Taxation & Estate Planning

3d DCA on when you're entitled to statutory attorney's fees in power-of-attorney litigation

By Juan Antunez

Bessard v. Bessard, --- So.3d ----, 2010 WL 1875627 (Fla. 3d DCA May 12, 2010)

Durable powers of attorney (POAs) are an integral part of modern estate planning. The prevalence of POAs means they come up with some frequency in estate-related litigation [click here]. That's what happened in the linked-to case. What's interesting about this case is it's focus on F.S. 709.08(11), a little-known subclause of Florida's durable POA statute entitling the prevailing party in POA litigation to attorney's fees and costs. Here's what the statute says:

(11) DAMAGES AND COSTS.-- In any judicial action under this section, including, but not limited to, the unreasonable refusal of a third party to allow an attorney in fact to act pursuant to the power, and challenges to the proper exercise of authority by the attorney in fact, the prevailing party is entitled to damages and costs, including reasonable attorney's fees.

In this case a father signed a durable POA granting his son ("Joseph") authority over his property while he underwent treatment for leukemia, tuberculosis "and other medical infirmities." The POA was challenged in court by Joseph's mother and two sisters. Before the court could rule on the merits of the case, Joseph's father died. At that point Joseph sought to have the case dismissed as moot. Joseph also filed a "renunciation" of his powers under the POA.

The trial court granted Joseph's motion to dismiss, but also granted a motion for attorney's fees and costs filed by his mother and sisters as the prevailing parties. On appeal the 3d DCA affirmed the trial court's attorney's fee order as follows:

As to the attorney's fees and costs awarded to the appellees as the prevailing parties, we also affirm. Section 709.08(11), Florida Statutes (2007), provides that the prevailing party in power of attorney litigation is entitled to attorney's fees and costs. The determination of the prevailing party for the purpose of awarding attorney's fees and costs is based on whether the party seeking fees succeeded on any significant issue(s) in the litigation. See Moritz v. Hoyt Enters., Inc., 604 So.2d 807, 810 (Fla.1992) (holding 'that the party prevailing on the significant issues in the litigation is the party that should be considered the prevailing party for attorney's fees'); Boxer Max Corp. v. Cane A. Sucre, Inc., 905 So.2d 916, 918 (Fla. 3d DCA 2005) ('The ‘prevailing party,' for purposes of attorney's fees, is a party which the trial court determines prevailed on significant issues in the litigation.').

Joseph contends that because the trial court never determined whether the signature on the power of attorney was executed by Mr. Bessard, and if executed whether it was done so knowingly and voluntarily, the trial court erred in granting the appellees attorney's fees and costs as the prevailing parties. We disagree. The appellees sought to have the power of attorney declared void, contending that the document was a fraud. When Joseph renunciated the powers granted to him under the power of attorney, agreed that the document be declared null and void, and destroyed the original and all copies, his actions necessarily mooted the complaint and was the functional equivalent of a judgment or verdict in favor of the appellees. See Augustin v. Health Options of S. Fla., Inc., 580 So.2d 314, 315 (Fla. 3d DCA 1991) (finding that when the defendant changed its position in the matter and made full payment as prayed for in the plaintiff's complaint, it necessarily mooted the complaint and was the functional equivalent of a judgment or verdict in favor of the plaintiff entitling the plaintiff to an award of attorney's fees as the prevailing party); see also Smith v. Adler, 596 So.2d 696, 697 (Fla. 4th DCA 1992) (holding that 'it is [the] results, not [the] procedure, which govern the determination' of which party prevailed for purposes of awarding attorney's fees).

Lesson learned?

Litigation can be very expensive. Any time your client has a shot at getting the losing side to pay his or her attorney's fees, it's a BIG deal. Just as importantly, the downside risk of F.S. 709.08(11) needs to be understood by all at the outset. This disclosure should be prominent in your retainer agreements.

Full post as published by Florida Probate Litigation Blog on July 12, 2010 (boomark / email).