NEWS

New Decision: Injunctions and Prevailing Party Fees and Costs (Coconut Key HOA v. Gonzalez)
May 11, 2018

Yesterday morning the Fourth District Court of Appeal clarified two important concepts for practitioners: who is a “prevailing party,” particularly in a multi-count complaint context; and, when injunctive relief is appropriate, even though money may compensate for past damages?

THE ISSUES

Coconut Key HOA, Inc. v. Gonzalez, Case Nos. 4D17-739 & 17-1749 (Fla. 4th DCA May 9th, 2018), involved an appeal and a cross-appeal. Gonzalez, a homeowner, sued asserting that the homeowners’ association failed to “properly manage the surface water management system” as required by the “governing documents” and including what the appellate court stated were assertions regarding the HOA Act. Count one sought a money judgment for damages allegedly resulting from the flooding of her property. Count two sought injunctive relief relating to the homeowners’ association’s alleged management failures, including failing to address alterations.

Three distinct trial court decisions provided the foundations for the issues on appeal.

  • After a three-day trial the jury found that the association failed to maintain the surface water management system; however, the Association’s breach did not cause Gonzalez’s damages and no damages were rewarded on count one.
  • Following the jury’s determination that the Association “violated clear legal rights in its governing documents,” the trial court granted Gonzalez’s motion for entry of the mandatory injunction sought in count two.

INJUNCTIVE RELIEF

Reciting the standard of appellate review as being discretionary, the appellate court cited three elements forming the statutory basis for legal and equitable relief in §720.305(1):

  • A clear legal right which has been violated;
  • Irreparable harm must be threatened; and,
  • Lack of an adequate remedy at law.

As to the first element, the jury found a violation of the governing documents. Addressing the second element, evidence existed that flooding could only be resolved if the Association acted. For the third element, past and future damages were differentiated. While compensatory damages were potentially available, they would only address past damage and only an injunction would prevent future harm. Nevertheless, the potential of damages for future diminished property value did not negate the lack of an inadequate remedy at law.

ATTORNEYS’ FEES

Rejecting the “no money judgment, no fees” approach to prevailing party attorneys’ fees, the appellate court focused upon the “prevailing party” language in §720.305(1).

Generally, the standard of review of an entitlement to attorney’s fees is an abuse of discretion; however, where the denial of entitlement was based not on a factual determination, but on the trial court’s interpretation of a legal issue, specifically a “prevailing party” designation, a de novo standard of review applies. The trial court is subject to reversal if the decision is not supported by “logic and justification for the result and founded on substantial, competent evidence.” As a corollary, the court recounted that when a “prevailing party” fee statute applies, reasonable attorneys’ fees must be awarded to the party that “won on the significant issues.” The trial court’s focusing on damages, or the lack thereof, was in error.

In a learning moment on the way to the holding, the appellate court reminded counsel that when a court must interpret the meaning of a legal term that is not otherwise defined by contract or statute, the court will often follow the definition contained in Black’s Law Dictionary. Corresponding to this point, Black’s is quoted as defining “prevailing party” as “[a] party in whose favor a judgment is rendered, regardless of the amount of damages awarded.Black’s Law Dictionary 1154 (8th ed., 2004) (emphasis in quotation added from original).

Applying Black's “prevailing party” definition, the appellate court held that:

  • “Normally, the ‘touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties.’” which usually occurs when there is an enforceable judgment. Practicality trumps principle because “a moral victory or a satisfaction would not suffice.”
  • When considering the amount of fees, Proportionality, or the relationship of the client’s recovery to the amount of fees to be awarded is not a proper factor. The court noted that private claims such as this are distinguishable from public litigation where a prevailing party may not recover damages, such as civil rights cases pursuant to 42 U.S.C. §1988. Thus, a prevailing party determination was not based on “the magnitude of relief,” but instead on whether “some relief on the merits” was obtained, harkening to the concept of whether a party succeeds “on any significant issue in the litigation.”

COSTS

Regarding court costs, the trial court has no discretion but to award costs to the “prevailing party.” More on what should have been a straightforward matter is below.

CONCLUSION

Concluding, the trial court’s decision granting the injunction was affirmed and the decision denying attorneys’ fees and costs was reversed and remanded for an award not only for the injunction claim but also for the damages claim.

MORE THOUGHTS FOR THE PRACTITIONER

While the decision provides helpful explanations, there are some areas that may leave you with contradictory impressions and concerns.

  • Interestingly, the court cited initially to the Condominium Act’s authorization of a private cause of action for injunctive relief in §718.303(1) without stating the reason for the quotation. It may be that the Condominium Act specifically provides for injunctive relief for a breach where the HOA Act only generally refers to “actions at law or inequity, or both” may be brought for “redress.” §720.305(1). There does not appear to be a reason for distinguishing causes of action between the two Acts, perhaps a matter for future legislative action, but nevertheless, the different wording between the two Acts does not appear to justify a different approach.
  • Concerning the award of costs, note the seemingly inconsistent treatment. Though citing to §57.041, the court did not actually quote that statute when holding that costs are awarded to the “prevailing party.” The statute actually provides for a cost award to the “the party recovering judgment….” §57.041(1) Fla. Stat. (2017). The distinction was most recently the subject of Section commentary concerning Olson v. Pickett Downs, Unit IV HOA, Inc., Case No. 5d 15-4043 (Fla. 5th DCA, December 2, 2016). Interestingly, the HOA Act has a prevailing party cost provision which the court could have utilized to the same end.

Michael J. Gelfand

Past Chair

Real Property, Probate and Trust Law Section

of The Florida Bar

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Note: This article is not legal advice. Statements and comments made are not those of The Florida Bar or the RPPTL Section

© 2018 Michael J. Gelfand

Michael J. Gelfand

Florida Bar Board Certified Real Estate Attorney

Florida Supreme Court Certified Mediator:

Civil Circuit Court & Civil County Court

Fellow, American College of Real Estate Attorneys

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