10-000009 Ralph Sexton And Ranch Management Consultants, Inc. vs. Wild Turkey Estates Of Vero, Llc, And St. Johns River Water Management District Status: Closed DOAH Final Order on Wednesday, June 16, 2010.

Summary: Attorney's fees could not be awarded under Section 57.105 against a losing party's attorney after the motion for fees was withdrawn against the losing party.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RALPH SEXTON AND RANCH )

MANAGEMENT CONSULTANTS, INC., )

)

Petitioners, )

)

vs. ) Case No. 10-0009

)

WILD TURKEY ESTATES OF VERO, LLC, AND ST. JOHNS RIVER WATER )

MANAGEMENT DISTRICT, )

)

)

Respondents. )

)

FINAL ORDER

The question presented at this point in the proceeding is

whether Section 57.105, Florida Statutes, allows an award of

attorney's fees against a losing party's attorney when an award

of fees cannot be made against the losing party. Because this

order rules that the answer to the question is "no," and that

answer disposes of all that remains of the proceeding, this

order is a final order.

Background

Prior to conducting any discovery, Respondent Wild Turkey

Estates of Vero, LLC ("Wild Turkey"), filed a motion for

attorney's fees. Among the claims in the motion was the

following:

Petitioners knew or should have known that

the claims made in the Petition are not

supported by material facts necessary to

establish the claims alleged in the Petition

and therefore, Wild Turkey is entitled to an

award of attorney's fees pursuant to Section

57.105(1), Florida Statutes.

Motion for Attorney's Fees Pursuant to Section 57.105, Florida

Statutes, and Section 120.595, Florida Statutes, filed

February 22, 2010.

On March 16, 2010, Petitioners filed "Petitioners' Motion

to Award Attorney's Fees," and then on May 5, 2010, an amended

motion. In each, Petitioners' asserted that "Respondent . . .

and Respondent's attorney Jonathan Ferguson knew or should have

known that [their] motion for attorney's fees was not supported

by the material facts necessary to establish the requested

relief." This assertion, like one of the bases in Wild Turkey's

motion for attorney's fees, 1/ was made under the authority of

Section 57.105, Florida Statutes.

On March 29, 2010, Petitioners filed "Petitioners Motion

for Summary Final Order Denying Respondent Wild Turkey Estates

of Vero, LLC's Motion for Attorney's Fees" ("Motion for Summary

Final Order"). The motion was directed solely at the attorney's

fees sought by Wild Turkey under Section 57.105, Florida

Statutes.

Wild Turkey did not file a response to the Motion for

Summary Final Order. Prior to the expiration of the time for

filing a response, Jonathan A. Ferguson, who had filed the

motion for attorney's fees on behalf of Wild Turkey against

Petitioners, withdrew as counsel to Wild Turkey. Mr. Ferguson's

successors as counsel to Wild Turkey did not file a response

either.

Petitioners then filed their Notice of Voluntary Dismissal

with Prejudice (the "Notice of Voluntary Dismissal") on May 20,

2010. In the Notice of Voluntary Dismissal, Petitioners not

only dismissed the petition but explicitly gave notice of

withdrawal of the pending motion for attorney fees against Wild

Turkey: "Petitioners also give notice of withdrawal of

Petitioners' pending motion for attorney's fees as to Respondent

Wild Turkey Estates of Vero Beach, LLC." As discussed below,

the withdrawal of the Petitioners' motion for attorney's fees

against Wild Turkey is crucial to the outcome of their attempt

to obtain fees against Wild Turkey's counsel. The Notice of

Voluntary Dismissal also asked that jurisdiction be retained to

rule on the Motion for Summary Final Order 2/ and Wild Turkey's

Counsel Jonathan Ferguson's liability for attorney's fees

pursuant to Petitioners' motion for attorney's fees.

An order was entered on May 21, 2010, that relinquished

jurisdiction over the Petition and, as requested by Petitioners,

retained jurisdiction over the Motion for Summary Final Order

and Petitioners' motion for attorney's fees against

Mr. Ferguson. On the same day, Petitioners filed "Petitioners'

Request for Ruling Regarding Motion for Summary Judgment and

Request for Hearing on Liability for Attorney's Fees against

Counsel for Respondent."

On May 24, 2010, Mr. Ferguson filed a response to the

Petitioners' request for a ruling on the Motion for Summary

Final Order and for a hearing on his liability for attorney's

fees, opposing both.

The parties 3/ to the attorney's fees issues, meaning

Petitioners and Mr. Ferguson, were ordered on May 25, 2010, to

file memoranda of law on the issue of whether any attorney's

fees under the circumstances of the case could be awarded solely

against Mr. Ferguson pursuant to Section 57.105, Florida

Statutes, when the statute calls for attorney's fees to be borne

equally by a "losing party" and the losing party's attorney.

Discussion

Section 57.105 mandates:

award of a reasonable attorney's fee to be

paid to the prevailing party in equal

amounts by the losing party and the losing

party's attorney on any claim or defense at

any time during [an administrative

proceeding 4/ ] in which the court [or an

administrative law judge 5/ ] finds that the

losing party or the losing party's attorney

knew or should have known that a claim or

defense when initially presented . . . or

at any time before [the administrative

hearing 6/ ] or at any time before [hearing 7/ ]:

(a) Was not supported by the material

facts necessary to establish the claim or

defense;

§ 57.105(1), Fla. Stat.

Attorney's fees may be awarded under Section 57.105,

Florida Statutes, for having to defend an unsupportable motion

for attorney's fees filed pursuant to the same statute. See

Albritton v. Ferrara , 913 So. 2d 5 (Fla. 1st DCA 2005).

Mr. Ferguson, however, maintains that they are not

awardable against him under the circumstances of this case based

on a plain reading of the statute, case law and the equities of

the case. Mr. Ferguson's argument on the basis of the equities

is not ripe for determination. It cannot be settled without an

evidentiary hearing. The other two bases, however, do not

require evidence. They can be decided as matters of law.

First, Mr. Ferguson points out that Section 57.105 calls

for an award "in equal amounts by the losing party and the

losing party's attorney." He argues that the use of the

conjunctive "and," rather than "and/or" or the disjunctive "or,"

demonstrates that liability is to be shared and may not be

imputed to either the losing party or the party's attorney

without the other unless there is a specific statutory provision

for doing so.

There is a provision in the statute that frees the losing

party's attorney under certain circumstances from liability for

Section 57.105 fees: "However, the losing party's attorney is

not personally responsible if he or she has acted in good faith,

based on the representations of his or her client as to the

existence of those material facts." § 57.105(1), Fla. Stat.

The opposite is not true. There is no statutory provision that

allows Section 57.105 fees to be awarded solely against an

attorney. The statute is silent with regard to situations in

which the client is free from responsibility because of having

been led astray by bad faith actions of the attorney.

In Mr. Ferguson's view, moreover, there is no jurisdiction

in this case to make the judgment under the statute as to

whether Section 57.105 fees are appropriate since the Division

of Administrative Hearings no longer has jurisdiction over Wild

Turkey. If Wild Turkey is not a participant, a hearing on fees

over what was known or should have been known about its claim

for fees from Petitioners is problematic, in Mr. Ferguson's

view. This point in his argument, however, overlooks that the

inquiry at such a hearing is whether either the losing party or

the losing party's attorney knew or should have known that there

was no support for Wild Turkey's motion for attorney's fees.

Wild Turkey's absence will not be an impediment to determining

what Mr. Ferguson, himself, knew or should have known about the

basis for the motion for attorney's fees he filed on behalf of

his client. But his argument with regard to jurisdiction, as

discussed, below, is valid. There is no jurisdiction under the

statute to consider fees solely as to the losing party's

attorney if the losing party is not also liable for an

appropriate share of the fees.

Countering Mr. Ferguson's argument is Petitioners'

contention that Avemco Ins. Co. v. Tobin , 711 So. 2d 128 (Fla.

4th DCA 1998) clearly holds that an attorney can be held liable

for Section 57.105 fees when his client is not responsible for

them and, accordingly, is not liable for them. A cursory

reading of Avemco could lead one to agree with Petitioners. But

a careful reading shows it is not on point with this case and it

is not controlling.

The first paragraph of the opinion of the court contains

the following sentence: " [u]nder the circumstances of this case ,

we hold that the lawyer could be made solely liable for fees

incurred by adverse parties arising from frivolous positions

taken by the lawyer on his own behalf. " Avemco , 711 So. 2d at

129 (emphasis added.) The circumstances to which the court

alludes are detailed in the opinion. The lawyer obtained funds

deposited in the court registry in payment of a judgment in

favor of his client for himself without his client's knowledge.

He then moved ex parte to have the remaining funds released to

his client, obtained an order for their release, and, with

knowledge of a pending emergency motion to have the order

vacated, turned the funds over to the client. When the trial

court vacated the order and required the return of the funds to

the registry, the lawyer refused. The result of the lawyer's

unprofessional and unethical behavior was that his client was

held in contempt of court. The lawyer was disciplined by the

Florida Bar for failure to inform the court of all material

facts during the ex parte proceeding, failure to maintain the

disputed funds in trust and refusal to comply with the court

order until his client was held in contempt.

After two hearings for attorney's fees, the court found the

lawyer to have caused extensive litigation by his refusal to

comply with the court order and that his position in the

litigation lacked any legal merit and was frivolous.

On appeal, the Fourth District Court of Appeal ruled that

the lawyer's assertions of his own personal interests by

bringing his personal claim for charges against a recovery in

the litigation raised his status from "lawyer" to "party." As

such, he could be both the losing party's lawyer and a losing

party and he became a losing party in the collateral proceeding

within the main action. Having made himself a party, the court

held, the lawyer was properly liable for 57.105 fees even though

his "nominal client in the litigation was not itself liable for

such fees." Id. , at 131.

There is no allegation in Petitioners' motion that

Mr. Ferguson has made himself a party in this proceeding or

acted in any manner that would have raised his status to a

"party" as did the lawyer in Avemco . Rather, the allegations

are simply that when the motion for attorney's fees were filed

against Petitioners for the claims in their petition,

Mr. Ferguson knew or should have known that there was no basis

for the claim for fees, the standard under the statute.

Mr. Ferguson also refers to Neustein v. Miami Shores

Village , 837 So. 2d 1054 (Fla. 3d DCA 2002) in which in a

footnote, the court recognizes that Section 57.105 fees cannot

be awarded solely against an attorney:

In the rare case in which it is appropriate

to assess the entire attorney's fee of one

side against the opposing side's counsel,

the more appropriate framework for analysis

would now appear to be the Florida Supreme

Court's recent decisions in Moakley v.

Smallwood , 862 So. 2d 221 (Fla. 2002), and

Diaz v. Diaz , 856 So. 2d 229 (Fla. 2002).

Id. at 1056, n. 3. While the first clause in the endnote could

be viewed as supporting Petitioners' position, the endnote in

entirety is not supportive of their position. The Moakley and

Diaz opinions discuss inherent judicial authority to impose

sanctions solely against an attorney absent a rule or statute

authorizing such sanctions rather than authority under Section

57.105.

In stark contrast to the interpretation Petitioners advance

with regard to Avemco , is the clear language of the court in

Gopman v. Dep't of Education , 974 So. 2d 1208 (Fla. 1st DCA

2008):

Section 57.105 allows an award of fees to be

paid solely by the litigant if counsel can

show that he "acted in good faith, based on

the representations of [the] client as to

the existence of" material facts.

Unfortunately, section 57.105 does not allow

for an award of fees to be paid solely by an

attorney when the client acts "in good

faith, based on the representations of" the

attorney as to the legal sufficiency of

claims or defenses . If the law allowed, we

would order the fees to be paid solely by

counsel.

Id. at 1212 n. 3 (emphasis added.) The underscored language in

the quote above is consistent with construction of the statute

advanced by Mr. Ferguson.

The facts of Gopman , however, are not on all fours with the

facts of this case. Gopman did not involve an attempt to have

fees assessed against a losing party when the pleading that

initiated the proceeding had been dismissed concurrently with an

explicit withdrawal of a pending motion for fees against the

losing party.

The outcome of Petitioners wish to obtain fees solely from

the losing party's attorney might have been different had

Petitioners not released Wild Turkey, the losing party, itself,

from participation in an award of fees under Section 57.105.

Had Petitioners obtained an award under the statute, they would

likely have been able validly to waive half of the fees from the

losing party and take the remaining half from the losing party's

attorney. The attempt by Petitioners now in this proceeding,

however, to have fees awarded only against the losing party's

attorneys without any involvement as to liability of the losing

party is outside the framework of Section 57.105, Florida

Statutes. Unlike the situation in which the losing party may be

held entirely liable for Section 57.105 fees specifically

addressed by the statute, there is nothing in the statute to

suggest that a prevailing party who moves for attorney's fees

can allow the losing party to escape them before a decision has

been made as to whether they should be awarded and then pursue

fees solely against the losing party's attorney.

CONCLUSION

Section 57.105, Florida Statutes, does not allow the award

of attorney's fees solely against Mr. Ferguson. Avemco , above,

is of no avail to Petitioners because of unique facts

inapplicable to this case.

Fees cannot be awarded against Wild Turkey because of the

withdrawal of the claim for the fees from Wild Turkey in the

Notice of Voluntary Dismissal with Prejudice filed by

Petitioners. If fees cannot be awarded against Wild Turkey,

they cannot be awarded under Section 57.105, Florida Statutes,

against Wild Turkey's attorney.

It is, therefore, ordered:

1. The Motion for Summary Final Order is deemed moot;

2. The request for a hearing on the liability of

Mr. Ferguson for attorney's fees under Petitioners' Motion for

Attorney's Fees under the authority of Section 57.105, Florida

Statutes, is denied. There is no authority in Section 57.105,

Florida Statutes, for an award of fees against the losing

party's attorney without an award against the losing party.

DONE AND ORDERED this 16th day of June, 2010, in

Tallahassee, Leon County, Florida.

S

DAVID M. MALONEY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of June, 2010.

ENDNOTES

1/ The motion sought denial of the fees claimed under Section

57.015, Florida Statutes. The motion did not address the claim

for fees by Wild Turkey under Section 120.595, Florida Statutes.

2/ A ruling on the motion is a condition precedent to

Petitioners' motion for attorney's fees. If Petitioners prevail

on the Motion for Summary Final Order, Petitioners will be the

prevailing party on Wild Turkey's motion for attorney's fees and

Wild Turkey will be the losing party, thus fulfilling a

condition for an award of Section 57.105 fees.

3/ The term "parties" as used in the Order of May 25, 2010, was

clarified to include Petitioners and Mr. Ferguson in an order

entered May 26, 2010. The use of the term "parties" in these

two orders as applied to Mr. Ferguson was not intended to be a

determination that Mr. Ferguson is a party to the case or that

he is a "party" as that term is used in Section 57.105, Florida

Statutes, either as a "prevailing party" or a "losing party."

It is simply a reference to him as a party to the attorney's

fees issues that remained after relinquishment of jurisdiction

over the petition.

4/ See § 57.105(5), Fla. Stat.

5/ Id.

6/ Id.

7/ Id.

COPIES FURNISHED :

Karen C. Coffman, Esquire

St. Johns River Water

Management District

4049 Reid Street

Palatka, Florida 32177

Marcy I. LaHart, Esquire

Marcy I. LaHart, P.A.

4804 Southwest 45th Street

Gainesville, Florida 32608

Jonathan A. Ferguson, Esquire

2366 South Brocksmith Road

Fort Pierce, Florida 34945-4407

J. Scott Sanders

Wild Turkey Estates of Vero, LLC

989 Sebastian Boulevard, Suite 1

Sebastian, Florida 32958

Johnathan A. Ferguson, Esquire

Ruden, McClosky, Smith, Schuster

& Russell, P.A.

145 Northwest Central Park Plaza, Suite 200

Port St. Lucie, Florida 34986-2482

Thomas G. Tomasello, Esquire

Thomas G. Tomasello, P.A.

1107 Terrace Street

Tallahassee, Florida 32303-6458

Michael Scott Shirley, Esquire

Ard, Shirley & Rudolph, P.A.

Post Office Box 1874

Tallahassee, Florida 32302-1874

Kirby B. Green, III, Executive Director

St. Johns River Water Management District

4049 Reid Street

Palatka, Florida 32177

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceeding are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

filing fees prescribed by law, with the District Court of

Appeal, First District, or with the District Court of Appeal in

the Appellate District where the party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.