We Need a Fix to the Lien Law’s Broken Attorney Fee Statute

For years, the Lien Law statute section 713.29, providing for an award to the prevailing party in a construction lien foreclosure case, made decisions about whether to pursue or defend lien foreclosures easier because the parties knew whoever prevailed would get their attorney’s fees paid by the other side. With some exceptions, this statute provided a level of certainty to guide the parties as they assessed whether and how to pursue or defend these claims. Through the years, the certainty eroded a little when courts stopped awarding fees to whoever received or prevented a net judgment for or against them and instead gravitated to the standard of deciding the prevailing party was whomever prevailed on the significant issues in the case, whatever those might be. The utility of section 713.29 as a planning tool before the parties decided whether or how to litigate was completely eviscerated by the Florida Supreme Court in Trytek v. Gale Industries, Inc., 3 So. 3d 1194 (Fla. 2009), which held that, although a prevailing party is entitled to an attorney fee award, courts no longer are required to determine that one party or the other prevailed party. For instance, if a lienor seeks $100,000 and wins $70,000, the court could find the lienor lost a third of its claim, whereas the owner was liable for more than they expected to find. Hence, no prevailing party and nobody gets an attorney fee recovery. The attorney’s fees incurred by both parties in such a case would likely make that outcome economically miserable for all. 

This problem was exacerbated two weeks ago when the Fifth District Court of Appeal decided the case of Continental Casualty Co. v. Baylor, 2012 WL 3870415 (Fla. 5^th DCA 2012), which applied this same uncertain analysis to fee awards on private project payment bond claims. In light of the emerging case law, the only fix is legislative and I understand Associated General Contractors is looking into legislation to address this. Although I haven’t yet seen their proposal, I understand they seek to revert to the old line of net judgment rule cases, where whichever party receives a net judgment wins the case and gets their attorney’s fees. Although courts receded from that line of cases due to inherent inequities (a lienor suing for $100,000 ought not be the prevailing party if they win only $100), it does provide a bright line test giving litigants some certainty to help guide their decisions about suit. Whether you support the net judgment rule standard or not, it probably beats simply not knowing where a party stands in terms of attorney fee recovery. Regardless, speak your mind. Watch for this bill to be presented in Tallahassee and either support or fight it. Let’s just hope that whatever comes out in the end beats this era of uncertainty in which we find ourselves.