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Arbitration & Mediation

: Florida Arbitration Law

Entitlement to Attorney's Fees Under Contract or Proposal for Settlement is Not Barred By Losing At Non-Binding Arbitration Under F.S. 44.103(6)

By Christopher B. Hopkins, Esq.

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There is nothing worse than winning in non-binding arbitration and then losing in trial (when it counts). Lawyers around the state sometimes voice displeasure at the trial court's ability to force cases to non-binding arbitration before trial. The inherent risk is "giving away" your strategy -- or at least allowing your opponent to get accustomed to your style and methods. That appears to be what happened in Midway Services, Inc. v. Custom Manufacturing & Engineering, Inc.

The parties had three contracts where Midway was to buy water meter devices which were designed and manufactured by CME. The deal went south and CME sued and then Midway counterclaimed. At some point, Midway filed a Proposal for Settlement. Likewise, one or more of the contracts had an attorney fee provision.

The trial court sent the parties to non-binding arbitration under Chapter 44. CME won all issues at arbitration. Midway then asked for a trial de novo. At trial, Midway won on all grounds. Thereafter, the trial court granted Midway's fees and costs but NOT fees/costs relating to the non-binding arbitration. The apparent theory was that the provision of F.S. 44.103(6) precluded an award of fees and costs under the contract or Proposal. Florida Statute 44.103(6) discusses that a party which seeks trial de novo but does not recover more than what was awarded in arbitration must pay costs. It is silent as to what happens if a party seeks trial de novo and wins.

The trial court improperly interpreted that silence to mean it was barred. The Second DCA thought otherwise and felt that the silence meant that the contract provision or the Proposal of Settlement could, indeed, fill the void.

Thus, if a party loses non-binding arbitration but wins the trial and has some basis for fees and costs, there is no bar to that party recovering fees and costs incurred during the non-binding arbitration.

Full post as published by Florida Arbitration Law on December 03, 2007 (boomark / email).