NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
KATRINA BUSHNELL, )
)
Appellant, )
)
v. ) Case No. 2D17-429
)
PORTFOLIO RECOVERY ASSOCIATES, )
LLC, )
)
Appellee. )
___________________________________)
Opinion filed September 14, 2018.
Appeal from the County Court for
Hillsborough County; Herbert M. Berkowitz,
Judge.
Jennifer Erin Jones of McIntyre Thanasides
Bringgold Elliott Grimaldi & Guito, P.A.,
Tampa, for Appellant.
Janet Varnell of Varnell & Warwick, P.A.,
Lady Lake; Lynn Drysdale of Jacksonville
Area Legal Aid, Inc., Jacksonville; Craig E.
Rothburd of Craig E. Rothburd, P.A.,
Tampa; and Arthur Rubin of We Protect
Consumers, P.A., Tampa, for Amicus
Curiae National Association of Consumer
Advocates, in support of Appellant.
Robert E. Sickles and Jason S. Lambert of
Broad and Cassell, Tampa; and David M.
Greenbaum, Racquel A. White, Brian M.
Bilodeau and Jessica L. Montes of
Portfolio Recovery Associates, LLC,
Norfolk, Virginia, for Appellee.
SILBERMAN, Judge.
Katrina Bushnell seeks review of a county court order denying her motion
for prevailing party attorney's fees after Portfolio Recovery Associates, LLC, voluntarily
dismissed its account stated cause of action against her. Portfolio, as the successor in
interest to the original creditor under Bushnell's credit card account, had filed suit to
recover $1021.22 based on Bushnell's alleged failure to object to a billing statement
reflecting the amount due. Bushnell sought attorney's fees pursuant to a provision in
the credit card account agreement that provides for fees to the creditor in any collection
action and the reciprocity provision in section 57.105(7), Florida Statutes (2015). The
trial court denied the request for fees and on rehearing certified that this case raises the
following question of great public importance:
IS AN ACCOUNT STATED CAUSE OF ACTION TO
COLLECT ON AN UNPAID CREDIT CARD ACCOUNT AN
ACTION TO ENFORCE A CONTRACT, SUCH THAT THE
PREVAILING PARTY IS ENTITLED TO AN AWARD OF
ATTORNEYS' FEES UNDER § 57.105(7), FLORIDA
STATUTES?
We rephrase the certified question as follows:
IS AN ACCOUNT STATED CAUSE OF ACTION TO
COLLECT ON AN UNPAID CREDIT CARD ACCOUNT AN
ACTION "WITH RESPECT TO THE CONTRACT" SUCH
THAT THE PREVAILING PARTY IS ENTITLED TO AN
AWARD OF ATTORNEY'S FEES UNDER § 57.105(7),
FLORIDA STATUTES (2015)?
We answer this question in the affirmative, reverse the order denying Bushnell's motion
for fees, and remand for further proceedings.
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I. Background
This dispute arises from Bushnell's alleged failure to pay the balance
owed on an Amazon.com store card. In its complaint and in an affidavit and exhibits
attached to the complaint, Portfolio claimed that it is the assignee of and successor in
interest to the original creditor and that it is the owner of Bushnell's credit card account
and the proceeds of the account. It asserted that it has all of the account seller's "power
and authority" regarding the account and that the seller has no further interest in the
account or account proceeds. Notably, Portfolio brought the action as one for account
stated, as opposed to breach of contract.
Bushnell answered the complaint, raised multiple affirmative defenses,
and requested an award of attorney's fees based on the underlying credit card
agreement. She filed an affidavit to which she attached the credit card agreement that
she stated was for the account. Eventually, Portfolio voluntarily dismissed its complaint.
Bushnell then filed a motion for award of attorney's fees and costs as the prevailing
party, relying on the credit card agreement and section 57.105(7).
The credit card agreement contains a provision authorizing the creditor to
recover its attorney’s fees as part of its collection costs if it "ask[s] an attorney who is
not our salaried employee to collect your account." The agreement does not limit the
recovery of fees to certain types of collection actions, whether for breach of contract or
otherwise. And the creditor "may sell, assign or transfer any or all" of its rights or duties
under the agreement including the rights to payments.
II. Arguments and Analysis
Section 57.105(7) provides, in pertinent part:
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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.
The trial court found that Bushnell could not recover fees under section
57.105(7) because the underlying action is not an "action to enforce the contract" as
required under that statute. Specifically, the court determined that an action for account
stated is not an action for breach of the contract at issue, which is the credit card
agreement. The court certified a question that requires proof of an "action to enforce
the contract" as follows:
IS AN ACCOUNT STATED CAUSE OF ACTION TO
COLLECT ON AN UNPAID CREDIT CARD ACCOUNT AN
ACTION TO ENFORCE A CONTRACT, SUCH THAT THE
PREVAILING PARTY IS ENTITLED TO AN AWARD OF
ATTORNEYS' FEES UNDER § 57.105(7), FLORIDA
STATUTES?
Bushnell argues that the trial court erred in interpreting section 57.105(7)
to require an "action to enforce a contract." She asserts that the provision requires an
action "with respect to the contract." She argues that the certified question should be
rephrased to require proof of an action "with respect to the contract." And she claims
that the account stated cause of action is an action with respect to the credit card
agreement.
Consistent with the wording of the credit card agreement and the statute,
and in light of the circumstances before us, we agree with Bushnell that the certified
question should be rephrased. In our view, there are two requirements for application of
the reciprocity provision in section 57.105(7): (1) the contract must include "a provision
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allowing attorney's fees to a party when he or she is required to take any action to
enforce the contract," and (2) the other party seeking fees must "prevail[] in any action,
whether as plaintiff or defendant, with respect to the contract." See Portfolio Recovery
Assocs., LLC v. Benjamin, 24 Fla. L. Weekly Supp. 96a (Fla. 9th Cir. Ct. Apr. 18, 2016);
Pujol v. Capital One Bank (USA), N.A., 23 Fla. L. Weekly Supp. 517a (Fla. 15th Cir. Ct.
Sept. 21, 2015); Portfolio Recovery Assocs., LLC v. Cordero, 23 Fla. L. Weekly Supp.
392b (Fla. 7th Cir. Ct. July 23, 2015).
The main thrust of the first requirement of section 57.105(7) is determining
whether there is a contractual provision allowing for the recovery of fees by a party who
is required to take any action to enforce the contract. There is no dispute that the credit
card agreement at issue has such a provision. The second statutory requirement, if
met, allows the other party to recover fees even though the agreement provides for the
recovery of fees only in favor of one party. The main thrust of the second requirement
is determining whether the movant is the prevailing party in an action with respect to the
contract.
In this case, there is no dispute that Bushnell is the prevailing party. See
Raza v. Deutsche Bank Nat'l Tr. Co., 100 So. 3d 121, 123 (Fla. 2d DCA 2012)
(explaining that the courts in Florida have consistently determined that a defendant in a
case that is voluntarily dismissed is the prevailing party for purposes of attorney's fees).
However, there is a dispute over whether the action for account stated constitutes an
action with respect to the credit card agreement. Thus, we rephrase the certified
question as follows:
IS AN ACCOUNT STATED CAUSE OF ACTION TO
COLLECT ON AN UNPAID CREDIT CARD ACCOUNT AN
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ACTION "WITH RESPECT TO THE CONTRACT" SUCH
THAT THE PREVAILING PARTY IS ENTITLED TO AN
AWARD OF ATTORNEY'S FEES UNDER § 57.105(7),
FLORIDA STATUTES (2015)?
We answer this question in the affirmative. Our answer to the question is
informed by the supreme court's interpretation of analogous contract language in
Caufield v. Cantele, 837 So. 2d 371, 379 (Fla. 2002). In Caufield, the contract provided
for "attorney's fees in connection with any litigation 'arising out of' the contract." Id. at
373. The supreme court concluded that the prevailing party in an action for fraudulent
misrepresentation was entitled to fees under this provision. Id. at 379. In so doing, the
court considered three other decisions in which courts declined to limit similar
contractual provisions to contract enforcement claims. Id. (citing Katz v. Van Der
Noord, 546 So. 2d 1047 (Fla. 1989) (rescission); Kelly v. Tworoger, 705 So. 2d 670
(Fla. 4th DCA 1998) (fraudulent misrepresentation); and Telecom Italia, SpA v.
Wholesale Telecom Corp., 248 F.3d 1109 (11th Cir. 2001) (tortious interference)). The
supreme court reasoned, "Had there been no contract, the ensuing misrepresentation
would not have occurred. Therefore, the existence of the contract and the subsequent
misrepresentation in this case are inextricably intertwined such that the tort complained
of necessarily arose out of the underlying contract." Id.
Although Caufield interpreted a contractual provision, at least one court
has applied its "inextricably intertwined" test to a statutory provision containing the
"arising out of" language. See Randall v. Lady of Am. Franchise Corp., 532 F. Supp. 2d
1071, 1093 (D. Minn. 2007) ("The Court therefore finds that a non-contract claim
'aris[es] out of [a] contract' for purposes of § 95.03 when that non-contract claim could
only arise if the parties have entered into a contract." (alteration in original)). We
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conclude that the "arising out of" language is not materially different from the "with
respect to" language in section 57.105(7). And we hold that the supreme court's
"inextricably intertwined" test in Caufield is applicable to determine whether an action is
"with respect to the contract" such that the reciprocity provision in section 57.105(7)
applies.
We are not persuaded by Portfolio's argument that the application of the
inextricably intertwined test to section 57.105(7) is inconsistent with Tylinski v. Klein
Automotive, Inc., 90 So. 3d 870 (Fla. 3d DCA 2012). In Tylinski, the plaintiff car dealer
filed suit against the defendants for breach of a Retail Order Contract (ROC) the
defendants had signed in the course of purchasing a car. Id. at 871-72. The
defendants prevailed in the breach of contract action, but the trial court denied their
motion for attorney's fees under section 57.105(7). Id. at 872-73.
In affirming, the Third District discussed two documents that the parties
had executed. Id. at 871-72. One was a Retail Order Contract (ROC), which did not
contain an attorney’s fee provision. Id. at 872. The other was a Retail Installment Sales
Contract (RISC), which contained an attorney’s fee provision. The court rejected the
defendants’ argument that fees should have been awarded to them in accordance with
the terms of the RISC. The court stated that it understood the defendants’ “argument
that, but for the financial commitment reflected in the RISC, the dealership would not
have allowed them to drive the car off the lot." Id. But the court explained that the
dealer sued only for breach of the ROC. And in their answer to the complaint the
defendants’ asserted a claim for attorney’s fees under the reciprocity provision of
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section 57.105(7) and the ROC. The defendants did not plead a claim for fees under
the RISC, which was the contract containing the fee provision. Id.
The Tylinski court's rejection of the defendants' "but for" argument to the
application of section 57.105(7) is not inconsistent with the application of the inextricably
intertwined test here. The Third District did not interpret the "with respect to the
contract" language in section 57.105(7) to determine whether the defendants were
entitled to fees. Instead, the court upheld the denial of attorney’s fees because the
defendants failed to plead a proper basis for the recovery of fees. Id. at 872-73.
In contrast to the circumstances of Tylinski, Portfolio brought an action to
collect money owed as a result of Bushnell’s use of the Amazon.com store credit card.
Bushnell responded to the complaint and asserted her claim for fees under a provision
in the credit card agreement and section 57.105(7). Thus, Tylinski simply does not
apply here.
To apply the inextricably intertwined test from Caufield in this case, we
must consider whether the account stated cause of action could have occurred absent
the existence of the credit card contract. A claim for account stated requires proof "that
there was 'an agreement between persons who have had previous transactions, fixing
the amount due in respect of such transactions, and promising payment.' " Burt v.
Hudson & Keyse, LLC, 138 So. 3d 1193, 1196 (Fla. 5th DCA 2014) (quoting Farley v.
Chase Bank, U.S.A., N.A., 37 So. 3d 936, 937 (Fla. 4th DCA 2010)). There does not
need to be an explicit agreement. Id. Instead, a claim for account stated can be based
on a debtor's failure to object to an account statement. Id.
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While a claim "for an account stated is based on 'the agreement of the
parties to pay the amount due upon the accounting, and not any written instrument,' "
Farley, 37 So. 3d at 937, the amount due here is based on the debtor's failure to pay
under the credit card contract. Simply put, if there had been no credit card contract, the
amount due would not have accrued in the first place. The credit card contract and the
account stated cause of action are therefore inextricably intertwined such that the
account stated cause of action is an action "with respect to the contract" under section
57.105(7). Accordingly, we answer the rephrased certified question in the affirmative.
In summary, we conclude that in an action for account stated brought to
collect the amount due under a credit card agreement, the reciprocity provision in
section 57.105(7) applies to a properly pleaded request for attorney’s fees made
pursuant to the terms of the agreement. As a result, we reverse the order that denied
Bushnell’s motion for attorney’s fees and remand for the trial court to determine the
reasonable amount of attorney’s fees to be awarded to Bushnell.1
Reversed and remanded for further proceedings; certified question
answered.
KELLY and MORRIS, JJ., Concur.
1The order on appeal awarded costs to Bushnell as the prevailing party
pursuant to a stipulation. We do not disturb that portion of the order.
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