And the Winner is… A party’s right to recover attorney’s fees
A party’s right to recover attorney’s fees incurred over the course of litigation hinges directly on whether one is deemed by the court to be the “prevailing party” at the conclusion of the case. Previously, the focus of the courts in deciding who was the prevailing party was based solely on the claim of the lien holder and whether he was ultimately awarded damages pursuant to his lien claim.
In the event that a lienor collected even a single dollar of his lien claim, he was treated as the winner – the prevailing party under Florida Statute 713.29, and was entitled to recover his reasonable attorney’s fees. This narrow interpretation became a significantly disputed issue and has been reviewed and broadened by the Florida Supreme Court.
Unfortunately for contractors, no longer is the result of the lien claim the only basis for reaching the determination of who won. In one case, the Florida Supreme Court decided that the main issue before it was not the contractor’s lien claim, but the amount of setoff that the owners had claimed in opposition to the lien. While the contractor in that case was awarded some money under his lien claim, the owners obtained almost the entire amount of setoff that they had sought and for that reason the Court determined that the owners, not the contractor, were the prevailing party and the ones entitled to recover attorney’s fees.
Courts are now applying what is commonly referred to as the “significant issues” test. This requires weighing all claims and the ruling made on each to determine which party, if any, truly prevailed in the litigation.
All contractors need to be aware of this development, especially since most lien claims are generally met with a setoff defense. This means that even if a contractor wins a portion of his lien amount, he may be the ultimate loser, and not only see his claims for attorney’s fees defeated but worse, also be on the hook for the other side’s legal fees and costs.