Arbitration & Mediation

Verdict + Costs = Judgment, When Determining Entitlement to Attorney Fees in Non-Binding Arbitration

By Christopher B. Hopkins, Esq.

Many of you will recall that section 44.103(6) was revised by the Florida Legislature so that, as of October 1, 2007, the loser of non-binding arbitration would be exposed to the winner's attorney's fees and costs if the judgment was 25% more than the arbitration award. Previously, the rule was a straight question of whether the judgment-is-greater-than-arbitration-award. Now you have to factor in a 25% calculation.

Along comes a case -- worth less than $10,000 -- which provokes not only a question of mathematics but one which pokes at the very foundation and wording of the 2007 amendment. More specifically, in Jeremias Antunez c. Deborah Whitfield, the combatants (litigants) in an auto case were sent to non-binding arbitration by a Fort Lauderdale trial judge. The Plaintiff won. The Defendant then requested a jury trial. The Plaintiff won again (although not as much as in arbitration). When costs were taxed and added to the verdict amount, the judgment was greater than the arbitration award. So, the jury award was LESS than the arbitration award. But, with taxable costs added, the judgment was GREATER than the arbitration award.

Questions: Does the Plaintiff win attorney fees under Chapter 44? If the judgment was entered in October 2006, but the appeal doesn't come down until 2008, which version applies?

Answers: The Plaintiff wins fees since, as the old rule states, it is a math question of whether the judgment (jury verdict plus taxable costs) is greater than the arbitration award alone. The court reasoned that the "old rule" applied since the change substantively changed the right to attorney's fees. If you have an interest in whether statutory changes are retroactive depending on whether they are procedural or substantive, you might be interested in this case.

We acknowledge that section 44.103(6) is intended to encourage settlement. But we do note it is a bit unusual that the two figures being compared (arbitrator award and the judgment) are not exactly the same thing. In non-binding arbitration, the arbitrator is NOT assessing taxable costs. Period. He or she is simply setting out the award (value of the claim). The jury is doing the same thing. It is only after the jury does its work, that the judge does hers (in this case), and taxes costs. That leads to the judgment. Ideally, the statute would compare the arbitration award to the jury award.

Nonetheless, the rule says "judgment" and it remains even after a Legislative change. Practitioner warning: under old or new version, you have to watch the judgment amount, not the jury award. That battle over taxable costs could mean the difference between fees or no fees!

Final note: consider a clever attorney who knows that the jury award might be close to the arbitration award and then the attorney decides to intentionally rack up taxable costs to pad the judgment and thereby increase the likelihood of getting fees. Let's say it is something simple like reading a few passages from depos or entering lots of documents into evidence. Sound farfetched? In this case, the difference was counted in hundreds of dollars!

Full post as published by Florida Arbitration Law on January 07, 2008 (boomark / email).