at 806. According to the invoice in the record, Trytek‟s cost
incurred for the electrical repair work was $11,770, including a $250 building
inspection fee. Trytek delivered a check to Gale for $736, which Trytek
determined was the amount due on the contract work after setting off the
inspection fee and repair work done by his company. Gale refused to accept
Trytek‟s check and recorded a construction lien in the amount of $12,725, which
did not include any offset for the damages it caused.
This case eventually proceeded to trial. As set forth in the Fifth District‟s
opinion:
Early in the proceedings the parties stipulated that the Gale Industries
claim of lien complied procedurally with the construction lien law,
Chapter 713, Florida Statutes (2001), and that all notice requirements
had been met. In addition, the parties agreed that the lien accurately
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stated the value of the labor, services and materials provided by Gale,
subject only to the Trytek counterclaim. An agreed order was
rendered that established that Gale‟s lien was procedurally sufficient;
that no evidence would be necessary at trial on that issue; and that
Gale Industries was entitled to recover the amount stated in the lien,
less any damages proved by Mr. and Mrs. Trytek; and that the only
issue to be resolved at trial was the value of the damages alleged in
the counterclaim.
Following a nonjury trial, the trial court entered an order
determining that the Tryteks were entitled to repair costs of $11,200.
After setting off that figure against the agreed lien amount of
$12,725, the net result was a judgment for $1,525 in favor of Gale
Industries.
Thereafter, each party concluded that it was the “prevailing
party” and filed cross-motions to tax attorneys‟ fees and costs
pursuant to section 713.29, Florida Statutes (2005). After a hearing
on the motions the trial court, while expressing some concern over
this court‟s position on the definition of prevailing party in the
construction lien context, determined that it was required to apply the
“significant issues” test set forth in Prosperi v. Code, Inc., 626 So. 2d
1360 (Fla. 1993), in order to award fees and costs properly. The
court then found that the Tryteks were the prevailing party because
the only real issue in the case was how much money should be set off
against the Gale Industries lien, and the Tryteks primarily prevailed
on their counterclaim.
Id.
In determining that Trytek was the prevailing party, the trial court reasoned:
There was never an issue about Gale performing the insulation work
at the Tryteks residence nor was there ever an issue about whether
Gale was entitled to payment for its work. Early in the case, there
was an agreed order on Plaintiff‟s Motion for Partial Summary
Judgment which recognized the validity and amount of Gales‟ [sic]
lien. The real issue in the case was how much money should be
setoff from the lien amount as compensation to the Tryteks for
repairing the damage done by Gale during its installation of the
insulation. The Tryteks prevailed on their counterclaim to the extent
of almost extinguishing the Gale lien. It was this aspect of the case
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that required expert testimony, document production, document
analysis and trial time. The Tryteks recovered $11,200 on their
counterclaim. Gale only offered a discount of from $320 to $3200.
Therefore, this Court finds that the Tryteks prevailed on the
“significant issue” of this case and are the prevailing parties entitled
to recover attorneys‟ fees and costs pursuant to § 713.29, F.S.
Gale Indus., Inc. v. Trytek, No. 48-2004-CA-7549, order at 4 (Fla. Orange County
Cir. Ct. Dec. 13, 2005).
The parties stipulated to the amount of attorneys‟ fees and costs and thus the
trial court entered an order awarding attorneys‟ fees of $55,982.00 and costs of
$4,016.67 in favor of the homeowner, Trytek.2 On appeal, the Fifth District
recognized that this Court‟s decisions in Moritz v. Hoyt Enterprises, 604 So. 2d
807 (Fla. 1992), and Prosperi v. Code, Inc., 626 So. 2d 1360 (Fla. 1993), modified
the “prevailing party” rule by applying the “significant issues” test. However, it
concluded that the “significant issues” test of Prosperi applies only where the
contractor is unsuccessful in its lien foreclosure action. The Fifth District
concluded that under section 713.29, a contractor who obtains any monetary
judgment pursuant to a construction lien claim would ordinarily be the prevailing
party, and in this case, the contractor did receive a judgment of $1,525. The Fifth
District therefore reversed and remanded for assessment of an attorneys‟ fees
2. The net final judgment entered in favor of the Tryteks was $57,728.39,
representing $55,982.00 in attorneys‟ fees and $4,016.67 in costs totaling
$59,998.67 offset by $2,270.28, which represented the principal amount awarded
to Gale on its lien plus statutory interest.
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award in favor of Gale. The Fifth District also recognized that this Court‟s
application of the “significant issues” test in Prosperi may have changed the legal
landscape for determining the prevailing party in a construction lien case and
accordingly certified a question of great public importance regarding whether the
“significant issues” test of Prosperi is applicable even when the contractor obtains
a judgment on its lien, no matter what the amount. Gale Indus., 960 So. 2d at 807
09.
ANALYSIS
The contractor claims that because it obtained a judgment on its lien, the
contractor is entitled to receive all of its attorneys‟ fees connected with the
litigation. The homeowner contends that by prevailing on the only issue tried
before the trial court—the counterclaim based on the contractor‟s damage to the
electrical wiring—the trial court‟s determination of prevailing party should be
affirmed. Both parties assert that one or the other must be the prevailing party.
The main issue in this case is what factors enter into a determination of
“prevailing party” pursuant to section 713.29. The specific issue raised by this
case is whether the trial court is vested with discretion, or is even required to
consider, which party prevailed on the significant issues; or whether the trial court
is bound by an inflexible bright-line rule that a prevailing party must be determined
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and that the contractor must be considered the prevailing party if it obtains a
judgment on its lien in any amount in excess of an asserted set-off or counterclaim.
It is well-settled that attorneys‟ fees can derive only from either a statutory
basis or an agreement between the parties. State Farm Fire & Cas. Co. v. Palma,
629 So. 2d 830, 832 (Fla. 1993). In this case, entitlement to attorneys‟ fees is
based on statute. We thus start with the language of the lien statute that concerns
the award of attorneys‟ fees in an action to enforce a lien. Section 713.29 was first
enacted by the Legislature in 1963. Ch. 63-135, § 1, Laws of Fla. Section 713.29
states:
In any action brought to enforce a lien or to enforce a claim
against a bond under this part, the prevailing party is entitled to
recover a reasonable fee for the services of her or his attorney for trial
and appeal or for arbitration, in an amount to be determined by the
court, which fee must be taxed as part of the prevailing party‟s costs,
as allowed in equitable actions.
(Emphases added.) Although the Legislature expressly defined several terms
within the Construction Lien Law in a section entitled “Definitions,” it did not
define the term “prevailing party,” see § 713.01, Fla. Stat. (2005), nor does a
definition appear in section 713.29.
With regard to any principles of statutory construction that might be
applicable, although we have generally held that attorneys‟ fees statutes should be
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“strictly construed” because there was no common law right to attorneys‟ fees,3 in
this case, that principle does not assist the Court in construing the term. Further, in
1977, the Legislature enacted section 713.37, which states that “[the Construction
Lien Law] shall not be subject to a rule of liberal construction in favor of any
person to whom it applies.” Therefore, jurisprudence that has relied on the
principle that the lien laws favor the contractor or laborer has no direct application
when determining which party is entitled to prevailing party attorneys‟ fees.4
Because our rephrased certified question asks whether the “significant
issues” test of Prosperi applies where a lienor has obtained a judgment on his or
her lien claim, we turn to this Court‟s precedent regarding lien actions and also
3. At common law, each party was required to pay its own attorneys‟ fees in
all actions and therefore we have generally adhered to the principle that statutes
awarding attorneys‟ fees should be strictly construed. See Willis Shaw Express,
Inc. v. Hilyer Sod, Inc., 849 So. 2d 276, 278 (Fla. 2003).
4. Before section 713.37 was enacted, our case law emphasized the
Construction Lien Law‟s purpose of protecting the laborer. See United States v.
Griffin-Moore Lumber Co., 62 So. 2d 589, 590 (Fla. 1953) (“[T]he labor and
material results in the unjust enrichment of the land owner if the laborer or the
materialman is not given priority in the enforcement of his lien claim.”) (citing
Robert L. Weed, Architect, Inc. v. Horning, 33 So. 2d 648, 651 (Fla. 1947) (“Lien
laws . . . were designed to protect laborers and materialmen and should be liberally
construed to accomplish that purpose.”)). However, in spite of this liberal
construction in favor of the laborer, this Court still emphasized that the protection
to the contractor or laborer must be “compatible with justice and equity.” Crane
Co. v. Fine, 221 So. 2d 145, 152 (Fla. 1969) (“It is our duty to construe this statute
liberally „so as to afford the laborers and materialmen the greatest protection
compatible with justice and equity.‟”) (quoting Hendry Lumber Co. v. Bryant, 189
So. 710, 712 (Fla. 1939)).
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jurisprudence regarding “prevailing party” attorneys‟ fees. First, with regard to the
purpose of the construction lien statute, we have stated:
[W]e note that mechanic‟s lien law serves at least two purposes.
First, mechanic‟s liens protect suppliers who furnish labor or
materials to the property by assuring them of full payment. Prosperi
v. Code, Inc., 626 So. 2d 1360, 1362 (Fla. 1993) (citing Emery v.
International Glass & Mfg., Inc., 249 So. 2d 496, 500 (Fla. 2d DCA
1971)). Mechanic‟s lien law also protects owners by requiring
subcontractors to provide notice of possible liens, thereby allowing
owners to prevent double payment to both a contractor and
subcontractor, material supplier, or laborer, for provision of the same
services or materials when the contractor and subcontractor are not in
privity. Aetna [Cas. and Sur. Co. v. Buck], 594 So. 2d [280] at 281
[(Fla. 1992)].
Stunkel v. Gazebo Landscaping Design, Inc., 660 So. 2d 623, 626 (Fla. 1995). The
dual purpose of the lien law in protecting both the laborer and owner seems to
evidence a legislative intent to emphasize fairness and equity in actions brought
pursuant to the lien law.
The notion that equitable principles should apply in determining “prevailing
party” attorneys‟ fees has been utilized in this Court‟s opinions deciding attorneys‟
fees in the context of section 713.29. For example, in C.U. Associates, Inc. v. R.B.
Grove, Inc., 472 So. 2d 1177 (Fla. 1985), the Court examined a case in which a
litigant had offered an amount to settle that was equal to the amount recovered.
This Court found that “in order to be a prevailing party entitled to the award of
attorney‟s fees pursuant to section 713.29, a litigant must have recovered an
amount exceeding that which was earlier offered in settlement of the claim.” Id. at
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1179. This Court explained that it based its decision on the purported policy
underlying section 713.29:
The award of attorney‟s fees and costs to the prevailing party in
a mechanic‟s lien action serves to encourage settlement of disputes
before resorting to litigation. Forcing the loser to bear the costs and
fees of producing the opponent‟s victory engenders a more realistic
appraisal of the merits of the claim and discourages dilatory or
obstructive tactics. If the statute were to apply as the Third District
construes it, however, the burden of fair dealing and good-faith
negotiation would lie only upon the defendant. To award attorneys
fees and costs when any judgment is won, without reference to earlier,
bona-fide good faith offers to settle the claim, allows the plaintiff a
free throw of the dice in an attempt to squeeze the last penny out of
the claim.
Id. at 1178-79 (emphasis added). Our decision in C.U. Associates explicitly stands
for the proposition that the underlying policy of section 713.29 is to “encourage
settlement of disputes before resorting to litigation.” However, the case also
implicitly espouses equitable principles by preventing a plaintiff who has
recovered a judgment from unjustly being awarded attorneys‟ fees after rejecting a
good faith offer from the defendant that exceeded the amount of the judgment.
Subsequently, this Court decided Prosperi, which is also based on basic
principles of fairness and an interest in discouraging needless litigation. The rule
of Prosperi is that in determining “prevailing party” under section 713.29, the trial
court should look to which party prevailed on the “significant issues,” as
recognized in our case of Moritz that had been decided the previous year.
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Prosperi, 626 So. 2d at 1363.5 Together, Prosperi and its predecessor Moritz
require that the trial court‟s determination of a prevailing party rest on whether the
party “succeed[ed] on any significant issue in litigation which achieves some of the
benefit the parties sought in bringing suit.” Moritz, 604 So. 2d at 809-10 (quoting
Hensley, 461 U.S. at 433).
In Prosperi, the contractor brought an action to foreclose a lien claim, among
other claims.6 The trial court denied relief on the lien claim and awarded damages
on the homeowner‟s breach of contract counterclaim. However, the trial court also
found that the homeowner‟s setoff from the counterclaim was less than the amount
owed to the contractor under the contract. Therefore, the contractor received a
judgment on its contract claim but did not prevail on the lien claim. The trial court
5. Moritz, a breach of contract action, adopted the “significant issues” test
from the United States Supreme Court‟s decision Hensley v. Eckerhart, 461 U.S.
424 (1983). Moritz, 604 So. 2d at 809-10. The Hensley decision involved the
Civil Rights Attorney‟s Fees Awards Act of 1976, 42 U.S.C. § 1988, which
provided that in federal civil rights actions “the court, in its discretion, may allow
the prevailing party, other than the United States, a reasonable attorney‟s fee as
part of the costs.” 461 U.S. at 426. Therefore, although Moritz was a breach of
contract action and Hensley involved statutory attorneys‟ fees under a civil rights
action, the “significant issues” test provided a flexible approach to prevailing party
attorneys‟ fees in both statutory and contractual actions.
6. The contractor filed a four-count complaint seeking (1) foreclosure of a
mechanic‟s lien; (2) damages for breach of contract; (3) quantum meruit; and (4)
account stated. 626 So. 2d at 1361. The owner counterclaimed for breach of
contract based on the contractor‟s actions of filing untrue affidavits, failure to
account, and negligent performance of the contract. Id.
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denied both parties‟ claims for fees, and on appeal the district court affirmed,
certifying the following question: “Does the test of Moritz v. Hoyt for determining
who is the prevailing party for the purposes of awarding attorney‟s fees apply to
fees awarded under section 713.29, Florida Statutes?” 626 So. 2d at 1361.7
In concluding that the “significant issues” test adopted in Moritz was
applicable to claims under section 713.29, this Court discussed what appellate
courts had termed the “net judgment rule,” which in essence precluded an owner
from recovering attorneys‟ fees under section 713.29 where a claimant fails to
foreclose a mechanic‟s lien but obtains a judgment on other non-lien claims that
exceeds any claim of the owner. Prosperi, 626 So. 2d at 1362 n.1. While giving
deference to the long line of appellate precedent, this Court ultimately held that, in
light of Moritz, the fact that a claimant recovers a net judgment is significant but
does not necessarily control the determination of the “prevailing party,” and the
trial court must have flexibility to consider the equities and determine which party
7. The district court also certified the following question:
Is an owner who prevails on a complaint by a contractor or sub
contractor to enforce a mechanic‟s lien under Part I, Chapter 713,
Florida Statutes (1989), entitled to attorney‟s fees under 713.29, even
though, in the same suit, the contractor prevailed against the owner on
a claim for money damages for breach of the contract, both claims
arising out of the same transaction?
Prosperi, 626 So. 2d at 1361. However, the Court was unable to give an
unqualified affirmative or negative answer to this question. Id. at 1363.
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prevailed on the significant issues. 626 So. 2d at 1363. Significantly, as applied to
the case, the Court observed:
As we see it, the net judgment rule itself was originated as a
device to do equity.[8] For example, under most circumstances it
would be unfair to require a contractor who recovers the bulk of its
claim to pay attorney‟s fees for failure to meet the technical
requirements of the mechanic‟s lien law. In some of the later cases,
however, the net judgment rule appears to have been applied
mechanically without regard to the equities. We believe that Moritz
now requires a more flexible application. The fact that the claimant
obtains a net judgment is a significant factor but it need not always
control the determination of who should be considered the prevailing
party. We hold that in considering whether to apply the net judgment
rule, the trial judge must have the discretion to consider the equities
and determine which party has in fact prevailed on the significant
issues.
In the instant case, the findings of the trial judge make it clear
that he believed that the owner was the innocent party but felt
constrained not to award him attorney‟s fees under a strict application
of the net judgment rule. Under the net judgment rule as tempered by
equitable principles according to the rationale of our opinion, it is
equally clear that the trial judge would have found the owner to be the
prevailing party. Therefore, we quash the decision below and remand
with directions that attorney‟s fees be awarded to the owner. We
quash the order awarding the contractor appellate attorney‟s fees and
direct that appellate attorney‟s fees also be awarded to the owner.
Id.
8. We are aware of the inherent confusion in the use of “net judgment,”
which the appellate courts have used to describe a situation where a homeowner
defeats a lien but the contractor obtains a judgment under other causes of action
such as contract or equity. In other contexts, the use of the term “net judgment”
may be synonymous with “affirmative judgment,” referring to any party who
obtains a judgment in its favor.
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While Prosperi dealt with a contractor that did not prevail on its lien action,
we do not read Prosperi and our precedent so narrowly. The reasoning supporting
the decision in Prosperi to replace the “net judgment rule” with the “significant
issues” test conveys this Court‟s preference for a flexible rule that will achieve an
equitable result with respect to the determination of the “prevailing party,”
irrespective of which party recovers a judgment on the lien claim. Although the
fact that a contractor has obtained a “net judgment” on its lien is certainly a factor
to be considered, it is not determinative of whether that party is the “prevailing
party” for purposes of entitlement to attorneys‟ fees.9 The application of an
inflexible bright-line rule that a judgment in any amount on the lien claim
mandates “prevailing party” attorneys‟ fees disregards the fact that a claim of lien
under section 713.08, Florida Statutes (2005), requires that the “contract price” or
the “value” of the “labor, services or materials furnished,” and the “amount
unpaid” be part of the “claim of lien.” §§ 713.08(1)(c),(g), 713.08(3), Fla. Stat.
9. We acknowledge that our prior decisions have stated that “„[p]revailing
party‟ has previously been construed to mean the „one in whose favor an
affirmative judgment is rendered.‟” See Mainlands Constr. Co. v. Wen-Dic
Constr. Co., 482 So. 2d 1369, 1370 (Fla. 1986) (quoting Peter Marich & Assocs.,
Inc. v. Powell¸ 365 So. 2d 754, 756 (Fla. 2d DCA 1978)). However, this decision
was rendered before this Court adopted the “significant issues” test in Moritz and
then decided Prosperi. Moreover, the Mainlands Court did not apply ordinary
principles of statutory construction to construe the term “prevailing party,” but
only relied on the definition set forth in Marich, which itself relied on other district
court decisions.
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(2005). This also comports with the well-established principle that a “judgment on
a construction lien requires a determination of substantial performance, not strict
performance.” Kenmark Constr., Inc. v. Cronin, 765 So. 2d 129, 130 (Fla. 2d
DCA 2000) (citing Poranski v. Millings, 82 So. 2d 675, 678 (Fla. 1955)).
We conclude that the equitable analysis of Prosperi is equally applicable in
this case and consistent with our jurisprudential approach favoring a flexible rule
in determining which party is the prevailing party. That approach also
encompasses the view that entitlement to attorneys‟ fees should be consistent with
encouraging settlement of disputes. We thus determine that the “significant
issues” test used in Prosperi is also applicable in cases where the contractor has
foreclosed on its lien against the owner.
THIS CASE
The trial court correctly utilized Prosperi in determining that the contractor
was not the prevailing party. In finding that Trytek was the prevailing party, the
trial court emphasized that the focus of the litigation was on the amount of damage
caused by the contractor‟s actions, which was the subject of the homeowner‟s
counterclaim.10 The trial court also noted that Trytek had “tried to negotiate a
10. Trytek‟s breach of contract counterclaim is a compulsory counterclaim
because both the lien claim and the breach of contract counterclaim arose from the
same transaction or occurrence. See Fla. R. Civ. P. 1.170(a). Thus, although
section 713.29 applies only to lien claims, Trytek‟s judgment on its counterclaim
could be considered in the trial court‟s determination of the prevailing party
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setoff with Gale” before the lien action was filed and that during litigation, “Gale
only offered a discount of from $320 to $3200.”11 However, we are uncertain of
whether there was in fact a “prevailing party” in this case. The trial court in its
order observed that it would prefer “a result where each party would bear its own
fees and costs,” but felt constrained to declare one side the “prevailing party.”
Even in this Court, both parties advance an all-or-nothing approach, with each
claiming to be the “prevailing party” entitled to all of its attorneys‟ fees.
In this case, because both parties stipulated to the amount of fees after
Trytek was determined to be the prevailing party, the trial court entered an
attorneys‟ fees judgment of $55,982.00 in favor of Trytek. Presumably, if the Fifth
District opinion is upheld, Gale would receive an attorneys‟ fee judgment of
approximately $41,882.50—the amount it asserted in its affidavit of attorneys‟ fees
and time, even though it lost on the only issue litigated and received a judgment on
because the counterclaim is considered as part of the lien claim. See Orix Capital
Markets, LLC v. Park Avenue Assoc., Ltd., 881 So. 2d 646, 650 (Fla. 1st DCA
2004) (“If compulsory . . . the counterclaim cannot, in our judgment, be considered
a claim independent from the suit in mortgage foreclosure.).
11. The details of any other ongoing negotiations do not appear in the
record, nor does the offer of judgment filed by Gale, which was not accepted. See
Fla. R. Civ. P. 1.442(i) (“Evidence of a proposal or acceptance thereof is
admissible only in proceedings to enforce an accepted proposal or to determine the
imposition of sanctions.”). Although neither party objects to making the offer of
judgment part of the record, as in all cases, we do not supplement the record with
facts not in either the trial or appellate record.
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its recorded lien of $12,725 in the amount of only $1,525. We are concerned that
fees may have driven the litigation and prevented the parties from resolving the
case.
The overall purpose of section 713.29 and attorneys‟ fee statutes in general
is to discourage rather than encourage needless litigation. Consistent with this
purpose, we conclude that a trial court has the discretion to make a determination
that neither party has prevailed on the significant issues in litigation after a
thorough examination of all the factors, including the issues litigated, the amount
of the claim of lien versus the amount recovered on the lien, the existence of
setoffs and counterclaims by the homeowner, and the amounts offered by either
party to resolve the issues prior to the litigation, assuming that those negotiations
were not otherwise confidential either by agreement or statute. See, e.g., §
44.405(1), Fla. Stat. (2008) (“Except as provided in this section, all mediation
communications shall be confidential. A mediation participant shall not disclose a
mediation communication to a person other than another mediation participant or a
participant‟s counsel.”).
Our conclusion is consistent with our precedent and section 713.29.
Certainly the possibility that neither party is a “prevailing party” is consistent with
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an application of the “significant issues” test of Moritz and Prosperi.12 Moreover,
this conclusion is consistent with our decision in C.U. Associates, where we held
that on remand the trial court could find that neither party was the “prevailing
party” entitled to an award of attorneys‟ fees. 472 So. 2d at 1179. Finally, our
decision does not conflict with section 713.29, which requires only that the
“prevailing party is entitled to recover” a reasonable attorneys‟ fee.13
CONCLUSION
12. Appellate courts have upheld decisions where the trial court found no
prevailing party under the “significant issues” test in breach of contract litigation.
See Brevard County Fair Ass‟n v. Cocoa Expo, Inc., 832 So. 2d 147, 151 (Fla. 5th
DCA 2002) (where both parties prevail on significant issues, the trial judge has the
discretion to determine neither party prevailed); Hutchison v. Hutchison, 687 So.
2d 912, 913 (Fla. 4th DCA 1997) (recognizing that there can be “compelling
circumstances” in which a trial court can determine that neither party prevailed in a
contract case); KCIN, Inc. v. Canpro Investments, Ltd., 675 So. 2d 222, 223 (Fla.
2d DCA 1996) (“A rule which requires an award of prevailing party attorney‟s fees
in all cases may result in an unjust reward to a party whose conduct caused the
failure of the contract. . . . [A]n attorney‟s fee award is not required each time there
is litigation involving a contract providing for prevailing party fees.”).
13. We do not construe any of the appellate cases concerning prevailing
party attorneys‟ fees to mandate that there be a prevailing party, only that where a
“prevailing party” is determined, the entitlement to attorneys‟ fees is mandatory.
See Pennington & Assocs., Inc. v. Evans, 932 So. 2d 1253, 1254 (Fla. 5th DCA
2006); Hollub Constr. Co. v. Narula, 704 So. 2d 689, 690 (Fla. 3d DCA 1997);
Grant v. Wester, 679 So. 2d 1301, 1308 (Fla. 1st DCA 1996); Sanfilippo v. Larry
Giacin Tile Co., 390 So. 2d 413, 414 (Fla. 4th DCA 1980). We reject the notion
that in every construction lien case the trial court is compelled to find a prevailing
party. See Kenmark Constr., Inc. v. Cronin, 765 So. 2d 129 (Fla. 2d DCA 2000)
(declining to announce a bright-line rule that a trial court must find a prevailing
party in every construction lien action).
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We answer the rephrased certified question in the affirmative and conclude
that the “significant issues” test of Prosperi applies to determine the issue of
“prevailing party.” We thus quash the decision of the Fifth District and direct that
this case be remanded to the trial court to reconsider the issue of attorneys‟ fees
consistent with this opinion.
It is so ordered.
QUINCE, C.J., and WELLS, ANSTEAD, LEWIS, and CANADY, JJ., concur.
POLSTON, J., did not participate.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.
Application for Review of the Decision of the District Court of Appeal - Certified
Great Public Importance
Fifth District - Case No. 5D06-1569
(Orange County)
Michael R. D‟Lugo of Wicker, Smith, O‟Hara, McCoy, and Ford, P.A., Orlando,
Florida,
for Petitioner
Edward M. Baird and Mark T. Snelson of Wright, Fulford, Moorhead, and Brown,
P.A., Orlando, Florida,
for Respondent
Barry Kalmanson, Maitland, Florida, on behalf of Southeastern Association of
Credit Management and Florida Independent Concrete and Associated Products,
Inc.,
for Amicus Curiae
- 19
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