Trial Practices, Inc. v. Hahn Loeser & Parks, LLP

               NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                      MOTION AND, IF FILED, DETERMINED


                                             IN THE DISTRICT COURT OF APPEAL

                                             OF FLORIDA

                                             SECOND DISTRICT


TRIAL PRACTICES, INC.,                       )
                                             )
              Appellant,                     )
                                             )
v.                                           )         Case Nos. 2D13-6051
                                             )                   2D14-86
HAHN LOESER & PARKS, LLP, as                 )
substitute party for Jack J. Antaramian,     )             CONSOLIDATED
                                             )
              Appellee.                      )
                                             )

Opinion filed April 12, 2017.

Appeals from the Circuit Court for
Hillsborough County; Herbert J. Baumann,
Jr., Judge.

G. Donovan Conwell, Jr. of Conwell
Business Law, P.A., Tampa, for Appellant.

Edmond E. Koester of Coleman,
Yovanovich & Koester, P.A., Naples, for
Appellee.



MORRIS, Judge.

              Trial Practices, Inc. (TPI), appeals a final judgment awarding attorneys'

fees, costs, and prejudgment interest to Hahn Loeser & Parks, LLP (Hahn), as

substituted for Jack J. Antaramian, who is deceased. The underlying litigation began
when TPI brought suit against Antaramian to recover fees it alleged it was owed for

various trial support services that TPI provided to Antaramian in his suit against a third

party. Antaramian successfully defended against TPI's suit, and as a result, he sought

prevailing party attorneys' fees and costs in the trial court.1 Ultimately, the trial court

awarded him prevailing party attorneys' fees, costs, and prejudgment interest.

              On appeal, TPI argues that the trial court erred by awarding attorneys'

fees and costs for litigating the amount of attorneys' fees. As will be discussed herein,

we disagree with that argument and we therefore affirm that portion of the award. TPI

also argues that Hahn is not entitled to prevailing party attorneys' fees because

Antaramian improperly paid expert witness fees to fact witnesses. And TPI challenges

the inclusion of overhead expenses within the cost award. While we find no error in the

trial court's ultimate conclusion regarding the propriety of payments to the fact witnesses

or in the trial court's award of costs for overhead expenses to Antaramian's attorneys,

we conclude that the trial court's failure to itemize an award of $317,873.64 within the

overall cost award requires reversal. We also agree with TPI that the trial court erred in

awarding prejudgment interest running from the time the attorneys' fees and costs were

incurred rather than from the time when they were awarded. Additionally, it is unclear

whether the prejudgment interest award was based, in part, on disallowed office

overhead expenses. Consequently, we must reverse the trial court's prejudgment

interest award. We affirm all other issues without further comment.




              1Antaramian  also successfully defended on appeal and was awarded
appellate attorneys' fees by this court due to his status as the prevailing party. See Trial
Practices, Inc. v. Antaramian, 97 So. 3d 228 (Fla. 2d DCA 2012) (table decision).


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                                     BACKGROUND

              In August 2005, TPI entered into its contract with Antaramian to perform

litigation support services in Antaramian's lawsuit against a third party (the "Consulting

Agreement"). TPI was required to assist Antaramian and his counsel in preparing for

trial and in presenting the case during trial. The Consulting Agreement required

Antaramian to compensate TPI five percent of any gross recovery that Antaramian

obtained as a result of a verdict in his favor or settlement. Ultimately, Antaramian and

the third party settled the lawsuit with each party agreeing to drop their claims against

the other party. Thereafter, Antaramian refused to pay TPI the five percent fee pursuant

to the Consulting Agreement under the theory that Antaramian did not obtain a gross

recovery and, therefore, did not owe anything to TPI.

              In June 2006, TPI sued Antaramian for breach of the Consulting

Agreement. The issue to be decided was whether Antaramian obtained a gross

recovery through his settlement with the third party thereby obligating him to pay TPI its

fee. The jury returned a verdict in favor of Antaramian. TPI appealed, but this court

affirmed the final judgment.

              Antaramian then sought prevailing party attorneys' fees and costs

pursuant in part to a provision in the Consulting Agreement. The provision provided in

relevant part that the

              prevailing party in any action arising from or relating to this
              agreement will be entitled to recover all expenses of any
              nature incurred in any way in connection with the matter,
              whether incurred before litigation, during litigation, in an
              appeal, . . . or in connection with enforcement of a judgment,
              including, but not limited to, attorneys' and experts' fees.




                                           -3-
Antaramian sought $2,551,796.26, exclusive of prejudgment interest. After a hearing,

the trial court granted Antaramian's motion, though in a reduced amount of

$2,004,432.58. The trial court also awarded prejudgment interest in the amount of

$462,709.81 "from the date the attorneys' fees and costs were incurred." Thus the total

award was $2,467,142.39.

              In making the award, the trial court found that the majority of Antaramian's

witnesses were fact witnesses and that Antaramian had improperly paid them as if they

were expert witnesses, which was prohibited by section 92.142(1), Florida Statutes

(2013). The trial court also found that the prevailing party provision in the Consulting

Agreement did not entitle Antaramian to recover the full amount paid to the fact

witnesses because TPI could not have foreseen that Antaramian would have paid the

witnesses at a rate higher than what they were entitled to be compensated. However,

the court noted that the fact witnesses also "assisted in both case and discovery

preparation" thereby rendering them consulting experts. Consequently, the trial court

permitted Antaramian to recover "certain fees charged." Those fees were apparently

part of a $317,873.64 cost award.

              Additionally, the trial court found that Antaramian could recover attorneys'

fees and costs for his attorneys' litigation of the issues of entitlement to and the amount

of attorneys' fees and costs. The trial court explained that the attorneys' fees and costs

provision in the Consulting Agreement was broad enough to encompass such an award.

              The trial court also found that Antaramian was entitled to recover his costs

incurred in connection with the action, but the court noted that the Consulting

Agreement did not extend so far as to require payment for "an 'overhead allocation' of




                                            -4-
[Antaramian's] staff and rent paid on [his] behalf." While the trial court awarded

separate cost awards for various attorneys who represented Antaramian, TPI contends

that the $317,873.64 cost award erroneously includes or at least fails to indicate

whether it includes $255,000 of Antaramian's office overhead expenses which the trial

court expressly disallowed.

                                        ANALYSIS

              I.     Award of Attorneys' Fees and Costs for Litigating the Amount of
                     Attorneys' Fees and Costs

              TPI challenges the award of $40,346 which was the portion of the final

judgment attributed to Antaramian's attorneys' litigation of the issue of the amount of

attorneys' fees and costs. TPI contends that Antaramian was not entitled to recover

attorneys' fees and costs for litigating the amount of fees to be recovered,2 even though

a fee-shifting provision in the parties' contract provides that such fees and costs may be

recovered.

              Both the Florida Supreme Court and this court have recognized that when

parties are seeking attorneys' fees pursuant to a statute, the parties are not necessarily

entitled to recover attorneys' fees for litigating the amount of fees. See, e.g., State Farm

Fire & Cas. Co. v. Palma, 629 So. 2d 830, 833 (Fla. 1993); Wight v. Wight, 880 So. 2d

692, 694 (Fla. 2d DCA 2004). However, in this case, the attorneys' fees and costs were

not awarded pursuant to a statute but were instead awarded pursuant to the fee-shifting

provision in the Consulting Agreement. And we agree with the trial court that the

provision was broad enough to encompass the award of fees and costs for litigating the


              2TPI   presents no argument on the propriety of awarding attorneys' fees
and costs for litigating entitlement to attorneys' fees. Since there is no dispute on this
issue, we do not address it.


                                            -5-
amount of attorneys' fees. Parties may "freely contract on the issue of attorney[s'] fees,"

Precision Tune Auto Care, Inc. v. Radcliffe, 815 So. 2d 708, 710 (Fla. 4th DCA 2002),

and we will not rewrite a contract in order to relieve TPI of the result of its obligation

under the Consulting Agreement, see Beach Resort Hotel Corp. v. Wieder, 79 So. 2d

659, 663 (Fla. 1955).

              We are not persuaded by the cases cited by TPI: Oquendo v. Citizens

Property Insurance Corp., 998 So. 2d 636, 638 (Fla. 3d DCA 2008), Paladyne Corp. v.

Weindruch, 867 So. 2d 630, 634 (Fla. 5th DCA 2004), and Mangel v. Bob Dance

Dodge, Inc., 739 So. 2d 720, 723-24 (Fla. 5th DCA 1999). In those cases, the parties

seeking the awards of fees relied on retainer agreements with their attorneys as the

basis for their recovery of fees from the opposing parties. But here, Antaramian did not

rely on a retainer agreement with his counsel as the basis for recovery of attorneys' fees

and costs. Rather, he relied on the Consulting Agreement, which was an agreement

between himself and TPI. As already discussed herein, the Consulting Agreement

includes a very broad fee-shifting provision which permits an award of fees that were

incurred by the prevailing party in any matter that is connected with the Consulting

Agreement.

              We find Waverly Las Olas Condominium Ass'n v. Waverly Las Olas, LLC,

88 So. 3d 386 (Fla. 4th DCA 2012), to be instructive to our case. In Waverly, a tenant

sued a condominium association in a dispute over parking spaces, and the association

filed a third-party complaint against the developer. Id. at 387. After the third-party

complaint was dismissed, the developer sought prevailing party attorneys' fees against

the association pursuant in part to an agreement between the developer and the




                                             -6-
individual unit owners. Id. As part of the fee request, the developer sought to recover

fees that were expended on litigating the amount of fees. Id. at 388. Because the trial

court concluded that the association's claims were all inextricably intertwined with one

set of core facts, the trial court awarded all fees incurred to the developer, including fees

for time spent on litigating the amount. Id.

               On appeal, the Fourth District upheld the fee award. The Fourth District

explained that "[t]he various third-party complaints focused on a common core set of

facts" and that although it might have been possible to apportion the fees between the

breach of contract claims and the other claims, "the broad language in the fee provision

contemplates its application to more than breach of contract claims." Id. Specifically,

the fee provision at issue in Waverly "provided for an award of fees for 'any litigation

between the parties under this Agreement.' " Id. The Fourth District also upheld the

trial court's decision to award fees for litigating the amount of attorneys' fees. The court

concluded that the contractual provision was "broad enough to encompass fees

incurred in litigating the amount of fees." Id. at 389 (footnote omitted). In doing so, the

court distinguished Palma on the basis that it involved a request for fees pursuant to a

statute. Id.

               Similarly here, the fee-shifting provision was drafted in such a way that it

broadly encompassed all claims that were connected in any way to the Consulting

Agreement. Further, the fee-shifting provision permitted recovery of "all expenses of

any nature incurred in any way" including attorneys' fees. Consequently, as the Fourth

District did in Waverly, we conclude that the language in the fee-shifting provision was

"broad enough to encompass fees incurred in litigating the amount of fees." Id. We




                                            -7-
hold that the trial court did not err in including an award of attorneys' fees and costs for

time spent on litigating the amount of fees.

              II.    The Cost Award's Inclusion of Recoverable Payments to Fact
                     Witnesses for Trial Testimony and Possible Inclusion of
                     Antaramian's Office Overhead Expenses

              TPI argues that payment to the fact witnesses of more than $5 per day

violates section 92.142(1) and constitutes sanctionable conduct. Thus TPI contends

that the trial court should have rejected Antaramian's total request for prevailing party

attorneys' fees and costs based on this alleged misconduct. TPI also asserts that

payment of prevailing party attorneys' fees and costs under these circumstances was

not reasonably contemplated by the parties at the time they entered into the Consulting

Agreement. TPI further contends that the trial court's award of costs improperly

included Antaramian's office overhead expenses.

              Below, the trial court agreed that attorneys who testify at trial as fact

witnesses are not entitled to the same hourly fee as an expert witness and, instead, that

they are entitled only to $5 per day, the amount of witness compensation provided for in

section 92.142. The trial court also agreed that the fee-shifting provision in the

Consulting Agreement did not entitle Antaramian to recover the full amount paid to the

attorney witnesses because TPI could not have foreseen that the witnesses would have

been paid at a rate higher than that to which they were entitled. However, the trial court

did permit recovery of "certain fees charged" by the witnesses to the extent that they

"also assisted in both case and discovery preparation."

              At the time of trial, rule 4-3.4(b) of the Rules Regulating the Florida Bar

provided that a lawyer could pay the following expenses of witnesses: "reasonable




                                            -8-
expenses incurred by the witness in attending or testifying at proceedings; a

reasonable, noncontingent fee for professional services of an expert witness; and

reasonable compensation to reimburse a witness for the loss of compensation incurred

by reason of preparing for, attending, or testifying at proceedings." Subsequently, in

2014, the rule was amended to omit the reference to payment for loss of compensation.

The relevant portion of the rule now provides that a lawyer may pay "reasonable

compensation to a witness for time spent preparing for, attending, or testifying at

proceedings." R. Regulating Fla. Bar 4-3.4(b); In re Amendments to the Rules

Regulating the Fla. Bar, 140 So. 3d 541, 566-67 (Fla. 2014).3 While the amended rule

does not govern this case, we emphasize that neither version of the rule makes it

unethical or illegal for a party to pay fact witnesses reasonable compensation for their

preparation for, attendance at, or testimony at trial.

              In this case, Antaramian requested $715,467.61 for legal expenses,

litigation support, lodging, fuel, and airfare as listed in the spreadsheet attached to the

affidavit of Robert Frazitta, Antaramian's controller. Of this amount, $255,000 appears

to be litigation support expenses as incurred by Antaramian Development Corporation

of Naples (ADCN) which TPI argues were Antaramian's office overhead expenses that

were nontaxable. This leaves an amount of $460,467.61 in fees, expenses, and costs

that were charged to Antaramian by other entities for legal services, litigation support,



              3Notably,    while eliminating the portion of the provision that permitted
payment for the loss of compensation, the court left intact the portion of the rule
permitting payment of reasonable compensation for the witness's time spent preparing
for, attending, or testifying at the proceedings. Such payments have long been
permitted as long as the payment is not conditioned on the content of the testimony.
See ABA Comm'n on Ethics & Prof'l Responsibility, Formal Op. 96-402 (1996) (titled
Propriety of Payments to Occurrence Witnesses).


                                            -9-
and related charges (such as lodging, fuel, and airfare). However, after considering this

amount as well as the assistance provided by the fact witnesses in case and discovery

preparation, the trial court found—consistent with rule 4-3.4(b)—that Antaramian could

not recover all of the requested costs for the payments to the witnesses. Thus the trial

court awarded Antaramian costs to recover his payments to the fact witnesses but did

so in a reduced amount. The trial court awarded $317,873.64 "with . . . respect [to]

fees, costs[,] and expenses for which Antaramian is indebted or has paid as testified to

by Robert Frazitta and as introduced at the evidentiary hearing."

              We agree with the trial court's analysis of section 92.142 as well as the

trial court's conclusion that Antaramian was entitled to recover (as costs) the fees paid

to witnesses for their assistance with case and discovery preparation. In doing so, we

reject TPI's argument that Antaramian's conduct of paying the attorney fact witnesses

anything more than $5 per day constituted illegal conduct that negated his right to

recover prevailing party attorneys' fees and costs. And to the extent that TPI argues

that it could not have reasonably foreseen that Antaramian would pay the attorney fact

witnesses anything more than $5 per day, we likewise reject that assertion based on the

fact that rule 4-3.4(b) permits the payment of reasonable compensation to witnesses for

preparing for, attending, and testifying at proceedings.

              However, TPI has raised another argument related to the costs that were

awarded to Antaramian which requires us to reverse the $317,873.64 cost award. From

the record before us, we cannot conclude that the award is supported by competent,

substantial evidence. This is because the trial court failed to itemize the award, and we

cannot determine which costs the trial court deemed taxable and which it deemed




                                          - 10 -
nontaxable. Although the trial court made the finding that Antaramian was not entitled

to recover costs for " 'overhead allocation' of the normal staff and rent paid" on his

behalf, the trial court's order also awarded costs to Antaramian as set forth in his

hearing exhibits 1 and 13. A comparison of the two exhibits reveals that Antaramian's

prejudgment interest calculation spreadsheet contained figures matching figures on the

attachment to Frazitta's affidavit and that attachment included Antaramian's office

overhead expenses. Thus Antaramian's prejudgment interest calculation appears to be

based on an amount which includes the disallowed office overhead expenses. And if

the trial court awarded prejudgment interest that was calculated based on amounts that

included Antaramian's office overhead expenses, that fact necessarily implies that those

office overhead expenses are part of the cost award itself. Although Antaramian's

prejudgment interest calculation spreadsheet indicates that there was an adjustment

made discounting Frazitta's costs, that fact does not save the $317,873.64 cost award.

Absent an itemization, the award on its face could be interpreted to include costs for the

disallowed office overhead expenses.4 Similarly, we are unable to discern what portion

of the award was for the payment to fact witnesses for their trial testimony.

              Where a trial court reviews a motion to tax costs, it "should consider each

item of cost and determine whether it should be allowed in whole or in part or

disallowed." Northbrook Life Ins. Co. v. Clark, 590 So. 2d 528, 528 (Fla. 2d DCA 1991).

And a trial court's failure to itemize costs, especially where a motion to tax costs is

denied in part, can result in a reversal. See id. ("Because [the appellant] failed to



              4We  acknowledge that the award could also be interpreted to exclude the
office overhead expenses, but it is precisely because the award could be construed in
two different ways that renders the award problematic.


                                            - 11 -
itemize these costs, there was no way to determine whether they were all taxable.");

Winn-Dixie Stores, Inc. v. Reddick, 954 So. 2d 723, 730 (Fla. 1st DCA 2007) (holding

that the trial court erred by failing to itemize which costs it chose to allow or disallow,

thereby precluding intelligent appellate review of the awarded costs); Kirkland v.

Thurmond, 519 So. 2d 717, 718 (Fla. 1st DCA 1988) (explaining that "unless the trial

court grants or denies [a] motion to tax costs in its entirety," the trial court "should

itemize those [costs] allowed and those disallowed[]and the amounts approved for each

item" in order to facilitate appellate review). Thus, because the trial court failed to

itemize the $317,873.64 cost award and because it could be construed to include

disallowed costs, we must reverse this award and remand for the trial court to determine

which costs were taxable and which costs were nontaxable.

              III.    Challenge to Inclusion of Costs to Counsel for Overhead

              TPI also challenges the various cost awards to Antaramian's attorneys in

the total amount of $89,415.48 to the extent that the awards include overhead expenses

such as postage, Westlaw research, office supplies, an iPad, travel expenses,

telephone calls, courier service, and photocopies. TPI cites cases that stand for the

proposition that such overhead expenses are nontaxable unless there is evidence that

they are reasonably necessary to prosecute or defend the case. See Lewis v.

Thunderbird Manor, Inc., 60 So. 3d 1182, 1182 (Fla. 2d DCA 2011); Bolton v. Bolton,

412 So. 2d 72, 73 (Fla. 2d DCA 1982); Landmark Winter Park, LLC v. Colman, 24 So.

3d 787, 789 (Fla. 5th DCA 2009). However, courts have acknowledged that a party

may recover overhead expenses as part of a cost award where a contract between the

parties permits such an award. See In re Amendments to Unif. Guidelines for Taxation




                                            - 12 -
of Costs, 915 So. 2d 612, 614 (Fla. 2005) (recognizing that "guidelines are advisory

only" and "are not intended to . . . limit the amount of costs recoverable under a

contract or statute"); Panama City-Bay Cty. Airport & Indus. Dist. v. Kellogg Brown &

Root Servs., Inc., 136 So. 3d 788, 788 n.1 (Fla. 1st DCA 2014) ("The parties' contract

broadly allows for the prevailing party to recover on 'any and all claims[,] actions,

damages, losses and costs' and 'all costs, expenses, and attorney's fees,' without

specifying limits, such as those provided under the Statewide Uniform Guidelines of

Taxation of Costs in Civil Cases."). And here, we construe the fee-shifting provision in

the Consulting Agreement to be broad enough to include such expenses. Our

treatment of these overhead expenses—versus Antaramian's personal office overhead

expenses—is different because the fee-shifting provision here permits the recovery of

"all expenses of any nature incurred in any way in connection with the matter," and the

attorneys' overhead expenses as described fall within that definition. But the reason

why we (and presumably the trial court) concluded that Antaramian's personal office

overhead expenses were not recoverable is because the expenses related to his staff

and rent are expenses that exist independently of the action. We find no error in the

distinct treatment of the types of overhead expenses, and we conclude that the trial

court did not err in awarding costs related to Antaramian's attorneys' overhead

expenses that were related to this action.

              IV.    Prejudgment Interest Award

              In awarding prejudgment interest on the award of attorneys' fees and

costs, the trial court found that the attorneys' fees and costs were an element of

damages. The trial court therefore found that the interest accrued from the date that the




                                             - 13 -
fees and costs were incurred. However, fees awarded pursuant to a prevailing party fee

provision in a contract are not damages because the party requesting them is not

entitled to the fees until he becomes the prevailing party, and therefore, interest does

not accrue prior to the date that entitlement to attorneys' fees is fixed by agreement, an

arbitration award, or by a court determination. See Butler v. Yusem, 3 So. 3d 1185,

1186 (Fla. 2009); Quality Engineered Installation, Inc. v. Higley S., Inc., 670 So. 2d 929,

930-31 (Fla. 1996). We reject Hahn's argument that entitlement to fees was fixed on

the date that the Consulting Agreement was signed in this case. While the fee-shifting

provision is broad and establishes a right to prevailing party attorneys' fees, that right

was not vested on the date that the Consulting Agreement was signed. Rather, that

right was established on the date that the trial court determined that Antaramian was the

prevailing party. Consequently, the trial court erred by awarding prejudgment interest

running from the date that the fees were incurred rather than from the date that

Antaramian was deemed to be the prevailing party.

              There is an additional reason for reversal relating to the prejudgment

interest award. In rendering its order, the trial court expressly relied on Antaramian's

prejudgment interest calculation spreadsheet. In fact, the trial court's prejudgment

interest award amount of $462,709.81 is the exact amount of interest listed on

Antaramian's prejudgment interest calculation spreadsheet. But as we discussed in

relation to the award of costs, the prejudgment interest calculation spreadsheet appears

to include the disallowed office overhead expenses as the basis for the prejudgment

interest calculation, and it is unclear whether the trial court's $317,873.64 cost award

included all or a portion of Antaramian's disallowed office overhead expenses. If the




                                            - 14 -
cost award included such disallowed expenses, then the award of prejudgment interest

was incorrectly calculated. Accordingly, we reverse the trial court's award of

prejudgment interest, and we remand for a recalculation of the award running from the

date that the attorneys' fees and costs were awarded rather than from when they were

incurred. Additionally, if the trial court's prejudgment interest calculation included

interest on disallowed office overhead expenses, it should omit that portion of the award

on remand.

                                      CONCLUSION

              The trial court correctly determined that Antaramian was entitled to

recover his attorneys' fees and costs for time spent litigating the amount of attorneys'

fees. Similarly, the trial court was correct in its finding that Antaramian's fact witnesses

were entitled to receive compensation for their assistance with case and discovery

preparation. However, because the trial court failed to itemize the cost award of

$317,873.64, thereby precluding effective appellate review, we must reverse that

portion of the cost award and remand for further proceedings. We likewise reverse the

prejudgment interest award because the trial court erred in its method of calculation and

because it is unclear if the interest award is based, in part, on disallowed office

overhead expenses. In all other respects, we affirm.

              Affirmed in part, reversed in part, and remanded for further proceedings.



WALLACE and SLEET, JJ., Concur.




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