Arbitration & Mediation

Third DCA Rejects Prevailing Party Can Claim Attorneys Fees Under Lemon Law

By Christopher B. Hopkins, Esq.

In a tersely phrased three page opinion, Judge Schwartz of the Third District appears to have shrugged off Fourth DCA and Eleventh Circuit precedent while apparently raking the Florida Legislature over the coals for poor writing. Meanwhile, the consumer who won his lemon law automobile claim is stuck with arbitration, trial and appellate attorney fees.

In General Motors Corporation v. Luis Sanchez, the appellant was a consumer who won a Lemon Law vehicle dispute under Florida Statute 681. He then filed suit, per F.S. 681.104(2)(a), claiming entitlement to attorney's fees.

Judge Schwartz, writing for the Panel (Schwartz, Wells, and Rothenberg), noted that there were "several policy arguments" advanced by both sides regarding why a consumer was, or was not, entitled to attorney's fees and that the only "conceivable" basis for fees was based upon the statute. But the Panel didn't like the statute. More specifically, they didn't like how it was phrased since it said that a consumer could file suit to recover "damages" and that the court shall award the prevailing consumer "any pecuniary loss, litigation costs, reasonable attorney's fees, and appropriate equitable relief."

The Panel took the Legislature to task for mixing attorney's fees in with damages. Fees are not a damage. "The legislature is presumed to have been aware of the case law excluding attorney's fees from the recovery of actual or compensatory damages," according to a 1992 Florida Supreme Court case. The Panel decided, "it is therefore clear that the present action which seeks to recover expenses are not damages" and that the sentence providing for fees cannot apply.

The hook is that arbitration panels (like the Lemon law panel) are typically not empowered to award fees. Under those circumstances, the prevailing party should file a court case seeking to confirm the award and further award fees (it is unclear if that is what the plaintiff in this case had done).

Thus, under the Third DCA's reading, attorney's fees are not a damage, attorney's fees can't be awarded by the panel "in such action," and therefore the plaintiff here cannot get his attorney's fees. In short, because the Panel doesn't like the phrasing of the statute, the plaintiff appears to be caught in the middle. Unless you see this a different way? Let us know.

Meanwhile, the Fourth District and 11th Circuit previously upheld the award of fees under this provision; but the Panel averred that those courts never considered this fine point of law and therefore there was no precedent for the Third DCA to follow. As Judge Schwartz concluded, "That authority now exists."

The Fourth District had an interesting ride with the lemon law a few years back, see here.

Full post as published by Florida Arbitration Law on August 05, 2009 (boomark / email).