Third District Court of Appeal
State of Florida
Opinion filed March 1, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D16-981
Lower Tribunal No. 09-44683
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The Bank of New York Mellon Trust Company, N.A. f/k/a The
Bank of New York Trust Company, N.A., as trustee for Chaseflex
Trust Series 2007-2,
Appellant,
vs.
Jill Fitzgerald,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Jennifer Bailey,
Judge.
Lapin & Leichtling, LLP, and Jeffrey S. Lapin, Alejandra Arroyave Lopez,
and Jan Timothy Williams, for appellant.
The Ticktin Law Group, PLLC, and Peter Ticktin, Kendrick Almaguer, and
Geovanni Denis (Deerfield Beach), for appellee.
Before WELLS, ROTHENBERG, and LAGOA, JJ.
LAGOA, J.
The Bank of New York Mellon Trust Company, N.A. f/k/a The Bank of
New York Trust Company, N.A., as trustee for Chaseflex Trust Series 2007-2 (the
“Bank”), appeals a final judgment awarding attorney’s fees to Jill Fitzgerald
(“Fitzgerald”) pursuant to the reciprocity provision of section 57.105(7), Florida
Statutes (2014). Because Fitzgerald successfully obtained a judgment below that
the Bank lacked standing to enforce the subject mortgage and note against her, we
find that no contract existed between the Bank and Fitzgerald that would allow
Fitzgerald to invoke the reciprocity provisions of section 57.105(7). The trial court
therefore erred in awarding Fitzgerald attorney’s fees pursuant to section
57.105(7), and we reverse.
I. FACTUAL AND PROCEDURAL HISTORY
The borrower, Fitzgerald, entered into a mortgage with the lender, Northstar
Mortgage Company (“Northstar”), on January 31, 2007. The mortgage contained
the following attorney’s fees provision in favor of Northstar: “Lender shall be
entitled to collect all expenses incurred in pursuing the remedies provided in this
Section 22, including, but not limited to, reasonable attorneys’ fees and costs of
title evidence.”
Concurrent with the mortgage, Fitzgerald signed a promissory note made
payable to Northstar. The note bore a special indorsement from Northstar which
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stated: “PAY TO THE ORDER OF JPMORGAN CHASE BANK, N.A., ITS
SUCCESSORS AND/OR ASSIGNS WITHOUT RECOURSE.”
On June 11, 2009, the Bank filed an action against Fitzgerald seeking to
foreclose upon the note and mortgage. The Bank alleged that it “is now the holder
of the Mortgage Note and Mortgage and/or is entitled to enforce the Mortgage
Note and Mortgage.” The Bank’s complaint attached a copy of the note and
mortgage.
On March 13, 2013, Fitzgerald filed her answer and affirmative defenses. In
her affirmative defenses, Fitzgerald asserted that the Bank lacked standing because
the note was specially indorsed to an entity other than the Bank, and that the Bank
was not the lawful assignee of the note and mortgage. Fitzgerald also asserted that
the Bank was not the holder of the note and mortgage, nor did it own or possess the
note and mortgage. Fitzgerald demanded attorney’s fees “pursuant to terms of the
agreement between the parties and Florida Statutes, Section 57.105.”
The case proceeded to a non-jury trial, and on January 15, 2014, the trial
court entered final judgment in favor of Fitzgerald after finding that the Bank
failed to establish standing. In reaching its ruling, the trial court found that “[t]here
was no Assignment of Mortgage, or any other document evidencing a transfer to
the [Bank] prior to the institution of the action attached to the Complaint.” The
trial court further found that “[t]here was never any actual delivery of the note to
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the [Bank] and no evidence of intent to deliver the note to the [Bank] on the part of
J.P. Morgan Chase Bank, the sole holder under the special indorsement.” The trial
court therefore found that the note “was never negotiated in favor of the [Bank]
and the [Bank] never became the holder of the note under Florida Statute §
673.3011(1), such that it could enforce the note.” Lastly, the trial court found that
the Bank did not qualify as a non-holder in possession of the instrument who has
the rights of a holder.1 The trial court reserved jurisdiction to award attorney’s
fees and costs.
On January 29, 2014, Fitzgerald filed a motion for entitlement to tax costs
and attorney’s fees pursuant to section 57.105(7), Florida Statutes (2014). In her
motion, Fitzgerald argued that she was entitled to attorney’s fees and costs “as the
prevailing party based on the contract between the parties which formed the basis
of the action.” In its memorandum of law in opposition to the motion for
entitlement, the Bank argued that Fitzgerald could not prevail on the merits on the
grounds that the Bank is not a party to the mortgage contract and yet rely on that
same contract to seek attorney’s fees from the bank under the contract’s fee
provision and the reciprocity provision in section 57.105(7), Florida Statutes.
The trial court subsequently entered an order granting Fitzgerald’s motion
for entitlement. After an evidentiary hearing, the trial court entered a final
1 The Bank did not appeal from the final judgment in favor of Fitzgerald.
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judgment taxing attorney’s fees and costs against the Bank. The trial court
awarded Fitzgerald $34,829.06 in attorney’s fees, $2,728.45 in pre-judgment
interest, and $3,562.50 for expert witness fees, for a total amount of $41,120.01.
This appeal ensued.
II. STANDARD OF REVIEW
Because it concerns a question of law, we review de novo a trial court’s final
judgment determining entitlement to attorney’s fees based on a fee provision in the
mortgage and the application of section 57.105(7). Florida Cmty. Bank, N.A. v.
Red Road Residential, LLC, 197 So. 3d 1112, 1114 (Fla. 3d DCA 2016);
Attorney’s Title Ins. Fund, Inc., v. Landa-Posada, 984 So. 2d 641, 643 (Fla. 3d
DCA 2008) (finding that “[o]ur standard of review is de novo because the ruling
on the attorney’s fees involves an erroneous interpretation and application of
Florida law”).
III. ANALYSIS
It is well-established that attorney’s fees may not be awarded unless
authorized by contract or statute. See Attorney’s Title Ins., 984 So. 2d at 643
(“Florida has long followed the so-called ‘American Rule,’ which stands for the
proposition that attorney’s fees are awardable pursuant to an entitling statute or a
contract between the parties.”); Leitman v. Boone, 439 So. 2d 318, 319 (Fla. 3d
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DCA 1983). Here, Fitzgerald’s claim to fees rests on the mortgage’s fee provision
and the reciprocity provision of section 57.105(7).
On appeal, the Bank argues that because the trial court found that the Bank
lacked standing to bring suit under both the mortgage and note, Fitzgerald cannot
recover fees pursuant to section 57.105(7). We agree.
Section 57.105(7) provides as follows:
(7) If a contract contains a provision allowing
attorney's fees to a party when he or she is required to
take any action to enforce the contract, the court may also
allow reasonable attorney's fees to the other party when
that party prevails in any action, whether as plaintiff or
defendant, with respect to the contract. This subsection
applies to any contract entered into on or after October 1,
1988.
Because section 57.105(7) shifts the responsibility for attorney’s fees, it is in
derogation of common law and must be strictly construed. See Florida Cmty.
Bank, 197 So. 3d at 1115. The effect of section 57.105(7) is to statutorily
transform a unilateral attorney’s fees contract provision into a reciprocal provision.
Id.
Section 57.105(7), however, cannot transform a contract’s unilateral fee
provision into a reciprocal obligation where, as here, no contract exists between the
parties. Fielder v. Weinstein Design Group, Inc., 842 So. 2d 879, 880 (Fla. 4th
DCA 2003) (finding that individual who was not a party to the contract cannot
recover prevailing party fees nor can such fees be assessed against him); Hanna v.
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Beverly Enterprises-Fla., 738 So. 2d 424, 425 (Fla. 4th DCA 1999) (affirming
denial of attorney’s fees under section 57.105(2)2 because no contract existed
between the parties); Florida Med. Ctr., Inc. v. McCoy, 657 So. 2d 1248, 1252
(Fla. 4th DCA 1995) (holding that where trial court found that defendant did not
incur obligations under contract containing attorney’s fees provision, “there is no
basis to invoke the compelled mutuality provision of section 57.105(2)”); cf. Bank
of New York Mellon v. Mestre, 159 So. 3d 953, 957 (Fla. 5th DCA 2015) (holding
that there was no contractual basis for attorney’s fees where signatures on
mortgage were fraudulent and noting that “we are doubtful that section 57.105(7)
authorizes attorney’s fees pursuant to a contract that was found to have never
existed”); Novastar Mortg., Inc. v. Strassburger, 855 So. 2d 130, 131 (Fla. 4th
DCA 2003) (finding that appellees were not entitled to recover attorney’s fees
under the mortgage and section 57.105(7) because they were not parties to the
mortgage).
We find our sister court’s opinion in HFC Collection Ctr., Inc. v. Alexander,
190 So. 3d 1114 (Fla. 5th DCA 2016), squarely on point. In that case, HFC
Collection Center (“HFC”) sued Stephanie Alexander (“Alexander”) to collect past
due amounts that Alexander allegedly owed American Express pursuant to a credit
card agreement. HFC claimed that it was the assignee of the credit card
2Subsection (2) of section 57.105 was renumbered as (7) in 2003. The text of the
subsection was unchanged.
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agreement, and was therefore entitled to pursue American Express's collection
rights against Alexander. Alexander, however, asserted in an affirmative defense
that that HFC lacked standing to bring suit, and Alexander prevailed when the trial
court entered summary judgment in her favor. In awarding summary judgment in
Alexander’s favor, the trial court found that HFC failed to prove that it was an
assignee of the credit card agreement, and that therefore no contractual relationship
existed between HFC and Alexander. 190 So. 3d at 1116.
Following the entry of summary judgment in her favor, Alexander moved to
recover fees pursuant to both the attorney’s fees provision contained in the credit
card agreement and section 57.105(7). Id. The trial court granted attorney’s fees
in favor of Alexander and the circuit court sitting in its appellate capacity affirmed
the award of attorney’s fees.
On appeal, the Fifth District reversed the fee award. The Fifth District
concluded that the trial court's determination that HFC was not the assignee of the
credit card agreement between American Express and Alexander meant that no
contract existed between HFC and Alexander. The Fifth District, therefore,
reasoned that “[i]f there is no contract between the parties, which would entitle one
to recover attorney's fees in the first place, ‘there is no basis to invoke the
compelled mutuality provisions of’ section 57.105(7).” Id. at 1117 (quoting
Florida Med. Ctr., Inc. v. McCoy, 657 So. 2d 1248, 1252 (Fla. 5th DCA 1995)).
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The court further held that because no contract existed between the parties,
“Alexander cannot employ section 57.105(7) as a basis for an attorney's fees award
after she proved that HFC never became a party to the contract.” Id. at 1117.
This Court’s opinion in Florida Community Bank is similarly instructive on
the issue of section 57.105(7)’s application within the context of a mortgage
foreclosure. In that case, the appellant bank sought to foreclose the mortgage on
the property of the appellee, Ada Rios (“Rios”). The mortgage at issue contained a
unilateral attorney’s fees provision in favor of the bank. In the motion to dismiss
filed by Rios, she asserted that she never signed the mortgage. Rios further argued
throughout the litigation that her signature on the mortgage documents was
fraudulent. After the bank voluntarily dismissed Rios from its lawsuit, Rios sought
attorney’s fees against the bank based on both the attorney’s fees provision
contained in the mortgage and section 57.105(7). The trial court found that Rios
was entitled to attorney’s fees, and entered a judgment awarding attorney’s fees to
Rios against the bank.
This Court reversed the trial court’s order and held that in order for Rios to
avail herself of section 57.105(7)’s reciprocity as the prevailing party, she “had the
threshold burden to plead and establish that she was a party to the mortgage
containing the fee provision.” 197 So. 3d at 1116. This is so because “[o]nly the
parties to a contract may avail themselves of section 57.105(7)’s entitlement to
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attorney’s fees.” Id. (emphasis added). This Court therefore reversed the fee
judgment against the bank because Rios’s successful, principal defense was that
she was a non-party to the contract, i.e., the mortgage. Reversal of the fee award
was, therefore, required as Rios could not as a non-party to the contract establish
her ability to invoke section 57.105(7)’s reciprocity. Id.
Here, the trial court specifically found that the Bank lacked standing because
“[t]here was no Assignment of Mortgage, or any other document evidencing a
transfer to the [Bank] prior to the institution of the action.” The trial court also
found that the note was never negotiated in favor of the Bank, and that the Bank
was neither a holder nor non-holder in possession with the rights of a holder. In
awarding final judgment to Fitzgerald, the trial court determined that no contract
existed between the Bank and Fitzgerald. Because the trial court found that no
contract existed between the parties, “which would entitle one to recover attorney’s
fees in the first place, ‘there is no basis to invoke the compelled mutuality
provisions of’ section 57.105(7).” HFC Collection Ctr., 190 So. 3d at 1117.
Therefore, we find that the trial court erred in awarding fees to Fitzgerald based on
a non-existent contract between the parties.
IV. CONCLUSION
Because Fitzgerald successfully obtained a judgment below that the Bank
lacked standing to enforce the mortgage and note against her, we find that no
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contract existed between the Bank and Fitzgerald that would allow Fitzgerald to
invoke the mutuality provisions of section 57.105(7). Because no contract existed
between the parties, the trial court erred in awarding Fitzgerald attorney’s fees
pursuant to section 57.105(7), and we reverse the trial court’s order awarding fees
in favor of Fitzgerald.
Reversed and remanded.
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